Sunday, February 11, 2007

Adam Smith on Paying Teachers

“Measuring a Teacher’s Worth” by Bryan Prior (9 February), a Dutko Fellow serving as an intern at the American Enterprise Institute (from - a magazine of ideas – online):

Brian Pryor writes a case for revaluing teachers as a prelude to raising their pay:

“In an age of statistical manipulation and easy punditry, Adam Smith remains a trustworthy guide.

Despite his laissez-faire theories and his faith in the invisible hand, Adam Smith understood that a certain amount of education, provided by the government, was necessary to prevent the decay of the basic virtues upon which the perpetuation of democratic civilization depends.

It’s worth remembering that well before The Wealth of Nations, Adam Smith wrote The Theory of Moral Sentiments, a work that reveals his deep respect for education, wisdom, and virtue. But even at his most laissez-faire, Smith recognized the importance of education to a sound society, writing in The Wealth of Nations of the common laborer:

"His dexterity at his own particular trade seems … to be acquired at the expense of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall unless government takes some pains to prevent it." [Wealth of Nations, Book V]

The column’s authors are right to criticize the way teachers are paid—based on seniority, not merit or performance. But prescribing a halt to modest raises in teachers’ already meager salaries is not the remedy. Ideally, the entire system of teacher compensation would be revamped to make pay more competitive. Given the clout of teacher unions, there’s no telling how long such sweeping reform would take. But until Smith’s economic theory hits America’s public schools, we ought to pay the utmost homage to the value Smith placed on education and respect teachers’ degrees, certifications, and noble pursuits—and thus their pay.”

“his laissez-faire theories”

He did not believe in laissez-faire (he never mentioned the words, and taking his work as a whole he regularly advocated measures severely in breach with laissez-faire, as understood by some French advocates, and, later by James Stuart Mill, in 1849.

“and his faith in the invisible hand”: “even at his most laissez-faire”

He cannot be said to have had ‘faith’ in ‘the invisible hand’; it was a metaphor he only used once in Wealth of Nations for a process which he had just explained clearly without any mystique that needed ‘faith’ to understand. He also gave many more numerous examples of the consequences of actions by people that did not lead to beneficial outcomes, compared to a few that did.

“the importance of education”

Nothing that Smith wrote on education did anything other than emphasise its importance to society and the need for people to invest in human capital.

“Given the clout of teacher unions”

These constitute the major constrain on raising both education standards and the pay of teachers. Teachers guaranteed their income no matter what they do up to, or more correctly down to, poor standards are part of the problem; paying them solely on the basis of being on the pay-roll for a length of time is not conducive to good practice. Smith was specific on this point. With job guarantees, seniority and parents disenfranchised from acting a check on quality, without adequate choices, teachers have no proper incentives to perform well, and every incentive to be indifferent, as many, Smith found, were (and not all that much has changed).

"respect teachers’ degrees, certifications, and noble pursuits—and thus their pay"

'Degrees, certifications, etc.,' are measures of inputs into teaching and are not adequate measures of outputs, especially when all teachers have them, the absolutely poor teachers, the laziest and the incompetent, as well as the best by all output measures, including their effect on raising their pupils' performances from wherever they start from with them. For pay, measure outputs, not inputs, otherwise just getting a job and staying there long enough qualfiies someone for higher pay.

Smith favoured a revenue system that included both government (i.e., tax payers) funding and some contribution from parents, including the poorest who would be charged pennies. He also favoured choice. The Unions hate ‘vouchers’ because this would break teacher-oriented choice, which amounts to ‘no choice’, but vouchers are consistent with Smith’s views. With teacher run unions in charge, with almost a veto on change, it is not a question of how long it will take for reforms to take effect. They won’t take effect at all.

There are enough schools of all kinds in the West for experiments to take place in all neighbourhoods; let schools funded the way the teachers unions prefer compete with schools funded the way some parents prefer (in all their forms), and let the best emerge to demonstrate their credentials against the worst.

That is the way we should test all proposals for reform.

[Read Bryan Prior’s article at:]


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