Demand, Not Supply Drives Educational Achievement

Free market conservatives passionately insist that school choice will solve America's education woes. So as schools proliferate and competition heats up, academic achievement will soar just as fierce market competition has delivered better and cheaper computers and TVs.  This seductive analogy is, unfortunately, hardening into unchallenged dogma.  Worse, it misdiagnoses the problem.  It is demand, not supply that drives academic attainment. In economic terms, Say's Law -- supply creates demand -- is wrong and Keynes -- demand creates supply -- is correct. If youngsters and parents truly desired academic excellence, the market would happily supply it. Absent demand, no amount of supply, regardless of price, can whet appetites for learning.

This misdiagnosis is also a recipe for wasteful political futility, for an uncertain benefit. Why lobby legislatures to permit charters or vouchers when after-school tutoring facilities can be created cheaply, and be economically self-sustaining to boot? Ironically, free-market reformers mistakenly believe that only the state can permit free-market solutions. Capitalism, not government permits free-market choice. As Yogi Berra said, you can see a lot by looking around. The market already overflows with school choice, none of it dependent on government authorization, much of it free or low cost for those craving academic excellence. Moreover, options are exploding independently of pressuring legislatures.  Piling on additional options will not reverse academic apathy.  

The current choice option menu is staggering. In New York City hundreds of so-called "cram" academies populate Asian neighborhoods and elsewhere, often catering to recent immigrants forgoing worldly pleasures to buy grueling lessons for their college-obsessed offspring. Most are Spartan storefront operations hiring teachers as needed and easily firing incompetents. A quick web search for New York City's "trapped parents" uncovers A+ Home Tutoring, Forde's Professional Tutoring, ClubZ!, Home Tutoring Services, among countless others. Many advertise of a willingness to accommodate customers with special needs or meeting pupils at community centers. Add national chains like Stanley Kaplan and Sylvan Learning that offer after-school coaching for state-mandated tests (especially reading and math), and given that parents demand results for their out-of-pocket fees, Kaplan's pedagogy (and technology) is constantly updated. Sylvan Learning Centers have more than 1100 locations in the US and Canada, with after school, evening and week-end hours, offering various courses, including study skills. 

The Internet has greatly expanded parental options nationally. An internet learning program typically costs less than a basic cell phone plan or cable TV.  SMARTHINKING since 1999 has provided over a million lessons on multiple subjects.  Blackboard likewise offers web-based interactive instruction between students and teachers. Parents unhappy with local math lessons can help junior by logging on to artofproblemsolving.com  for advanced math for grades 6-12 (as of February 2008 there were 37,000 registered users). The site also lists math books, competitions and a gateway to mathematics organizations. MIT provides K-12 science courses (including video) free to students nationally via the web.

Tutoring is now even out-sourced to non-US experts. TutorVista (tutorvista.com) offers 24 hour online instruction from K-12 plus college in nearly all academic subject as well as preparation for all the standardized tests. Unlimited sessions begin at $99.00 per month. Lessons begin by assessing each individual's current knowledge to create customized study plans, and this service includes voice and instant messaging, an electronic whiteboard and a toll-free fax number. Instructors all have college degrees or teaching credentials, undergo weeks of intensive training, and adhere to US state requirements, and by 2008 it had 10,000 subscribers worldwide. On Oct 21st 2008 Brightstorm announced that it had secured $6 million in financing to launch a new online tutoring service targeting teens with expert video lessons provided by star teachers across the entire US.  Besides lessons on all usual high school subjects and standardized tests, each student can choose his or her own teacher and preferred teaching style. 

For those not inclined to web-based technology, the home schooling industry supplies a plethora of help, and parents need not withdraw junior from school to take advantage of these resources. Just shut off the TV and insist that the lessons be done. Those who have not looked into this burgeoning industry will find the variety and subjects covered are amazing. It is a genuine marketplace where approaches range from the highly traditional, including religious-themed, to the most cutting edge. Lessons can be geared from those lagging behind to budding geniuses. Again, it is just a matter of investing the time and energy, and even those overwhelmed by jobs and housework can arrange local cooperative ventures in which parents take turns instructing small groups (many private schools began as these "living room" academies and expanded as local kids showed up).  

