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Source link: http://archive.mises.org/11034/the-market-for-teaching-and-learning/

The Market for Teaching and Learning

November 14, 2009 by

After a century of being told that education is a public good that can’t be efficiently provided by private means, and that really the state must obtain and retain the monopoly to the service, some people are now scandalized to find that there is indeed a thriving marketplace and that the internet is making it come to life. This NYT story is about regular teachers who make extra money selling their services online — and being investigated and having their ethics questioned as a result.


David Bratton November 14, 2009 at 10:23 pm

The Teaching Company (http://www.teach12.com) has been doing something similar since the days of VHS tape.

austrian November 14, 2009 at 11:16 pm

Gonna have to disagree with this one. I have never heard an economist argue that education is a public good, and it certainly does not fit the standard textbook definition of a public good (nonrival, nonexcludable). That would be the definition the traces to Samuelson. I have heard economists defend public education using moral arguments, positive externality issues and welfare concepts. I have also never heard anyone say that the state should have a monopoly on it. Everybody knows that there is a market for books, textbooks, paper, pens, maps, science experiment materials, private tutors, private schools, private universities, et cetera. Even the people who are very aggressive about public education spending tend not to support the outlandish idea of having a government monopoly over education. The typical position on education is to support both publicly subsidized resources and multiple types of private markets happening simultaneously, which is what we see described in that article.

Prashanth Perumal November 15, 2009 at 1:23 am

@ austrian

Searching “education a public good” on google does seem to get me a lot of relevant results.

Staring at Wheat November 15, 2009 at 2:46 am
austrian November 15, 2009 at 2:53 am

Many people use the colloquial expression “for the public good” to refer to anything that they believe helps other people. That could correspond to a moral philosophy, welfare theory or positive externality argument.

Also many people, but not those who write econ textbooks, use the expression “public good” for everything that the government does provide, or in their opinion should provide.

I’m sure you’ll get many hits on google that use the words “public good” together with public education, but they are not using the term the way the economics book would.

The economics definition of a public good, with lineage to

Paul Samuelson, The Pure Theory of Public Expenditures, Review of Economics and Statistics, 36(4): 350-356, 1954

is the same one you’ll find in econ textbooks, both by authors who like and who dislike free markets.

jeffrey November 15, 2009 at 5:51 am

Whether or not education qualifies under one of the many definitions of public goods, Jack High thought the arguments on education were substantial enough to be included in the Cowen edited volume of readings on public goods http://books.google.com/books?id=a1IZuGvXxTMC&lpg=PP1&pg=PP8#v=onepage&q=education&f=false. See also holcombe http://mises.org/journals/rae/pdf/RAE10_1_1.pdf

In any case, my point is to draw attention to the strange opposition to teachers who find a market value for their otherwise tax-funded services.

Saul Frugman November 15, 2009 at 5:55 am

for the public good: for 51% at the expense of 49%

democracy: 51% can murder and steal from 49%

federal reserve: a necessary part of the free market; it’s federal and has a reserve

free market: the economic system we have now

central banking: the opposite of central planning

regulation: preventing competition

deregulation: what caused the housing bubble

printing press: what you can use to make everyone richer instantly

Shay November 15, 2009 at 10:20 am

It must be noted that these teachers are still operating in a market created entirely by the state (copyright).

dewind November 15, 2009 at 11:23 am

“Even the people who are very aggressive about public education spending tend not to support the outlandish idea of having a government monopoly over education.”

What? If you mean that because it is not illegal to educate privately it is not a monopoly then I guess you are ‘right’.

A monopoly, in libertarian terms, are goods and services that have a direct partnership with government. Where their income is derived from subsidies or taxes. The education monopoly is second only to the military.

Given that logic, one might as well support government healthcare since it is clearly not a ‘monopoly’ because it won’t explicitly ban private care.

