It is the poor who know that good schooling is the only way to a better life
George Shultz used
to say that people loved to argue with Milton Friedman, especially when he
was not there. I am going to do exactly that, argue with Milton when he is not
in our midst anymore. I would have loved to hear his views about the remarks I
am going to make on his idea of education vouchers. My criticism does not take a
whit from my admiration of him: he was my master at-a-distance through his
books and articles on microeconomics, on consumption theory, on money, on
inflation, on expectations—you name it. Indeed I am attracted to the idea of
school vouchers and have been known to defend them, but I think they are only a
"second best" remedy for the failings of school systems where the
state plays a large role.
By "second
best" I mean the kind of engineered solution that tries to take a way
around some immoveable legal or institutional restriction that makes the best
solution unattainable. In the case of education the first best is, surprising
though it may sound, totally private education, supplied by for-profit schools
and financed by families and charities. This would not only be better for
individual liberty and public morality but also surprisingly feasible if we
attend to educational history and present day experience, as we shall see. The
example of developing nations, where private education has proved to be vastly superior
to public education, especially for the poor, should make us think
twice about any statist intervention education.
The restriction
that makes this first best of totally private school systems look unattainable
is the secular practice of having sovereign authorities meddle in all the
dimensions of schooling. The dogma that education must be intervened, managed,
and directed by the authorities is so ingrained in the West that it seems
impossible even to think of totally private schooling systems financed by
families with no public subsidies. But, as Friedman himself said in 1962 when
proposing the remedy of school vouchers, Government intervention has resulted
in making education the most backward of the major industries in the West from
a technical point of view, "because it is a socialist enterprise
controlled by a monopoly." An added perverse effect of such relentless
interventionism has been the under-education of the poorest and less gifted in
our midst, thus increasing the division of our societies and indeed of the
world into "skilled and highly schooled haves versus unskilled
and poorly schooled have-nots".1 If Government intervention in
education is is here to stay, despite its disastrous consequences, then some
kind of second best remedy would be called for and this remedy, said Friedman,
is school vouchers.
Government and
education
Friedman proposed
the idea of school vouchers in his best-selling book Capitalism and
Freedom(1962). 2 He started by distinguishing three
possible points of public intervention in education: requiring schooling,
financing schooling, and administering schools. A case could be made "both
for the impositions of a minimum required level of schooling and the financing
of this schooling by the state". However, having government administer
schools and in effect nationalizing part of the education industry did not
follow from the other two and could not be justified.
A strong case can
be made to oblige parents to have their children properly taught to a certain
level. It was defended by no less an individualist than John Stuart Mill, as early as
1848. The reasons Mill gave are interesting because they have been taken up by
most defenders of public schooling. Mill thought that education was an instance
of the consumer often being an incompetent judge of its worth and therefore an
exception to the principle of laissez faire. When parents are
unschooled, how can they appreciate the advantages of education? Hence, the
Government could "impose on parents the legal obligation to give
elementary instruction to children."3 Mill then proceeded to
make an apparently commonsensical remark: that the common wages of unskilled
labor could not bear the full cost of such an education—a remark on which I
will throw some doubt later on. His conclusion was that the government should
make sure that such elementary education be supplied free or at trifling
expense. Mill however stopped short of having the State be the main or sole
provider of education. At most, the State could enter into free competition
with private schools, but it should not prescribe the content of school
programs, for this would be a danger for public liberty. "A government
which can mold the opinions and sentiments of the people from their youth
upwards, can do with them whatever it pleases".4 At most,
Governments should concentrate on guaranteeing the quality of education by
setting up public examinations at regular intervals of a child's life.5
This was
Friedman's position, expressed in words of a century later. The principle was
that parents should be able to choose the kind of education they want their
children to receive. They could send them to a free public school financed by
taxes. If they preferred a fee-paying school and did not have sufficient means,
they should be granted government help. The distinguishing point in Friedman's
scheme was that this help should come in the form of a voucher given to the
parents rather than a subsidy granted to the school. "Parents who choose
to send their children to private schools would be paid a sum equal to the
estimated costs of educating a child in a public school", if the school of
their choice was an approved one. Friedman added a further detail: parents
could add money of their own to the voucher if they so chose.
