St. Milton of Friedman Elementary

By scrapping the existing school system, conservatives can get rid of a powerful and influential Democratic union, gain a new source of revenue and a valuable consumer demographic, eliminate taxes, and ensure a permanent underclass of underpaid workers. The only wonder is that the public schools were allowed to exist at all.

Megan McArdle is pushing school voucher programs again, an utterly inexplicable action on the part of a "libertarian." Libertarians want all public schools abolished, as well as taxes and state control. The last thing they should want is public money being redistributed to help pay for someone else's education. But once you ignore that little complication, you are free to indulge in glowing fantasies of complete privatization, with businesses taking over schools and the government getting out of education. Still, privatization doesn't put cash in McArdle's pocket; vouchers would.

There's a small problems with this free market solution--it has all of the problems of the free market as well. Businesses want control over supply, freedom from regulation, ability to compete. They are cost-effective, stream-lined, out-sourced, and leveraged. Over here in the real world, privatization would deny poor children many services and risk even greater social and financial inequality. Fortunately for voucher proponents, not everyone lives in the real world. What does Our Lady Of The Atlantic Lake, Megan McArdle, think about this issue?

McArdle quotes Mathew Yglesias, who discusses a recent study on school vouchers:

Friedman (1962) argued that a free market in which schools compete based upon their reputation would lead to an efficient supply of educational services. This paper explores this issue by building a tractable model in which rational individuals go to school and accumulate skill valued in a perfectly competitive labor market. To this it adds one ingredient: school reputation in the spirit of Holmstrom (1982). The first result is that if schools cannot select students based upon their ability, then a free market is indeed efficient and encourages entry by high productivity schools. However, if schools are allowed to select on ability, then competition leads to stratification by parental income, increased transmission of income inequality, and reduced student effort--in some cases lowering the accumulation of skill. The model accounts for several (sometimes puzzling) findings in the educational literature, and implies that national standardized testing can play a key role in enhancing learning.

Friedman had no problem with children being left behind. He seemed to assume that it would happen, and in fact wanted only to provide the most minimum free education possible.

Governments could require a minimum level of education which they could finance by giving parents vouchers redeemable for a specified maximum sum per child per year if spent on "approved" educational services. Parents would then be free to spend this sum and any additional sum on purchasing educational services from an "approved" institution of their own choice. The educational services could be rendered by private enterprises operated for profit, or by non-profit institutions of various kinds. The role of the government would be limited to assuring that the schools met certain minimum standards such as the inclusion of a minimum common content in their programs, much as it now inspects restaurants to assure that they maintain minimum sanitary standards.

He had no problem with inequality, since it was a by-product of perfect individual freedom.

Essentially this proposal--public financing but private operation of education-- has recently been suggested in several southern states as a means of evading the Supreme Court ruling against segregation. This fact came to my attention after this paper was essentially in its present form. My initial reaction--and I venture to predict, that of most readers--was that this possible use of the proposal was a count against it, that it was a particularly striking case of the possible defect--the exacerbating of class distinctions--referred to in the second paragraph preceding the one to which this note is attached.

Further thought has led me to reverse my initial reaction. Principles can be tested most clearly by extreme cases. Willingness to permit free speech to people with whom one agrees is hardly evidence of devotion to the principle of free speech; the relevant test is willingness to permit free speech to people with whom one thoroughly disagrees. Similarly, the relevant test of the belief in individual freedom is the willingness to oppose state intervention even when it is designed to prevent individual activity of a kind one thoroughly dislikes. I deplore segregation and racial prejudice; pursuant to the principles set forth at the outset of the paper, it is clearly an appropriate function of the state to prevent the use of violence and physical coercion by one group on another; equally clearly, it is not an appropriate function of the state to try to force individuals to act in accordance with my--or anyone else's--views, whether about racial prejudice or the party to vote for, so long as the action of any one individual affects mostly himself. These are the grounds on which I oppose the proposed Fair Employment Practices Commissions; and they lead me equally to oppose forced nonsegregation.

