The primary purpose of any education system is to develop the human capital of the next generation so that it joins the ranks of the workforce and improves lives; doctors heal people, artists create beauty, musicians entertain us, designers clothe us, engineers design bridges, construction workers then erect those bridges, and computer programmers make our lives more productive. Lately, I have been thinking about the education system a great deal, especially when it comes to public schools versus private schools.

The education system in the United States is working very well for some students, and utterly failing other families.
My Four Beliefs About Education and the Education System in the United States
I have four primary beliefs when it comes to education and the education system:
- Every child, not just the children of the rich, should have a chance at being taught by the best teachers.
- The best teachers should have an opportunity to be paid extremely well, just like corporate lawyers or doctors. This would put their salaries and bonuses in the range of $100,000 to $500,000 per year.
- Ineffective teachers should be fired regardless of tenure, experience, or education credentials. No one has a “right” to teach any more than you have a “right” to be an NBA star or get a record deal.
- The goal of education should be to instill practical knowledge and skills in a child that will enable him or her to be a productive, responsible, self-sufficient member of society.
There Are Several Challenges to the Existing Education System in the United States
The challenges currently encountered to such an end-results are:
- Not all teachers start with a level playing field. A teacher in a rich district has kids who are fed, clothed, read to, and socially adjusted, while a teacher in a crime-ridden district suffering from crippling poverty are teaching kids with much less “built-in” knowledge on the first day of school.
- Rich families have mechanisms and strategies, often non-intentional, that result in making it impossible for poor families to enter affluent districts.
- It is only necessary to have a teachers union because the present system forces individual educators, some brilliant and others terrible, to negotiate salaries and benefits together and be treated equally, even though they are not.
- Teachers are required to teach to the middle or bottom of the classroom, ignoring the most gifted students. This is an enormous waste of intellectual capacity that is vital to the future of the nation with the expanded level of global competition.
How I Would Design a School System or Education System
If I were using my own knowledge of mental models and human incentive systems to create an education plan, here is what I would do: Split each subject into 12 grade levels that were individually mastered, just like college, instead of an across-the-board grade levels determined by year of birth. For example, someone who is 10 years old might be in level 9 chemistry if they love the subject and are great at it, but in Level 3 literature if they have trouble with the written word. This would achieve several things:
- Teachers would be able to specialize in one subject and give their entire efforts to it. A teacher who loved teaching the basics of reading and writing to younger students could do it, while a teacher who enjoyed dealing with gifted mathematically-inclined students could spend his or her time doing that.
- Slower students wouldn’t feel left behind and would get the attention they needed.
- Gifted students could move up as rapidly as the system allows.
- The entire system would force individualized attention without any additional demands on teacher time.
- You wouldn’t get “social” promotions from one grade level to another; you only pass if you can do the work, in a specific topic.
How Do We Structure the System? That Is a Good Question
I want you to think about something for a moment …
- When you or your child gets sick, you hire to the best doctor you can afford.
- When you or your child has a cavity, you hire the best dentist you can afford.
- When you buy a car, you buy the best car you can afford consistent with your needs.
- When you buy a television, you buy the best television you can afford.
What makes you think choosing an educator is any different? Parents want the best teachers for their kids. It is human nature.
Instead, families who send their kids to public school register, then hope for the best. If education is so much more important than television, why would you allow your child to be educated by the luck of the draw? Education should not be a lottery ticket. Right now, the system is setup so that people like me (read: those with means) can buy the best education but everyone else is subject to hope and prayer. It shouldn’t be that way. It’s a fundamental moral wrong.
[mainbodyad]You wouldn’t tolerate, let alone accept, this situation in any other facet of your life. Would you take a car that was assigned to you randomly by a car dealer? How would you react if a furniture salesman decided which television model you could buy with your money and chose a black-and-white tube-television from 1957? You’d huff and puff, take your money, and walk out of the store.
How can we fix it? One option is to give each child a financial educational voucher that let his or her family “vote” on the teacher(s) they wanted so they got to decide how their dollars were allocated, with the subject matter to government standards, just like colleges and universities are accredited. That way, you couldn’t have schools teach bizarre nonsense (e.g., the Earth is only 6,000 years old), and the best schools will naturally rise to the top as parents vote with their dollars for individual teachers.
That is, families could “vote” in effect on the teachers and schools that were bests for their children by allocating their own tax dollars. Just like Reddit, the “front page of the Internet” crowdsources the best content that then goes viral, the same approach might work for education systems.
Under such a system, a teacher who is truly fantastic at their job could earn enormous sums of money. They would be negotiated and recruited just like lawyers, doctors, and software engineers. They would attract their own following as word got out about their skills. There are great teachers. Everyone knows who they are. Everyone tries to get their kid into those teacher’s classrooms because virtually all parents want their children to do better than they did. I can go back and tell you the “best” teachers in each of my grades K-12, even though I am now almost 30 years old. It’s evident, even to a child, some people are better at their jobs.
The ineffective teachers, on the other hand, would fail and fail miserably within a few years. Families in individual school districts, who know what is going on in their own community, would simply refuse to hire a specific teacher for their kid. In three or four years, they’d be earning minimum wage and get the clue. There are terrible teachers in each district. Everyone knows who they are, too. You try to avoid them and, if your kids are assigned to their classroom, you do everything you can to get out of it. These people should not have a job. It even persists at the university level, where everyone from faculty members down to freshman know who can’t run a classroom, yet they can’t push them out due to union contracts.