Sean A November 15, 2009 at 11:52 am

-The article seems intent on highlighting the lavish spending of the extra profits these teachers are making, such as a trip to Rome, Kitchen decorations, ext…. The nerve of these teachers.

-”To the extent that school district resources are used, then I think it’s fair to ask whether the district should share in the proceeds,” said Robert N. Lowry, deputy director of the New York State Council of School Superintendents.

Really???? Perhaps if the district was actually financing these “resources” as opposed to the taxpayers, this moron might have half an argument.

Fephisto November 15, 2009 at 12:17 pm

“deregulation: what caused the housing bubble”

Why do people say this? I have yet to find good reasoning other than an emotional appeal.

IanW November 15, 2009 at 2:19 pm

Some definition of terms would be useful. What forms of education, for whom, constitute a public good?

Bruce Koerber November 15, 2009 at 4:30 pm

Education Is Available To Those Who Want It!

At what point is continuing education the best means of individualizing education?

Whenever that is, that is also the point where alternatives need to be available. In a free market society the alternatives will be many and varied.

Imagine people getting hired because they are passionate about a subject rather than simply because they have a piece of paper with the name of an institution on it. Then they will enter a process where they will be evaluated and further trained.

Education taken out of the hands of the ego-driven interventionists (government mandated schools) will be made available by the entrepreneurs since they are the ones actively seeking solutions to problems and since they are the ones actively seeking ways to get all types of information into the hands of those who are interested.

Just like with acquiring a very specialized training needed in certain specialized fields, acquiring an education of all kinds will be directly attributable to the practice by individuals of the independent investigation of truth.

Russ November 15, 2009 at 5:37 pm

Fephisto wrote:

“Why do people say this? I have yet to find good reasoning other than an emotional appeal.”

I believe that many people believe that if derivative trading were more tightly regulated, none of this “recession” would have happened, hence unregulated capitalism is to blame. Never mind that none of this recession would have happened if the government had not been actively encouraging derivative trading through Fanny Mae and Freddie Mac, etc.

In short, the government causes a problem, blames it on too much market freedom, thus having an excuse to call for more control of the market, so they can cause more problems. As per usual.

Eric November 15, 2009 at 8:07 pm

Russ wrote:

“In short, the government causes a problem, blames it on too much market freedom, thus having an excuse to call for more control of the market, so they can cause more problems. As per usual.”

I think it’s even more insidious and systemic than this. The government encourages a bubble. It bursts. They yell and scream in an illogical appeal to emotions that freedom caused it so… they can create regulations that further restrict our freedom and increase their power. It’s like a ridiculous government power feedback loop, a statist self-fulfilling prophecy of sorts.


Eric Evans

T. Ralph Kays November 15, 2009 at 8:51 pm


“deregulation: what caused the housing bubble”

“Why do people say this? I have yet to find good reasoning other than an emotional appeal.”

If you accept the currently used definition of “deregulation” then it is a true statement. If you understand that “deregulation” actually only refers to “a change in regulation” then it is understandable that this “caused” the housing bubble. At least in the sense that had the regulations been different then the bubble may very well have been in a very different part of the economy.
Regulations are always instituted to benefit some people at the expense of others, whether they be consumers, the poor, or domestic producers. Regulations are changed for the same reason, to benefit someone else and because of political influence.
Fractional reserve banking, deficit spending and the actions of the federal reserve created massive amounts of new money that had to enter the economy somewhere, of course the existing regulations would shape where in the economy this money would manifest itself. The government through regulation could change where the disaster would manifest, but not whether there would be a disaster.
This is a perfect example of Mises point that it is not possible to have an economy part way between freedom and socialism. All points between the extremes are inherently unstable. It also illustrates the fact that there is no way to achieve freedom through ‘baby steps’. We can not get back to a free market by changing a little here and a little there.
The choice is freedom or slavery.

Matt November 15, 2009 at 9:50 pm

This story reminds me of the teacher who sold advertising space on exam papers in order to cover the costs of printing them.

