Thursday, May 21, 2009

Discipline, Education, and the Concept of Moral Hazard

The term "moral hazard" has been bandied about lately as a term of economics and the question of whether the government should be "bailing out" failing companies. As an economic term, "moral hazard" means the hazard that comes from insulating an entity form failure and the conseuqences of it. "Running the risk of moral hazard" is the idea that a risk we take in insulating others from failure is that they will never learn from their mistakes and may take as big or bigger risks in the future.

While the term has been used in economics, I think it is high time we apply it to the world of educational psychology. More directly, we educators should remain cognizant that every time we "keep students from failing" by artificially insulating them from the consequences of negative actions, we are ensuring that they do not learn from mistakes. In other words, if the best way to learn from mistakes is to realize that they are mistakes, then interfering with the experience of consequences of mistakes means interfering with the best feedback mechanism one has.

Many times in my career as a teacher have I argued this position and many times, unfortunately, I have lost the argument. In a previous post, I referred to one such incident: me and several other teachers brokered a deal with a senior in danger of failing that if he does x and y, we would see to it that he could pass. Repeatedly, he broke the deal. Repeatedly, the other teachers (without me) rebroekered the deal - all to ensure that he could pass despite having broken the agreement on which his success depended.

Many other times, I have seen the risk of moral hazard come into play when teachers explain rules and cosnequences to students only to, when push came to shove, chafe and allow students to break said rules without undergoing the consequences.

Why do we teachers allow and evene encourage such moral hazards to occur?

I believe that, just as in the current economic situation, it is hard to "hold the line" and enforce consequences when the consequences are severe. It is all well and good to say that companies that are irresponsible shall be allowed to go bankrupt, but it is painful to sit by and watch this happen. Thus, the government ends up caving in and taking the emotionally easy way out by not letting companies go under and people go unemployed.

In the same way, teachers allow such moral hazard becasue, as teachers, we generally do not like to hurt kids. We want to see kids happy, and we do not enjoy seeing kids fail. Unfortunately, we do not often realize that while this is a noble feeling, we often do more harm than good by protecting students form the consequences of their actions, and in the process, interfering with the feedback mechanism of natural consequences. She who places her hand on the stove and gets burned will not do it again. She who places her hand on the stove and is repeatedly saved from such an experience (by having their hand yanked away from the stove, etc) will never, or very slowly, learn that the stove burns. But as no one wishes to see a child get hurt, we protect them and unknowlingly slow down their learning process.

I have learned - and this will sound strange - to find a small (very small) bit of accomplishment in allowing students to fail of their own accord. I see it as a learning opportunity for the student. Of course, I don't actively want students to fail and do not try to make them fail; on the contrary, I want to do everything in my power to see them succeed SHORT OF PROTECTING THEM FROM DESERVED CONSEQUENCES. If this sounds strange, let me illustrate with an example.

One particular student of mine did just about everything wrong in the second and third marking period. He showed up late, talked back, did not do work, disrupted class, etc. I talked with him many times and warned him that he was heading for a failing grade. When his third quarter grade showed up as an "E," he did everyhing he could to try and convince me to change no avail. I explained to him that that was the consequence of his actions and that if he wanted to avoid failing the class, he must improve in quarter four. I would not change his grade or offer him any special benefit of the doubt.

From then on, he has improved greatly. He has been much better in class and is now earning a "B." I tell him as frequently as I can that I am proud of his change in behavior, and when asked what accounts for this new and improved showing, he simply tells me that he knows that acting up will result in a failing grade.

So, there you have it. Fairness means helping children succeed while holding to the rules when they don't. The minute one allows the rules to be overlooked and protecting kids from consequences of their actions, one is running the same "moral hazard" risk the economists talk about: we run the risk of interfering with people's ability to learn from, and correct, their mistakes.


  1. Exactly right. And since the consequences are usually years away, there's not much incentive for teachers to take the moral hazard seriously (another layer of moral hazard...).

    I don't think it sounds strange at all getting a sense of satisfaction from seeing kids fail and learn to change. My brother-in-law was teaching a math class and he wanted to have a finances game throughout the semester to give the students a sense of money management; he was planning analogues for education, employment, and credit, and they'd be able to cash their play money in for bonus points. He said his goal was to let some student make all the wrong choices and get so saddled with debt that he'd never be able to turn it around all semester. Most of these students came from pretty poor families, and there's a chance he could have made a huge difference for a few of them. (Unfortunately, he never ended up getting a chance to try it out.)

  2. This post is years old, yet this problem is still so relevant today. When you ask why teachers allow this moral hazard to occur I had an answer right away; We have to! Administration forces us to bend the rules, to leave no child behind, and to inflate grades to make children feel successful even if they didn't really succeed. If it were my choice, I would not do these things because this sets up students to think this is how the world works. Unfortunately for them, they will realize soon that it certainly does not work that way and we did not prepare them to deal with failure and mistakes.