Commentary: Schools Are Not Businesses

Schools Are Not Businesses

Why market forces don’t apply to the public school

Those who suggest that schools should be more like businesses do not understand the fundamental operational differences between the two. This is not to say that we cannot take best practices and management cues from the most successful organizational models – especially those of non-profits – because sound organizational practices are not the exclusive purview of the private sector. Indeed, some schools have gone so far as to hire organizational experts as School Managers[1], because those skills are not educational, allowing Principals to focus on being instructional leaders. However, the art and science of teaching children is not “business.”

We don’t allow citizens to tell firefighters how to fight fires. We don’t consult popular opinion during each phase of a crime investigation. These are critical, specialized public services provided by career professionals. Teaching is among the greatest of public trusts, a service to society that cannot be lashed to majority rule or demand from a vocal minority. Neither popularity nor loudness constitute a sound assessment of teaching quality or academic success, and we educators cannot make policy based upon irrelevant or inappropriate demands that impose incompatible operating principles. American educators must establish policy and deliver instruction in this nation’s classrooms unencumbered by ineffective and inaccurate systems of evaluation. Individuals untrained in educational theory, science, and practice cannot continue to tell teachers how to teach. It hasn’t worked, and it’s not going to work, so we should stop allowing the untrained to steer the proverbial school bus.

Market Forces

The argument for imposing business principles upon America’s schools frequently if not inevitably leads to the argument to privatize education. Those that support that stance generally proffer a market-forces rationale: if all schools were private, parents would remove their children from failing schools and place them in more successful schools. This would supposedly eliminate unsuccessful teachers (who end up unemployed), thereby eliminating unsuccessful schools (which end up without enrolled pupils as parents will not choose schools that provide poor quality academics), and consolidate successful teachers (who will get teaching jobs because they’re effective) at successful schools (to which parents will logically send all the children), resulting in fewer (therefore less costly) and better schools.

However, a market-forces argument incorrectly assumes schools have a standard, objective definition of success; a standard, objective measure of that success; and that parents have a standard, objective demand for success.

None of these three assumptions are correct.

A business is an enterprise with a globally-standard objective: to make money for owners. It has a globally-standard indicator of success – profit – and a globally-standard unit of measure – currency. (The American Dollar is worth a precise amount at any given moment in time.) We assess the success of a business with a simple, objective calculation: We add up expenses. We total income to find our revenue. We subtract expenses from revenue to find profit. If profit is a positive value (and over time, greater than the previous profit value), the business is successful.

The private sector can effectively reduce systems to a “bottom line,” because in the final analysis, businesses are primarily driven by profit quantified through basic math. If making a more inferior product results in increased profit, a business will adopt precisely such a strategy. Look at the first decades of the automotive industry: Safety features were not in demand and were considered unnecessary, so seat belts were not standard equipment and airbags weren’t invented yet. In 1948, when Preston Tucker created an innovative, safer car, the industry retaliated against him to ensure they didn’t have to include such features[2], which it viewed as costly. Only after fatalities were linked to design failures did the market force automotive manufacturers to adopt changes, as it became economically infeasible to pay court costs stemming from unsafe designs[3]. The bottom line is profit, and when profits were impacted, practices changed.

Schools cannot operate that way. The above-stated rules don’t apply.

A school is an enterprise with a non-standard goal and a non-standard, subjective indicator of success. The goal of the school is for students to succeed, and success is a wide spectrum that varies dramatically from child to child. For some students, success is general academic achievement, perhaps culminating in college admission. For others, it is the acquisition of certain vocational skills, perhaps culminating in an apprenticeship or immediate employment. For still others, it may be gaining the ability to read, or to speak, or even to respond to simple visual stimuli. Every child is unique, and consequently every child has unique potential and ability.

Moreover, children are not products; they possess individual intellects and are individual emotional beings with their own personal goals. This is not an ethereal or “touchy-feely” statement, but a frank analysis about the essential nature of the “raw materials” in question: A business can standardize the characteristics of the raw materials entering the process (e.g., quality control), whereas a school not only cannot homogenize or ensure certain characteristics in all incoming pupils, but would not if it had magic powers. That would ignore the unique strengths and qualities of each learner. Additionally, schools don’t make a single product, or even a custom product. Every individual child that leaves the school has a unique set of desires and abilities, and therefore an individual trajectory after school. Consequently, there is no standard unit by which we measure “success,” and there cannot be. Instead, we must utilize a complex, subjective method of assessing success. Success might be defined as change over time in the quality and nature of human experience from an individual’s perspective. That cannot be measured with a simple number. I do not suggest it cannot be measured at all, but it cannot be reductively quantized into so crude a figure.

