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Friedman: The Solution Is Choice

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To mark the 50th anniversary of economist Milton Friedman’s proposal for a universal system of publicly financed school vouchers, the Nobel laureate talked with Education Week Senior Editor Caroline Hendrie about his views on the national push for greater educational choices. The following is a transcript of that conversation.

Q: It’s been 50 years since you called on the government to relinquish its control over the administration of publicly funded schools in an essay called “The Role of Government in Education” published in the journal Economics and the Public Interest. Could you please explain what your original proposal was and why you made it at the time you did?

A: My original proposal was in the paper considering the philosophical problem of what role should government play in the field of education. It was part of a broader study of what the role of government was in terms of the basic value of liberty and of individual freedom, and the broader study was contained in the book Capitalism and Freedom, which appeared seven years later in 1962.

So I just asked the question, what role should government play? It does, in fact, at the moment play three roles. First, it requires every child to have a certain amount of compulsory schooling. Second, it finances that schooling by spending money on providing schools. Third, it administers schools—it produces the product of schooling in government-owned and -run buildings.

If you examine that on the grounds of a free society, you can make an argument for government compelling youngsters to have schooling on the grounds that you cannot have a democratic society unless the members of it have at least a certain minimum level of literacy and understanding of history. It’s much more difficult to make a case for the government paying for schooling. It’s not obvious at all why the government should pay for schooling, anymore than it pays for food, clothing, or housing for everybody. You can make an argument that there will be children who are born in indigent families who cannot afford to pay for their schooling. And you could make an argument therefore for government helping out in that case. In fact, there really is no argument for the government paying for the schooling of every child. No social function is performed that way.

But the fact is that we do school children … [yet] there is certainly no justification for government running schools. That is the same question as should the government produce automobiles? Should government grow wheat and run the bakeries? Government has no special merit when it comes to operating and organizing the school.

There are these three functions, of which the third seems clearly not justified by the principles of a free society. There is some justification for the other two, but how can you separate them? And therefore the proposal was made to separate them by having the government provide every parent with a voucher that they could use for schooling and nothing else.

Q: A half-century after your voucher proposal, a smattering of state-financed voucher-like programs now exists around the country. How would you assess the state of what has come to be known as the school choice movement? And where do you think it will stand 50 years from today?

A: Fifty years from today, I won’t be around to see it, but I would be amazed if you did not have an almost complete termination of the government running schools. I would be surprised if 50 years from now you don’t have universal vouchers. And the reason I say that is that it seems to me that once you set it down and look at it without bias or prejudice, it’s so obvious that that’s the way to go. Who has more interest in the schooling of a child, the parent or a government bureaucrat? Who is in a better position to decide what school is best for a child, the parent, or whoever happens to be in charge of a government school?

Q: You have warned that voucher programs that are only for the poor will be poor programs.

A: Yes, they will be.

Q: Does that mean that programs like those in Milwaukee, Cleveland, and the District of Columbia have done more harm than good to the cause of universal vouchers?

A: No, it doesn’t. It means that if their example of restricting vouchers to low-income families alone is followed, the whole movement will soon come to a dead end. So far, these have been very small deviations from the standard pattern and so far, you’re starting from a situation where any introduction of competition and choice is going to be an improvement. But if indeed the voucher program is viewed as a charity program and not as an education program, it doesn’t have a future.

Let me emphasize, if you had a universal program so that every child was entitled to a voucher, the groups that would benefit most would be the low-income families, just as they are the ones who benefit most ultimately from every major economic improvement. Automobiles when they were first invented and developed were a toy of the rich. But they ultimately were an indispensable necessity for the bulk of the population. The same thing goes with television, with radio, of anything you can think of. One of the roles of the rich in society is to serve as a proving ground for new developments.

Q: And do you think the rich have served that through private education?

A: I think that the rich have partly served that through private education, but they aren’t given the opportunity to do so.

Q: Critics of vouchers say they drain needed funds from public schools. Do you agree?

A: That’s nonsense, because voucher programs save money. You have a place like Milwaukee you mentioned, which spends roughly $10,000 per child on students in public schools, which provides a voucher which is a maximum of $6,000, so that every student who leaves the public schools and goes to a private school saves the taxpayer, whether city or state or federal, $4,000.

Q: You have stressed that voucher programs save money. Do you think that argument has been lost in the current debate?

