To Market, To Market

I can't believe even a Governor Dayton will be so equally foolish and obvious to push day care unionization.  Rather than lose another industry to the usual blend of higher costs and lower quality, we should instead be asking how to take back some of the professions we've already lost.  And there is no better place to start than K-12 education.

Consider this excerpt from Grading The Teachers, a Wall Street Journal piece by Bill and Melinda Gates.  (Hat tip once again to District 279 United!)

It may surprise you—it was certainly surprising to us—but the field of education doesn't know very much at all about effective teaching. We have all known terrific teachers. You watch them at work for 10 minutes and you can tell how thoroughly they've mastered the craft. But nobody has been able to identify what, precisely, makes them so outstanding.

This doesn't surprise me.  Go to any car dealer or real estate firm.  It often is literally true that 20% of the the salespeople make 80% of the sales.  And there is little if anything on any of their employment applications that predicts such success or failure.  Like the good teachers, you can readily identify the good producers even without seeing their sales totals.  Figuring out what they do right or better is another matter, of which hundreds of books have been written.

The sounds like an impossible situation.  How can we train people to be successful in such roles if we can't figure out the keys to success?  That doesn't stop us from trying.  Managers send their charges off to various professional development programs and lofty-sounding symposiums.  Employees seek additional training, often advanced degrees.  And beyond certain specialties like medicine, there's often no telling if it will really raise their game.

Once again, we're trying to answer the wrong question.  There is a solution.  It's called the market, the free market that is.

The market determines who we think has it, one dollar, one purchase at a time.  There's room for many winning approaches, even a few clunkers.  (Robert Goulet?)  It higgles and jiggles, sorts and sifts, and somehow the cream floats as New Coke sinks.  It will not be denied, as NetFlix found out recently.

But if not allowed to work, as in education today, as some want tomorrow in day care, the market cannot pick and reward our winners, our great teachers for example.  In fact, there will be fewer winners that are harder to find in a sea of mediocrity.  But don't worry.  Over half of of your child's teachers have master's degrees or better. Imagine what graduate school will be able to teach a certified, licensed, unionized day care worker, one you can no longer afford by the way.

It's time to go on offense.  I think the public can understand what a disaster unionizing day care would be.  With Wisconsin leading the way, maybe the way is clearing to undo the disaster that is Education Minnesota.  Eden Prairie sent their Superintendent of low expectations packing.  Even Mark Dayton had to sign off on alternative teacher licensing, given our near highest in the nation achievement gaps.

Let the market prevail!  It's for the children.

Comments

[CDO]

Well said.

[Hiram]

Markets simply match buyers and sellers. They are no guarantor of quality.

[Hiram]

How good are free markets in delivering Mercedes Benz's to poor people?

[Speed Gibson]

And what does guarantee quality? Certainly not government (IRS, DMV, Post Office, ...). Certainly not unions (EM, SEIU, ASCFME, ...).

[Hiram]

And what does guarantee quality?

An excellent question. Certainly not markets.

[J. Ewing]

So, when unionized American autos were perceived as having lower quality than unionized Japanese autos, what was it that caused sales of Japanese autos to skyrocket, followed by a drive for improved quality of American autos?

[Hiram]

Markets deliver what people are in the market for. There is a product I buy at Target. It comes in two forms, one as a national brand, and the other in Target's house brand. The nationally branded product is considerably more expensive than the house brand. But they are the same stuff, with the same quality. So why are they priced differently? If the market is driven by quality of product, and they are the same product, why aren't the two products priced the same?

When they are in the market, people look for different things, and those things are not necessarily consistent with public policy.

[The Big Stink]

Hiram: Are you the only inhabitant of your planet? If markets don't determine winners and losers then why keep score with such a trivial medium as money? You obviously would never demean yourself by accepting dollars as a measure of your worth and that's fine. We've allocated a cardboard box for your retirement. Maybe you can convince your family you're worth more. Good luck. They've probably written you off because of your rambling non-sequiters. Don't be so coy as to try to make us believe altruism ought to be our yardstick of worth. If you want to live alone in your delusion - have at it.