The positive
effects of this scheme would be mainly felt on the supply side of education.
Public schools, though financed by tax money, would feel the pressure of
competition from voucher funded private schools, where parents could as easily
send their children. On their part, private schools would be in competition not
only with the best public schools but also with for-profit establishments, as
parents of all classes could top up vouchers with their personal money to pay
for innovation.
The state of
schools
The idea of having
the State guarantee that all citizens are schooled to a minimum level is
appealing but has up to now proved to be unattainable in most countries. Public
democratic education has failed those who most need it. In most advanced
democracies a whole underclass leaves school early, is functionally illiterate,
and is incapable of the simplest calculations.
The main source
for comparing educational attainment in the world is the OECD, especially the
statistics gathered under the PISA program. The acronym stands for
"Program for International Student Assessment", whereby the
capacities of fifteen year-olds in reading, mathematics, and science are tested
every three years in more than seventy countries. The scheme is praiseworthy
and gathers much interesting information about different school systems around
the world and their achievements and failings. I would like to underline some
traits that do not necessarily stand out in the PISA studies but are relevant
for voucher systems such as that proposed by Friedman.
In many advanced
countries, especially those with an ethnically diverse population, PISA shows
that a considerable proportion of fifteen year-olds drop out of school and many
fail to get a job. Some countries showed low dropout rates in 2009, such Nordic
Denmark with 2.9% or central European Poland with 3.6%. But many of the more
advanced countries are afflicted by higher rates, such as the United States
with 8.8%, the United Kingdom with 9.6%, and Spain with no less than 13.4%. In
the United States, close to 30% leave school without a high school certificate.
However these
statistics of young people graduating from school say too little about the
baggage they have acquired during their long years of education. The percentage
of pupils with poor reading results (in effect functional illiteracy) was 19%
on average in the European Union countries in 2009, with the United Kingdom and
Germany at 18% and Spain and France at 20%. The gap separating high and low
achievers at school in the US is as worrying as in Europe. In America there is
a clear difference between white and Asian students on the one hand and black
and Hispanic students on the other, with a steady percentage of underachievers
impervious to measures taken to reduce this gap. Again, around one fifth of
American adults find it difficult to get information from printed materials.6
Public schools in
America and in many other countries, from New Zealand to the United Kingdom and
from Chile to Canada, suffer from evident shortcomings. This explains the
spreading across many nations of a movement to supplement them with
"schools of choice" or charter schools that are in whole or in part
publicly financed but are less subject to regulation than their public peers.
This movement has been beneficial, but the Friedmans were right to say that
charter schools are a very limited step in the right direction; they are still
part of the State system and by forcing them to be not-for-profit they lack the
dynamism of private enterprise.7
In sum, despite
all the advances, public education systems in diversified societies 8 have
proven to be highly unsatisfactory, especially for supplying low level
education to those most in need of bettering their human capital.
Education (and
health) vouchers in Sweden
The public
education system of Sweden underwent what many would call a revolutionary
transformation in the 1980s and 90s with the introduction of school vouchers.
The change was extraordinary for a country famed for its socialist Welfare
State, all the more so because the Health Service also moved from central
planning to vouchers.
The whole change
started with public dissatisfaction with the incapacity of the public school
system to attend to the demand for nursery education. Education is a municipal
service in Sweden under State supervision. First a venture was started at
Pysslingen to offer this pre-school service, and after a great struggle it was
able to open its doors. Then the inhabitants of a small village called
Drevdagen turned the local school into an independent establishment. In 1993
the non-Socialist Government of Carl Bildt reached a compromise with the Social-Democrats
to launch the school voucher scheme. Vouchers collected by private schools were
worth 85% of the average per head cost at municipal schools. Though families
could not top up the education vouchers with additional money, greater
efficiency allowed many private schools to make a profit. The main addition to
the usual voucher scheme was that municipal schools also had to compete for
vouchers or face closure. School choice reigned.9
The same voucher
competition scheme was introduced for hospitals and clinics in Sweden and
private for-profit corporations flourished and spread to the Continent of
Europe. Only brain and heart surgery departments were kept in the public sector
due to resource scarcities.
