Friday, April 01, 2011

Let's Automate Schools and Privatize Everything

The ever-insightful Stephen Moore offers this gem:
Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.

But education is an industry where we measure performance backwards: We gauge school performance not by outputs, but by inputs. If quality falls, we say we didn't pay teachers enough or we need smaller class sizes or newer schools. If education had undergone the same productivity revolution that manufacturing has, we would have half as many educators, smaller school budgets, and higher graduation rates and test scores.
Brilliant. We'll replace public school students with robots and computers, and train teachers how to program them. The teachers will be able to reach thousands of units through a single interface, with uniform, measurable results. And a properly programmed machine should be really good at taking standardized tests.

What's that, you say? Perhaps the issue is the "human factor"? That while we can automate many of the processes involved in manufacturing motor vehicles, or redesign their parts, components and assembly procedures to increase efficiency, we don't have the same luxury when it comes to children?

You know, I understand that back in the 1960's a newspaper columnist might produce, oh, two columns per week. Now, with increased efficiency and technology a typical columnist produces... is it two columns per week? I see. And as "senior economics writer for The Wall Street Journal editorial page" Moore appears to be far less productive than the typical columnist. But I'm sure Moore will tell us that his own lack of productivity and the fact that he is a "taker" and not a "maker" is somehow different.

Moore's editorial suggests that we've had a massive growth in public sector jobs since 1960, pointing to figures suggesting that about 5 out of 100 Americans worked in government in 1960, rising to about 7 out of 100 in 2010. He doesn't explain the causes of the increase, and devotes absolutely no attention to what parts of government have grown the most (or what parts of government have shrunk). Yet without that type of analysis, the raw figure isn't illuminating. Moore is trying to leverage the concept that "government worker" is a slur - that it's somehow wrong to work for the government, that all government jobs do is "take" from society, and that (forget about the man in Moore's mirror) true nobility comes from "making" things - tangible items such as cars.

Moore's concept of what it means to "make" things is similarly absurd. He complains that the population of government workers exceeds the population of people who "work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined". Because there's nothing like cherry-picking the workforce employed in declining industries during a painlessly protracted "jobless recovery" or industries that have largely automated, and making an "apples and oranges" comparison to government workers. Factory farms have displaced family farms - does Moore believe the nation would be better off if we went back to small family farms and reduced the level of farm automation, crop science, and other factors that have contributed to our nation's having an abundance of food despite a shrinking population of agricultural workers? It would be better to end any automated mining and go back an era in which ore was extracted by men with pickaxes and buckets? Surely not. Yet in insisting that those historic "makers" had some form of moral superiority over today's "takers" he implies that such inefficiency would be a good thing.

Moore asserts, and would have us take it on faith, that "Most reasonable steps to restrain public-sector employment costs are smothered by the unions". (It would have been nice had he provided even one example.) It seems fair to note, in response, that a great deal of inefficiency in our society - and in our government - comes not from trade unions but from Moore's buddies in business associations.

Why are our nation's car dealers saddled with an archaic and costly network of car dealerships and, even when they're at the point of collapse, why does Congress rush in to "save" redundant dealerships from being closed? Why can't I go online to a car dealer website, design a car, finance and pay for it and arrange to have it delivered to a dealership near me or even my house? Because NADA has been very effective at lobbying state governments and Congress to protect car dealerships from, dare I say, market efficiencies. Why are purchases and sales of real estate so costly and cumbersome, involving huge fees to parties that seem to do little work other than performing a "merge" on a stack of standard form contracts and having a nice office for people to sit in when they review and sign those documents? Because real estate agents and brokers, the mortgage industry and title companies have successfully lobbied against modernizing and streamlining that system. Why are the tax code and regulations so complicated - for the benefit of ordinary people, or for the benefit of Moore's wealthy peers and multinational corporations? Yes, every time a powerful interest successfully lobbies for new tax favors the tax code gets more complicated.

Moore suggests,
Study after study has shown that states and cities could shave 20% to 40% off the cost of many services — fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers.
Study after study, but again not even one "for instance." And, surprise, Moore is (I assume deliberately) oversimplifying the issues and omitting the downside. That is, there are many reasons other than "unions oppose it" to hesitate before drinking Moore's Kool-Aid.

