Anti-Capitalist Sentiment (with some morality)

[CoccoBill]

Well it kinda fucks up your decision tree, doesn't it? Doesn't it look like this now?

No.

1) Increase Prices and let the revenue flow to the bottom line. Kids keep learning, investors get dividends, everybody wins.

Yes, assuming that the price increase does indeed raise revenues, and not lower them. The only one suffering are the customers, who pay more for an identical product. No appeal to morality, just an observation.

2) Increase Prices and reinvest the additional income into the school in the hopes of attracting new revenue streams (more students)

Now you're fabricating reality. It makes no sense to reinvest if you're already making sufficient profits. If you're not, we've already exhausted option 1), which this is. I'm not looking for anecdotal stories of what company x might do, I'm looking at incentives and the most rational business decisions.

2a) Use additional new revenue to invest in marketing
2b) Use additional new revenue to invest in product
3) Cut Costs, i.e. degrade the quality of the product.

Why would you do this, when cutting costs accomplishes the same with lower expenditure? Alright, major company reorgs and downsizing are more costly than marketing, after the easiest cost-cutting measures have been exhausted. The point is, that improving the actual product seems to make the least economical sense, that's the last resort. R&D, improving manufacturing processes, better QC etc. are costly as shit, take a long time and still don't guarantee better sales.

It seems that your point is that a for-profit school system would be compelled by the free market forces to prioritize bottom line financial results over the quality of education provided to it's students.

More or less.

You're saying that when faced with profitability concerns, a school administrator's first move would be to cut costs. The first page of the playbook is to diminish the amount and quality of services provided. Your first post seemed to espouse the idea that only an "idiot" would do anything other than this.

But supposing the administrator IS an idiot, you believe his next move would be to take more money out of a failing business and then use it to gamble on measures that may or may not attract more students.

Also in your scenario, it never occurs to this administrator to invest in the quality of service in order to justify a higher price to his existing students.

Unless I'm mistaken, your premise here is that the privatization of education will result in a system where student's concerns rank last. But in order to prove that, you need to use a decision tree that is devoid of the most obvious and beneficial solutions.

Well played

I haven't said anything about results or what anyone's gonna do, I've looked at the incentives. The rational move is to minimize expenditure and maximize profits. You could possibly gain more relative profit using a more costly method, but that seems to incur more risk, which again makes no rational sense. To me it looks like improving the product comes last down the list. All the adding of the price hikes to the decision tree does is drop the product improvements further down the list.