[Hiram]

If markets don't determine winners and losers then why keep score with such a trivial medium as money?

Markets aren't there to determine winners and losers, at least not on the planet, on which I reside. They are there to match buyers with sellers. You have a good, I have money. We exchange one for the other. That's the way it works, and no one wins or loses, and no one keeps score.

[Hiram]

In talking about markets, I often urge people to think about what they are really buying. When you buy a tube of toothpaste, are you really in the market for the white stuff in side, or whiter teeth. In my example of the two products, I would ask, what are you buying that justifies the price differential? Are you buying the thing? Or it's label? What you are buying, what you make the decision to pay for, tells you what market you are in.

[Hiram]

It's a very Minnesota thing by the way, to see commercial transactions in terms of winners and losers. It's so often not enough for a Minnesotan to enter into a good deal, he must feel he won the deal, and even more importantly, that the person he has dealt with has lost the deal. I have to admit, on my personal planet, I think this is weird. If I am happy with a deal I make, I just don't care that much if the person on the other side of the deal is happy or not. If anything, I hope he is, if for no other reason that a person I consistently make deals with which make me happy, won't be around after a while, and that would make me sad.

[The Big Stink]

Hiram, you don't have to remind me not to frequent your establishment.

[Hiram]

If it's ntent in frequenting my establishment, to make sure I do business at a loss, I would guess I can do quite nicely without your patronage.

[The Big Stink]

Under "rambling non-sequiters," see the last entry.

[J. Ewing]

Wow. We have winners and losers in the marketplace all the time, because there is, or should be, competition. But free markets don't create winners and losers on a transaction by transaction basis. In every transaction, both parties win because each exchanges something they have for something they value more. For me, the toothpaste, for Target the money. Now if in the aggregate more people choose Colgate than choose Crest, Crest eventually becomes a "loser" and may even go out of business. Why this collective decision is what it is has absolutely zero to do with public policy and should not. Individuals may see higher value because of quality, price, brand loyalty or no reason at all. In other items, like automobiles, one or more of these differences may predominate. So what. Let the free market prevail.

[Hiram]

"We have winners and losers in the marketplace all the time, because there is, or should be, competition."

Why would I want to deal with someone who is determined to make sure I lose in the transaction? Who sees me as a competitor rather than a customer?

[Speed Gibson]

The market allows multiple winners, like multiple garbage haulers. The government wants only one, preferably city run. The result, like in Robbinsdale, choices limited, costs UP not down, and no point complaining to City Hall.

[The Big Stink]

Hiram: If you insist on entering into an "I lose, they win" arrangement for goods or services there are two Latin sayings for this: 1) Cavaet Emptor, and, 2) Non compes mentes.

[Hiram]

"If you insist on entering into an "I lose, they win" arrangement for goods or services there are two Latin sayings for this: 1) Cavaet Emptor, and, 2) Non compes mentes."

I don't actually. I don't think markets are about winners and losers. I think they are about matching buyers and sellers.

"But if not allowed to work, as in education today, as some want tomorrow in day care, the market cannot pick and reward our winners, our great teachers for example."

I see this kind of thinking a lot. When market yield results we like, it's because it has been allowed to work. When markets don't yield results we like, it's because of the intervention of some nefarious force. In reality, markets are not pre-disposed to do much of anything. They are pretty much neutral, and for that reason, avoided by a lot of sensible people.

[J. Ewing]

So, there are "sensible people" out there who never trade their labor for money, or their money for goods and services? How do they live, photosynthesis?

[Hiram]

"The government wants only one, preferably city run."

That isn't quite true, although we might be better off it were. In dealing out contracts, for example, the government often takes care to distribute them evenly, both in political terms, by spreading them out across the country, and in business terms in the way it distributes business among competitors.

I watched Andrew Napolitano on the Daily Show the other night. An extended version of the interview is carried on their website. Andrew argued that government picked winners and losers, and he didn't care for that. But isn't that we do any time we make a choice? To avoid picking winners and losers, we would have to avoid making choices at all, and even that's a form of choice.