A Financial-Based Education System Effectively Transfers Money from Bad Teachers to Effective Teachers
Under a “vote-with-your-pocketbook” system, the pay of good teachers rises drastically, with most of the money coming out of the pockets of bad teachers, who are then forced out of the system. This makes teachers pure knowledge workers, not commodities.
[mainbodyad]After all, have you ever heard of lawyers needing a union? Of course not. They are each their own business and the most talented, skilled, and effective lawyers get paid the most money with a handful of exceptions. It is an infinitely fairer system than the one we have now where good teachers are forced to pick up the slack for the bad and, even more insultingly, paid the same amount as their ineffective colleagues.
There would be several major challenges that would need to be addressed. To me, one of the biggest quandaries is the absolute necessity of safeguards so that people didn’t vote for teachers who graded easily, resulting in academic hyper-inflation.
There Is Also the Opposite Approach: Require Everyone to Participate in the Public School System
Then again, there is another possibility: Do away with all private schools, entirely. Public schools fail because the “best” students and families, who have doctors, lawyers, accountants, engineers, and elected officials, often self-select out of the system. If these students were required to participate in the system, the parents would get involved and actively work to improve the quality of the local community schools. It’s human nature.
Otherwise, how do you fix it? In a knowledge economy, we cannot keep creating a dualistic society of low wage retail workers on one hand and high paid, high skilled labor on the other. We are wasting our human capital. That is bad for everyone.
Reader Comments (5)
Comments are presented chronologically, with replies indented beneath the comments to which they respond.



Gilvus
August 26, 2012
Excellent post. One thing I think you should mention here, though: the difference between formal and informal education. What you're talking about is the formal education system only.
In some ways, we already have a financial-based informal education system. You've been a part of it for years now through your Investing for Beginners website. You've taught me and countless other readers the equivalent of personal finance 101, business finance 101, and economics 101, which would have cost us thousands in tuition dollars if we had taken formal courses in a college. We've voted with our dollars, and made you rich. You've probably taught more people and got paid more than any single university professor through this platform.
The only thing that informal education lacks is certification. Sure, I learned a lot from you, but I have nothing to show for it if I want to find a job. The formal education system has a stranglehold on accreditation, which may change in the coming years due to MITx and other ambitious projects. Once people decide that they're overpaying for formal education and once the stigma of taking online courses has evaporated, the formal education system will crumble. Only then will we have an overhaul.
TL;DR: Informal education is individualized and awesome but not yet taken seriously, formal education is outdated and will fall once people finally realize they're swallowing massive student loans using the wrong orifice.
Patrick
August 26, 2012
Great post and imo spot on. Early in my corporate career at a Fortune 500 company, I did training of software/hardware for customers. After every session I did, an evaluation form went out to the customers and I was evaluated by my company based on it. I wouldn't have had it any other way. It was win/win for everyone. The customer wins because it ensures they get high quality training and if they don't, a feedback mechanism to correct this. The company wins because this ensures their training continually improves, and I won because I got great reviews and ended up moving up in the company. Aside from the question of how to ensure teachers don't try to "buy" good reviews by being easy markers, I don't see why we shouldn't be doing something similar in schools
TheLonelyHumanist
August 27, 2012
I have spent decades thinking about these problems myself. I was in the gifted program but, outside of that, I feel like I wasted years of my life bearing the burdens of other people's agendas. One of the biggies here was affirmative action. I had several tenured teachers who should never have set foot in a classroom who were there simply because of the color of their skin. Between that and calling every winning football coach a "math teacher" I didn't have a shot at developing up through calculus. I went from As and Bs in gifted math to failing Algebra 1.
I was thinking just yesterday about topics that should be taught in school that are not. I have often said Econ should be taught all four years of High School but yesterday I was thinking that it should be broader, maybe an "Enterprise" class: economics, business, finance, and maybe even some technology that would give students a pragmatic and holistic understanding of the economy that gives them the knowledge to navigate it for themselves and make good policy decisions for each other. Science needs to be the cornerstone of education. Social science should be more psych and bioanthro based: every kid who will one day vote on policy needs a basic understanding of the human evolution and the Agricultural Revolution. STEM might even be it's own class. And then all the crucial little things that would have made all the difference if someone had told me, like why we do not study things that humans are innately good at (like throwing) and spend so many years working on things that are frankly unnatural (like calculus). The whole point of education is to increase human capital by helping us with the things that have value but we cannot figure out on our own. Humans are built to chuck spears. Algebra is more useful.
At the very least all students must watch The Gods Must be Crazy, the first eight minutes of which form the most influence any single film has ever had on me. http://www.youtube.com/watch?v=mI-WJtGC8dI&feature=watch-now-button&wide=1
Joe Woody
August 29, 2012
Have you seen Waiting for Superman?
Andrew
December 22, 2013
What I think the biggest problem with our education system is: We don't want to stomach the transition. These bad teachers are not bad people. No one enjoys firing good people.
These teachers were taught by the same education system. It isn't fair that suddenly the bar is raised far beyond where they were told it would be at.
This is the same problem across a lot of social situations. The whole "everyone gets a trophy for trying" scenario. It's very difficult to get out of. One generation has to bear the painful contrast of seeing the previous generation get trophies but not them.
IMO: Get the painful transition period over with quickly, and try to support this one-generation of teachers that have to go through it. Give free (with tax money) high-quality education to our educators (this generation ONLY). Then once the bar is raised, everything else will fall into place. Everyone knows where the bar is when they are working towards their teaching career. I honestly think that's the best approach. The "education dividends" would far exceed the price paid by society.