Here: http://edition.cnn.com/2008/LIVING/12/03/teacher.ads.on.tests/index.html

matt November 15, 2009 at 11:05 pm

From the article:

Joseph McDonald, a professor at the Steinhardt School of Culture, Education and Human Development at New York University, said the online selling cheapens what teachers do and undermines efforts to build sites where educators freely exchange ideas and lesson plans.

“Teachers swapping ideas with one another, that’s a great thing,” he said. “But somebody asking 75 cents for a word puzzle reduces the power of the learning community and is ultimately destructive to the profession.”

What he does not understand is that probably most of this lesson-sharing would not even go on if it could not be profited from. It’s nice to think of all the teachers devoting so much of their (very sparse) free time to exchanging ideas with others about how best to teach, but it’s probably just not worth it to them. On the other hand, if someone thinks they made a good lesson and want to let others use it, while someone else doesn’t want to “reinvent the wheel” each time they make a new lesson plan, as one teacher put it, this really benefits both of those parties, and the kids with the second teacher perhaps end up with a better lesson than they would have gotten otherwise.

I wonder if this professor is also against teachers teaching out of textbooks written by someone else. I wonder if he uses textbooks written by anyone else in any of his classes?

T. Ralph Kays November 15, 2009 at 11:08 pm


Beautifully said!

Gene Berman November 16, 2009 at 4:16 am


You err (and, in a certain sense, seriously) in your interpretation of Mises’ teaching on the subject of govenment intervention in the market.

What Mises explained was that, because intervention was unsuccessful at achieving the purpose for which designed, interventionists would either abandon the intervention or (more likely) seek to “fix” its failure by increasing (“plugging loopholes,” regulating allied inputs, etc.). The latter course constitutes the gradual (or not-so-gradual) process leading from freedom (or relative freedom) to all-round control. (The “Road,”– explicated by Hayek–”to Serfdom.”)

But the reverse is also true. Each measure freeing one aspect of the market from control creates an identical pressure (to re-institute the foregone control or expand the area not subject to control). In one direction, whether by large or small steps, lies the spectre of totalitarianism while, in the other (also whether by large steps or small) lies the goal of freedom.

Your interpretation suggests that only major, even fundamental or “revolutionary” change can possibly
lead to the goal. Mises said (and Austrian econ
concurs) just the opposite: each and every step is not only positive but, itself, prepares and illustrates the desirability of taking the “next” step (whatever that might be) toward freedom.

I emphasize this (otherwise seemingly small) matter because it has important bearing on the mind-set and disposition of all those desirous of the shared goal of greater freedom: every move in the right direction (even one so small as merely a forestalling of one in the wrong direction) is a victory: “half a loaf is better than none,” and, truly, even every “slice” counts. And the battles that must be fought to achieve victory (large or small) are only secondarily contested in the political arena: they are, first and foremost, contests that must be waged in the minds of individual men, itself a long, difficult (and never-ending) process.

Gene Berman November 16, 2009 at 5:35 am


The matter you raised is illustrative in another and different sense: it actually tends to highlight a fundamental dichotomy in world view in which Austrian economists and their political counterparts (chiefly libertarians, whether in name or sympathies) are, more or less, arrayed against MOST of “the rest,” but all of whom, whether they realize it (or would like it if they did) or not, are, more or less aligned with the thought (no matter how contradictory) of Karl Marx’ brand of utopian socialism. Marx presumed to know the course history was “bound” to take, regardless the actions of men, either as individuals or groups. The “inevitability” of the “coming of socialism” was, thus “a done deal”; being “inevitable,” any actions of men to bring about the result, whether in large or small steps, were, presumably, superfluous. But Marx was not stupid–at least not stupid enough to believe his own propaganda: he well understood that changes he hoped to bring about in various countries could only be achieved throught the marshalling of the forces of very great masses of men: the coming of socialism would be brought about through “class struggle” in which a dominant force–the proletariat–would violently usurp all authority and their elites institute the “classless” society in which everybody (or nobody) would be a proletarian.