Naturally choice movement defenders will insist that these bountiful options (and we mention only a tiny handful) are still inadequate since they cost money and may be inconvenient for harried poor families. This is willful blindness -- options are there if wanted and reasonably affordable. Public libraries often supply free Internet service and professional librarians regularly teach school-related subjects (perfectly rational client-building). Surely even the computer illiterate can request the librarian to find home school options and help with ordering materials. 

But if there is a decisive argument about insufficient demand, not supply, being the culprit, it was the utter failure of No Child Left Behind's free tutoring, including the same high-quality tutoring available to ambitious students. Until late 2008 NCLB permitted low-performing schools to spend up to 5% of their federal grants on outside tutoring, more if necessary (this program may soon be restored, however). 

With "free money" waiting, one would predict a rush to find enrollees. No such luck.  Even illegally bribing students and school officials failed to generate business. Nor did holding classes in the student's own school help. One would guess that ample NCLB money would have encouraged tutoring firms to invent ways to lure struggling students.

This version of Say's Law was a disaster and school actually returned unspent funds. The national average for eligible students enrolling was 12% and even these dreary figures exaggerate enthusiasm since many (perhaps most) of the enrollees never completed the course.[i] In New York City's struggling schools, as of late 2002, only 10,000 of the 240,000 eligible students had signed up for free tutoring.[ii] The news from Detroit was worse -- "only a handful" out of 51,237 had signed up as of early 2004[iii]. But even this exceeded the percentage in Pittsburgh where zero of 2900 sought free help.[iv] California in 2004 had some 397,000 eligible students and 20,000 -- 5% -- sought assistance, or at least signed up.[v] In New Orleans during 2003 some 7,500 public school students were eligible and 500 signed up -- 6.6%.[vi] After all, why should slackers suddenly be energized by hearing the same old boring stuff yet one more time? These figures are typical and it appears the worse the school system, the lower the enrollment for free help, and this help could come from any number of competing tutoring firms.

A powerful message lies here for free-market-oriented philanthropists anxious to invest millions to bring quality education to those lagging behind. Spend a few thousand dollars instead. Rent a second-story suite of offices month-to-month; buy a few Internet-ready computers and some used furniture; peruse off-the shelf teaching materials from the home school marketplace; hire some moonlighting teachers or university graduate students by the hour, but only as needed; advertise in local newspapers or church bulleting boards and if rivals are successful with their methods, just knock them off since none of this is protected by patents or union rule. Now, almost in an instant, help for those anxious to learn is available. This broken shoe string operation will provide exactly what education-obsessed parents offer their children denied a decent public school education. No political battles, no confrontations with the teachers' union and barely any capital outlays. If demand is insufficient and tinkering with services and prices is futile, just close up after a year versus pouring yet more money into supplying what is not wanted. This is real market-driven education innovation.  

The problem is upping appetites for learning, an extraordinarily difficult task in a society subordinating the acquisition of knowledge to non-academic pursuits. Compared to lighting these fires, lobbying a legislature to pass a charter school or voucher law is a snap and this, unfortunately, may explain the unthinking embrace of Say's Law. Giving the proverbial horse a greater selection of expensive bottled waters will not cure the lack of thirst.     


[i] Saulny, Susan, "Tutor Program Offered by Law is Going Unused," New York Times, February 12, 2006. Late edition, final edition, online version.

[ii] Goodnough, Abby, "Free Tutoring Fails to Draw Many Students," New York Times, November 15, 2002. Late edition, final edition, online version.

[iii] Associated Press State and Local Wire, "Thousands of tutoring spots for Michigan Students Going Empty," February 21, 2004. Online version.

[iv] Associated Press State and Local Wire, "Thousands of students missing out on free tutoring," October 18th, 2004. Online version.

[v] Associated Press State and Local Wire, "Only 4 percent of those eligible apply for free tutoring," May 17th, 2004. Online version. 

