The Free Market, Public Education System and Profit Incentives
Politics / US Politics Jan 18, 2010 - 04:32 AM GMTHistorically, it has long been a self-evident truth that the most efficient, productive, and fastest, way to produce goods and services to best serve the consumer desires is to allow a entity to have a profit incentive i.e., unhampered markets. Without such an incentive all three (efficiency, productivity, and speed) will deteriorate and will become submarginal i.e., public education, Amtrak, and the U.S. Postal Service to name just a few. In many cases without a profit incentive, the only incentive today is the bailout incentive i.e., Fannie and Freddie, etc.
If entrepreneurs are not allowed to, from free market business activity gain profits when they have the foresight to take advantage of it and to incur a loss when their judgments are proven faulty, it becomes impossible to decide upon how to best serve consumer desires. In a free market, if consumers see no gain from buying goods and services from one entrepreneur, they have the right to buy from another. If their desires are not meet businesses will more than likely go bankrupt or incur losses and produce less and the land, labor, and resources which would have been used up unprofitably, will become available for another entrepreneur who may serve consumers better than one who cannot. To survive you must be the fittest!
Government thinks otherwise. Advocates of public education fail to realize that education was far better before government believed they had to take control it. Literacy rates were much higher from privately schooled children than publicly school ones, and still are. Many presidents of the past promote public education, yet hypocritically their own children attend private institutions. All one has to do is look at the fault lines and they will realize that Chinese and Indian children are far better equipped going into college than American children are. If only the education system had a profit incentive in which meeting consumer (in this case, children and their parents) desires, schools can compete with one another and tout that “my school offers better education than another”. If competition is allowed, institutions will go out of their way to insure quality education with an affordable price; otherwise consumers will be happy to shop around, which gives all the more reason to offer better services. Since parents hold quality education for their children close their hearts, a firm offering education would be particularly sure to offer better quality than another. Checks and balances do in fact work.
Many would worry that the free market education system would turn into a monopoly, profit greedy business. This wouldn’t be possible under a free society, monopolies theoretically can only exist with government aiding them, and if education becomes unsatisfactory, the parents could turn to another institution. The possibility of a one firm providing all the education is not likely. There is no way of telling if public education funds are efficiently put to use due to no profit incentive. If the schools aren’t properly financed, throwing more money at it doesn’t solve much, and how much would to too much or too little be? The margins for wasted taxpayer money are incalculable. Under private institutions, they will have to offer and maintain quality education first before major profits are realized, rather than public education with no incentive, rather forcing children to attend.
Money is not the root of all evil. It’s surprising that many people fall into this type of deception; these same people would have us also believe that guns kill innocent children or that since money was created by men, all men must conclusively be evil also. Money certainly isn’t “everything”, but it is quite important. If there ever were another better way to produce goods and services in more efficient, productive, and speedier manner, the profit incentive will fall to the way side and a new system will emerge, so long as government does not suppress it. If one reads history thoroughly, they will find out that many problems of the past are present today.
By Viresh Amin
viresh_amin89@hotmail.com
An Austrian economic, Libertarian, and Anarcho-capitalist writer.
© 2010 Copyright Viresh Amin - All Rights Reserved
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