However, the same grounds also lead me to oppose forced segregation. Yet, so long as the schools are publicly operated, the only choice is between forced nonsegregation and forced segregation; and if I must choose between these evils, I would choose the former as the lesser. The fact that I must make this choice is a reflection of the basic weakness of a publicly operated school system. Privately conducted schools can resolve the dilemma. They make unnecessary either choice. Under such a system, there can develop exclusively white schools, exclusively colored schools, and mixed schools. Parents can choose which to send their children to. The appropriate activity for those who oppose segregation and racial prejudice is to try to persuade others of their views; if and as they succeed, the mixed schools will grow at the expense of the nonmixed, and a gradual transition will take place. So long as the school system is publicly operated, only drastic change is possible; one must go from one extreme to the other; it is a great virtue of the private arrangement that it permits a gradual transition.

An example that comes to mind as illustrating the preceding argument is summer camps for children. Is there any objection to the simultaneous existence of some camps that are wholly Jewish, some wholly non-Jewish, and some mixed? One can--though many who would react quite differently to negro-white segregation would not--deplore the existence of attitudes that lead to the three types: one can seek to propagate views that would tend to the growth of the mixed school at the expense of the extremes; but is it an appropriate function of the state to prohibit the unmixed camps?

The establishment of private schools does not of itself guarantee the desirable freedom of choice on the part of parents. The public funds could be made available subject to the condition that parents use them solely in segregated schools; and it may be that some such condition is contained in the proposals now under consideration by southern states. Similarly, the public funds could be made available for use solely in nonsegregated schools. The proposed plan is not therefore inconsistent with forced segregation or forced nonsegregation. The point is that it makes available a third alternative.

Charming man.

McArdle responds to Yglesias's post:

There is more to a market than buying or selling. Armchair economists and parlor libertarians often act as if all you need to make a market is to remove the government barriers to trade. This can be true (ag subsidies, I'm looking at you!), but in many places it's nowhere near enough. You need the social norms that support market trade, and you need to set good rules by which trade happens. What we did to Russia is a good example of why the "get government out of the way" theory is not sufficient.

[the quote]

The rules surrounding markets matter a lot--and the reason we don't know this is that the rules that work have disappeared into the background, faded out of our consciousness, become part of the miasma of "the market". For example, I recall a web debate years ago in which someone made the standard point that cartels are very difficult to hold together, which means anti-trust rules about this sort of thing have dubious utility. I believe it was Eugene Volokh who pointed out that this was true . . . but only because courts refused to enforce cartel agreements. If courts did enforce them, cartels would work pretty well--which is why we still have professional sports leagues.

Luckily, this is the sort of rule that most voucher programs enforce--and because I find this paper pretty convincing, I'd say they should continue to.

The crux of the entire argument is whether or not most voucher programs enforce open enrollment, and McArdle gives us no proof at all of her statement. The DC voucher program gave out "scholarships" through a lottery system, and the kids could go to any private school that would admit them. Most of them went to Catholic schools. We have no evidence that admittance to the schools was equal, only that distribution of the vouchers was equal.

Friedman did not consider inequality to be a problem. He addressed the problem of class distinctions, losing the "healthy intermingling of children from decidedly different backgrounds," but dismissed it, saying that most children don't mix with other backgrounds under the present system due to residential stratification. "The establishment of private schools does not of itself guarantee the desirable freedom of choice on the part of parents," Friedman said, and there is no guarantee that a school will admit anyone who wants admittance, and won't retain the rights of refusal of service.

I was not able to find any regulations stating that DC Catholic schools were required to take children of other religions, children with expensive special needs that require additional personnel, services and equipment, mentally disturbed, disruptive students, or children with limited intellectual ability. (Federal law requires that public school districts identify private school students with special needs and provide them with equitable services, further subsidizing private schools.) They may be there, but I could not find them and evidently neither could McArdle, who presents her opinion as fact. Many, many private schools compete on the basis of high standards and accelerated learning, where intelligent children will not be held back by others of lower ability who need more time and help. These schools will not suddenly throw away their successful business plan. Schools with high scores and student achievement will be able to charge higher tuition and provide more services. More modest schools will not. Most of all, the amount of the voucher will dictate growing inequality. The poor will lose thousands in services every year.

