The national panic over outsourcing is driving US lawmakers to come up with new forms of protectionism. This is a shame, both for those of us who see some value in outsourcing and for those who disapprove of it. For the protectionist, panic obscures an important American reality: that outsourcing was encouraged in the first place by too much protectionism in a specific US industry: education.
We are not speaking of America's boarding schools or MBA programmes, whose waiting lists include hopefuls from Düsseldorf and Seoul. The problem lies with workaday publicly funded grammar and secondary schools, especially in cities. These are the factories that produce the national workforce. Yet, for the past quarter-century, they have had little competition and have enjoyed a lack of scrutiny that would make Parmalat blush.
The result has been predictable. Schools have blithely accepted increasing inputs - namely, funding - even as the quality of their output has decreased, to the point where students cannot handle Excel spreadsheets, or learn to, and cannot locate Indonesia, or even adopt a polite telephone manner.
Most of the time, the education sector has disguised its failings with a trick so dirty other sectors would not even try it: the open doctoring of industry standards - in this case, the measures used to assess the quality of US schooling. But the truth occasionally seeps out. In 2000, the Organisation for Economic Co-operation and Development produced a study by its Programme for International Student Assessment. The study showed that US high-school students did not read as well as their peers in 14 other developed nations, despite the fact that the US spent more than most OECD nations educating each child. Many of these US high-school pupils go on to college, where their skills improve less than you might expect. All this helps explain why an articulate Indian gets work before a 21-year-old from Toledo, Ohio.
Of course, most Americans do not consider the education industry to be protected, or even an industry. They think about schools with the softer part of their brain that deals with home, pride and community. Still, applying a cold trade analysis to schools goes a long way towards explaining those PISA results.
The first protectionist feature of the US education business is the most obvious: public schools are a monopoly. Over the past decade, isolated voucher experiments have taken place, giving families a chance to select schools. But most families who want education for their tax dollars still have to send their children to assigned schools, or move.
Unions - another feature typical of protectionism - are one reason for the delay in expanding choice. OUS school unions are large - the National Education Association, the biggest, has 2.7m members. They funnel millions to politicians, who in turn sustain the public schools' monopoly by failing to pass reforms to open the market. These unions have never really faced what might be called an Arthur Scargill moment - the sort of threat to their existence faced by Britain's miners' union and their leader 20 years ago. They therefore always manage to convince themselves, and often others, that their work is fine. Germany's poor showing in the PISA study was such a national scandal that the phrase "PISA-Schock" entered the language. But in the US the low American score earned barely a mention.
We also find in US schools a third trait common to protected industries: management that seems to have forgotten its original mandate. Until the 1960s, schools were mostly about producing students who could read to a certain level, get as far as trigonometry in maths if possible, and recount the battle between the Merrimack and the Monitor, two civil war ironclads. In the 1960s, however, educators, courts and lawmakers turned inwards. They made schools into engines of social change: elementary schools became the nation's most important vehicle for racial desegregation.
All these changes came in the name of a good cause, civil rights. But the goal of strong outcomes was lost. The tradition of rigour moved out of the classroom and into the gym. And the promotion of pupils for social rather than academic reasons became habitual everywhere. In US suburbs and towns today, schools are better than in big cities - "pretty good" is the usual description. But even "pretty good" is no longer enough to ensure competitiveness - at least not at the price US workers now demand.
Given this context, you can see why the US education secretary went feral in February and labelled a teachers' union a "terrorist organisation", and why Alan Greenspan, chairman of the Federal Reserve, has taken to lecturing crowds about schools. After all, domestic reforms that educators have complained about lately - President George W. Bush's No Child Left Behind programme, for example - are as nothing compared with the challenge presented by globalisation.
Not that the US will necessarily fail to confront that challenge. One of the wonderful and astounding things about America is the way sheer innovative power has always made up for lack of formal learning. This can be the case again. Besides, all efforts at protectionism collapse sooner or later. Perhaps outsourcing will accelerate the collapse of school protectionism, forcing reforms that generate stronger workers. If so, the more outsourcing, the better.
© Copyright 2004 Financial Times
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