I finally got a chance to read Aaron Benanav’s recent essay in Logic about socialist planning. I’ve been a fan of Aaron’s since I first heard him talk about his work debunking the idea that automation creates unemployment.
Strong socialist commitments combined with deep knowledge of economics, history, and politics and an ability to write clearly about it—you can’t go wrong with his stuff (also Logic is a great mag, check it out).
The essay “How to Make a Pencil” takes up the socialist calculation problem and digital socialism. Benanav wants to know what a fully human mode of production might look like, recovering the concept of socialist planning from a century’s worth of rightwing mischaracterizations.
The socialist calculation problem is a fun puzzle: it’s Ludwig von Mises’s claim that a planned economy where property is owned collectively couldn’t allocate resources equally because, in such a system, it’s impossible to calculate prices.
Prices let managers figure out how to buy, sell, and produce in ways that permit the most tailored and appropriate distribution of stuff and (so the theory goes) you can’t calculate prices without private property and competition: there has to be people that own stuff and make decisions out of self-interest for profit to generate prices.
In the socialist case, von Mises said, you can only have central planners that stipulate prices, which they’ll inevitably get wrong, thereby creating all kinds of inefficiency, havoc, shortages, lack of choice, etc.
Benanav goes through responses to this by Neurath, Lange, and others, and in so doing sketches some criteria for what a democratized economy—one that doesn’t leave all this stuff up to capitalists looking for profit—would entail in our age of unprecedented computing power.
He’s not a digital socialist and says that no amount of computation could make a fully human economy. There’d have to be protocols for democratic collective decision-making as well as calculations. It’s these protocols he’s interested in examining, since they’ll be what ensures a collective and egalitarian allocation: the way people decide how much to make, what resources that’ll entail, and the cost and efficiency of the whole process of getting everyone in society what they need.
So what does this have to do with school funding?
When I was reading the piece, the whole system of school funding in the United States flashed before my eyes. In the last few years, I’ve been trying to understand how this system works. It has so many pieces that I’ve never been able to conceive of it as a whole. But when reading Benanav’s essay, I could see it in all its weird glory for the first time.
So I wondered to myself: is the school funding system an example of socialist planning? Is it the kind of thing a socialist US economy would have to have, but for pencils and not pupils? Is it an example of the kind of protocols and calculations he’s after?
Let’s see. In the rest of this post I’m going to try to map out how school funding works in the US through the lens of planning. This might get long, apologies—I’m feeling a summative impulse.
One important caveat: while schooling is a mass social project, education isn’t production. Even though it costs tons of money and people work to make education happen, technically (in Marxism anyway), education is reproduction since it’s helping to get people ready to produce. Even though it’s an industry valued in the billions of dollars globally, viz. capitalism, education is work that produces workers (or human capital to the neoliberals).
A related caveat: schools are funded through taxes, largely on property like real estate. The state extracts money from these markets to finance schooling, rather than schooling generating its own funds through production and sale of its goods. It’s a public good provided by the state. It’s free at the point of service and sort of single-payerish.
Despite these caveats, I still think it’s an interesting exercise to see if the US school funding system is a prototype of socialist planning. Finally, a disclaimer: this is me synthesizing a few years of study on this issue and I’m still learning. Hopefully I don’t get anything terribly wrong.
Per pupil layers
Like Aaron says, let’s focus on a few things: prices, formulae that calculate allocation, decision-making protocols, and inputs.
K-12 education does have something like a price: per pupil spending. Districts spend a certain amount to educate each student considering the wages, infrastructure, nutrition, transportation, curricular material, etc needed to do so. It costs a certain amount to educate each student, in other words.
There’s no national standard per pupil cost in the US. No one says “it should take at least X amount to educate a student in this country.” It’s a de-centralized, district by district, state by state thing. Lower Merion, for instance, spends twice as much per pupil as Philadelphia only a few miles away.
What’s interesting is that this process isn’t competitive. Districts aren’t competing with one another to do their thing the same way that companies do in capitalism. It’s not dog eat dog. They’re all just trying to provide education to their people. (This is what makes them stable investments in the bond market, btw.)
Of course, there is some competition within districts between charter schools and private schools, but again, this isn’t the same as competitive markets. Charters are tax-funded and people who pay private school tuition still pay property taxes (despite all their attempts to get out of it).
How do districts calculate the per pupil price without competition? Through a series of computations and decisions occurring at multiple levels.
At the local level, the district calculates how much it can tax its real estate by deciding on a millage rate (the amount per thousand dollars of assessed property value that residents must pay). Representatives of municipal government, many of whom are elected, come together and decide these rates based on what the municipality needs and can spend.
If you have high property values you can tax relatively little and bring in a lot of revenue for schools. Districts with high property values tend to not need much help beyond that.
But many districts get state aid. States calculate allocations per district based on a funding formula. These formulae differ widely. Some of them are weighted and account for poverty, students with disabilities, English language learners and other factors. Some aren’t weighted and just take into account average number of students in the district.
This state aid gets determined by an apparatus headed up by the Governor and their Department of Education, as well as committees in the house legislature that craft and pass policy, and judges that make decisions about legality. The state taxes stuff, brings in revenue, and distributes it to districts.
Finally, the federal government has a whole apparatus mirroring the state and locality, providing some funding (but very little relatively speaking). Title 1, for example, uses four formulae that distribute federal dollars to states with districts qualifying as disadvantaged.
Per pupil spending doesn’t take into account capital expenditures, like school building construction and maintenance. Local governments tend to issue bonds for these projects, taking out loans and paying them back on a one-time basis. These issuances are voted on by the locality. Sometimes, districts buy bonds themselves to make the money back with interest as well.
Allovue has a great graphic that traces some of these pathways, breaking it down according to weighted and unweighted models.
Protocols for decisions
The point of sketching this out is to see whether these are the kinds of things that could happen in a socialist economy (it’s also just interesting to try and zoom out and see it all at the same time).
Let’s look at the protocols for decision-making at each level. The locality elects people to govern their jurisdiction and school district. Principals hired by the district lead each school, submitting their budgets. Superintendents keep an eye on the schools, working with the elected school board and the principals and other city government electeds like the mayor.
Property owners pay into the system through taxes, whose rates get decided by the elected government and bureaucrats. Voters also weigh in on bond issuances through ballot measures.
But that’s just local. The state has an elected Governor and appoints DOE officials to administer state aid; committees of elected members of congress; judges, etc. The federal government does the same with a whole other set elected and appointed officials that weigh in on education issues.
All of these protocols result in an allocation of money for education, resulting in per pupil expenditures in every district.
School funding as socialist planning?
One thing I noticed while writing this post is that per pupil price is calculated without private property or competition. Through all the democratic protocols—elections, committees, judgements—and computation through formulae, the system calculates per pupil spending.
Is the school funding system in the US a kind of socialist calculation process? Given the caveats I stated at the beginning, probably not (and likely for a bunch of other reasons).
Let’s assume that it is, just for fun. A socialist economy in the US would have to look something like this system, but for production. Making a pencil would be like making a pupil.
To settle allocation questions like prices, there would be committees of elected and appointed officials, judges, and other apparatuses that decide on the per pencil costs in each region. Rather than taxpayers, there would be workers in the firms and consumers of the products voting on measures, electing decision-makers, and holding the system accountable at multiple levels. This is sort of what Benanav says that Neurath had in mind, too.
Maybe that’s what a socialist economy in the US would have to look like. If so, it wouldn’t be perfect (there are a lot of problems with school funding). But it wouldn’t be capitalist either. And I’d be willing to bet that if there was a socialist economy, there’d be better allocation of per pupil money.