And who would stop a monopolist from using his muscle to crush a cheeky upstart with the temerity to think that his idea deserves to be tested fairly in the marketplace? I think we can assume that our titanic captains of industry – once they stopped laughing – would suit up and take down the upstart.

Only a regulator can do that. You might expect an informed populace to do somewhat the same, but in many cases the upstart’s idea won’t even see the light of day, so scratch the informed populace.

As I said earlier, nobody forced Detroit to reject multi-valve engines, unibodies, fuel-injection and the like; they did it on their own. Not to mention the ossified culture that allowed people to fail their way steadily upward.

Of course, there are plenty of examples outside Detroit. Look at Bob Nardelli; he was booted out of Home Depot in disgrace, and what was his severance? A mere $200,000,000.

What about the financial excesses of the Wall Street investment banks? The idiocy of people like Scholes of LTCM, assuming that they could model the behaviour of people using randomness, is unbelievable unless you add an incredible amount arrogance.

Where was the free market when Russia defaulted on its obligations and LTCM almost brought down the world’s financial system?

Where was the free market when the S&Ls went bust under Bush I?

None of this should be construed as a claim that government is always good. I’ve seen at close quarters the damage that government workers – those arrogant, self-righteous, overpaid, dumb, underworked whiners – can do.

But that’s not to say the free market always works. It doesn’t.

As further proof of the free market working, there are the consequences of interfering with it.

The auto companies did respond successfully to the Japanese invasion, they just didn’t respond successfully to the *second* Japanese invasion.

There are a whole bunch of car models, some which still exist and some which have passed into history, that were part of that response. The Nova, Comet, Fairlane, Dart and a bunch of other models that were the successful response to the initial Japanese/German automotive invasion. But to a monopolist competition is tiring and unnecessary so when the Japanese and the Germans made a reappearance the American response was less enthusiastic and less successful. Pushing the car companies in the direction of building cars with less regard for consumer preferences then for corporate convenience were the endless demands by the UAW.

But as it became clearer that there was no succor in government action – the best the UAW and the car companies got from that quarter was the “voluntary” import restricts – the car companies acted to preserve themselves at the expense of the UAW, their tormentor.

That’s what led to the spin-offs of the parts divisions so that the bulk of the union workers are now in only engine and transmission manufacturing and final assembly and even they’re broken into two categories – those grandfathered under older contracts and those not. The new guys are being paid much closer to what they’re worth inasmuch as their monopoly on labor is neutralized by the absence of a monopoly by the car companies for which they work.

Also, the existence of shades of gray doesn’t preclude black and white. The free market is no more or less voluntary then gravity since mutually beneficial exchanges of considerations of value will occur whether there’s official permission or not but like the law of gravity if you’ve got sufficient power you can, temporarily, ignore the law of gravity or the free market. Eventually though gravity always wins as does the free market.

In fact, I believe it’s the denial of the free market that’s driving education reform which, you will note, revolves now not around setting educational standards higher via some governmental mechanism but around parental, i.e. customer choice.

The government didn’t force them to build unreliable, badly-designed cars, nor to refuse to use better technology (multi-valve engines, overhead camshafts and fuel injection, to mention just a few); they ceded the small-car market to the Japanese on their own. Nobody forced them to build monstrosities like the Pontiac Fiero, in which they discovered too late that there wasn’t enough space for an oil pan. What was their solution? A smaller oil pan, leading to overheating and fires!

It’s probably true that the unions got their lackeys in Congress (let’s not forget Tailpipe Johnny) to lean on the management, but as you point out, the companies went along because “…[they] could fund them because they had a defacto monopoly.”

Did they think of the future? No, and that’s bad management.

Nor for the financial genii who got us into this mess. It wasn’t the heavy hand of government that caused AIG to take incredibly stupid risks; ditto Goldman Sachs, Bear Stearns, Merrill Lynch, Wachovia, etc., etc., etc.

The Right Honourable Barney Frank leaned on his buddy Franklin Raines to buy worthless mortgages, true; but what did that have to do with the criminal negligence of the investment banks?

The S&L fiasco was caused in large part because the eminent M. Danny Wall, then the regulator in charge of S&Ls and thrifts, was asleep on the job. Not content with the mess he created, he then went to Utah (I think) and repeated his performance.

I hold no brief for the government, as my occasional posts indicate. Still, to look for clear blacks and whites is to ignore reality; we live in a world of grays.

