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Will Buffett’s billions transform education or be wasted?

By Bob Williams

Warren Buffett is giving more than $30 billion to the Bill and Melinda Gates Foundation, which has education reform high on its list of priorities.

How the Gates Foundation invests these new funds can either transform education or do nothing to improve what has become a crisis of low student achievement in our nation’s public schools. The Gates and Annenberg foundations have already invested more than $2 billion trying to improve public schools, with no appreciable return on their investments.

The performance of our public schools has actually gone down since the federal report entitled “A Nation at Risk” was published in 1983. Today, three out of every 10 students who start high school do not graduate on time. Among minority students, graduation rates are much worse.

Many students earn a diploma only to discover they aren’t prepared to enter the workforce or college. Businesses are struggling to find employees qualified for available jobs.

How is this possible with all of the money being invested in education from both public and private sources?

Quite simply, our current public education system is designed to support and expand itself rather than meet the individual needs of students in a rapidly changing world. It does not respond to parents, students and teachers, but to politicians, interest groups and union officials. Reforms that do not fundamentally change this structure and put the focus back on students are destined to fail.

I would offer the following advice for the Gates Foundation’s investments in public education:

First, do no harm.

Albert Einstein is often credited with saying: “Insanity is doing the same thing over and over again and expecting different results.” No amount of Gates/Buffett funds will solve the K-12 education crisis if invested in maintaining the current public-education bureaucracy.

Nationwide, taxpayers already spend more than $400 billion a year on K-12 education. Investing additional billions of dollars in a broken system will not get the job done. Monopolies are bad for consumers, and government monopolies (in which everyone is required to pay for a service whether it is well-delivered or not) are even worse. There is simply no incentive to pursue excellence and efficiency.

The structure must be changed to put parents and students in the driver’s seat and empower them to choose the educational services that best suit their individual needs.

Second, invest in market-based education reform.

Both Gates and Buffett earned their fortunes through brilliant entrepreneurial work. They understand the importance of pleasing their customers by producing a quality product at an affordable price. Thus, they should understand why an education system in which customers (parents and students) have little control over the services they receive does not have a built-in incentive to pursue effectiveness and efficiency.

The Gates Foundation could revolutionize education by choosing several large school districts (or a state) in which to offer parents the opportunity to send their children to the school of their choice – public or nonpublic. Schools would then have healthy incentives to compete for parents’ business by offering the best educational services to students. Everyone would benefit from this competition.

The Gates Foundation should also consider investing in a research project to compare the performance of the public school system to that of the U.S. military. Both are government monopolies, yet the military is, arguably, far more successful than the school system.

Before the research even begins, we know that the military emphasizes choice, strong discipline, high standards and rewards for excellence. Our school system does not emphasize these principles.

Also, higher education – where dollars follow students to the institutions of their choice – should be the model for ideas about how to reform K-12 schools.

The choice is clear: The Gates Foundation can continue to invest millions of dollars in small modifications to the current public school system that have little affect on student learning, or it can invest in market-based solutions that have potential to improve student learning across the nation.

Which will it be?

– Bob Williams is president of the Evergreen Freedom Foundation (EFF), a private, nonprofit, public policy research organization in Washington state. EFF's mission is to advance individual liberty, free enterprise and limited and accountable government.

The Bluegrass Institute is an independent research and educational institution offering free-market solutions to Kentucky's most pressing problems.

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