When was the last time you heard someone say that they wished they could move to Detroit in order to enroll their child in Detroit Public Schools?  The fact is, we would be surprised to hear anyone say that.  While there are lots of ways to measure school quality, an obvious one is how many children end up with a high-school education, as this is a key to getting a decent job in today’s society. The graduation rate for the Detroit Public Schools class of 2005, according to a 2009 study by Editorial Projects in Education, a well-respected organization that publishes Education Week, was 37.5 percent.  The national average was 70.6 percent. The average graduation rate for the principal school districts serving the nation’s largest 50 cities was 52.8 percent.  Only two cities, Cleveland and Indianapolis, had lower graduation rates. Detroit Public Schools do not just have a less than satisfactory graduation rate -- they have a terrible graduation rate.

Another way to measure success of any entity is whether or not it is attracting customers. Enrollment of Detroit Public Schools in 1998-99 was 175,653, while today it is less than 90,000.  In a little over a decade, the district has lost nearly half of its student body while statewide, enrollment fell by less than 5 percent. Obviously, there is dissatisfaction with the Detroit Public Schools system.  The problem is not a lack of spending. In the last year for which the Michigan Department of Education has posted data, 2008-09, Detroit Public Schools spent $12,759 per pupil, one-third higher than the statewide average of $9,545. 

There is clearly something wrong with the system by which education is delivered in Detroit.  Every year thousands of Detroit children fail to receive even an adequate despite large amounts of taxpayer dollars being spent in the effort. We should expect from our next governor the leadership necessary to drastically change the structure of Detroit Public Schools so parents find the educational needs of their children are being met.

A basic understanding of economics begins with the fact that people respond to incentives.  As Adam Smith put it in his famous book, An Inquiry Into the Nature and Causes of the Wealth of Nations:

"Man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only.  He will be more likely to prevail if he can interest their self-love in his favor, and show them that is for their own advantage to do for him what he requires of them.  Whoever offers to another a bargain of any kind proposes to do this.

"Give me that which I want and you shall have this which you want, is the meaning of every such offer, and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of.  It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." 

Our current educational system in Michigan (and in most other states) generally relies on a benevolent superintendent, principal, or teacher to provide quality education.  There is nothing in the system that provides an incentive to produce quality education in the same way that the market system produces auto repair services, iPods, or any of the myriad goods and service we use every day.  If you fail to make a product that consumers value more than the cost of the resources used up in making the product, you will make losses and go bankrupt. Customers leave K-Mart for Wal-Mart if K-Mart can’t meet the customer’s needs and expectations. 

In our public educational system, if you are a very good teacher, or principal, you do not get paid more, you do not expand your school—generally you don’t get rewarded based upon how you perform in meeting the needs of your students.  This is not to say that you will never find a benevolent teacher, principal, or superintendent who does an excellent job just because they desire to please people.  You will get some excellent teachers and schools.  But the system itself does not reward productive behavior and one result of that is Detroit Public Schools has not excelled, nor even done a satisfactory job, over a very lengthy period of time.  When only a third of students who enter high school finish in four years despite spending a third more than the state-wide average per pupil you have evidence that a different system is needed.  It is well past time to move Detroit Public Schools from a centrally planned monopoly to a competitive system that rewards producing the education that parents desire for their children. This will require some innovative thinking and political skill, but the future of thousands of our youth depends upon it.

This article originally appeared in The Michigan View  (http://themichiganview.com) on July 15, 2010.