Freedom in Education: the profit motive

NB: this post is by Tim Hewish, my Parliamentary Researcher, and the views expressed are his own.

I recently attended the E. G. West Memorial Lecture delivered by Professor James Tooley and sponsored by the IEA on the topic of for-profit schooling.

He noted that the word profit is highly politicised and many would not wish to even countenance the notion that profit-making should be implemented in schools.  Professor Tooley prefers the term freedom in education because when we discuss freedom of association we do not object to people making a profit when they meet freely in social co-operation. Therefore, why not in education?

Universal access is a strong label to argue against; however, he objects to the term compulsory education as you cannot compel someone to learn, you merely give them the opportunity. If you look at the number of truancies in the UK this bears out.

Tooley, first through historiography then secondly through present day international examples explains how for-profit education has been successful for the UK and the third world’s poor.

He shows that in 1861 only 4.5% of school children were not in school and the Education Act 1870 was brought in to address this deficit. However, the more the State moved into education it reduced the number of thriving private schools. Parents paid about 7 or 8 pence per week which was possible to pay for but when greater taxation came in and schools were offered cheaper options some even for free, this undercut the existing self-sustaining schools.

Internationally, his work in Africa, India and China shows how for-profit schooling is thriving in these regions. In Nigeria 41% of schools are recognised private, 33% unrecognised and only 26% Government funded. While in Delhi, private schools for the poor are outperforming state run institutions. More evidence can be found by reading his work the Beautiful Tree.

Putting examples to one side, the enduring Left/Right divide is about process. We both want the same basic ends: freedom and prosperity which is both fair and universal, but those on the Right focus less on motives and more in outcomes, the Left visa versa.

For conservatives, the profit motive is reconciled under the aim of results. These for-profit schools are benefitting the world’s poorest without State intervention. It is giving them a better chance in life. The Left will always struggle with this.

In addition, the Left are making the assumption that the State is without motive. Many politicians are driven by the vote motive, likewise civil servants the power motive. They are not devoid of pressure which is not altogether altruistic. We are not angels.

Currently in state education, the allocation of resources are not left to the market place of ideas which are then tested against others. They are left to politicians and civil servants. You could even argue that for-profit schools have more incentives to succeed because the failure would mean closure harming all concerned, whereas state funded schools can continue unharmed, propped up by tax payer money.

The arguments that for-profit schools would leave some pupils at the bottom as they are not ‘profitable’ are disingenuous because after over a 100 years of state schooling and each child receiving  12 years of compulsory education 22% of pupils leave innumerate and 17% illiterate. The Evening Standard’s campaign to highlight the literacy crisis in London supports this position.

Also pupils are left behind under the current state system. Sink schools leave economically poor but bright pupils in a system of mediocrity.

Furthermore, schools today are often oversubscribed and are simply not being built. As the report from the Adam Smith Institute shows: 15.4% of parents nationally did not secure a place at their first choice preference in 2011 and one in ten pupils are now educated in schools that have exceeded their capacity with pupil numbers projected to raise by 8% by 2014-14.

Put simply: There is a frustrated demand and an inadequate supply in the schools market. To be denied the freedom to set up a school for-profit is damaging to the success of pupils from all backgrounds.

Therefore, to allow Free Schools to be run for-profit isn’t something that should be taken off the policy table. In Sweden, 63% of their free schools are run by joint-stock companies and new applications come almost entirely from for-profit organisations.

I can sense it is one half of the Coalition dragging their ideological heels as the for-profit label is too much to stomach. Yet they should look deep into their foundations as a party of Freedom and listen to their founding father:

I confess I think these Resolutions are conceived in a spirit adverse to that national character. They have a tendency in utter contrariety to it. They tend to encourage a dependence which is alien and foreign to the minds of Englishmen—to substitute that which is mechanical, technical, and formal for that which is free, open, elastic, and expansive

The element of the freedom in which we move and breathe and have our being is essential to the development of the English character, and, if you take it away, you pine and starve that character, and any substitute you can give in the form of Education Returns is utterly worse than worthless.

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