How Free Market Logic Fails in Schooling— and What It Means for the Role of Government

Market-based policies, especially school vouchers, are expanding rapidly and shifting students out of traditional public schools. This essay broadens, deepens, and updates prior critiques of the free market logic in five ways. First, while prior articles have pointed to some of the conditions necessary for efficient market functioning, I provide a more comprehensive list. Second, with an up-to-date literature review, I show that all of these conditions fail to hold to an unusual extent in schooling, relative to other markets. Third, because of these failures, I argue that the strongest critique of the free market approach to schooling comes from the intellectual home of markets—economics. Fourth, I show that the issues leading to inefficiency are the same ones leading to inequity. Fifth, I argue that the analysis points to specific roles for government, which go well beyond those included in new universal school voucher policies, but which are also narrower than the roles of government encompassed in traditional public education. For these reasons, the current direction of policy is off-track and apparently inconsistent with the main criteria on which we evaluate education policy and even with the values that voucher advocates themselves profess.