For what it’s worth, I too think that the public school system shows government at close to its worst.

That does not mean, however, that the free market works all the time. See Shaw’s “Apple Cart” and consider whether “Breakages, Ltd.” is pure fiction.

The automotive mess is due in no small part to government intervention which gave the union sufficient power to extract deals that bore no relationship to the value the workers brought to the job from the car makers who could fund them because they had a defacto monopoly. Monopoly’s gone, car makers are gone and pretty soon the sweet deals are gone.

That’s the value of capitalism, that it puts a cost on organizational empire-building and if someone doesn’t come along and destroy the empire the empire will destroy the company. But move that same dynamic to the political sphere and the empire-building can go on a lot longer and do a lot more damage.

In public education the inevitable empire-building shows up as, among other things, legions of professionals who have little to do with education and whose contribution to the task of educating children is unclear. If you’re hiring people who make no contribution to the core mission of the organization how important does that make the people are important to the core mission of the organization?

“If the free market works to filter out bad employees and businesses all over the U.S., why would it not work for education?”

Does it?

In light of the financial mess we’re in now, not to mention the automotive mess, or the S&L fiasco some years ago, I think it’s hard to say that we can blindly trust the free market.

In large companies, the employees who do well are typically the kiss-ups and the cronies, not the competent ones.

There are small companies in which people know who the competent employees are, and treat them appropriately. Usually, however, the arrival of an MBA and/or venture capital signals the end of that era.

hits the nail on the head. Schools try too hard with antiquated traditions: prom, homecoming, pep assemblies, time wasters. A quick mental count in my head… I lost 5 full class periods per class last year due to shortened schedules for assemblies or other nonsense. That is a week of instruction. Show me evidence that any of these antiquated traditions have a significant and positive impact on student learning.

Thanks for your thoughtful response.

A quick reply:
I admit my situation –a school with few obviously bad teachers –could be quite anomalous.

I’m not opposed to weeding out bad teachers. But I’m not at all sure that bad teachers are a huge factor in our educational underperformance. Do you think that they are? It seems to me that factors such as poor curricula (I’m in favor of a meaty Core Knowledge type curriculum), student misbehavior, lack of prep time, and a general pro-social, anti-academic atmosphere at many schools are more significant factors. So I’m just not that eager to initiate a witch-hunt for bad teachers. And I suspect that many of these “bad” teachers could be made better if given a better curriculum and the prep time and PD to craft great lessons. So it’s not that I’m implacably opposed to a more energetic system for weeding out bad teachers; it just seems to me to be misdirected energy.

News this week was that France and Germany have emerged from recession –ahead of the US. And I wouldn’t characterize Toyota and Honda as companies that could learn some lessons from America about how to run a business.

I’m not sure this answers your question exactly, but I’ve got to rescue eggplant from the broiler.

You are right about the lack of standardized tests but their absence is due to the fact that the public education system works quite nicely, thank you very much, without standardized tests so, what needs is there of them?

That’s the problem, that the public education system has gotten along quite well without any overt and officially-sanctioned measures of accountability for so long that the concept is foreign and frightening. In fact, as I’ve been maintaining for a while, education, as a measured, and thus crucial outcome, doesn’t figure very importantly in the professional life of anyone employed in the public education system.

The teachers that are good are good not because being lousy gets you fired but because their pride won’t allow them to act any other way. But the system in which they work takes no notice of their skills. I’d suggest that the result is a work environment not particularly conducive to the pursuit of excellence by the professionals employed in that environment.

The underlying problem is that the current structure of public education is hostile to the introduction of standardized testing. Standardized testing’s actually been around for a couple of decades at the state level but has, in the bulk of cases, had its fangs pulled; no one takes the tests too seriously.

NCLB was an attempt to change that but it was building a structure of accountability on a foundation of sand. The solution is that the structure of public education has to change one in which testing is inherently a proper function of the system and confers worthwhile results.

If you are going to use test scores to evaluate teachers, then you need to evaluate all students’ IQ, executive function, and family support structure. If your students’ average IQ is 90, with poor frontal lobe function and zero family support, good luck improving those test scores.

As for the education unions, their main function is to lobby their well-groomed pet legislators to help limit competition. No to charters, no to vouchers, no to school choice, no No NOOO!!!

Robber barons of education in union uniforms. Charming, but just the way backs get scratched, the Chicago way don’t you know.