There is no “bottom line” in education. In education, we never compromise the quality of any individual “product” at any cost, and that is anathema to business principle. In my experience, non-educators who oversimplify student achievement to an artificial “bottom line” often hold up principles of private industry as a map to success: Increase productivity, eliminate waste, increase class size to minimize cost, mandate so many hours of training or require so much additional time spent in the school building… ideas that may seem innocent in a vacuum, but that have practically nothing to do with enhancing the quality of teaching and learning. Effective budgeting, good human resource administration, and maintaining the physical school is not educational leadership; it’s basic office management, and that no more translates to increased academic achievement than to rising profits. (All the good budget management in the world won’t save a company with a lousy product.) The misconception that simple quantitative principles apply to improving schools leads to basing the measurement of our education system’s success on inaccurate, useless information – standardized test scores – and as a consequence the decisions made based on that data are destined to fall short.

Despite ample research indicating that standardized tests ineffectively measure skill mastery and content comprehension[4], they remain ubiquitous in schools in large part due to non-educators setting educational policy. Standardized tests oversimplify the complexity of a learner’s skills, knowledge, potential, and specific qualities to simple numbers that non-educators believe they can understand. Even though we know such scores rarely reflect actual mastery, decisions are made every day about a child, a group, or a school based upon the inaccurate and sometimes irrelevant data.

Non-educators who make educational policy think standardized test data means what they think it means. They think an upward trend in math scores means students have improving math skills. They think a sharp drop in social studies scores must translate to lacking performance by the teachers responsible. The business-minded person might look at a score of 50%, and believe that to achieve a 60%, one needs to eliminate waste and increase productivity, and if everyone works harder, 60% is a logical and presumable outcome. We educators know that a test score of 50% taken in a vacuum is a useless statistic and that 60% is anything but presumable. Standardized tests tell us nothing about the true root causes of the struggles of each learner. Indeed, how can we expect to glean anything meaningful to help the individual child achieve while homogenizing our analyses of children?

We continue to use fallacious data because non-educators do not have the specific skills or experience to understand how to meaningfully assess student skill mastery and understand the diverse, complex data that results. This deficit is hardly an indictment of intelligence or character; non-educators simply chose a different vocation and are no more responsible for understanding our craft than we for the finer points of zookeeping, astrophysics, or plumbing. Oversimplified data generates oversimplified test instruments, created out of ignorance, and ignorant decisions are made based upon it. This method is inaccurate, irrelevant, and ineffective.

Supply and Demand

Since the quantitative aspects of business do not apply, what of the qualitative idea that drives a business? What about the oft-cited law of supply and demand? I suggest that the law does not apply, because in education, supply and demand do not align.

What do parents want for their children? Each time I ask this question, ultimately most parents and non-parents offer a variation on the same essential answer: “Parents want what is best for their children.”

No, they don’t. And that’s okay.

Parents want what they think is best for their children. Parents are hardwired to view their children differently than any other children. As such, I do not judge parental bias negatively; to the contrary, I view it as totally natural and normal. If while a group of parents play with their children on a playground, a gunman runs into view, which children will parents protect? Of course parents will grab their own children, because parents are hard-wired to be biased.

It is natural and critical that parents advocate for their own children above others; it is an essential parental role. Just as we know children are individually intellectual and emotional, so are parents, who view the world through their own respective lenses. However, it is the responsibility of the public school – a group of trained, experienced professionals – to do what is best for children from its objective standpoint. In best-case scenarios, these two viewpoints are reconciled in productive collaboration, as anyone who has been through an effective IEP meeting knows. On the contrary, in worst-case scenarios parents may take actions that are ultimately harmful to children, and we as educators have ethical and legal responsibilities to intervene as objective professionals, as anyone who has ever had to contact CPS knows. The simple problem is that schools and parents sometimes disagree about what is best for children.

Apply this disagreement to a business analogy: When a company produces a product and sells it for what the market will bear, and people demand that product, the product sells. However, if a company produces that product, and consumers come to the market wanting something totally different, supply and demand ceases to apply to that relationship. What the enterprise does and what the customer wants are two different things, and there is no market. We educators see this disparity all the time. The school may offer a rigorous AP course, and a parent may want his child enrolled in that course and to have an A at year’s end. If this child lacks the prerequisite preparatory coursework and is struggling to adapt to a cognitive disability, that child may not be capable of earning that A at that time. The parent in this case is demanding something that the school cannot simply supply.

If schools were designed to give parents what they want, regardless of whether or not it’s best for children, privatizing schools would be a logical choice because supply and demand principles would then apply. But schools do not exist for that reason, nor should they, nor can they. Schools are designed to give children what they need, regardless of whether or not it’s what the parents think children need. The critical market principle of supply and demand, therefore, does not apply to the school.

If we accept that the “commodity” or “service” a school “supplies” is success for the child, and we accept that parents do not demand what is needed for success, but rather what a parent thinks is needed for success, then privatizing education in this country is dead on arrival. Though private and parochial schools have an important role to play in the fabric of American society and education, they can be neither the primary nor the sole source of education for the general populous. They operate on principles that, by design and definition, will at best bend towards constituent demand, or at worst capitulate outright to parents regardless of what might be best for children.

