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Politics K-12 kept watch on education policy and politics in the nation’s capital and in the states. This blog is no longer being updated, but you can continue to explore these issues on edweek.org by visiting our related topic pages: Federal, States.

School Choice & Charters

Alan Greenspan Finds Flaw in Free Market

By Michele McNeil — October 23, 2008 1 min read
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The respected and conservative free-market thinker Alan Greenspan, the revered former chairman of the Federal Reserve Board, declared today he was “partially” wrong in thinking the free-market system could regulate itself.

He told Congress today: “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”

Does this economic crisis—and more specifically Greenspan’s admission that there may be flaws in the free-market system—have implications for the debate over vouchers, and the theory that competition and free markets will improve public education?

(UPDATE: In fact, the Cato Institute’s Andrew J. Coulson takes an in-depth look at this question in a September 2008 policy analysis titled “Markets vs. Monopolies in Education: A Global Review of the Evidence.”)

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A version of this news article first appeared in the Politics K-12 blog.