Historically, we had private fire protection. You purchased fire protection services from a private company and hoped that they weren't too busy to put out the fire when you called them for help. And if you hadn't paid a fee... I guess some things never change. Strangely, it does not appear that the best way to save money in firefighting comes from privatization, but is instead through volunteer fire departments. You have to ask yourself, how would a private fire department save money as compared to a volunteer fire department? It couldn't pay its employees less than the volunteers make. The answer would appear to be through cutting standards, training, equipment levels, locations, vehicles, maintenance, etc.

There's something else to consider, which is that private companies typically introduce efficiency into government activities when there's competition. That is, when there are a number of private trash haulers serving surrounding communities, a municipality can put trash collection out for bid. (Or it can adopt the approach of some of the surrounding communities and let people retain their own trash hauling company.) If one company falls down on the job, there are others ready to step in. And although the specter of price fixing or oligopoly pricing may loom, for the most part if one company's prices get out of line it will lose customers to the others.1

The picture changes when there is no competition, or no meaningful competition. If you turn over the full responsibility for fire protection to a private company and that company fails to do its job or declares bankruptcy, where are you going to find on a moment's notice another company that can step in, acquire buildings and equipment, and staff to adequate levels? If Moore is proposing some sort of hybrid - a construct in which the only thing "privatized" are firefighter jobs - he's really talking about breaking unions. That's illustrated by his conceit that the overpaid skimmers of the financial industry are "makers" to be compared to NYC's government employees. I guess they did make the world's economy collapse, but I don't personally see that type of "making" as a good thing.

There's something else to consider in relation to privatization: You lose government control and oversight. You lose responsiveness to the taxpayer. Elected officials have a lot less influence over companies with which they have contracted than they do with government employees. The lack of oversight can create opportunities for corruption. It's difficult to imagine a circumstance in which judges would be bribed by a state-run prison to channel criminal defendants - let alone children - into its cells.

Moore appears to view it as a horror story that government workers are paid decent wages and receive decent benefits. By his own numbers, he's complaining that the average government worker makes about $44,500 per year including benefits.2 Sure, if you go with low bidders who employ minimum wage workers and offer no benefits, you may be able to "save money" (although again, with risk to quality and scope of services provided, to responsiveness and, in some cases, to integrity.) But what sort of community are you creating when you structure government such that there are a handful of managers - who would all be making substantially more than the salary Moore suggests is excessive for government work - who oversee contracts with outside providers whose employees can't even afford to live in the towns in which they work? I suppose Moore would have the teachers, firefighters, and low-level administrators bus into town each day on the newly privatized public transportation system. A real sense of community,3 that guy4 has.

1. At the same time, the private haulers may have up charges for services the city included, such as yard waste removal and recycling - part of the way a private company can make money, after all, is by cutting the level of service or charging additional fees for better or more complete service.

2. He writes, "Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million).... Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees."

3. Gated community.

4. You've probably figured out by now that Moore is something of a hack. Here's an example of some true hackery:
Speaking of the current situation in Libya, Moore says "You know Sean [Hannity] what’s really despicable about this is that for years and decades the left has sort of apologized for Qaddafi." Let's be real for a moment. It was the political right under the leadership of George W. Bush that embraced Qaddafi and legitimized both the man and his government. Bush repeatedly held Qaddafi up as a success story in the "war on terror", a man who had surrendered his evil ways and had redeemed himself. As Rand Paul notes, the political right is tied up in knots about how to respond to Obama's participation in military action against Libya:
They just really can't decide over at Fox News. It's like, what do they love more, bombing the Middle East or bashing the president? It's like, I was over there and there was an anchor going -- they were pleading, they were pleading -- "please, please, please, can't we do both? Can't we bomb the Middle East and bash the president at the same time? How are we going to make this work?"
As usual without presenting a single example, Moore stands history on its head and pretends that Bush's embrace of Qaddafi is somehow attributable to the left?


  1. I think you both missed the point. If we want to apply the advances of modern American manufacturing to the education system, the first thing we have to do is outsource all of our schools (and students) to the developing world . . .

    : )


  2. Microsoft appears to envision teachers as "administrators" (sysadms?) with students sitting in front of Kinect devices that deliver lessons. If the number of hours kids spend on an Xbox is a measure of educational success, the Gates Foundation has nothing on Microsoft. ;)