Diane Ravitch on “the Nature of Markets”



By 03/02/2010

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“It is in the nature of markets that some succeed, some are middling, and others fail.”  That is the primitive, static view of markets proposed by Diane Ravitch in her book-length, passionate diatribe against choice and accountability.

The great economist, Joseph Schumpeter, saw it another way.  Markets “creatively” destroy middling performers by giving successful ones room to expand—until they themselves are “creatively” destroyed by still better producers. Because market destruction is creative, economies generally grow rapidly after recessions have taken their toll on the unproductive.

Ignoring basic economic principles, Ravitch asks us to keep intact our hopelessly disabled school system, now stagnant for half a century or more. She thinks she can get American schools to adopt her favored curricular reforms—even though they have refused to do so despite her multi-decade advocacy.

Amazingly, she rages against the very school choice arrangements that are creating schools willing to try out the curricular reforms she favors. She condemns charters, which are still emerging from infancy or, at best, entering their early adolescence.  Her judgments resemble those offered by buggy whip makers—“Get a Horse”—when cars first arrived or RCA Victor’s evaluation of early pocket transistor radios.

What makes charters so important today is not their current average success but their long-term capacity to innovate–unless governments and unions and do-gooders prevent them from doing so. Left unfettered, many charters will become laboratories of technological innovation that give us the best hope of finding a way out of the current quagmire (a topic explored further in my forthcoming Saving Schools: From Horace Mann to Virtual Learning.)

It is “in the nature of markets” that those who make the best use of new curricular materials and new technologies will become dominant—to the benefit of us all.

Abiding by the law of creative destruction, RCA Victor eventually disappeared as an independent entity.  Ravitch’s naïve concept of the marketplace is even more at risk.




Comment on this article
  • PhillipMarlowe says:

    our hopelessly disabled school system, now stagnant for half a century or more.

    What happened?
    Black students and poor students are getting a worse education than they did during the days of segregation?
    White students are getting a worse education?

  • I discuss how this all came to be in my book that is coming out this month – Saving Schools: From Horace Mann to Virtual Learning.

    http://www.hup.harvard.edu/catalog/PETDEC.html

  • Paul says:

    yes, the marketplace is ruthlessly effective at rewarding innovation. four years ago i founded my own teacher-to-teacher marketplace (TeachersPayTeachers.com) that is in the early stages of testing this hypothesis in the arena of teacher-created content. preliminary results are promising.

    but an interesting question remains. well-educated people are writing and reading this journal and others like it. in fact, there are a lots of well-educated people in the united states. how is it possible that they managed to become so well-educated? someone out there must have known how to provide a really good education; they probably still know how to do it! if this is true, do we really need ‘transformative’ and ‘disruptive’ innovation in education? or do we need to just replicate what made US all so smart?

  • Adrian Rodriguez says:

    You have a faith based approach to markets whereas Dr. Ravitch has used an evidence based approach. The reality is that the reforms that she challenges have failed to deliver on their promises. However, I do not believe that there is any possible evidence that you would accept to refute your faith in markets. As an educator with great skepticism regarding the quality of our schools I cannot count on your faith in the market. I need solutions that work. The only solutions that make any sense are those proposed by Dr. Ravitch (national curriculum standards, well-educated teachers). Only if supporters of charters and vouchers abandoned their ideological commitments and focused on the actual evidence then school improvement would be a possibility. The reality is that continued support of failing policies simply reveals the ugly agenda behind these reforms-mindless privatization and union busting. Not one student in America will benefit from people serving ideologies. Ideologies should serve the people.

  • Thanks for your note. Markets have been with us for several centuries. The evidence of their power is abundant. Educational services are not a unique product. Indeed, in higher education we have market forces at work, if not always perfectly so, but the result is a much more effective system than is evident at the elementary and secondary level. It takes the faith of a convert to ignore this information.

  • [...] For another perspective, Harvard government and  education policy professor Paul Peterson dismisses “her book-length, passionate diatribe against choice and accountability” in a piece in the Hoover Institution’s Education Next blog. [...]

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