Average per pupil costs of the public schools in Washington [DC] was $8,812 in 1995-96, thelast year for which reliable information is available.28However, this figure includes monies forancillary costs, such as transportation, school lunch, capital costs and central administration, costsnot incurred by all private schools. When public-school expenditures for services and programscomparable to those offered in private schools are considered, estimated average public-schoolper-pupil expenditure was $7,653 in 1995-96. Presumably, per pupil expenditure was higher in1998-99. But if public-school expenditure remained constant after 1996, the amount spent perpupil was an estimated 92 percent higher than those in the private schools attended by the averagescholarship student.

Given these differences in expenditure levels, one would expect to find more extensivefacilities and smaller classes in Washington public schools. But reports from parents are onlypartially consistent with this expectation. Smaller classes require more teachers relative to thenumber of pupils, and the number of teachers in a school is a significant determinant of schoolcosts. It is, therefore, surprising that public schools were said to have larger classes. Parents saidpublic schools, on average, had 22 students in their classrooms, four more than those in privateschools (Table 5).

In focus group sessions, Washington parents often expressed concern about the lack ofresources in both public and private schools. In one focus group consisting mainly of public-school parents, the conversation ran as follows:28 Data taken from the U. S. Department of Education, Office of Educational Research and Improvement. NationalCenter for Education Statistics, Common Core of Data, School Years 1993-94 through 1997-98. (Washington, D. C.:2000). Comparable data estimate excludes public-school expenditure for student transportation, food services,enterprise operations, non-elementary/secondary programs, adult education, capital outlay, payments to other schoolsystems, payments to state governments, interest on school system debt, central support for planning research andmanagement services, and unspecified support services.

25Mother: I mean my kids have come home and told me they don't even have toiletpaper....That's ridiculous.2ndmother: Oh, yeah, and they can't drink the water. They had to take a case of water toschool.3rdmother: My son took two cases of water to school because some of the kids can'treally afford to bring them. They have to sit there all day without water.4thmother: One day this week, ... the coldest day in school, --- didn't have any heat. Thekids had sit in the classroom with coats on. 29

Still, findings from the parental survey displayed in Table 5 suggest that the number of facilitiesand programs were more extensive in public schools than in private schools of the District ofColumbia. Parents of students in public schools were much more likely to report that their schoolhad a nurse's office. They were also considerably more likely to say the school had a cafeteriaand special programs for non-English speakers—for each of these items, the differences werelarge, nearly 25 percentage points or more. Public-school parents were also somewhat morelikely to say their school had a special education program, library and a computer lab. On theother hand, private-school parents were more likely to report that their school had individualtutors, a difference of 19 percentage points. Moreover, they were somewhat more likely toindicate that the school had an after-school program and a program for advanced learners. Therewere no significant differences in the parent responses with respect to the following facilities andprograms: child counselors, arts and music programs, and a gymnasium.

But remember--opponents of vouchers are morally bankrupt.

Forgive me--I'm about to get testy again--but this thread on 11D really does seem to me to showcase in stunning technocolor the moral bankruptcy of voucher opponents who have pulled their own kids out of failing inner city schools. They have no good answer for why their choice is morally worthy, but vouchers are horrifying; their response to the deep need of kids in failing schools is a slightly gussied up version of "screw you, I've got mine." Their children's future, you see, is an infinitely precious resource that trumps their principles of distributional justice and community solidarity, but they cannot imagine putting the futures of poorer, darker skinned children ahead of sacred principles such as "Thou shalt not allow children to attend schools run by the Catholic Church" and "Supporting the public schools (even when they suck)". I could do a better job arguing against school vouchers.

Savvy fake libertarians understand that most voucher money will probably go to people already in private school, and Megan McArdle, whose parents paid a large fortune for her private school education, doesn't seem to mind redistribution if some of it comes her way. After all, some day there will be a Little Megan, God willing, and why should McArdle pay all of her private school tuition when she can con all the Heartland mommies and daddies into helping pay for it instead? Right now we're taking money from the rich and giving it to the poor, when with the voucher system we can take money from the poor and give it to the rich!