Introduction

The persistent knowledge and critical thinking deficit among America's young people is deservedly one of the nation's top political issues. From presidential candidates to governors, every prominent policymaker calls K–12 reform a priority. But though reform fever is intense these days, widespread concern about the K–12 system is not new. Diane Ravitch, a top education official in the first Bush administration, said it was a major concern for most of the 1900s (Ravitch 2000, 23–27). Nuclear scientist Admiral Hyman Rickover's 1959 book blamed the K–12 system for the dangerous lack of scientific, engineering, and math talent in the United States, saying that "The system looks upon talented children primarily as a vexing administrative problem" (Rickover 1959). President Reagan's blue ribbon commission reached a similar but more strongly worded conclusion. Its 1983 report called the United States "a nation at risk," arguing that we have done something to ourselves that would be seen as an act of war if a foreign power were to blame (National Commission on Excellence in Education 1983). Those strong words produced an accelerated reform effort that continues to this day, but so far the reform frenzy has produced little more than micromanagement and frustration. The children discussed in A Nation at Risk have graduated from or dropped out of schools that even prominent Democrats — the strongest proponents of the current governance and funding process — call "a disaster" (Senator Gray Davis qtd. in Broder 1999; Kirkpatrick 1997; Senator Joseph Lieberman qtd. in Shokraii 1998).

This monograph defines and extends the argument for real competition in schooling, but its primary topics are the two reasons why the call for reform is so persistent and intense: (1) reform efforts have left existing governance and funding systems intact, and (2) choice advocates have forsaken and endangered the only truly effective reform catalyst — competition — mostly unwittingly, but often intentionally. Genuine competition is the only true reform catalyst. In the simplest terms, establishing competition means ending the government's policy of financial discrimination against families who prefer private schools or nontraditional public schools and implementing flexible pricing, set by market forces, for education services. This monograph identifies and discusses the critical elements of a competitive education industry, describing the foreseeable outcomes of competition and the transition to it.

Current parental choice programs and nearly all the prominent choice proposals are too small and contain too many restrictions to harness market forces effectively, yet much of the rhetoric asserts the presence of competition. The resulting combination of high expectations and low potential for improvement might be politically devastating. Lackluster "results" from alleged experiments might broadly tarnish parental choice programs. Deeming current programs successful may only prompt the duplication of restriction-laden, escape-hatch versions of parental choice.

A brief review of the failures of K–12 education and the reasons for those failures is a useful first step before turning to the failures of the K–12 reform debate and what must be done to create true improvement.

Where We Stand: The Achievement Deficit

Because "stories of academic mediocrity have become so common that they have lost power to shock" (Coats 1997, 10), I am leaving the task to other sources (Murphy 1996, 139–48; Vedder 2000, 5–9). Instead, I mention some of the more subtle symptoms of failure, discussing a few of them in more detail later on.

The incredible growth in home schooling may be the most compelling symptom of our system's failure (Brandly 1997; "Explosion in Home Schooling" 1996). Many parents give up careers to do the work of teams of education specialists whom they have already paid and typically outperform them by a wide margin. Home-schooled children are highly sought after college recruits. Yet educating children is not easy, and the advantages of specialization apply to schooling as to any other trade or profession. If it were not for the profound failure of public schools, it would be no more likely that home schooling would produce superior results than, say, home television repair.

Another symptom of failure is parental apathy. Despite widespread concerns about K–12 performance, the high cost of exiting the public schools (which supposedly should lead to more "voice"), and the pressure "to get involved in public schools" (Lowe and Miner 1996), the vast majority of parents make little effort to influence the practices of their own schools (Dixon 1992; Pierce 1993). Multiple levels of political control make parents feel powerless and give educators little leeway in addressing their concerns. In addition, educators have little incentive to heed parents' concerns. Educators' paychecks depend on pleasing public officials, not on serving children.

State takeovers are another symbol of failure and frustration. Since 1988 the states have taken over twenty local school systems, including schools in Boston, Baltimore, Chicago, Cleveland, Hartford, Newark, Philadelphia, and Washington, D.C. (School Reform News 1999). State takeovers unfortunately elicit only additional frustration and fail to yield significant improvement. Even in those schools that have had a positive takeover experience, significant improvement has meant approaching merely the national norms of "a nation at risk."

Other cities — among them Milwaukee, the site of the nation's most famous school choice program — are on the brink of a takeover. The Milwaukee Public School (MPS) situation reflects both of the problems cited earlier: its reform efforts left existing governance and funding systems intact, and the additional rivalry created by Milwaukee's small low-income voucher program falls far short of the truly competitive conditions necessary to prompt real reform.

The system's persistent failings are not an accident. The problems begin with the baneful effects of monopoly. The activists and public officials who refuse to consider any fundamental changes in funding and governance denounce the monopoly label. They correctly fear it. Americans rightly associate monopoly with consumer helplessness, producer sloth and indifference, and high prices. Defenders of the status quo point to the system's highly fragmented nature, multiple layers of oversight, and nearly fifteen thousand school districts (Lowe and Miner 1996) as evidence that it is not a monopoly. Still, the monopoly label is appropriate. The number of districts in a metropolitan area matters only a little bit. The number nationwide is nearly irrelevant. Monopoly is not just a matter of numbers (whether one or...