But there always
is a serpent in Paradise. The well-educated young of immigrant parents find no
work after leaving school! The two previously quiet locations of Rinkeby and
Husby have been rent by riots. So, even the voucher system becomes a third best
when a new institutional restriction is added: in this case, ethnic
concentration and no jobs. (FT, 25-26 May 2013)
The beautiful tree
The web site of
the Friedman Foundation for Educational Choice10 is well worth a
visit to gauge the spread variety of the voucher scheme in America. A further
step would be to apply the Swedish idea that public high schools should also be
financed by vouchers handed them by the parents. So, what is my complaint about
Friedman's version of school choice?
Let me take the
education industry at the other end. In countries such as Nigeria, Zimbabwe,
Ghana, India, and China there are flourishing private, for-profit schools that
cater to the poor, the miserably poor. The story is told by James Tooley in his
enchanting book The Beautiful Tree: A Personal Journey into How the
World's Poorest People Are Educating Themselves. Tooley was sent by an
international organization to study educational systems in Africa. He was told
by local officials that the only private schools there catered to the rich. But
then he discovered two things. One was that the State schools financed with
international aid were a scandal of corruption and inefficiency; the other was
that the miserably poor families in the slums chose to take their children to
private enterprise establishments. The premises were cramped. They had to pay
whatever they could afford. But in desperate cases the owner granted them a
scholarship. The teachers did not miss a class; there was discipline in the
classroom; their children were taught what would serve them in later life.
In the West we
have been corrupted by entitlements. Mill was wrong when he said that
unschooled parents could not appreciate the advantages of education. It is the
poor who know that good schooling is the only way to a better life.
References
Friedman, Milton
(1955): "The Role of Government in Edication". Robert A. Solo,
ed.: Economics and the Public Interest, pgs. 123-144. Rutgers
University Press, New Brunswick.
—— (1962): Capitalism and Freedom. University of Chicago Press, Chicago.
—— (1980): "What's Wrong with Our Schools", being ch. 6 of Free to Choose. Harcourt Brace Jovanovich.
—— (1962): Capitalism and Freedom. University of Chicago Press, Chicago.
—— (1980): "What's Wrong with Our Schools", being ch. 6 of Free to Choose. Harcourt Brace Jovanovich.
Friedman, Milton
and Rose D. (1998): Two Lucky People. Memoirs. The University of
Chicago Press, Chicago.
Mill, John Stuart
(1848, 1965): Principles of Political Economy with Some of Their
Applications to Social Philosophy. In The Collected Works of
John Stuart Mill. Vols. I and II. University of Toronto Press.
—— (1859, 1977): On Liberty. In The Collected Works of John Stuart Mill. Vols. XVIII. University of Toronto Press.
—— (1859, 1977): On Liberty. In The Collected Works of John Stuart Mill. Vols. XVIII. University of Toronto Press.
OECD (2012): Education
at a Glance 2012. OECD Indicators. Paris.
Tooley, James
(2009): The Beautiful Tree: A Personal Journey into How the
World's Poorest People Are Educating Themselves. Cato, Washington D.C.
Sandbu, Martin and
Crouch, David (2013): "Fire in the People's Home. Swedish
Riots". Financial Times, 25-26 May.
Svanborg-Sjöval,
Karin (2012): Private Choice in the Public Sector. The New Swedish
Welfare Model. Tmbro, Stockholm.
Wikipedia
"Education in the United States" Retrieved 27 May 2013.
Wikipedia:
"Charter School" Retrieved 27 May 2013.
Footnotes
2. Friedman first mooted the idea
of educational vouchers in his (1955) essay, later rewritten as ch. 6 of Capitalism
and Freedom.
3. Mill (1848), pages 948-9. Also
available online at http://www.econlib.org/library/Mill/mlP73.html#Bk.V,Ch.XI.
8. Finland is a contrary example
that bears more study. Its school system is exclusively public, is thoroughly
uniform, centrally organized and gives excellent results. The homogeneous
character of that country makes such statism easier to apply than in ethnically
and culturally more diverse countries.
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