Those who suggest schools should be subject to “supply and demand” assume that parents would evaluate a school on the basis of its “success,” and that parents would be willing to allow other adults to make decisions about their children with which they may disagree. However, we teachers know from experience that this is not the case. Instead, parents would remove their children from schools that did not give the parents what they wanted, or what those parents thought their children should have had, and therefore reduce our national school system to an impoverished model that lacks objectivity and would virtually guarantee primacy for popular demand, thereby relegating pedagogy, objective assessment, and reflective practice to distant secondary considerations.

Education Policy by Educators

In the first decade of the 21st century, we saw the tragic result of non-educators setting sweeping, oversimplified educational policy based upon business-like principles. No Child Left Behind would have closed the doors of any school that failed to “succeed” under the inaccurate and oversimplified indicators described here. With the September 23, 2011 announcement by President Obama that components of NCLB will be waived[5], we took one step back from the brink, but the current administration still has not addressed the fundamental error: oversimplification of student success and the application of oversimplified analyses to set uninformed and unwise policy. Until we draw a bright line between “professionals” and “civilians” in education, as we do in other areas of public service from firefighters and soldiers to nurses and police officers, those who think they know better will continue to impose inappropriate values and methods on the schools of this country.

In The Failure of American Schools, Joel Klein, then Chancellor of the New York City Schools, wrote that unions, politicians, and vendors were perpetuating the status quo, and that a “major realignment of political forces” was required to dramatically improve schools. “Without political leadership willing to take risks and build support for ‘radical reform,’ and without a citizenry willing to insist on those reforms, our schools will continue to decline,” Klein wrote[6]. However, much of his article dealt with failures of institutional management (primarily budget and personnel management), and the measures of success he discussed were almost entirely related to standardized test score data. Yes, we education reformers want accountability, effectiveness, proper resources, and powerful leadership, but the article did not address the fundamental improvements in pedagogy, curriculum, assessment, and instructional design that are the real deficits in American schools. Again, this is not an indictment of Mr. Klein’s character or intelligence… but he is not and never has been a teacher. He was not in a position to determine what effective teaching looks like. (Mr. Klein now works for News Corp.)

The answer to the old Silicon Valley joke, “What do you call an entrepreneur with several failed start-ups?” is “experienced.” Businesspeople seem to think that any successful business can be run on business principle alone, without meaningful understanding of the product. A CEO doesn’t have to have master knowledge of shampoo to run Johnson & Johnson. I’d bet Lee Iacocca doesn’t have (or likely care to have) intimate understanding of the physics of friction between metallic compounds in the brakes on Chryslers that his company manufactured. “Business is business,” as the saying goes. But education isn’t like that. Great businesspeople can’t be great blacksmiths without deep and applicable understanding heat, metal, and the tools involved. Great businesspeople can’t be great dancers without rigorous training, significant expertise, and constant practice of the craft.

Great businesspeople cannot be great educators or great education leaders without a profound, studied, and experienced understanding of how children learn and how to teach them.

This is a national problem that no single individual can solve, but individuals can play their parts by consistently articulating the need for teachers to do the teaching. Correcting the “failure of the American schools” cannot be led by non-educators, because those without the training and experience to understand the practical, psychological, social, and pedagogical complexities of teaching and learning lack even the essential vocabulary to observe and discuss education, let alone improve it. Educational leaders should never refer to what we do as the “business of” education, and should never call parents or students “customers” as Mr. Klein and other businesspeople who foray into education have done. True educators must never replace expertise and deep understanding of complex systems with oversimplified figures simply to make data, inaccurate or misleading as it may be, more accessible to non-educators. While we can and should be transparent and accountable, and invest the time necessary to develop strong and meaningful partnerships with involved stakeholders in improving every child, every class, and every school, we cannot do so effectively by reducing the complex to oversimplified figures. There are no “customers” in education. Education is not easy, education is not simple, and education is not a business.



  • [1] Archer, J. (2004, Sep 15). Tackling an Impossible Job. Education Week. S3.
  • [2] Mateer, G. Dirk and Stephenson, E. Frank. (2011). Using Film Clips to Teach Public Choice Economics. Journal of Economics and Finance Education. 10(1) 34.
  • [3] Rehmke, G. (1988). Preston Tucker: A Generation Too Late. Econ. Oct 1988.
  • [4] For example: Popham, W.J. (1999). Why Standardized Test Scores Don’t Measure Educational Quality. Educational Leadership, 56(6) 8–15.
  • [5] Dillon, Sam. (2011, Sep 23). Obama Turns Some Powers of Education Back to States. New York Times.
  • [6] Klein, J. (2011, Jun). The Failure of American Schools. The Atlantic.