Steve Jobs on benefits of competition in education

There seem to be as many political solutions to education problems in South Korea as there are people thinking about them. Thus, there is endless controversy about which policies should be implemented. A major reason for the controversy is the biggest difference between political and market-based polices: In politics, a situation that captures public attention is seen a problem or crisis; in the market, such situations are seen as opportunities.

Some of the world’s greatest, boldest and most aggressive entrepreneurs have avoided tackling education problems. Instead of being “innovative disrupters” in the education world, entrepreneurs have been relegated to being surrogate parents tutoring kids. Wealthy people are welcomed ― as money trees who donate money, expected to celebrate wildly like cheerleaders regardless of the results. Is there any doubt that education would look different today if youngsters weren’t just using iPODs or iPADs but also were in schools established by great innovators and entrepreneurs who were motivated by the profit motive rather than altruism?

Steve Jobs has passed away, but his 1996 interview with Wired Magazine is a reminder about the negative consequences of sticking with a political model that funds producers rather than a market competition model subsidizing consumers. To cut to the chase, Jobs’ main public policy suggestion was to have a “full voucher system.” In his early days he had spearheaded initiatives getting computer equipment into schools, but he later changed his view that technology could help education. “What’s wrong with education,” he argued, “cannot be fixed with technology. No amount of technology will make a dent.” He pointed to the “political problem.” He was blunt: “The unions are the worst thing that ever happened to education because it’s not a meritocracy. It turns into a bureaucracy.” He made similar comments at a 2007 appearance with Michael Dell.

Jobs’ proposal to put education dollars in the hands of parents rather than schools is not exactly new. Classical liberals like French economist Frederic Bastiat (1801-50) and American Milton Friedman (1912-2006) have noted that the quality of education is undercut by the lack of a private motive in education and by parents not paying directly. Some libertarians go so far as to suggest that there needs to be a full-blown free market in education. Jobs was being more pragmatic but pointing to the same age-old problem: The lack of concern about efficiency and cost when others pick up the tab. As Jobs said: “They feel like it’s free, right? No one does any comparison shopping.”

Education was on Jobs’ mind just as he was about to return to Apple. Imagine that: Steve Jobs could have spent the last 14 years of his life developing the iPOD equivalent for education if there had been a market model in education. That could have truly changed the world, even more than the iPOD has. In 1996, he told Wired: “I believe very strongly that if the country gave each parent a voucher for forty-four hundred dollars that they could only spend at any accredited school several things would happen. Number one, schools would start marketing themselves like crazy to get students.”

That would mean real change ― schools could no longer rely on compulsory education laws and truant officers to deliver customers to them. That’s where we have the choice between remaining with the current political model or having a market-oriented model in which parents would seek out schools they believe are most appropriate for their children, regardless of school boundary lines.

His second reason for a full voucher program that would lead to the market model: “I think you’d see a lot of new schools starting. I’ve suggested as an example, if you go to Stanford Business School, they have a public policy track; they could start a school administrator track. You could get a bunch of people coming out of college tying up with someone out of the business school, they could be starting their own school.”

He then gave a final positive result of a universal voucher program: “The third thing you’d see is I believe, is the quality of schools again, just in a competitive marketplace, start to rise. A lot of the public schools would go broke. There’s no question about it. It would be rather painful for the first several years.” Naturally, reporters, activists and educators would focus on those painful stories, but families would be better off eventually with a wider range of choices, educators who must cater to them, and the power to easily exit schools they aren’t satisfied with.

The “discovery process” that guided Jobs is impossible in the political model where education is a problem rather than an opportunity. Jobs could have been wrong, not everything he touched turned to gold, but as almost all education systems (including South Korea’s) are currently structured, there is not a chance to find out. For at least three decades, private institutions (“hagwon”) have been targeted for destruction by the intellectual and political elite in South Korea. Unfortunately, South Korean politicians are pushing for giveaway programs that don’t enhance private enterprise and instead strengthen government power. It is likely that the education status quo will remain in place, with the usual tinkering and internal reforms that frustrate more than they improve things.

By Casey Lartigue, Jr.

Casey Lartigue, Jr., director of international relations at the Center for Free Enterprise, is co-editor of the book “Educational Freedom in Urban America: Five Decades after Brown v. Board of Education.” He has a master’s degree in education from the Harvard Graduate School of Education. ― Ed.