wsj
September 28, 2000
Why America Needs
School Vouchers
By Milton Friedman. Mr. Friedman is a senior research fellow at the
Hoover Institution, a 1976 recipient of the Nobel Prize in Economics,
and the author, with his wife, Rose, of "Two Lucky People: Memoirs"
(University of Chicago Press, 1998).
Much current discussion of educational vouchers takes it for granted
that their primary aim is to improve education for low-income students in
urban areas. That would indeed be one of the effects of the full-fledged
adoption of vouchers, and it is certainly a worthy objective, but it is very
far from the major objective, at least to this supporter of vouchers.
I have nothing but good things to say about voucher programs, like those in
Milwaukee and Cleveland, that are limited to a small number of
low-income participants. They greatly benefit the limited number of
students who receive vouchers, enable fuller use to be made of existing
excellent private schools, and provide a useful stimulus to government
schools. They also demonstrate the inefficiency of government schools by
providing a superior education at less than half the per pupil cost.
Proper Scale
But such programs are on too small a scale, and impose too many limits, to
encourage the entry of innovative schools or modes of teaching. The major
objective of educational vouchers is much more ambitious. It is to drag
education out of the 19th century -- where it has been mired for far too
long -- and into the 21st century, by introducing competition on a broad
scale. Free market competition can do for education what it has done
already for other areas, such as agriculture, transportation, power,
communication and, most recently, computers and the Internet. Only a
truly competitive educational industry can empower the ultimate consumers
of educational services -- parents and their children.
What is needed for a truly competitive educational industry is an
unrestricted voucher of substantial size, such as that put forward in
Proposition 38, scheduled for the ballot this fall in California. That
proposition provides for a scholarship of $4,000, or half of the average per
pupil funding in government schools, whichever is greater. The scholarship
will be available to all students in government schools in the first year after
the proposition is passed, and will be phased in over four years for
students already in private schools, so that it will cover all students in the
state.
For the first time, tax money dedicated to educating the children of
California would go to the intended beneficiary -- the student -- to be
controlled by the people most interested in the student's welfare -- the
parents -- and not to an intermediary institution, such as a school or school
district. Instead of schools choosing students, as they do now for the 90%
of students who go to government schools, students and their parents
would choose the school.
What would a competitive educational industry look like? I do not know,
nor does anyone else, any more than anyone could have predicted what
would happen to the telecommunications industry after the break-up of Ma
Bell.
One thing we can be sure of is that a competitive educational industry
would be very different from the present private school industry. That
industry is selling something for which a competitor -- a government school
-- is offering a close substitute without specific charge. Only two kinds of
schools have been able to succeed under those conditions: (1) highly
expensive elite schools, some for-profit, others non-profit, and some highly
endowed; and (2) parochial and other low-tuition, non-profit schools.
The elite schools appeal to the very rich who can easily afford to pay twice
for schooling their children, once in taxes and again in tuition. The parochial
and other low-tuition, non-profit schools are in a position to subsidize the
schooling they provide and -- by keeping tuition fees low -- can attract
parents who are so dissatisfied with government schools that they are
willing to pay twice out of their meager incomes for schooling their
children. (There is also a sizable home-schooling industry. Incidentally, is
there any other case in which the homemade "product" is greatly superior
to the professional product? What an indictment of the government school
system.)
Neither of these segments has any incentive to be innovative and
experimental. The passage of Proposition 38 would change that situation
completely. It would create a potential market with millions of potential
customers able to pay at least $4,000 -- which is more than most existing
private schools charge. That would attract the kind of innovative private
enterprise that has been so productive in every other field. Schools would
be established that specialized in meeting every kind of substantial demand.
Innovative uses of computers and the Internet would offer new paths to
learning. New methods of teaching would replace old, and costs would go
down just as surely as quality would go up. This happened when parcel
and message delivery was opened up to competition, when the telephone
monopoly was dismembered, when air travel was deregulated, when
Japanese competition forced the U.S. automobile industry to change its
ways, and on and on. Government schools would have to meet the
competition or close up shop.
The teachers' unions that today control the government school monopoly
would not relish that competition, even though they would have twice as
much per pupil to spend as the size of the voucher. That is why they are
going to such lengths to oppose Proposition 38, spending millions of their
members' money on frantic political opposition.
Indeed, they are almost the only ones who stand to lose from a competitive
educational market. The potential winners are far more numerous. Students
would benefit from an improvement in the quality of their education.
Teachers, and especially good teachers, would benefit from the wider
market for their services. Existing private schools would be in a far better
competitive position, and could use the additional funds to improve still
further the education they provide. Educational entrepreneurs and their
financial backers would benefit from the new field opened to their talents.
Taxpayers would benefit from a decline in government spending on
schooling, since vouchers equal only half of spending in government
schools. Employers would also benefit from a larger pool of
better-schooled potential employees. Finally, institutions of higher
education would benefit as the need for remedial courses for entering
students declined.
Every technological and economic advance since time immemorial has
ended up benefiting the poor disproportionately. That would be no less
true of the educational revolution that would be triggered by the passage of
Proposition 38. As fewer youngsters in the inner cities dropped out of
school and more acquired the skills needed for remunerative employment,
economic levels would rise, street violence decline, and crime become less
attractive to the young.
Social Impact
Failing schools are not the only reason for the parlous state of the inner
cities, but they have played an important role. Far and away the biggest
winner from an educational revolution would be society as a whole. A
better-schooled work force promises higher productivity and more rapid
economic growth.
Even more important, improved education would narrow the gap between
the wages of the less-skilled and more-skilled workers, and would fend off
the prospect of a society divided between the "haves" and the "have-nots,"
of a society in which an educated elite provides welfare for a permanent
class of unemployables. |