A: No, I don’t think it’s been lost at all. I think it’s been deliberately misrepresented. I think that the trade unions, who are the most determined opponents of vouchers, have deliberately misstated the facts over and over again. We were very much involved, of course, in the referenda in California for vouchers in 1993 and 2000. And in both cases the unions blared on the TV and radio programs that this will cost money and this will break the budget and impose extra costs on the taxpayers, whereas the actual truth was just the opposite.

Q: The 800-pound gorilla on today’s education scene is the No Child Left Behind Act. As someone who wants individual freedom over education enhanced, what is your view of the law?

A: It’s a very mixed bag. In its original version, as Mr. Bush originally wanted to put it in, it provided for vouchers. It had a provision that there was going to be a sum set aside to finance vouchers in five or six—I’m not sure how many—cities, as something of an experiment. And that was compromised out. And there’s very little choice left. There’s some provision that students in failing schools can choose to go elsewhere to other public schools if other schools will take them.

On the other hand, there are some good things in the No Child Left Behind Act. The emphasis on higher-quality standards and more accountability is all to the good. But it’s very hard to see where, in the absence of choice, the accountability is. You can only really have accountability if you have competition and choice.

Q: Do you think the No Child Left Behind Act has affected the balance of power between the education establishment and parents?

A: I have no idea. I haven’t followed the actual effect of the No Child Left Behind Act in the various states.

Q: School choice legislation suffered more defeats than victories this year in state legislatures. Yet some voucher proponents, including those at your foundation, predict that some of those setbacks have set the stage for victories in the next several years. Do you see the current trend as positive or negative?

A: The current trend is obviously positive, but from my point of view, it’s much too slow. With the possible exception of the Florida case, which is in the courts, so far as I know, there have been no voucher programs that have either been terminated or reduced in size, and there have been voucher programs that have been increased in size. At least some of the setbacks have been a result of using the courts. For example, the Colorado voucher program was declared illegal by the Colorado Supreme Court.

Undoubtedly, the direction is positive. The number of students using vouchers and being schooled under choice programs is larger this year than it was last, larger last year than the year before that, and so on. But it’s still very small.

Q: In March, the Arizona Senate approved a universal voucher program that would have provided tuition vouchers for use in secular or religious private schools to students in grades K-12, without regard to where they lived or their families’ incomes. The plan was not brought up for a vote in the House because supporters lacked the votes to get it passed in the face of an expected gubernatorial veto. Were you disappointed to see that proposal die?

A: Well, I really didn’t have any basis for having any expectations one way or another. Someone else at our foundation had a basis for doing that. [Friedman Foundation President and Chief Executive Officer] Gordon St. Angelo follows those things much more closely than I do, but I really have no sharp judgment on it at all.

Q: I was just struck by the fact that it was one house of a legislature approving a universal voucher program similar to what you seemed to have proposed so many years ago and I thought that might be notable.

A: It is notable and quotable. But on your question of whether it was something that I expected to go farther, I really had no expectations.

Q: The Florida Supreme Court recently heard oral arguments in a challenge to one of that state’s voucher programs on grounds that it violates the state constitution’s ban on aid to religious institutions. Should voucher supporters be trying to change constitutional language like that in Florida and other states?

A: We ought to try to change them, or as has happened in some cases, have them invalidated by the U.S. Supreme Court. But these Blaine Amendments, which is what they are, are really a very severe obstacle and they ought not to be in the constitutions in the first place. And I certainly think it would be desirable to have them taken out. But whether that’s the way the movement should try to go or not, I’m not prepared to say. It’s a question of costs and probabilities.

Q: Another place you mentioned is Milwaukee. The newspaper out there has been looking at the voucher program and it has suggested that it may have failed in its primary goal of trying to promote educational excellence through choice and competition. Do you agree with that?

A: No, not at all. I know, for example, that the school test scores in the public schools in Milwaukee have definitely improved as a result of the voucher program. And that seems to me to be a movement in the direction of educational excellence.

I know that there have been a lot of brand-new schools that have been set up in Milwaukee. What are there now, a hundred and some now in the program? There have been a lot of new ones added. And what’s good also, some have closed down. So you’ve really had a competition in which those who couldn’t perform were driven out of the market.

So I think on the whole, so far, the Milwaukee program is an example of the positive effects of the voucher program. It’s more limited, in my opinion, because the voucher program in Milwaukee is still very small and still limited to low incomes.

