Supply and demand in the non-profit world
Those of us who have been to college and taken Economics 101 are familiar with the supply and demand curve. If you’re not, here it is again.
The demand curve illustrates the variation of a demand Q in relation to the variation of a price P. The supply curve illustrates a variation of supply according to a variation of price P. The intersection of the demand curve D and the supply curve S represents the equilibrium price Pe where a quantity Qe of commodities will be sold.
What might we learn if we applied this market thinking regarding supply and demand to the non-profit world, and in particular to our public schools? Demand might then become the demand on the part of students for education. Supply would be the knowledge that the teachers brought with them into the classroom.
Learning would take place at the point where the students’ demand for met the teachers’ supply of knowledge.
But what actually happens in our schools? Those of you who have visited our public schools, especially the troubled inner city schools serving largely poor and minority student populations, will readily admit that the “demand” for education on the part of the students is almost non-existent. The students are clearly not present in school to learn, or in other words, to have their demand met by the supply of education that the school is there to provide.
What about the supply? Well, if there is little or no demand we don’t know, do we? We don’t know much about the supply. Teachers may be, or may have been at one time, well supplied with enough learning to meet the demand, but years of close contact with non-demanding students will have sent that supply into deep storage, perhaps never to reappear.
In the supply and demand curve the price is all important. High prices will lower demand, and vice versa. At the point where the two curves meet the price will be right and the purchase will be made.
In our schools, however, the price is always too high. And the students are rarely ready to pay the high price represented by the hard work it will take in order to learn. As a result there is little exchange and the teachers remain pretty much without a market for their goods. The two curves never meet.
The single most important question in regard to our schools, and in particular in regard to those that are failing, is how to increase the students’ demand for learning. How do we motivate them? Up until now only the single teacher, here and there throughout the nation’s hundreds of thousands of schools, seems to know how to do this. And up until now he or she hasn’t known how to pass this particularly valuable skill on to others.
At this very moment the entire country, while following the directives of the No Child Left Behind Law, seems to be using standardized tests to raise the students’ “demand” for knowledge. This of course is not what’s happening. And although the jury is still out regarding the effectiveness of the Law there is ample anecdotal evidence that this “fix” is not fixing anything at all.
We might extend what we have said up until now to the non-profit world in general. In the for profit world goods, cars and televisions etc., things that people want, are constantly being produced, and demand is meeting supply.
In the not for profit world, on the other hand, what is being supplied is not what people want, but rather what some people, often government employees, think that people should want, things such as education, healthcare, jobs, and homes.
But what’s the difference? Don’t people want education, good health, jobs and homes? And if so, why doesn’t demand and supply work in this world also? Well, these goods, education, healthcare, jobs, etc., for their production and full realization, depend no less, perhaps even more, on the consumer than on the producer.
We can build schools and hospitals, provide teachers and doctors. We can create businesses and provide jobs. We can build new homes. But we cannot give someone an education or good health. Both are both things that people have to do by and large for themselves.
Also we can provide a job and a new home. But doing the job satisfactorily and maintaining the home is something else again, something that people have to do largely for themselves, and so far we haven’t been very good at motivating them to do this for themselves.
This is why the demand and supply curve breaks down in the non-profit world. The "rub" is that we go on pretending that it doesn’t break down, that the analogy holds, that education and healthcare can be provided like cars and televisions. They can’t.
The not for profit world is really a supply side world. There is no demand in this world unless we create this demand, that which we don’t yet know how to do. There is only a supply of help, a great supply to be sure for we are the richest country in the world.
A lot of help is what we’ve been providing in Iraq, and in other troubled places in the world, not to mention in our own impoverished inner cities. We have most often failed in our endeavors because, while giving away the store, we haven’t yet been able to arouse in the recipients a demand on their part for what we have to give, be it algebra, history, safe neighborhoods, or democracy.
Two final comments. One, give me a motivated learner and I can teach. If that motivation is not there, if it is not aroused by what I do, I will never teach him a thing.
And two, a last word in regard to standardized tests. Tests shouldn’t have the kind of importance they now have. For if they have that importance it’s really only because nothing else of an academic nature is going on in the school. If the kids were demanding to learn about math and history tests would be of little or no importance, to them or to us.
