-Caveat Lector-
Stage Three in Education Has Arrived
by Gary North
There is a fixed pattern in economic development that is not well understood
by the public. There are three main stages of development. Using political
terminology, I call these three stages the oligarchic/autarchic, the
democratic, and the individualistic. I realize that we lose some conceptual
accuracy by transferring concepts from one discipline to another, but when no
readily recognized terms exist in one discipline, imports sometimes help.
Oligarchy
The oligarchic phase of an economy is where skilled craftsmen produce mainly
for the rich. The market is narrow. Competition is based on quality rather
than price. Meanwhile, poor families produce for themselves (autarchy) and
for barter with their neighbors, with a few local producers of low-quality
goods that are priced in money, but at prices where the poor can just barely
afford them.
To maintain such a hierarchical, stratified economy, political compulsion is
mandatory. A common feature of the medieval economy was the producers’ guild.
Members of a guild cooperated politically with members of other guilds in
cities to pass laws that restricted access to local consumers. A system of
hierarchical apprenticeship and screening was established by each guild in
order to restrict competition. The goal was to keep price competitive
products away from consumers. This subsidized those who competed in terms of
high quality rather than price. It kept the masses poor.
Democracy
At some point, those producers with the ability to produce a larger quantity
of goods by means of a new technology break through the legal barriers. They
beat their way into the market by offering significantly lower prices. The
market responds to a fundamental economic law: "At a lower price, other
things remaining the same, a greater quantity will be demanded." I call this
the democratic phase of economic development. It is marked by a decline of
political compulsion in the market.
Price competition is initially associated with lower quality, but only when
compared to quality that had been available to the rich elite. For the poor,
these new mass-produced products represent a quantum leap in quality. Buyers
who could never have afforded to buy similar goods at the older, higher
prices now find new products available and affordable. For them, the quality
seems very high: something rather than nothing. The goods’ lower quality in
relation to the older array of prices and products is irrelevant to the
buyers.
Two groups oppose this development: those who produce for the rich, who now
find that some of their rich clients also like a bargain; and those who
produce for the poor, offering shoddy merchandise at prices that the poor
have barely been able to afford. Both groups lose customers to the new
producers.
Individualism
The new mass-market producers at first offer limited choices. As was said of
the Model T Ford, "You can get it in any color, as long as you want black."
The Model T opened the automobile market to the growing American middle
class. But in the 1920’s, General Motors took this market away from Ford by
offering five brands of GM cars and many options within each brand line. This
price competitive market had begun to increase diversity. Ford and Chrysler
had to imitate this multi-brand automobile marketing strategy in order to
survive. Then came foreign imports in the 1950’s. Today, the level of
diversity is beyond most car buyers’ ability to monitor.
Here is the pattern. Price competition initially creates a mass market for
some product line by offering minimal diversity. But as these new mass
production techniques are imitated by competitors, diversity raises its
lovely head. Buyers then are offered more choices at far lower prices than
existed before the initial market-creating breakthrough took place. They get
rising quality and falling prices.
The microcomputer has been the best example of this process of
diversification in a physical product line during the last two decades. As
for services, the best example is the steady erosion of network television’s
audience to cable and satellite channels. This process even has a clever
phrase: from broadcasting to narrowcasting. This is the individualism phase.
Buyers can get pretty much what they want.
Dell Computer will sell you a computer with most of the features you can
imagine. They will even help you to imagine lots of new ones. Your computer
is put together for you personally in Taiwan (or wherever) and flown to the
United States, to be delivered to your door. This is truly a personal
computer. All this came about because a teenage Michael Dell started
producing microcomputers to order in his college dorm room back in the early
1980’s. He still offers the same service, but he uses a much larger room.
Stages of Education
The same stages of development have taken place in education. Prior to the
printing press, education was limited to a tiny minority: sons of the very
rich, sons who gained access to the literate branches of the priesthood, and
sons of Jews. Books in those days were too expensive for most people to buy,
so there was little demand for literacy.
The model for family education was the tutor. A rich family hired a tutor for
its sons (and maybe daughters, though probably not). Formal education was
therefore oligarchic and familistic. Only in monasteries and in universities,
after its appearance around 1070, did anything like a classroom model exist,
but only for a tiny minority. Classroom education had existed for thousands
of years, but had been confined to political and priestly oligarchies.
The printing press changed everything. Demand rose for books and also for the
ability to read. Then the division of labor was increasingly applied to
education. Tutors who were willing to teach larger groups than the sons of
one family began offering their services to groups of middle-class families.
This was the classroom model. "We don’t make house calls," the tutors
announced. Mass education began. This was the beginning of the democratic
phase of education.
The classroom model was far cheaper per student. The student/teacher ratio
rose. There was less student-teacher interaction. But the quality of formal
educational instruction was vastly higher than what had been offered to most
families before the advent of the printing press. Something beats nothing
almost every time.
The tutorial has gone out of existence except in very rare cases. The very
rich have used their money to create and then fund prep schools. Meanwhile,
the middle class and the poor have been thrown together by law in
government-funded schools. Here, the Model T model has ruled supreme since
the 1830’s. The basic educational model has not changed, although academic
content and student discipline have declined since the 1930’s. Taxes to fund
these schools have risen. This is what compulsion produces every time: lower
quality and higher prices.
Tax-funded, compulsory education initially adopted the educational model of
the democratic phase of market production – price competition without great
diversity – and locked it in by law, beginning in Prussia after Prussia’s
defeat by Napoleon in 1806. The United States imported this model, beginning
in the 1830’s in Massachusetts.
This legally locked-in American model involves the following: (1) compulsory
tax funding, (2) compulsory student attendance, (2) mass-produced,
low-common-denominator textbooks, (3) state-controlled teacher certification,
(4) state-mandated trade union compulsion, and (5) state-enforced,
monopoly-granting accreditation to educational institutions. Oh, yes, one
more thing: intervarsity athletics to keep the voters supportive of "their"
schools. Boola-boola = moolah-moolah.
This witches brew of statist compulsion has stifled educational innovation
for almost two centuries. It has also led to enormously high costs per
student, compared to the law-hampered private schools that educate only a
small fraction of students.
Today, a new technology is offering parents great diversity at lower prices:
the Internet. Take a look at the recent book, Homeschool Your Child for Free
by LauraMaery Gold and Joan M. Zielenski. (As an advertising copy writer, I
appreciate its benefits-laden subtitle: More Than 1,200 Smart, Effective, and
Practical Resources for Home Education on the Internet and Beyond.) It is
amazing how much material is on-line for free, only five years after Web
browsers hit the market.
The Internet now threatens to smash the state’s monopoly of education. The
classroom model is now being undermined by new technologies. What parents
have at their disposal today is technology that will enable them – mainly
mothers – to become effective tutors. Soon, there will also be teachers who
sell their services to hundreds of families at low prices, using electronic
grading to do their grunt work, and hiring teaching assistants to do the
grading on more personalized examinations and term papers.
The Internet is already offering the ultimate price competition: approaching
zero price as a limit. "Just add paper and toner!" It is also offering
stupendous diversity of educational choice.
This is where the free market always heads: from quality competition to price
competition to both price and quality competition. What has undermined
education over the last 170 years is the Prussian model: education by the
State and for the State. This model has always been tied to the classroom.
The Internet points to the future: individual instruction. The individualism
phase has begun to appear, having been held back by law. Familism in
education is being restored, as it was for the oligarchs half a millennium
ago.
May God bless the digital pipeline! Parents who care can and will get back
their children!
January 30, 2001
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