Home > Uncategorized > The Closing of New Orleans Charters Evidence that the Invisible Hand Makes Services Disappear

The Closing of New Orleans Charters Evidence that the Invisible Hand Makes Services Disappear

October 29, 2018

In a blog post written yesterday, Diane Ravitch describes how over 670 school children were left without a school when a private charter went out of business…. oh, and only two of those children were white and only 5% did not qualify for free and reduced lunch. This just happened in New Orleans, the city where Hurricane Katrina opened the door for wholesale privatization and, supposedly a “miracle” that resulted in improved performance in the public schools.

Much of the post deals with debunking this so-called miracle, but no where does Ms. Ravitch point out the fact that once a service is commodified, the “invisible hand” of the marketplace comes into play and, according to economic theory, everyone will benefit because efficient and well run enterprises will rise to the top and poorly run businesses will be forced to close. But here’s another reality of economic theory that reformers conveniently overlook: the invisible hand of the marketplace creates far more options in marketplaces where there are large sums of money and has no incentive to provide equity. The result is that those who reside in poor neighborhoods and poor towns do not have the same choices and those who live in affluent neighborhoods and communities.

And here’s a sad consequence of the marketplace paradigm: As long as those living in affluence do not have to worry about the impact of the marketplace on their neighborhood schools and as long as they have a wide range of choices when it comes to buying food, clothing and shelter, they can buy into the idea that EVERYONE has that same array of choices and, therefore, endorse the notion that “choice” is a fair means of leveling the playing field.

Schools and public services cannot be commodified… for when they are, the inequities that exist in options for housing, food, and shopping will occur in those services.


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