Gary K. Clabaugh, Emeritus Professor of Education, La Salle University 

An earlier version of this article was published in Educational Horizons. Rewritten 1/26/17


It is an article of faith with conservatives that competition will improve the nation’s schools. This is nothing new. Adam Smith advanced a general version of this argument in his 18th century classic, The Wealth of Nations.

Smith claimed that unrestrained competition inevitably produces socially beneficial consequences. He asserted that when people pursue their own selfish interests in a competitive environment, they inevitably produce those goods and services “society” wants, in the quantities desired, and at prices people are willing to pay. Moreover, because workers are free to sell their labor in competition with other workers, equality of opportunity is promoted. So, said Smith, government should keep its hands off and let the marketplace decide. Besides, said Smith, government is, by nature, spendthrift, irresponsible, and unproductive. 

The artlessness of Smith’s argument has a certain appeal. One simple answer to a host of complicated questions usually does. Shortly after the publication of The Wealth of Nations, however, more sophisticated political economists warned that Smith’s analysis was dangerously simplistic. Robert Owen, for example, counseled that competition between self-motivated individuals would have acute social costs. Noting the extraordinary social dislocations set in motion by the industrial revolution, he warned that unrestrained competition was unleashing immense and abiding evil.

Similarly, David Ricardo (a contemporary of Owen) noted that some people profit hugely from competition but contribute nothing of value. These economic parasites suck life from competitive processes, said Ricardo, and give nothing in return. Ricardo also noted that unrestrained competition inevitably creates serious social conflict, And, he observed, the benefits of unrestrained competition are not prone to trickle down.

Owen and Ricardo proved to be visionaries. But history’s bitter lessons seem to offer no caution to politicos advocating competition as a goad to reform. They just keep repeating their mantra about the benefits of competition without ever acknowledging its costs.

They also ignore contemporary experience of how competition can misfire. For instance, competition between institutions of higher education is fiercer now than ever. Private colleges and universities, public sector and for-profit universities all are in a relentless battle for tuition dollars. Yet this Darwinian struggle does not seem to be making colleges better. As a matter of fact, it seems to be making them worse.

One way to win the competition for students, for example, is to discount tuition. That now is standard practice. But tuition discounts erode collegiate income which, in turn, leads to budget reductions. And budget cuts lead to all sorts of unpleasant consequences. Colleges also respond to competitive pressures by quietly lowering their admission and graduation standards. In many schools Admissions Office files marked “Rejected Applicants” remain largely empty.

What is more, you have to be unable to pee a hole in snow not to graduate. Colleges seek to become more attractive to the broad mass of “students” by quietly dumbing down their curricula. They eliminate tough requirements like mathematics and foreign languages, for example, and substitute brain dead electives. Unprofitable, but intellectually rigorous, majors also are trashed. Some hard-pressed schools end up essentially giving out degrees to nearly everyone who pays tuition. Then, to add to revenue, popular majors like education are milked for every available dime by trashing program quality.

Professors competing for declining numbers of students in a curriculum bereft of requirements survive by passing every “scholar” who can walk and chew gum. Cynicism replaces idealism as this tactic is greeted with civil inattention. Oily academic bureaucrats persuade tough professors to ease up by, among other things, siding with students in grade disputes. Meanwhile senior staff saves money by buying out the most experienced professors. They replace these masters with adjuncts hired at vassal wages, even though they know full well that the proliferation of part-timers erodes program quality.


In sum, competition generally erodes higher education’s quality and integrity. Only elite colleges and universities, insulated from competitive pressure by abundant endowments, can maintain standards and still sail majestically on. This, not the inevitably beneficial consequences Adam Smith promised, is what unrestrained competition brings to higher education. So the next time “conservative” politicians assure us that competition will improve basic education, we might be forgiven a healthy measure of doubt.