All Commentary
Thursday, July 1, 1993

Friedman and North on Vouchers

North says educational vouchers will reduce the supply of sellers who will supply sectarian education.

To the Editor:

Re: the article by Gary North in the February 1993 Freeman on “Educational Vouchers,” may I call the attention of your readers to the following quotation from my wife’s and my book Free to Choose (pp. 161-163):

This plan [the voucher plan we propose] would relieve no one of the burden of taxation to pay for schooling. It would simply give parents a wider choice as to the form in which their children get the schooling that the community has obligated itself to provide. The plan would also not affect the present standards imposed on private schools in order for attendance at them to satisfy the compulsory attendance laws.

We regard the voucher plan as a partial solution because it affects neither the financing of schooling nor the compulsory attendance laws . . . .

The compulsory attendance laws are the justification for government control over the standards of private schools. But it is far from clear that there is any justification for the compulsory attendance laws themselves. Our own views on this have changed over time. When we first wrote extensively a quarter of a century ago on this subject, we accepted the need for such laws on the ground that “a stable democratic society is impossible without a minimum degree of literacy and knowledge on the part of most citizens” [Capitalism and Freedom, p. 86]. We continue to believe that, but research that has been done in the interim on the history of schooling in the United States, the United Kingdom, and other countries has persuaded us that compulsory attendance at schools is not necessary to achieve that minimum standard of literacy and knowledge. As already noted, such research has shown that schooling was well-nigh universal in the United States before attendance was required. In the United Kingdom, schooling was well-nigh universal before either compulsory attendance or government financing of schooling existed. Like most laws, compulsory attendance laws have costs as well as benefits. We no longer believe the benefits justify the costs.

The danger North raises that a parental choice scheme that made vouchers available for both government and private schools would lead to efforts to control the curriculum of private schools is very real, but it is present now because of compulsory attendance laws. Moreover, in a well-drawn voucher initiative, such as the one that will be on the California ballot at the next general election, provision can be made for avoiding that outcome. To quote from the California Parental Choice Initiative:

Private schools shall be accorded maximum flexibility to educate their students and shall be free from unnecessary, burdensome, or onerous regulation. No regulation of private schools, scholarship-redeeming or not, beyond that required by this Section and that which applied to private schools on October 1, 1991, shall be issued or enacted, unless approved by a three-fourths vote of the legislature or, alternatively, as to any regulation pertaining to health, safety or land use imposed by any county, city, district, or subdivision of the State, a majority vote of qualified electors within the affected jurisdiction. In any local proceeding challenging such a regulation it shall have the burden of establishing that the regulation: (A) is essential to assure the health, safety, or education of students; (B) does not unduly burden private schools or the parents of students therein; and (C) will not harass, impede, injure, or suppress private schools.

My ultimate objective is precisely the same as Gary North’s, but I do not believe that we can get there from here without a transitional measure. That is what the voucher proposal is intended to provide.

—Milton Friedman

Senior Research Fellow

Hoover Institution, Stanford, California

Dr. North replies:

In his letter, Dr. Friedman cites his 1980 book, Free to Choose: “This plan would relieve no one of the burden of taxation for schooling.” This is the heart (and soul) of the problem with vouchers. The problem is not primarily one of economic efficiency; it is a problem far more fundamental: the locus of judicial authority over education. He who pays for schooling is asserting this authority.

Here is the crucial question: Who is responsible before God for the education of children, their parents or the state? I contend that it is the parents. I therefore reject educational vouchers on principle. But more to the point, I reject them even as a transitional tactic, for vouchers will reduce the freedom of sectarian parents to choose by reducing the supply of sellers who will supply sectarian education.

When I wrote the first version of my essay “Educational Vouchers: The Double Tax” in 1976, I had Dr. Friedman’s Capitalism and Freedom (1962) in hand. That book has become a classic in the literature of free market economics. But it has a flaw. It promotes educational vouchers (chapter 6), while denying the efficiency and the necessity of occupational licensing (chapter 9).

What I argued in my essay is that state-funded vouchers are part of a program of state licensing. For the state to establish mandatory standards of performance in any profession is to proclaim its authority over that profession. Licensing involves the creation of legal barriers to entry against those who cannot meet the state’s standards and also those who work in terms of rival standards. Similarly, for the state to establish subsidies for any profession is to proclaim its authority over that profession. Subsidies involve the creation of legal barriers to economic survival against those who cannot meet the state’s standards and also those who work in terms of rival standards. So, I conclude, if there is no legitimate reason to license a profession, there is no legitimate reason for the state to create a voucher system to fund it.

There can be no state subsidies apart from criteria that restrict access to the subsidies; otherwise, there would be greater demand for the “free” money than supply of the “free” money. The state uses regulations to ration access to the “free” money. In Dr. Friedman’s proposed system, all parents (“buyers”) will have access to the state’s “free” money (vouchers). I contend that all schools (“sellers”) will not. Those schools that deny the legitimacy of the state’s standards will be denied legal access to the money. Why? Because the money used to subsidize some schools at the expense of others does not belong to the parents; it belongs to the state.

An educational voucher program enlists the parents as the state’s agents in a program of judicial discrimination against those schools that proclaim state-disapproved standards. Vouchers are, in the vernacular, “hush money.” Teachers are bribed with tax money to keep silent on certain topics, most notably the topic of God and his sovereignty over history . . . .

Here is our problem: Modern education rests on the myth of religious neutrality. Modern education asserts: “By means of a religiously neutral methodology, teachers and students can come to an accurate understanding of cause and effect.” Any discussion of cause and effect which appeals to God’s sovereignty over history is dismissed as “religious,” and is thereby barred by the U.S. Supreme Court from any tax-funded classroom. Only a methodology which systematically ignores the question of God has legal access to a tax-funded classroom or educational program . . . .

Thus, it is irrelevant that the language of a California voucher proposal appears to protect the authority of parents to choose any school they desire for their children. The U.S. Supreme Court has determined what curriculum standard must apply in state-funded education: a compelling secular purpose (see Lemon v. Kurtzman and Hunt v. McNair, 1971). Parents will be free to choose when they use the state’s money, but their choices will be limited to state-approved schools. They will be free to choose only what the state approves.

I learned all this from Capitalism and Freedom—excluding chapter 6.

  • Milton Friedman (1912-2006), recipient of the 1976 Nobel Memorial Prize in Economic Science, is a Senior Research Fellow at the Hoover Institution.