Do you suppose that before anybody produced a television set, the law should have been that you cannot sell it for more than $20? … The argument here is that you should permit choice only for low-income people. And that’s like saying that if you can’t produce a television set that low-income people can buy, you shouldn’t produce it at all. In that case, there never would have been a television set. There never would have been an automobile. And it’s not an accident that education is almost the only field in this country that you can name in which we are technologically back where we were two centuries ago. There have been no essential technological advances.

Q: I think that when economists and others make comparisons to retail goods people often take umbrage. They say that our children aren’t products. Anything you want to say to that sort of thinking or that sort of criticism?

A: The provision of schooling is the same thing as the provision of cars or televisions. It’s the provision of a service for a purpose. And the importance of children and the importance of school is reflected in the compulsory schooling and the fact that we make it a matter of law that every child ought to be schooled. And that is certainly a recognition of the difference between children and automobiles. But what I’m trying to say here is something different. If you had a universal voucher system, you would have an education enterprise that would be open to innovation and there would be schools of every kind.

Let’s say you had a voucher of $6,000. There would be schools that charged only $6,000, but there would be schools that charged $8,000 or $10,000, maybe some that charged $20,000 or $25,000. Just as you would have Ford automobiles and Cadillac automobiles, you would have Ford schools and Cadillac schools.

Q: Interestingly, in the area of education, those kinds of discrepancies have been the focus of a great deal of litigation and legislative work as people have tried to equalize the funding for schools between low-income communities and high-income communities.

A: If the people who do that would stop and think for a moment, what they are doing is saying, here’s a rich man. If he wants to spend his money on wine, women, and song, that’s fine. We’re not going to stop him, after we take our taxes away, but we don’t want to let him spend it on educating his child. It’s an absurd position.

If they are really serious, what they need to do is impose a tax which will leave nobody with more income than they think is proper, and the result of that would be to bring the economy to a halt. They want to eat the golden goose and still have it. There are those people who believe that parents should not be permitted to spend money in addition to any voucher. And there are those people who believe that parents should not be able to send their children to private schools.

Q: But that has been long ago discredited and shot down by the Supreme Court. People are allowed to send their children to private schools. The question is can you spend tax money to subsidize that, or pay for that? That seems to be the real dividing line.

A: Who provides the tax money? Everybody provides the tax money, and what you ought to be doing is to give everybody. Let’s say you’re prepared to spend a voucher of $6,000. Every parent of every child is entitled to a voucher of $6,000 for that child, provided it’s spent on schooling and nothing else. And if he or she wants to add something to it, that’s fine, that’s OK. I find it difficult to have any sympathy at all for the view that somehow or other it’s bad to have parents be able to increase the amount they spend on their children’s schooling.

Q: I think a big argument against it is it perpetuates social class. You kind of undermine the American dream of social mobility. What do you think of that argument?

A: I like that dream, too, and I’m all in favor of mobility, but I think you get more mobility by increasing the realm of competition and choice, not by reducing it. The way in which you get mobility in this country is by people who have nothing having a great idea and developing it and becoming millionaires. The incentive for them to do that is going to be eliminated if you don’t let them spend it.

You need private enterprise and innovation and willingness to take risks in order to have a very rapidly growing country. And if you leave competition open and you don’t establish monopolies or give monopolistic privileges, that will produce a society with some very rich people, some relatively poor people, but in which the situation will be changing all the time, in which there’s a great deal of mobility.

Q: Is there anything else you would like to add?

A: I think it’s an absolute disgrace for the United States as a country that literacy today is lower than it was 150 years ago. And that is true only because government has taken over the operation of the school industry, for the most part, and has permitted it to be unionized.

When I graduated from high school in 1928, there were 150,000 school districts. Today, there are less than 15,000 for a population that is more than twice as large. If you dig deep, this concentration of schooling and the growing power over schooling of governmental institutions is the primary reason for this disgraceful situation.

Moreover, on the question of [social] mobility, there is absolutely nothing that would do more than to increase mobility and reduce the difference between the top and the bottom than improving the educational system. What can you say about the greatest country in the world, which has a system in which 30 percent of the youngsters never get through high school? What kind of a life are they going to be condemned to?

Anybody who’s really worried about reducing the inequality and improving the distribution of income, the place to look is at schooling, and the solution to it is competition and choice. And universal vouchers are the most efficient and obvious and easiest way to get there.

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