In believing that men and their society are ultimately controlled by forces beyond their (except his own)
comprehension, Marx essentially aligned himself with the (by far) majority view of the world in which mens’ affairs are ultimately controlled from areas quite outside the human orbit of thought and action. Much of such thinking is, frankly, religious or theological (including superstitious) but a similar mind-set is on display quite prominently in the theory (and practice) of nearly the entirety of the economics “profession,” in which numbers, symbols, equations, and curves have, literally taken the place of incantation and expert interpretation of the divine. All of these serve the same purpose as they served for Marx (and countless other charlatans before and after): to forestall the “thinking-out” of various problems by methods readily available to reason and the formation of groups of followers and adherents whose numbers and resources may be employed (politically, financially, socially) to those “leaders’” benefit.

When one understands these matters, it becomes extremely clear why, over 60 years ago, Mises walked out of the meeting of the Mont Pelerin Society, calling Milton Friedman a “socialist.” Only two possibilities exist in that regard: Friedman understood (and agreed), in which case his entire works are example of “false front” and, more or less, deliberate “con”–or, he did not understand, in which case he must have been considerably less bright than reputed (I incline toward the former explanation).

geoih November 16, 2009 at 6:46 am

It all sounds like a great idea, but I predict copyright law suits are on the way (i.e., school districts claiming copyright over materials created by their employees).

T. Ralph Kays November 16, 2009 at 12:30 pm

Gene Berman

I think you were answering my post not Fephisto.
My understanding is that Mises said that a mixed economy was not possible, that it must eventually move to complete socialism or return to a free market. If I am wrong about that I apologise in advance. If what you say is true then logically a mixed economy would be entirely possible, one could go to any point of intervention in the economy and just stop.
The idea that a gradual path back to freedom will work is flawed because it ignores that once you are in a mixed economy the policy of intervention is necessarily already accepted. As I said, regulations or interventions are embarked on, not for their own sake, but to benefit some people at the expense of other people. You are assuming that a small step towards freedom won’t hurt anyone, that it will be a clear gain for everyone. A move in either direction necessarily involves hurting someone in order to benefit someone else. Remember, the propriety of intervening as a concept has already been accepted in a mixed economy. When the people who formerly benefited from a policy of intervention lose that benefit they will not be happy and they will argue, to a society that has accepted some regulation as appropriate, that the deregulation was harmful and not beneficial. I am talking here about the actual beneficiaries of regulation, not those that were identified by the politicians as the intended beneficiaries, they are only occasionally the same.
Also you are mistaken in assuming that small moves towards freedom will always lead to an improved situation. The situation in California a few years back when they “deregulated” energy is a great example. In truth they only removed some regulations and left others, a baby step towards freedom. Complete chaos resulted, because that small step towards “freedom” unexpectedly gave some participants in the energy market an overwhelming advantage over those still restrained by regulations. Rolling blackouts became the norm.
To sum up, once you are in a mixed economy, small steps towards freedom will only work as a path to total freedom if the people who lose their previous benefits of intervention are politically powerless. This condition must be repeated almost endlessly to achieve freedom, a near impossibility. Further, it is not proven that every small step towards freedom will always be beneficial, some steps towards freedom will in fact cause great harm.

pjsw November 16, 2009 at 12:57 pm

I didn’t see this this post in my RSS reader until after I blogged about the same story myself.

If anyone is interested:

iawai November 16, 2009 at 2:28 pm

Regardless of whether this is good, bad, or how it is characterized, the key is that coercion has been used to artificially restructure the means of education.

These “bleed outs” of free enterprise from the system illustrate what values exist on the market that are either created as a response to coercion or remain as needs despite the coercion.

Examples like this are what need to be collected and assembled as evidence of what we propose as solutions without a coercive government: Enterprising individuals who can give property or service to others to meet mutual needs.

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