THE LAST DAYS OF THE PUBLIC SCHOOLS
All across the country this winter public schools closed their doors as the taxpaying public, fed up at last with spiraling property taxes, increasingly said, "No." Many schools in Ohio, Missouri, Wisconsin, California, and Washington shut their doors early in December to await the new year and a new budget. In Chicago, the school board kept schools open only by borrowing ahead from 1972 funds. Schools were closed in November in Independence, Missouri, but despite the school board's brinkmanship voters rejected a tax increase proposal for the seventh time in 21 months. Despite a massive ad campaign, voters in Los Angeles rejected a $200 million "earthquake safety" school construction bond issue. And in Portland, Oregon, voters three times rejected a $6 million tax increase, as a result of which the school year will be cut by 17 to 20 days.
While the public is thus showing its disgust at the ever-more-costly public school monopoly, several radical steps in the direction of competition are quietly proceeding. The first and largest experiment in performance contracting has entered its second year in Gary, Indiana. There, Behavioral Research Laboratories (BRL), a profit-making Palo Alto, California, company, has been given a four-year, $2.6 million contract to take over Bannecker Elementary School. The company must refund the per-pupil cost for any child in the sixth grade who fails to reach or exceed national norms in reading and math. In just the first year, the percentage of children in the all-black school reaching or exceeding the norms has gone from 25 to 73% (as measured by an outside testing firm). BRL hired 25 of the 34 previous teachers at the school but has supplemented them with 28 "learning supervisors" (who are mainly interested local parents without teaching certification from the State). The firm uses a variety of teaching approaches, plus highly individualized instructional materials.
In California, where an OEO-sponsored five-year experiment with education vouchers got underway last fall, Governor Reagan's January state-of-the-state message called for a similar state-level voucher experiment. Under a voucher plan, the school system would distribute its per capita education funds directly to the parents, to cash in at any school they chose—public or private. Meanwhile, in Washington, Representative Roman Pucinski has proposed a third approach—tax credits. Under Representative Pucinski's bill, parents would be given a tax credit (not a deduction for income, but a direct reduction in taxes due) of 50% of their tuition payments to private schools, up to an annual maximum of $500 per child. "The time has come for the federal government to ease the crushing burden placed upon the shoulders of parents of private school pupils (by the state)," said Pucinski.
Although all three measures fall far short of establishing a free market in education, they are hopeful signs of evolution in that direction.
• "Plight of Public Schools Worsens," Associated Press, 10 December 1971.
• "Private Firm Better at Teaching 3Rs," N.Y. Times News Service, 18 November, 1971.
• "Highlights of Reagan's Message," United Press International, 6 January 1972.
• "Help for the Private Schools," David Lawrence column, 22 January, 1972.
PRESCRIPTION: FREE COMPETITION
It has become almost a cliché to say that American businessmen are all for free competition—as long as it's in somebody else's field. So it is that pharmacists' lobbies in nearly every state in the union long ago got laws passed "to protect the public" by prohibiting consumer-oriented advertising of prescription drugs. Gradually, over the past few years it has begun to dawn on consumerist groups that such laws help only the sellers, at the expense of the consumer. CONSUMER REPORTS pointed this out a few years ago (May 1970, p. 279), and the latest group to do so is the Consumer Education and Protection Association of Philadelphia.
Last year the Pennsylvania Supreme Court threw out the state's anti-advertising law on prescription drugs. As a result, consumers have had a field day comparison shopping, and large, efficient drugstores have capitalized on discount prescription sales. Actual prescription prices in Philadelphia vary up to 100% between large and small retailers. As a result of this burgeoning free market, the State Pharmacy Board (dominated by—you guessed it—the pharmacists) has decided that the public again needs to be protected. So it has proposed regulations governing drug price advertising; briefly, the new rules would require that ads list, in addition to a drug's price, the full medical information provided to doctors. (This would raise the cost of advertising high enough effectively to prohibit it.) The Board contends that current ads "bait the public and demean the profession of pharmacy" because all emphasis is placed on price rather than service. "Drugs shouldn't be treated as pieces of merchandise," states Dr. Sol Turnoff, chairman of the Pharmacy Board.
But the consumer groups aren't about to be duped by that sort of self-serving rhetoric. Max Weiner, head of the Consumers Education and Protection Association, is leading the fight against the new rules because of the fact that the existing ads increase price competition and allow consumers to shop around. Countering the "we must protect the corner drugstore" argument, Mr. Weiner contends that "we don't think it's the consumer's problem to subsidize an old economic method of distributing drugs." Also fighting the proposed law is Frederick Wegner of the Retired Teacher's Association, which runs a mail-order pharmacy in conjunction with the American Association of Retired Persons. Wegner sees the new law as an economic attack on the mail-order business, which provides discounts of 25% to retired persons.
Whether the consumerists in Pennsylvania win or lose this round, the fact that they have seen through the political rhetoric and have explicitly come out in favor of free competition may mark a turning point in the consumer movement.
• "Prescription Costs Vary by Up to 100 Pct.," PHILADEPHIA INQUIRER, 9 January 1972.
ABORTIONS SAVE LIVES
The effects of liberalized or repealed abortion laws continue to show up in statistics. An analysis of New York City health officials showed that the maternal death rate declined from 51 per 100,000 live births in the first four months of 1970 to 16 per 100,000 in 1971. The main reason for the decline is that unsanitary illegal abortion had been the largest cause of maternal deaths until the antiabortion law was repealed. A second factor is that since more women are now choosing abortion instead of carrying the pregnancy to term, the mortality rate is going down since the risk of death in a properly-performed abortion is far less than in a full-term delivery. Figures from California, where a liberalized law has been in effect for four years, confirm the dramatic drop in mortality rates.
• FAMILY PLANNING PERSPECTIVES, Summer 1971, quoted in the LOS ANGELES TIMES, 15 August 1971.
• "Liberalized Abortion Law: 4 Years Later," LOS ANGELES TIMES, 21 November 1971.