Friedman on School Vouchers

Milton Friedman (1912–2006) was an American economist and Nobel Prize winner whose thinking and writings were enormously influential in the rise of neoliberalism. He argued that the role of government should be reduced as far as possible in order to nourish the freedoms and efficiencies created by the market. From the mid 1970s, Friedman proposed a system of educational vouchers that would require public and private and public schools to compete in a market-like setting. Friedman explains how vouchers would introduce competition into education, bringing what he considers to be the virtues of the market, to public schools.

I shall discuss a … reform that would retain compulsory schooling, government financing and government operation, while preparing the way for the gradual replacement of public schools by private schools.

The City of New York now spends about $1,500 per year for every child enrolled at public elementary and secondary schools. Parents who send their child to a private school therefore save the city about $1,500. But they get no benefit from doing so. The key reform would be for the city to give such parents a voucher for $1,500 to pay for schooling their child (and for no other purpose). This would not relieve them of the burden of taxes; it would simply give parents a choice of the form in which they take the schooling that the city has obligated itself to provide.

To widen still further the range of choice, parents could be permitted to use the vouchers not only in private schools but also in other public schools—not only in schools in their own district, city or state, but in any school anywhere that is willing to accept their child. This would involve giving every parent a voucher and requiring or permitting public schools to finance themselves by charging tuition. The public schools would then have to compete both with one another and with private schools …

Let us examine … some problems with the voucher plan and some objections that have been raised to it:

  1. The church-state issue. Parents could use their vouchers to pay tuition at parochial schools. Would this violate the First Amendment [in which the government cannot provide support to religious organisations]? Whether it does or not, is it desirable to adopt a policy that might strengthen the role of religious institutions in schooling? … Whatever the fate of a full-fledged voucher plan, it seems clear that the [US Supreme] court would accept a plan that excluded church-connected schools but applied to all other private and public schools. Such a restricted plan would be far superior to the present system, and might not be much inferior to a wholly unrestricted plan …
  2. Financial cost. A second objection to the voucher plan is that it would raise the total cost of schooling—because of the cost of paying for children who now go to parochial and other private schools. This is a ‘problem’ only if one neglects the present discrimination against parents who send their children to nonpublic schools; universal vouchers would end the inequity of using tax funds to school some children but not others …
  3. The possibility of fraud. How can one assure that the voucher is spent for schooling, not diverted to beer for papa and clothes for mama? The answer is that the voucher would have to be spent in an approved school or teaching establishment …
  4. The racial issue … [A] voucher plan might increase racial and class separation in schools, exacerbate racial conflict and foster an increasingly segregated and hierarchal society. I believe that it would have precisely the opposite effect—that nothing could do more to moderate racial conflict and to promote a society in which black and white cooperate in joint objectives, while respecting each other’s separate rights and interests. Much objection to forced integration reflects not racism but more or less well-founder fear about the physical well-being of children and the quality of their schooling. Integration has been most successful when it has been a matter of choice not coercion.
  5. The economic-class issue. The question that has perhaps divided students of vouchers more than any other is their likely effect on social and economic class structure. Some have argued that the great value of the public school has been as a melting pot in which rich and poor, native and foreign-born, black and white have learned to live together. This image had much validity for small communities and still does. But it has almost none for large cities and their suburbs. In them, the public school has fostered residential stratification, by tying the kind and the cost of schooling to residential location. Most of the country’s outstanding public schools are in high-income enclaves [where the locals pay high taxes and schools are well funded]—Scarsdale or Lake Forest or Beverly Hills. Such schools are better regarded as private tax shelters than as public schools. If they were, in the strict sense, private, their cost would not be deductible in computing federal income tax. But the cost is deductible as local taxes because the high-cost and high-quality school is nominally public. Elementary schools would probably still be largely local under a voucher plan … And secondary schools would almost surely be less stratified. Schools defined by common interests—one stressing, say the arts; another, the sciences; another, foreign languages—would perforce attract socially and economically more heterogeneous clienteles from a wide variety of residential areas.
  6. Doubt about new schools. Is this not all a pipe dream? Private schools now are almost all either parochial schools or elite academies. Will the effect of the voucher plan not simply be to subsidize these, while leaving the bulk of the slum dwellers in inferior public schools? What reason is there to suppose that alternatives will really arise? … The absence of alternatives when there is no market does not mean that none would arise when there is one. Today, cities, states, and the federal government spend about $50 billion a year on elementary and secondary schools. That sum is about a third larger than the total spent annually in restaurants and bars for food and liquor. The smaller sum surely provides an ample variety of restaurants and bars for people in every class and place. The larger sum, or even a minor fraction of it, would equally provide an ample variety of schools. It would offer a vast market that would attract a host of entrants, both from the public schools and from other occupations. In the course of giving occasional talks on the voucher plan, I have been enormously impressed by the number of persons who have come to me afterward and said something like: ‘I have always wanted to teach [or run a school] but I couldn’t stand the educational bureaucracy, red tape, and general ossification of the public schools. Under your plan, I’d love to try my hand at starting a school.’
  7. The impact on public schools … Both the National Education Association and the American Federation of Teachers claim that vouchers would ‘destroy the public-school system’ which has been the foundation and cornerstone of our democracy. Claims like this are never accompanied by any evidence that the public-school system is in fact, under current conditions, achieving the great results claimed for it—whatever may have been true in earlier times. Nor is it ever made clear why, if the public-school system is performing so magnificently, it need fear competition from nonpublic, competitive schools.

Friedman, Milton. 1975. There’s No Such Thing as a Free Lunch. LaSalle IL: Open Court. pp. 273–281. || WorldCat