A Model For Preventing Educational 'Poverty Traps'

            In a previous post, (http://thinkingabouthumansociety.blogspot.ca/2013/04/why-free-market-society-is-not-caste.html), I argued that, contrary to what some of the advocates of public education think, a free-market educational system would not turn a society in which it was implemented into a rigid caste society. Recently, some of my views on this subject have been criticized. The objective of this post is to answer those criticisms by elaborating more fully on my views regarding education, and by making a slight modification to my previous argument.

            So that we are all on the same page, and so that I can avoid repeating myself, I will reproduce some of the relevant passages from that previous post here:

           

“Firstly, many successful people did not attain their success because they had a certain degree or certification, but succeeded because they had the brains to be able to serve the consumers in a more efficient way than their competitors. This will be especially true in a free market, where professional associations and unions will not be permitted to use force to restrict entry into a profession and where it will be easier, due to less taxes, licenses, and regulations, for small upstart companies/individuals to compete with bigger established companies/individuals.

Secondly, education is an investment where a sufficient return is expected, just like for starting a business, and for this investment, like for starting a business, loaned funds will be forthcoming if the creditor believes that the investment is a good one. Thus, if having a good education is really as important for making it in the free market as leftists generally claim it is, then financial institutions, and perhaps even the educational institutions themselves, should be happy to give out loans to students, in the expectation that their future incomes, with the education, will be high enough to enable paying back the loan with interest.

Thirdly, in a free market the price of education will go down from what it is currently. At the post-secondary level, without the government giving guaranteed student loans, the universities will be forced to attract students based on quality and price, and they will compete with each other in this regard, instead of inflating tuition fees because they know that the government will almost always enable students to pay them. At the primary/secondary level, in the absence of public schools, not only will the tax money used to pay for them be returned to the citizens, but in their absence there will grow a wider variety of private schools at different price levels, instead of just expensive ones for rich kids whose parents don’t want them to go to public school. Private tutors too could even provide different levels of education for a wide range of prices in a free market for education.

Fourthly, if the government is subsidizing education or even operating schools, it must of necessity decide what is taught and what is not, thus creating conflicts between parents and not supporting the teaching of certain views in schools, something that the flexibility of the free market would quickly solve. 

All that being said, I do recognize that basic literacy and numeracy is a vital necessity in our society, but if someone cannot even afford to give their children this kind of basic education, they are probably a good candidate for the minimal social safety net of the kind I have expressed support for elsewhere, which will provide basic primary education for children. As with welfare generally, there is no need to strangle the education market for the relatively minor problem (in a prosperous free market society), of children whose parents can’t afford to give them the most basic level of education.”

            Now, the main criticism of my views on this subject center around point #2, where I argued that student loans would be forthcoming if creditors expected the educational investment to be a good one in terms of the higher future income of the debtor that it would enable. The criticism was that while this might be true in higher and more technical levels of education, no rational creditor would lend their money to the poor family of a four year old in the hopes of the investment in early education one day paying off in terms of the higher future income of the now-literate child.

            I gave an undeveloped response to this criticism in the last paragraph of the quoted text above, saying that basic literacy and numeracy are so vital for living in modern society that parents who couldn’t afford to give their children this would be good candidates for my minimal social safety net policy discussed elsewhere (http://thinkingabouthumansociety.blogspot.ca/2013/03/issue-analysis-welfare-social-safety-net.html).  

            Now that I think back on it though, it seems that a better solution to this problem could be, instead of sending to the minimal social safety net families who couldn’t afford basic education for their children but could support themselves otherwise, a primary education voucher program would work better.

            The program would work as follows. Educational vouchers (think gift certificates that can only pay for primary educational services) amounting to enough to send kids through Grade 1-6 at an average class-size/quality of school would be provided to every family by the government out of their general tax pool. Parents can supplement these vouchers with their own money if they want higher quality education for their children, or they could spend less than the full amount of the voucher on formal, institutional schooling and spend the balance on tutors or extracurricular programs such as Kumon or reading programs instead. There would be no public schools and no legal tolerance for teachers’ unions who choose to use coercive activities such as forced strikes to achieve their demands. There would be no educational licensing requirements, and voucher acceptance limitations would be minimal. As long as an education provider teaches Reading, Writing, and Arithmetic as a part of their service offering sufficiently, they will be eligible for voucher payments from the government.

            I choose this voucher scheme rather than the traditional public schooling model to introduce more parental choice, competition, and dynamism into the education market, which is currently characterized by monopoly, limited parental choice, stagnation, and bureaucracy. Besides offering more choice and dynamism, competition between educational providers would probably result in tendencies towards lower prices for the same services over time and a much wider variety of differently priced educational services. This would both save the taxpayers money and allow even poor parents more educational choice than they currently enjoy.

            I have chosen to make this somewhat un-libertarian concession because Reading, Writing, and Arithmetic are the common, universal, intellectual pre-requisites for functioning in modern civilization. They are also the keys that unlock all the doors to further knowledge, which the students can then pursue themselves later if they are so inclined.

            This scheme is intended to help parents who are capable of supporting their kids until about age 16, but who cannot afford give them education or choose not to give them education. If the family were poorer than this, they would qualify for my minimal social safety net, which includes basic education for children. If the family were richer than this and could in fact afford to pay for the education of their children, the program is not intended to help them, as if it did, it would morph into an egalitarian-focused educational policy like the current one, which is not what is intended.

