Trust in Markets
Charge 'em for the lice,
Extra for the mice,
Two percent for looking in the mirror twice!
Here a little slice,
There a little cut,
Three percent for sleeping with the window shut!
When it comes to fixing prices,
There are a lot of tricks he knows.
How it all increases,
All those bits and pieces,
Jesus! It's amazing how it grows!
This little ditty by the villainous Thenardier from Les Misérables nicely illustrates people's mistrust of profits. Even though our society's present development and prosperity are the direct result of capital markets, the public still generally views private enterprise as suspect. In the education sphere, this deeply-rooted mistrust is expressed in terms of worries that profit-making schools will exploit their students, scrimping on the quality of their education so that the owners can afford fancy cars and trips.
What people forget is that non-profit ventures have built-in inefficiencies (like armies of bureaucrats, waste and corruption, and high salaries and benefits) that result in higher costs. If a private businessman can reduce these costs and run a more efficient operation, he can offer the same product or service at a lower price and still make a profit.
As Adam Smith wrote back in 1776, "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the publick good."
The spectacular failure of Communism should have settled this question once and for all, but still people persist in thinking in terms of greedy capitalist scoundrels who charge exorbitant prices for shoddy merchandise. Of course, it is true that such practices may result in large profits in the very short run, but before long the customers stop buying. Tellingly, Thenardier was bankrupt by the end of the first act.
In the long run, it is in the self-interest of successful businessmen to offer high-quality products and services at a low cost - so that the profits continue to roll in over many years. Just as the profit-making motive has led to better restaurants and cars, so too does it lead to better schools.




Did I not say privatization is the real agenda. Lets trust the education system to the folks who brought us “The Great Recession” brilliant. Diane Ravitch has the solution and the answer to this failed direction.
http://www.educationnews.org/ednews_today/83950.html/