Today I heard a brief interview on the Cato Daily Podcast with economist John Merrifield. Merrifield is the author of a new Cato Policy Analysis which demonstrates that none of the essential ingredients of free markets exist in any of the US experiments. He is correct — but I had not focused on that fact until he raised it. Periodically we hear of some new study reporting that “we proved markets don’t work that well in education”. That’s rubbish, even advanced school choice systems like the Netherlands are nothing like real markets.
…The most intensely studied programs lack most or all of the key elements of market systems, including profit, price change, market entry, and product differentiation— factors that are normally central to any discussion of market effects. In essence, researchers have drawn conclusions about apples by studying lemons.
Merrifield suggests that for now, in the absence of any real world education markets, that
…economists should look to simulation models, indirect evidence such as outcomes in similar industries, and school systems abroad that enjoy varying degrees of market accountability.