Educators must be free to innovate, to set their own prices, and to tailor their services to specific groups of children. All these things are critical to the effective operation of market forces. Prices are a lynch pin of market operation, directing the energies of providers to the areas in which there is the greatest unmet demand. Flexibility in pricing is also key to the cycle of innovation and improvement that has occurred throughout the economy (outside the field of education). Televisions, cell phones, VCRs, and DVD players all began as luxuries but are now mass market commodities. What’s more, the VCR that costs $40 today is technologically superior to the one that cost $1,000 two decades ago. The possibility of charging a high price for a new and superior service or technology is one of the driving forces behind the creation of such services and devices. Without the existence of providers who can recoup high research and development costs through high initial prices, the commercialization and dissemination of innovations grinds to a halt.

Schools must also be free to target particular audiences. While it is true that we want all children to have access to good schools, it is not true that every school can do a good job of serving every child. Specialization and the division of labor, so well understood and thoughtfully exposited by Adam Smith, must be preserved for the education marketplace to work effectively.

Finally, ensuring that teachers enjoy real professional freedom is a key element in maintaining high morale and motivation. Many teachers burn out and leave the profession because they are frustrated by pedagogical, administrative, or curricular requirements that they feel prevent them from doing a good job. Teachers in the comparatively free private sector report having much more control over their professional lives, and being much happier with that level of control than are their public school counterparts.[13]