            Once the child is done 6 years of government-supported schooling and has reached the age of 13, they should be able to read, write, and understand arithmetic, and they should be aware of other areas of knowledge, which they could potentially pursue further. After this, in contrast to the current model, I think that from then on, education should be specialized or career-focused, and no particular educational path should be forced on students. What is currently learned in grades 7-12 is mostly either useless, not focused enough, could be picked up through self-study, or could be included, if relevant, at the beginning of more career-focused educational programs.

            I expect that after age 13, what I call an iterative education model would prevail, especially for children of poorer or middling families. I will spend the rest of this post discussing this model, which I think provides not only financial advantages, but also pedagogical and developmental advantages over the now-prevailing educational model.

            What I mean by an iterative educational model is this: education and work are to be done either in alternating shorter periods, or are to be done concurrently (think continuing education). This is in contrast to the current prevailing model where post-primary education is done in a big chunk (age 13 to age 22 or later) and then real, paying work is to be started only after all this.

            In this model, money from previous (or current) work is used to finance education leading to a higher level of job. Or, in anticipation of the education leading to a better paying job in a reasonable period of time, financial institutions, the educational institutions, or hiring companies themselves could advance credit to the students, to be repaid with interest out of the higher income of the future job that the education in question is geared towards.

            This means that rather than a very long-term educational investment being made as in the current model, education becomes a series of shorter-term investments that build on one another, facilitated and focused by income the student makes by working during this period.

            This iterative model works because most career paths feature both semi-skilled or skilled ‘technician’ jobs that can be started after a relatively short course of practical, job-related training. Most career paths then have ‘managerial/professional’ jobs that may require more theoretical, and perhaps lengthier, courses of education, but which nonetheless are generally done better by people with prior experience in the lower-level ‘technician’ positions of that career path.

            For instance, people aiming to be accountants could be bookkeepers or financial administrators first. Prospective mechanical engineers could be mechanics, machinists, or machine operators first. Prospective plumbing engineers could be plumbers first, electrical engineers electricians first, etc… Prospective lawyers could start as law clerks or paralegals. Prospective doctors could start as nurses or pharmacists. Prospective business mangers or executives could start in the operational positions within their respective departments (sales, marketing, logistics, manufacturing, etc…). Prospective architects could start as draftsmen or architectural technologists.

            The point is that while working in the ‘lower’ positions, students can get both valuable work experience and the financial resources (or credit-worthiness) necessary to purchase education leading to higher positions in the future. Best of all, they can get this process started maybe with an unskilled job from 13-15, then pursing a short course of training for a skilled/semi-skilled technician position (facilitated by the income made from the unskilled job), and then they could begin thinking about further education once comfortable in this technical position, maybe by around 22. This would put these students, with significant relevant work experience and education that is actually career-focused, ahead of the 22 year olds in the current system who have little work experience and who might have been pursuing an impractical or unsuitable course of study.

            In the trendy terminology of modern business and product development, this iterative education model could be called a ‘lean’, ‘agile’, or ‘just-in-time’ education model, as opposed to the traditional ‘waterfall’ education model. The main idea of lean/agile business methodology is to commit time and resources only in shorter spurts and only when really necessary, then observing the results, and then using these observations to make beneficial adjustments for the next commitment of time and resources. This is in contrast to the traditional ‘waterfall’ model, where a lot of the available time and resources are committed up front, in the hopes of getting the product right the first time. The now-prevailing educational model clearly follows the ‘waterfall’ methodology, where students spend around 9-12 straight years doing post-primary education, with little chance to test whether they will even like the kind of career they’re working towards or of determining whether pursuing that career is even economically realistic. Huge up-front financing requirements, significant chances of making educational malinvestments, and little concentration on an important factor in job success, work experience in the industry, all result from this uneconomical educational model.

            Now, for the iterative educational model to work, there must be an unhampered market for post-primary education. This means a system free of government licensing restrictions, of subsidies and privileges, and of artificially inflated, government-sponsored student demand for higher education through give-away student loans that can be used for unpractical programs.

            An unhampered education market like this would almost certainly result in more flexible (online, part-time, self-study, tutor, continuing education), more content based rather than hours based (think CFA exams versus current law or medical school), more career-focused, and less expensive, educational offerings. This would be the result of allowing the needs and financial realities of students and employers to structure the education market, rather than the dictates of government and established-university bureaucracies.

            On such a market, I suspect that the iterative model will be more financially realistic, and hence more desirable, for students and families at all sensitive to financial considerations. Students and families who could afford it could of course opt to continue with the traditional ‘waterfall’ model of education if they so chose, and there would certainly be educational institutions that would cater to this demand. In most cases though, due to its financial, pedagogical, and developmental advantages for students, I suspect that the iterative model I described would be more popular on an unhampered education market.

            Now, egalitarians will no doubt find many aspects of my suggestions to be ‘unfair’. People who, for whatever reason, value societal economic equality as an end significantly more than I do, might not be convinced by what I have said. All I can do to try and convince them is to point out the impoverishing results of pursuing egalitarian government policies (many of the posts on this blog), and to try to explain why I do not believe in egalitarianism but subscribe to another conception of ‘fairness’ (http://thinkingabouthumansociety.blogspot.ca/2013/09/in-praise-of-market-meritocracy.html).  If this is to no avail though, then, alas, I am powerless to change their opinion. To my great sorrow, such people and I would, unfortunately, have to ‘agree to disagree’.

            This post wasn't designed to appeal to egalitarians, but to those who worry about poor kids falling into ‘educational poverty traps’ and who aren’t otherwise strongly committed to egalitarian ideals. I hope that my discussion of the iterative education model that would probably be more popular in a free-market education system, my discussion of the advantages of such a model and of a free-market educational system in general, and my un-libertarian primary-school voucher policy concession, will help to dispel such fears.