Education:
School Vouchers: The Next Great Leap Forward

By Amity Shlaes

Milton and Rose D. Friedman have made a career of advocating radical changes in public policy and economic thinking. Hoover media fellow Amity Shlaes recently spoke with the Friedmans about their latest cause.

Milton Friedman played his part in spurring our nation’s last great expansions. In the 1970s, he set forth the principles that helped Chicago commodities traders lay the ground for the multitrillion-dollar derivatives market. And he pushed for the lower capital gains tax rates that enabled venture capital to power Silicon Valley in the 1980s. So the other day I called on Professor Friedman and his cothinker and wife, Rose, to ask what change might trigger our next Great Leap Forward.

The Friedmans indeed had an answer. It wasn’t job training or wiring schools for the Internet, to name two millennial projects favored by the White House. It wasn’t rolling back regulation. It wasn’t even lower taxes. No, the Friedmans summed up their goal for the twenty-first century in two words: school vouchers.

“Vouchers would reduce stratification, they would build competition, they would restore control to the people most competent to decide on children’s education: their parents,” said Friedman. He and Rose are so preoccupied with vouchers that they wrote about them in their newly published memoir, Two Lucky People. They have also established a foundation to promote school choice.

That the father of free markets would hone in on such a narrow policy project tells you something about the power of the voucher idea. Once dismissed as a fringe notion, vouchers are rapidly becoming the central project of school reform. In June, when the Wisconsin Supreme Court handed down a landmark decision allowing Milwaukee’s voucher experiment to proceed, the excitement became palpable. What is it about the voucher movement that has set us all hoping that there is finally a chance to escape the education purgatory? The answer is pure Friedman: Vouchers are the best stepping-stone to privatization, the school reform that will bring the revolution.

From armchairs in their San Francisco apartment, the Friedmans laid out a few precepts for getting to that utopia. They’re worth listing, if only because they show why vouchers stand out from the rest of the education experiments up and running in this country.

THE PUBLIC SCHOOL MONOPOLY CAUSED THIS PROBLEM
Government controls this market. We’ve ended government control of the economy in Russia and East Europe; now it’s time to end it in our schools. “Why should socialism work better for education than for anything else?” asks Friedman. Public school choice sounds nice. In reality, though, it has about as much potential for real change as Leonid Brezhnev’s agriculture reforms did in communist Russia. Teacher unionization made it worse. The National Education Association used to be a professional organization. When it and the American Federation of Teachers transformed themselves into unions, teachers stopped thinking of schools as places where kids learn and started thinking of them as jobs programs for teachers. Professor Friedman puts this in the terms of his trade: “Simple economic reasoning tells you these unions are working for teachers”—not kids. That’s why state initiatives and court cases that seek to curtail union abuses are so important. It’s also why the AFL-CIO will spend umpteen millions of dollars to halt them, as it recently did opposing California’s Proposition 226.

LOCAL IS GOOD
In earlier times school policy was set by a few farmers who met on the village green to hire a schoolmarm. For the past thirty years, though, our nation has been busy centralizing control over education to the state and federal level. Parents need a say; centralizing takes it away. “Give parents the control,” says Friedman. “They are the ones who have the greatest interest in the schooling their children receive, and they are the ones who have the greatest competence in the matter.”

CHARTER SCHOOLS AREN’T ENOUGH
Merely giving parents and charter schools the independence to set school policy or jawboning about “small school empowerment” won’t do the trick. Parents need to control the money as well. Otherwise the state or federal government can intrude when it pleases. “The fundamental problem is that these schools remain government entities,” says Friedman. “You may have competition in demand. But you don’t have free market competition in supply. It’s still socialism.”

FEDERAL VOUCHERS ARE NOT THE ANSWER
Lawmakers led by Senator Paul Coverdell (R.-Ga.) have tried to create tax breaks for grammar and high school education through the federal code, with an eye to the plan being a sort of a down payment on a federal voucher system. That’s dangerous, says Friedman. Why? Because it keeps control in Washington’s hands. Local and state governments are closer, so they should be the ones to give the vouchers.

FULL TUITION VOUCHERS ARE A BAD IDEA
Some voucher advocates want vouchers equal in amount to what states and localities now spend on schools. Wrong, says the professor. Most private schools do the job for less money than government does. Why give them incentive to raise tuition? “Let the market work. And let parents pay some of the cost.” All customers need to know the value of what they’re buying.

Today the voucher movement is a small one, with a few proj-ects concentrated in Milwaukee, Cleveland, and New York. But then, the derivatives market was a tiny thing when Friedman first started pondering it, in the early 1970s. And who can predict what untold gains in productivity private education can bring, once the conditions for change are in place? Speaks the professor: “We are not smart enough to predict what the market will do.”

Available from the Hoover Press is Private Vouchers, Terry M. Moe, editor. Also available is the videotape “Reading, Writing, and Reform,” an episode of the weekly television program Uncommon Knowledge , jointly produced by the Hoover Institution and the San Jose PBS affiliate KTEH, which features Maureen DiMarco, former secretary of the California Office of Child Development and Education, and Bill Honig, former California superintendent of public instruction, discussing problems in America’s classrooms. To order this book or videotape, call 800-935-2882.