The national panic over outsourcing is driving U.S. lawmakers to come up with new forms of protectionism. This is a shame, both for those of us who see some value in outsourcing and for those who disapprove of it. For the protectionist, panic obscures an important American reality: that outsourcing was encouraged in the first place by too much protectionism in a specific U.S. industry: education.
 
    We are not speaking of America's boarding schools or master's of business administration programs, whose waiting lists include hopefuls from Dusseldorf, Germany and Seoul. The problem lies with workaday publicly funded schools, especially in urban areas.
 
    These are the factories that produce the national workforce.
 
    Yet, for the past quarter-century, they have had little competition and have enjoyed a lack of scrutiny.
 
    The result has been predictable. Schools have blithely accepted increasing inputs--namely, funding--even as the quality of their output has decreased, to the point where students cannot handle Excel spreadsheets, or learn to, and cannot locate Indonesia or even adopt a polite telephone manner.
 
    Most of the time, the education sector has disguised its failings with a trick so dirty other sectors would not even try it: the open doctoring of industry standards--in this case, the measures used to assess the quality of U.S. schooling.
 
    But the truth occasionally seeps out. In 2000, the Organization for Economic Cooperation and Development produced a study by its Program for International Student Assessment. The study showed that U.S. high school students did not read as well as their peers in 14 other developed nations, despite the fact that the U.S. spent more than most OECD nations educating each child. Of course, most Americans do not consider the education industry to be protected, or even an industry. They think about schools with the softer part of their brain that deals with home, pride and community. Still, applying a cold trade analysis to schools goes a long way toward explaining those PISA results.
 
    The first protectionist feature of the U.S. education business is the most obvious: Public schools are a monopoly. Over the past decade, isolated voucher experiments have taken place, giving families a chance to select schools. But most families who want education for their tax dollars still have to send their children to assigned schools, or move.

    Unions--another feature typical of protectionism--are one reason for the delay in expanding choice. School unions are large--the National Education Association, the biggest, has 2.7 million members. They funnel millions to politicians, who in turn sustain the public schools' monopoly by failing to pass reforms to open the market. NEA members always manage to convince themselves, and often others, that their work is fine. U.S. schools also have a third trait common to protected industries: management that seems to have forgotten its original mandate. Until the 1960s, schools were mostly about producing students who could read to a certain level, get as far as trigonometry in maths if possible, and recount the battle between the Merrimack and the Monitor, two Civil War ironclads. In the 1960s, however, educators, courts and lawmakers turned inward. They made schools into engines of social change: Elementary schools became the nation's most important vehicle for racial desegregation.
 
    All these changes came in the name of a good cause, civil rights. But the goal of strong outcomes was lost. The tradition of rigour moved out of the classroom and into the gym. And the promotion of pupils for social rather than academic reasons became habitual everywhere. In suburbs and rural areas today, schools are better than in big cities--"pretty good" is the usual description. But even "pretty good" is no longer enough to ensure competitiveness--at least not at the price U.S. workers now demand.
 
    Given this context, you can see why the Education Secretary Rod Paige went feral in February and labeled a teachers union a "terrorist organization," and why Alan Greenspan, chairman of the Federal Reserve, has taken to lecturing crowds about schools. After all, domestic reforms that educators have complained about lately-- President Bush's No Child Left Behind program, for example--are nothing compared with the challenge presented by globalization.
 
    Not that the U.S. will necessarily fail to confront that challenge. One of the wonderful and astounding things about America is the way sheer innovative power has always made up for lack of formal learning. This can be the case again.
 
    Besides, all efforts at protectionism collapse sooner or later. Perhaps outsourcing will accelerate the collapse of school protectionism, forcing reforms that generate stronger workers. If so, the more outsourcing, the better.
 
Amity Shlaes is a syndicated columnist for the Financial Times

    A fact of political life today is that if you favor meaningful educational reform, you can automatically count yourself a political enemy of two groups: the teachers unions that prefer the status quo and too many politicians who depend on them for financial support.
 
    This doesn't excuse Education Secretary Rod Paige's reference Monday to the National Education Association as a "terrorist group," a comment for which he immediately apologized. But it does explain why the people who claim to be so outraged want to dwell on the Secretary's off-the-cuff rhetorical gaffe rather than the behavior of his target.
 
    In his apology, Secretary Paige said he makes a distinction between rank-and-file teachers and the NEA's "high-priced Washington lobbyists [who] have made no secret that they will fight against bringing real, rock-solid improvements in the way we educate all our children regardless of skin color, accent or where they live." Now, there's a truly disturbing accusation, and it happens to be spot-on.
 
    Teachers unions are among the most powerful lobbies in American public life. In political influence they rank alongside the Teamsters, the AARP and the NRA. And they use the exact same hardball tactics to try to get what they want, which in their case is to preserve their monopoly on public education.
 
    The NEA has 2.7 million members from whom it collects hundreds of millions dollars in involuntary dues and spends tens of millions on political activities, some 95% of which goes to Democrats. Its 1,800 designated political directors use an integrated command structure -- referred to internally as UniServ -- to coordinate national, state and local activities for Democratic candidates. Affiliates have a strong financial incentive to toe the line.
 

    It's easy to forget that all but 8% of education spending occurs at the state and local level, and that's where the teachers unions wield most of their power by pressuring legislatures, defeating state ballot initiatives, supporting campaigns and even getting their own members elected and appointed to education committees. In state capitals, it's not unusual to find NEA headquarters within a stone's throw of the statehouse steps.
 
    Back in Washington, NEA President Reg Weaver stands ready to describe any criticism of the union as an attack on public school teachers. "We are the teachers; there is no distinction," he told a reporter this week. The typical teacher, who earns a fraction of the $334,000 Mr. Weaver reportedly took home last year, may beg to differ.
 
    So far as the NEA is concerned, the real outrage is the Bush Administration's attempt to introduce accountability in public education through the No Child Left Behind Act. The unions want to make it an issue in November and as usual the Democrats will try to accommodate them. "There are two big interesting education reform ideas in America today," says Chester Finn, a former Education Department official. "One involves standards and tests and accountability; the other involves competition and choice. The NEA is against both, and they will unflaggingly work to defeat both kinds of reforms."
 
    We don't have to tell that to Rod Paige.