When historians review the changes in schools over the twentieth century, two things are likely to stand out. First, there has been a dramatic consolidation of school districts, leaving fewer but significantly larger districts. Second, schools have become more unionized. Historians may not see the interaction of these two things, but it is just that interaction that makes new forms of competition among schools so important. Improving our schools in the twenty-first century is likely to rest on developing forms of school choice—vouchers, charters, and other institutions—that counteract these two forces. [also published in Innovations in Education, Proceeding of the Federal Reserve Bank of Cleveland Conference, Cleveland, November 17-18, 2005, pp. 27-32]