[vi] Associated Press State and Local Wire, "Free Tutoring: 7,500 eligible, 489  sign up," October 15, 2003. Online version.
Free market conservatives passionately insist that school choice will solve America's education woes. So as schools proliferate and competition heats up, academic achievement will soar just as fierce market competition has delivered better and cheaper computers and TVs.  This seductive analogy is, unfortunately, hardening into unchallenged dogma.  Worse, it misdiagnoses the problem.  It is demand, not supply that drives academic attainment. In economic terms, Say's Law -- supply creates demand -- is wrong and Keynes -- demand creates supply -- is correct. If youngsters and parents truly desired academic excellence, the market would happily supply it. Absent demand, no amount of supply, regardless of price, can whet appetites for learning.

This misdiagnosis is also a recipe for wasteful political futility, for an uncertain benefit. Why lobby legislatures to permit charters or vouchers when after-school tutoring facilities can be created cheaply, and be economically self-sustaining to boot? Ironically, free-market reformers mistakenly believe that only the state can permit free-market solutions. Capitalism, not government permits free-market choice. As Yogi Berra said, you can see a lot by looking around. The market already overflows with school choice, none of it dependent on government authorization, much of it free or low cost for those craving academic excellence. Moreover, options are exploding independently of pressuring legislatures.  Piling on additional options will not reverse academic apathy.  

The current choice option menu is staggering. In New York City hundreds of so-called "cram" academies populate Asian neighborhoods and elsewhere, often catering to recent immigrants forgoing worldly pleasures to buy grueling lessons for their college-obsessed offspring. Most are Spartan storefront operations hiring teachers as needed and easily firing incompetents. A quick web search for New York City's "trapped parents" uncovers A+ Home Tutoring, Forde's Professional Tutoring, ClubZ!, Home Tutoring Services, among countless others. Many advertise of a willingness to accommodate customers with special needs or meeting pupils at community centers. Add national chains like Stanley Kaplan and Sylvan Learning that offer after-school coaching for state-mandated tests (especially reading and math), and given that parents demand results for their out-of-pocket fees, Kaplan's pedagogy (and technology) is constantly updated. Sylvan Learning Centers have more than 1100 locations in the US and Canada, with after school, evening and week-end hours, offering various courses, including study skills. 

The Internet has greatly expanded parental options nationally. An internet learning program typically costs less than a basic cell phone plan or cable TV.  SMARTHINKING since 1999 has provided over a million lessons on multiple subjects.  Blackboard likewise offers web-based interactive instruction between students and teachers. Parents unhappy with local math lessons can help junior by logging on to artofproblemsolving.com  for advanced math for grades 6-12 (as of February 2008 there were 37,000 registered users). The site also lists math books, competitions and a gateway to mathematics organizations. MIT provides K-12 science courses (including video) free to students nationally via the web.

Tutoring is now even out-sourced to non-US experts. TutorVista (tutorvista.com) offers 24 hour online instruction from K-12 plus college in nearly all academic subject as well as preparation for all the standardized tests. Unlimited sessions begin at $99.00 per month. Lessons begin by assessing each individual's current knowledge to create customized study plans, and this service includes voice and instant messaging, an electronic whiteboard and a toll-free fax number. Instructors all have college degrees or teaching credentials, undergo weeks of intensive training, and adhere to US state requirements, and by 2008 it had 10,000 subscribers worldwide. On Oct 21st 2008 Brightstorm announced that it had secured $6 million in financing to launch a new online tutoring service targeting teens with expert video lessons provided by star teachers across the entire US.  Besides lessons on all usual high school subjects and standardized tests, each student can choose his or her own teacher and preferred teaching style. 

For those not inclined to web-based technology, the home schooling industry supplies a plethora of help, and parents need not withdraw junior from school to take advantage of these resources. Just shut off the TV and insist that the lessons be done. Those who have not looked into this burgeoning industry will find the variety and subjects covered are amazing. It is a genuine marketplace where approaches range from the highly traditional, including religious-themed, to the most cutting edge. Lessons can be geared from those lagging behind to budding geniuses. Again, it is just a matter of investing the time and energy, and even those overwhelmed by jobs and housework can arrange local cooperative ventures in which parents take turns instructing small groups (many private schools began as these "living room" academies and expanded as local kids showed up).  

