Free Market for Education? Economists Generally Don’t Buy It
In addition, Betsy DeVos, Mr. Trump’s nominee for education secretary, has supported legislation that would establish vouchers in Michigan, as well as the rapid expansion of the state’s charter school sector.
You might think that most economists agree with this overall approach, because economists generally like free markets. For example, over 90 percent of the members of the University of Chicago’s panel of leading economists thought that ride-hailing services like Uber and Lyft made consumers better off by providing competition for the highly regulated taxi industry.
But economists are far less optimistic about what an unfettered market can achieve in education. Only a third of economists on the Chicago panel agreed that students would be better off if they all had access to vouchers to use at any private (or public) school of their choice.
While economists are trained about the value of free markets, they are also trained to spot when markets can’t work alone and government intervention is required.
A classic example is pollution. Factories and cars that spew toxins ruin the air for everyone. Pollution is what economists call a “negative externality”: Drivers get the benefits of the gas they burn when they drive to work, but everyone else gets the bad emissions. Economists recommend governments use taxes and regulations to minimize this negative externality.
Another way that government facilitates the functioning of markets is by helping consumers get clear information. People can make informed choices only if they know a product’s qualities and price, whether it’s a car, a mortgage or a college education. That is why automakers are legally required to disclose their cars’ fuel efficiency, lenders have to use standard forms to describe the terms of a mortgage, and the federal Education Department’s College Scorecard reports the graduation rates and earnings of colleges’ alumni.Free Market for Education? Economists Generally Don’t Buy It - The New York Times: