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Home | Blog | Joel Klein, Monopolist

Joel Klein, Monopolist


[Cross posted at Organizations and Markets]

Joel Klein does not have a well-developed sense of irony. As Clinton Administration antitrust czar, he became a household name with his relentless pursuit of Microsoft, a $40 billion company with 70,000 employees in 100 countries. Today Klein heads the New York City public school system, a conglomeration of 1,450 schools with 136,000 employees, 1.1 million students, and a $15 billion operating budget. Oh, did I mention that it's a monopoly? Not a private company with a large market share, but an actual monopoly, an organization protected from competition by an exclusive government franchise.

Klein was Distinguished Executive Speaker at tonight's Academy of Management Convocation, which I attended. The speech was disappointing -- not because of Klein's political philosophy, which I don't share -- but because it was a shallow, fluffy talk about "leadership," "accountability," "change agents," and the like. (I did enjoy his voice, however, a smoother version of Jimmy Durante's.)

His main point was that school reform requires both decentralization and tighter performance measures. This might be a reasonable strategy for a private firm, where objective (financial) performance measures are available, but it's far from obvious how it applies to a government activity that lacks such measures. (Klein is obviously not familiar with Mises's Bureaucracy.) In any case, one might have expected a purported antitrust specialist to say something about competition and entry barriers. Does a school system's monopoly franchise have anything to do with its massive inefficiencies? But there was not a peep. Indeed, Klein never even mentioned the word "monopoly" (except in a joke about a $30 million gift from Bill and Melinda Gates -- one of Klein's associates cracked "If you hadn't have sued him, maybe he'd have given you more").

Peter G. Klein is Carl Menger Research Fellow of the Mises Institute and W. W. Caruth Chair and Professor of Entrepreneurship at Baylor University's Hankamer School of Business.

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