Naturally choice movement defenders will insist that these bountiful options (and we mention only a tiny handful) are still inadequate since they cost money and may be inconvenient for harried poor families. This is willful blindness -- options are there if wanted and reasonably affordable. Public libraries often supply free Internet service and professional librarians regularly teach school-related subjects (perfectly rational client-building). Surely even the computer illiterate can request the librarian to find home school options and help with ordering materials. 

But if there is a decisive argument about insufficient demand, not supply, being the culprit, it was the utter failure of No Child Left Behind's free tutoring, including the same high-quality tutoring available to ambitious students. Until late 2008 NCLB permitted low-performing schools to spend up to 5% of their federal grants on outside tutoring, more if necessary (this program may soon be restored, however). 

With "free money" waiting, one would predict a rush to find enrollees. No such luck.  Even illegally bribing students and school officials failed to generate business. Nor did holding classes in the student's own school help. One would guess that ample NCLB money would have encouraged tutoring firms to invent ways to lure struggling students.

This version of Say's Law was a disaster and school actually returned unspent funds. The national average for eligible students enrolling was 12% and even these dreary figures exaggerate enthusiasm since many (perhaps most) of the enrollees never completed the course.[i] In New York City's struggling schools, as of late 2002, only 10,000 of the 240,000 eligible students had signed up for free tutoring.[ii] The news from Detroit was worse -- "only a handful" out of 51,237 had signed up as of early 2004[iii]. But even this exceeded the percentage in Pittsburgh where zero of 2900 sought free help.[iv] California in 2004 had some 397,000 eligible students and 20,000 -- 5% -- sought assistance, or at least signed up.[v] In New Orleans during 2003 some 7,500 public school students were eligible and 500 signed up -- 6.6%.[vi] After all, why should slackers suddenly be energized by hearing the same old boring stuff yet one more time? These figures are typical and it appears the worse the school system, the lower the enrollment for free help, and this help could come from any number of competing tutoring firms.

A powerful message lies here for free-market-oriented philanthropists anxious to invest millions to bring quality education to those lagging behind. Spend a few thousand dollars instead. Rent a second-story suite of offices month-to-month; buy a few Internet-ready computers and some used furniture; peruse off-the shelf teaching materials from the home school marketplace; hire some moonlighting teachers or university graduate students by the hour, but only as needed; advertise in local newspapers or church bulleting boards and if rivals are successful with their methods, just knock them off since none of this is protected by patents or union rule. Now, almost in an instant, help for those anxious to learn is available. This broken shoe string operation will provide exactly what education-obsessed parents offer their children denied a decent public school education. No political battles, no confrontations with the teachers' union and barely any capital outlays. If demand is insufficient and tinkering with services and prices is futile, just close up after a year versus pouring yet more money into supplying what is not wanted. This is real market-driven education innovation.  

The problem is upping appetites for learning, an extraordinarily difficult task in a society subordinating the acquisition of knowledge to non-academic pursuits. Compared to lighting these fires, lobbying a legislature to pass a charter school or voucher law is a snap and this, unfortunately, may explain the unthinking embrace of Say's Law. Giving the proverbial horse a greater selection of expensive bottled waters will not cure the lack of thirst.     


[i] Saulny, Susan, "Tutor Program Offered by Law is Going Unused," New York Times, February 12, 2006. Late edition, final edition, online version.

[ii] Goodnough, Abby, "Free Tutoring Fails to Draw Many Students," New York Times, November 15, 2002. Late edition, final edition, online version.

[iii] Associated Press State and Local Wire, "Thousands of tutoring spots for Michigan Students Going Empty," February 21, 2004. Online version.

[iv] Associated Press State and Local Wire, "Thousands of students missing out on free tutoring," October 18th, 2004. Online version.

[v] Associated Press State and Local Wire, "Only 4 percent of those eligible apply for free tutoring," May 17th, 2004. Online version. 

[vi] Associated Press State and Local Wire, "Free Tutoring: 7,500 eligible, 489  sign up," October 15, 2003. Online version.