Saturday, July 03, 2004

Innovation and Profit: What Education Needs Most

Heartland Institute has an enlightening interview with industrialist David Brennan, a key promoter of charter schools. Brennan argues that statist structures like the public school system have a "total inability" to effect innovation, which can only come with market forces that provide choice:

"Profit-making enterprises are recognized as the essence of our economy in every segment of our society. An education enterprise should be run like a business. The structure that supports the classroom--but not the classroom itself--should be run like a business. That means making sure expenses do not exceed revenues. The reality is that every not-for-profit activity has to be run like a business unless it has an unlimited source of contributions.

Businesses don't have that luxury. To sustain themselves, they have to operate with less expenses than revenues. If a particular enterprise can't do that, it has to shut down. No government agency has to meet, no regulation has to be approved, no law has to be passed, and no court has to rule for that to occur. It just shuts down. That efficiency is an incredibly inexpensive way to eliminate poor performers. But it's harsh. Market forces are terribly unforgiving.

Profits are misunderstood by those who object to them. Profits are nothing more than a return on investment capital. If you invest money, you should get a return on your investment. It's profit when you get interest on a savings account. A profit from a successful business is simply a reward for having put up money for it, and that would be the case with education businesses, too.

Tax dollars should follow a child to the schools of their parents' choice, not the school itself. Like Brennan says, school choice would drive reform in public education through competition. And we'd see more innovative programs in black communities -- programs tailored to our specific communities' needs -- instead of the government one-size-fits-all schools. The good news is that many blacks are challenging liberal elitists, who block black progress and desires at every turn on this issue.


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