What’s Wrong with Our Schools? – The Failure of Government Monopoly in Education
The sixth major argument in Free to Choose is a powerful and provocative critique of the American public school system. The Friedmans argue that elementary and secondary education in the United States, particularly in inner cities, is in a state of crisis. Despite skyrocketing costs and a vast professional bureaucracy, the quality of schooling has been declining precipitously. Students are failing to master basic skills, and schools have become sources of social conflict and even physical danger rather than centers of learning and assimilation.
The root cause of this failure, they contend, is not a lack of funding or a lack of good intentions. It is a fundamental flaw in the structure of the system itself: the fact that government-run schooling operates as a protected monopoly. By severing the direct link between the provider (the school) and the consumer (the parent and child), and by centralizing control in the hands of professional educators and distant bureaucrats, the public school system has become largely unaccountable to the people it is supposed to serve. The only effective way to revitalize American education, they argue, is to break this monopoly and introduce the principles of competition and choice into the educational marketplace through a voucher system.
The Historical Shift from Market to Monopoly
To understand the problem, one must first understand that the current system is not the only way to organize schooling. In the early years of the American republic, education was a diverse and largely private affair. Schooling was widespread and financed primarily by fees paid directly by parents, supplemented by charitable and local government funds for the poor. The system was decentralized and highly responsive to parental desires.
The shift toward government-dominated, “free” public schooling in the mid-nineteenth century was not, the Friedmans argue, a response to a grassroots demand from dissatisfied parents. Rather, it was a crusade led by a coalition of well-meaning reformers and a nascent class of professional educators, exemplified by Horace Mann. While reformers were driven by the noble ideal of using schools to create a common civic culture and promote equality of opportunity, the professional educators had a more direct self-interest: a government-run system would offer them greater job security, guaranteed salaries, and more professional autonomy, freeing them from the direct accountability that came with having to please their customers—the parents.
This shift created an “island of socialism in a free-market sea.” For most of the nineteenth and early twentieth centuries, the negative effects of this monopoly were muted because the system remained highly decentralized. Control was largely in the hands of local school boards, which were directly accountable to the parents in their communities. If parents were unhappy with the local school, they could directly influence its policies through the political process or, in a nation of many small communities, “vote with their feet” by moving.
The Rise of Bureaucracy and the Decline in Quality
The twentieth century, and particularly the period after the Great Depression, saw a dramatic acceleration of a trend toward centralization and bureaucratization. Power shifted steadily from local communities to larger districts, to state capitals, and ultimately to Washington, D.C. This process was driven by the same intellectual faith in centralization and expert control that fueled the growth of the welfare state. The result has been the creation of a vast, entrenched educational establishment—a powerful bureaucracy of administrators, education specialists, and union officials—that is increasingly insulated from the control of parents.
This bureaucratization, the Friedmans contend, is the direct cause of the system’s decline. They cite what Dr. Max Gammon called the “Theory of Bureaucratic Displacement”: in a bureaucratic system, an increase in inputs (spending) will be matched by a fall in outputs (production). The American school system is a perfect illustration. Over the past several decades, spending per pupil has soared (even after adjusting for inflation), the number of teachers and administrators per student has risen, but the results—as measured by standardized test scores, literacy rates, and basic competence—have plummeted.
The problem is not the size of the schools, but the lack of competition. In a competitive market, an enterprise can only grow large if it is efficient and provides a product that consumers want. A large, inefficient firm will be driven out of business by more nimble competitors. But a government monopoly faces no such discipline. The public school system does not get its funds by satisfying its customers; it gets them through the coercive power of taxation. A school that performs poorly does not lose its students and go out of business; it continues to receive its budget, and its administrators may even argue that its poor performance is a reason to give it more money.
This system is particularly devastating for the poor, especially those trapped in the inner cities. Wealthy parents have always had a choice. They can opt out of the public system by sending their children to private schools, or they can effectively choose their public school by buying a home in an affluent suburban district known for its excellent schools. For the poor, these options are largely unavailable. They are forced to send their children to the local government-run school, regardless of its quality. The tragic irony is that a system established in the name of equality of opportunity has become a rigid, class-based system that perpetuates inequality by providing the worst schooling to those who need good schooling the most.
The Solution: A Voucher System
The Friedmans’ proposed solution is to introduce competition and choice by giving control back to the parents. This would be accomplished through an educational voucher system.
The mechanics are straightforward:
- The government would calculate the average cost of educating a child in its public schools (for example, say, $5,000 per year).
- Instead of giving this money directly to the schools, the government would give each parent a “voucher,” or certificate, worth that amount (or a substantial fraction of it, say, $4,000).
