Explained by my favorite economic blogger, Megan McArdle blogging at The Atlantic:
One thing that strikes me about the arguments I’ve been having with voucher opponents is just how little they seem to understand how markets work. Markets don’t work because they get it right the first time; they succeed because if at first they don’t succeed, they try, try again.
A public school, by and large, cannot fail. If it screws up, no matter how badly, we will continue pouring money into it. This is particularly true because most of the employees of most systems can’t fail either. They can be atrocious at their jobs, but provided that they are not actually molesting the students, it’s nearly impossible to get rid of them.
Failure, to put it bluntly, works. Failure is nature’s way of telling you “Hey, that doesn’t work!” The American economy is vastly strengthened by the fact that companies are allowed to fail–and also by the fact that our crazy culture encourages us to try things that don’t work.
In the first few iterations, this often looks inferior to a centralized system. Look, the critics say, they sat down and planned it all! Compare that to our messy, fragmented market where half the stuff doesn’t work!
It can take a decade or more before the cracks in the planning appear. The planners, it turns out, didn’t foresee that the world would change, and now the giant, planned system can’t cope.
But the way public schools are set up, they can’t really fail–and so they don’t succeed at the hardest task we’ve given them. The schools are not set up to learn; they’re set up to follow the rules, and to serve their customer base, who are not in the case of poor schools the parents, but the various people who work for the system…
The full post, which I recommend be read in full, can be found here.