One of our time-honored traditions that has become part of our culture is that competition is good. Americans have an antipathy to monopoly. We believe that markets should be open and accessible in order to spur innovation.
According to Wikipedia, competition law has been around since the Roman Empire. Here in the U.S., competition law is better known as antitrust law. Antitrust law is fraught with complexity, with problematic attempts by regulators to undo the damage that is inflicted upon the marketplace by government policy gone wrong.
That said, one of the most famous antitrust cases in American history involved AT&T – a.k.a. “Ma Bell.”
My generation grew up referring to Ma Bell as “the phone company.” The irony of the case was that AT&T was a government-sanctioned and regulated monopoly (is there any other kind?).
In 1974, the political winds changed and the Department of Justice initiated antitrust actions against Ma Bell. The company was broken up into smaller regional companies and the markets were opened up to allow for competition. The resulting companies were called Regional Bell Operating Companies (RBOCs) or “Baby Bells.” New companies were formed to compete with them and paved the way for innovation.
Another wave of competition came from long-distance phone companies which dramatically reduced prices. Fast forward to today, we now have a multitude of choices with regard to phone service: landline service, an internet-based phone service (VOIP) or a wide range of choices with regard to cell phone service providers. The onslaught of technological innovation spurred by the demise of the AT&T monopoly has been nothing short of breathtaking.
In competitive markets, you can shop around for insurance, phone service, automobiles or toothpaste. One area where we are prone to make an exception is education, particularly on the primary and secondary school level. When it comes to higher education, there is still a degree of competition and choice despite considerable intervention by government. The student/consumer can make cost/benefit decisions based on quality, availability and cost. There is a college for nearly every level of affordability, ability and worldview.
With regard to primary and secondary school education things are very different. We have a “single payer” system that is funded by tax dollars and in West Virginia it is becoming clear that we are not getting our money’s worth. By now, nearly everyone is aware of the audit of the West Virginia state school system done by Pennsylvania-based consulting firm Public Works LLC published in January of this year. The audit stated that our school system is top heavy and inefficient; that we have one of the most highly regulated systems in the nation; that we have too much administrative overhead; that we have cumbersome laws that do not allow for innovation. It also said that there is essentially $90 million per year of waste in the system.
According to Article XII of The Constitution of West Virginia: “The Legislature shall provide, by general law, for a thorough and efficient system of free schools.” We all know that our schools are not “free.” Someone pays for them. As for “efficient,” the recent audit reveals that not to be the case. Because our school system has no meaningful competition, there is no incentive or urgent catalyst for efficiency or innovation or to even respond to the people it is supposed to serve. After nearly a year – still no response from the state board regarding the audit!
In West Virginia we have one of the most centralized school systems in the nation. In nearly every other state, schools are administered on the local level – by the county or municipality. Perhaps it is time to break up the West Virginia school system into local authorities and allow for local control, which, incidentally, may be the only way to solve the locality pay issue. Then we should look at ways to create school choice. Competition spurs innovation and allows those directly involved to influence outcomes.
With regard to education it could empower parents to be able to make the right choices for their children.
— Elliot Simon writes from Jefferson County.