- This voucher could be used to pay for the tuition of the parent’s child at any “approved” school of their choice—be it a government-run school, a private secular school, or a parochial school.
- Schools, in turn, would redeem these vouchers for cash from the government.
This simple change would have revolutionary consequences. It would transform the educational landscape by creating a competitive market where schools would have to compete for their students.
The Benefits of a Voucher System:
- Empowerment of Parents: The voucher system puts the consumer—the parent—in the driver’s seat. Parents, who have the most direct interest in their children’s well-being, would be free to choose a school that best fits their child’s needs and their own values. Schools that failed to provide a quality education would lose their students—and their funding—to schools that succeeded. This creates a powerful mechanism of accountability that is entirely absent in the current system.
- A Flowering of Diversity and Innovation: The voucher system would break the monolithic, one-size-fits-all model of public education. It would create a vibrant and diverse marketplace of educational options. New schools would spring up to meet a wide variety of demands. There would be schools specializing in science and math, schools focused on the arts, schools organized around different pedagogical philosophies, schools for children with special needs, and so on. This competition would foster innovation and experimentation, as schools would be constantly seeking better ways to attract and educate students.
- Improved Quality and Lower Costs: Competition forces providers to be efficient and to offer a better product at a lower price. The Friedmans point to the example of parochial schools, which have consistently educated children, often from disadvantaged backgrounds, at a fraction of the cost of public schools and frequently with better results. Under a voucher system, all schools, including the government-run ones, would face this same pressure to perform.
- Greater Equity for the Poor: The greatest beneficiaries of the voucher system would be low-income families. For the first time, they would have the same freedom to choose that wealthy families have always had. They would no longer be trapped in failing inner-city schools. The voucher would give them the financial power to seek out the best education for their children, forcing existing schools to improve or creating the demand for new, better schools to be established in their neighborhoods. The argument that the poor are not competent to choose for their children is a gratuitous and paternalistic insult; history shows that when given the opportunity, parents at all income levels will sacrifice a great deal for their children’s future.
- Reduction of Social Conflict: Many of the most bitter conflicts in American society—over issues like busing, curriculum content, and prayer in schools—are a direct result of the government monopoly on education. Because everyone is forced into a single system, these issues become political battlegrounds where one group seeks to impose its values on another. The voucher system de-politicizes education. It allows for peaceful coexistence. Parents who want a school with a traditional curriculum can choose one; parents who want a more progressive approach can choose another. Busing, if it occurred, would be voluntary, not compulsory.
Addressing the Objections
The Friedmans confront the common objections to the voucher system head-on:
- The Church-State Issue: Would vouchers for parochial schools violate the separation of church and state? They argue it would not. The voucher is a payment to the parent, not the school. It is analogous to the G.I. Bill, under which veterans have long been free to use their government benefits at religious universities. In any case, even a voucher plan that excluded religious schools would be a vast improvement over the current system.
- The “Destruction” of the Public School System: The educational establishment argues that vouchers would destroy public schools. The Friedmans’ response is blunt: a school that cannot attract any students in a competitive environment does not deserve to survive. Good public schools would have nothing to fear; they would thrive under competition. The only “destruction” would be of the monopoly power of the bureaucracy.
- The Fear of Greater Segregation: Some critics fear that choice would lead to greater racial and class segregation. The Friedmans argue the opposite. The current system, by tying schooling to residential location, is a major engine of segregation. The voucher system would break this link. It would allow children from inner-city neighborhoods to attend schools in the suburbs, and vice versa. It would foster schools organized around common interests (e.g., a science magnet school) that would draw students from diverse backgrounds, creating a more genuine and voluntary form of integration than the coercive and often counterproductive methods used today.
- The “Add-On” Problem: Some supporters of vouchers want to prohibit parents from supplementing the voucher with their own money, fearing this would lead to a stratified system. The Friedmans reject this view as a pernicious form of egalitarianism that seeks to harm the poor in the name of preventing the rich from having a “privilege.” To deny the poor an opportunity for a better education simply because a wealthy person might get an even better one is, in their view, a “final corruption” of the egalitarian instinct.
The primary obstacle to this profoundly democratic and liberating reform, they conclude, is the political power of the vested interests that benefit from the current system: the professional educational establishment. This group has consistently and vehemently opposed every attempt to experiment with vouchers, because it correctly sees choice and competition as a direct threat to its power, privileges, and job security. The battle for educational vouchers is thus a classic case of the general interest in a better-educated citizenry versus the special interest of a protected monopoly. The future of American education, and by extension, the future of the nation, depends on the outcome of this struggle.