Schools of Thought

The school choice movement is divided over tactics and faces enormous establishment resistance. But it may still get what it wants.

During the first presidential debate on October 6, President Clinton made a startling admission. "I support school choice," he said. "If a local school district in Cleveland, or any place else, wants to have a private school choice plan, like Milwaukee did, let them have at it." While the president has often talked one way and governed another, he usually allows himself more wiggle room. As Reagan administration education official Chester E. "Checker" Finn Jr. wrote in The Wall Street Journal a few days later, Clinton's unambiguous statements on education made it appear that the only differences between the two candidates were whether to subsidize vouchers with federal tax dollars (Bob Dole's plan) and whether to abolish the Department of Education. Supporters of school choice seem to have won the debate.

Over the past five years, vouchers and other significant education reforms have moved from presidential debates, think tanks, and academic conferences to thousands of school districts nationwide. And no wonder. Since 1960, test scores and other measures of achievement have taken a downward spiral even though inflation-adjusted spending on elementary and high schools has more than quadrupled. In most inner cities, the schools resemble prisons and the crime rate on school property approaches that of the neighborhood at large. And teachers' unions, backed by the bureaucratic establishment, go ballistic any time reforms are suggested that threaten the status quo. The intellectual marketplace has been ripe for new ideas.

Parents, with the help of education reformers and a few politicians, have pushed through a number of school choice initiatives. Cleveland has joined Milwaukee to offer tuition vouchers to a couple of thousand low-income students. Twenty-six states have established or are setting up "charter schools"--publicly funded schools with specialized curricula that are exempt from many union and other regulations. New York City's John Cardinal O'Connor offered to enroll 5 percent of the city's most difficult to educate students in parochial schools; Mayor Rudolph Giuliani accepted the offer, originally floating the prospect of using vouchers to fund the transfers. (The money must now come from private sources.) New York's effort would be far from unique: Nationwide, more than 100,000 "difficult to educate" students--young people with physical handicaps, learning disabilities, emotional troubles, or involvement with the juvenile-justice system--are already enrolled in private secular and religious schools at taxpayer expense.

While all this ferment is under way, debate about the direction of education reform is raging within libertarian circles, where most of these ideas originated. School choice supporters face a dilemma: Universal vouchers may be the only way to assure a complete overhaul of the government schools, but any political momentum vouchers now have is concentrated on those plans that would help only low-income parents. Hence the disagreement.

Nobel laureate Milton Friedman, who invented vouchers, criticizes proposals that target only low-income parents. He has always advocated making vouchers available to all parents who remove their children from public schools. Limiting vouchers to poor children, he says, prevents an effective private alternative to government schools from developing. Meanwhile, Institute for Justice President William "Chip" Mellor and Vice President Clint Bolick defend means-tested plans in court. They believe choice plans that target low-income families can weaken the teachers' unions and transform the education monopoly while saving a generation of children from hellish inner-city schools. Friedman and the institute represent the poles of the debate, with other school choice advocates falling somewhere in between--liking the purity of universal vouchers but attracted to the political viability of means-tested experiments.

Even as these internal debates intensify, the primary danger vouchers pose to the schooling monopoly may be indirect. As a response to the threat of vouchers, the system of compulsory schooling is undergoing subtle but potentially far-reaching changes. Supporters and critics of vouchers concede that it may take a generation to break the public school monopoly. Yet, at the margins, changes are just beginning that may be as effective in eroding the system of tax-financed common schools, perhaps without a single large voucher program ever being enacted. And charter schools, which are increasing in both numbers and popularity, might offer the greatest possibility to transform elementary and secondary schooling.

Original Intent

Milton Friedman first proposed school vouchers in a 1955 academic article. His original idea was to provide any student who left a public school a voucher equal in value to the average amount spent per student by the local school district. In the intervening years he has modified his position slightly, arguing that the private sector should be able to provide schooling for less than the government; he now thinks vouchers valued at about half the per-pupil expenditure would be sufficient to entice private schools to take students from the government schools. From the start, Friedman has argued that the government's monopoly on schooling could be challenged only by "the rapid establishment of an industry [in private schools] that's large enough to have clout." He invented vouchers as a mechanism to generate funding for the creation of this alternative market, which might include for-profit schools as well as religious or secular schools operated by nonprofit organizations.

Friedman says he got part of his inspiration for vouchers from fellow Nobel laureate F.A. Hayek, "who taught me that every major advance in society originated from the top down rather than the bottom up." This doesn't mean central planning. Rather, from the automobile to television to the personal computer, new products with a widespread impact must first be tested by "early adopters"--those individuals with enough money or technical skills to try something new and see if it might appeal to a larger group of consumers. These early adopters both supply the initial market test, and they finance the development and learning that enable producers to create things more cheaply, making it possible to bring these innovations to people of more modest incomes.

The "early adopter" phenomenon is one reason Friedman has promoted universal vouchers over those targeted specifically at low-income students. "The key," he says, "is to provide an incentive for private entrepreneurs to fight the education establishment." He predicts that the first commercial education efforts will result in high-tuition, for-profit "Rolls Royce schools," primarily targeted at wealthy parents, where innovations in curricula, teaching, and technology will be tested.

Friedman acknowledges that we can't predict what shape a competitive education market would take. "We know from the experience of every other industry how imaginative free enterprise can be, what new products and services can be introduced, how driven it is to satisfy the customers--that is what we need in education," he wrote in a Washington Post column. But he does have a vision: He believes that vouchers would stimulate demand for "Rolls Royce" schools. "We know that 37 percent of parents in the top income brackets in California educate their children privately," he says. "With a real [universal] voucher in place, that number could easily reach 50 percent." And these new schools would differ from today's exclusive academies because they would be commercial enterprises as well as centers of learning--and because the prospect of a universal market would create pressures to replicate successful experiments, and to bring the cost down over time.

Friedman believes those parents who send their children to these high-priced commercial schools will become the early adopters who demand top-notch schools for their children--and that the most innovative features of their schools could eventually be replicated in more modestly priced "McDonald's schools," profitably providing quality education at a price people with lower incomes could afford.

The potential market for entrepreneurial schooling is enormous. "The cost of government elementary and secondary schooling in the United States is about $300 billion a year," Friedman says. "Total worldwide spending on the computer market is $150 billion." If even half the money spent on government schools were to enter a competitive marketplace, "you're talking about establishing a new, major industry." Friedman and his wife Rose, a fellow economist, have decided to invest most of their time--and much of their fortunes--promoting their vision of education reform. They have established the Milton and Rose Friedman Foundation to study and support universal voucher programs.

Inner-City Rescue

Neither a bill nor an initiative establishing universal vouchers has passed in a legislature or won on a statewide ballot since Friedman developed the idea. Instead, vouchers have been means- tested, targeted at low-income parents. It's over the composition of vouchers that Friedman says "the real and very important debate is currently under way."

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