The Public Policy

Centralized Cappuccino

What if coffee shops were run like schools?

By 11.12.06

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Some parents cried, some screamed, and one man had to be wrestled out of the room by security guards. It sounds like a school hostage crisis, but that's actually a description of a Seattle School Board meeting last month.

The Board was considering whether or not to close nine city schools, and the parents and students who would have been affected weren't especially keen on the idea. In the end, the closure plan was suspended, but it is almost certain to resurface given the district's ongoing budget woes. When it does, the tensions will resurface along with it.

These sorts of battles -- which go on all over the country -- are endemic to the way we organize schools. Run the same way, any other field would generate just as much conflict.

Imagine what would happen if coffee shops were run like schools. Let's say that state and local officials granted Starbucks a "public coffee" franchise, paying it $10,000 annually per customer (about what the public schools spend per pupil) to keep us all in caffeinated bliss.

It would be the espresso shot heard round the world.

Not everybody likes the same brand of coffee, and the decision to let Starbucks give its product away for free would drive most other suppliers out of business. Coffee drinkers would get mighty steamed about that. Aficionados of competing shops would demand the right to spend their share of the coffee franchise money on the baristas of their choice.

Of course, if things played out the way they have in education, these dissenters would get nowhere. In the end, they would be forced to cave and join the tax-funded coffee queue at Starbucks, or foot the bill at their preferred shops and kiss $10,000 a year in free coffee goodbye.

But that would be just the beginning. Once Starbucks had a guaranteed source of tax revenue, customer satisfaction would fall by the wayside as a motivating principle of its business. After all, it would get paid the same amount whether or not folks were served well or promptly. To improve its bottom line it would no longer need to focus on consistency and innovative new products. So it would look for ways to cut services.

Which brings us back to school closures. An official "public coffee" version of Starbucks would soon start thinking about closing down and consolidating shops to lower its costs. Occasionally customer complaints might delay that process, as they did at last month's Seattle School Board meeting, but any such victories would be fleeting.

In the early 1930s, there were about 130,000 school districts in this country. Today, there are barely 14,000, despite massive growth in the U.S. population. Consolidation at the school and district level has been relentless, and it would be no different with "public coffee."

Another cost-saving move that Starbucks might adopt would be to eliminate customers' ability to choose even from among its own shops -- just as the Seattle School Board is considering eliminating its already limited district choice program. After all, if customer satisfaction doesn't affect your bottom line, why allow customers to gallivant all over the city? Much more efficient to assign customers to a single shop, whether they like it or not.

Of course, anyone actually advocating a "public coffee" monopoly would need round-the-clock police protection. We all understand that it would be a terrible idea. But we need to acknowledge is that it is also a terrible idea in the far more important area of education.

There is no question that education has an important public dimension, but that does not mean that it is best provided through a government-run monopoly. On the contrary, it's time we realized that the consumer choice and market incentives that have made America a coffee-drinker's paradise over the past decade would do wonders for our children's education, as well.

In a free education marketplace, popular, well-managed schools would grow, while unpopular, poorly managed schools would close. There would be no politburo-like board threatening to merge schools together or close them down for its own budgetary reasons. The incentives of that marketplace would encourage innovation and a variety of options to cater to the diversity of families' demands. Children would not be treated as interchangeable widgets to be processed through a single official system based on their age, or be shuffled around from one school to another just to make someone's numbers work out.

Obviously we would need to ensure that everyone had the resources to participate in that educational marketplace, but that would be easy to do. It is not a new idea. The Dutch, for instance, have had a nationwide public and private school choice system for nearly a century.

Public education is a set of goals and ideals, not a particular institution. And there is a far better way to fulfill those goals and ideals than our current system of central planning.

Andrew J. Coulson is director of the Cato Institute's Center for Educational Freedom, and author of Market Education: The Unknown History. He blogs at Cato-at-Liberty.org.

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Andrew J. Coulson is Director of the Cato Institute's Center for Educational Freedom, and author of Market Education: The Unknown History.