In his famous 1955 essay, “The Role of Government in Education,” the venerated economist, Milton Friedman, proposed replacing our government-run system of schooling with a school choice voucher. Although, Friedman argued, the public interest in an educated citizenry meant that the government had a compelling interest in funding education, it did not necessarily follow that the government should also operate the schools.
Most critics of Friedman argued against his conclusion, preferring a centrally-planned school system to a market-based school system, but agreed with his argument that the government had a compelling interest in defining, mandating, and funding a minimum level of education.
However, I don’t believe that government control of determining and funding this minimum level of education is economically favorable. Specifically, there are substantial costs for children and society as a whole tied to the attempt to reach a socially optimal level of education by force.
The Externality Problem
The argument for public financing of education (which we should refer to as schooling; something that is much different from what an education can be) is that there may be positive externalities associated with educated citizens.
In other words, without subsidization of schooling, individuals may consume schooling at an amount less than the social optimum. This may be true, but how can anyone determine what this “socially optimal” level is? In attempting to reach this imaginary level, we may do more harm than good. We may very well push consumption over this level and waste resources, especially since we compel all children to do so.
More importantly, by forcing all children to consume schooling, we are denying them the ability to consume other types of education. Though some children may benefit from 13 years of primary and secondary schooling, they may benefit more from a different combination of schooling and other educational activities.
The positive (or negative) externality argument can be made for any type of good or service. For example, I can argue that the automobile creates benefits that are experienced by the consumer and the rest of society. Society benefits from the automobile when I use the product since I can more-easily network with other individuals and spend my income on their goods.
If I can move from place to place at a lower cost, I can spread my experiences and knowledge more easily. The rest of society benefits from that. Therefore, subsidize automobiles. But that same product damages the environment through pollution. Therefore, tax automobiles.
Similar arguments can be made about any other product. Instead, we should accept the existence of externalities and consider the possibility that market failures may be more optimal than government failures. If any financing is to be publicly provided, it should be limited to the least-advantaged families. However, we should also realize that the education for the children from these families could also be financed voluntarily through charitable donations.
What is Minimum?
A forced “minimum level of education for all children” may sound good at first. Of course, children all deserve to have at least some minimum level of education. But how can we all agree on what that minimum level of education is? Since all children are diverse, some may require an additional focus on mathematics and behavior, while others may need to focus on reading and citizenship.
Since all children are unique, we have an endless number of combinations of needs that bureaucrats must currently attempt to determine. Even with our best efforts put forth, we are guaranteed to come up with an extensive list of goals for this minimum level of education. In an attempt to make everyone happy, we provide all students the same type of comprehensive schooling. As a result, most children get a little bit of what they need (and a lot of what they don’t) at a monumental cost.
Friedman states that the government could certify schools that meet “minimum standards” as they do with restaurants for minimum sanitary standards. Since this process is a barrier to market entry, it restricts the supply of schools, further increasing the price of schooling. The procedure itself also costs money and guarantees that the government will have a monopoly.
Since families are unique, even government employees with the best intentions will make approval decisions that are not optimal for all families. Instead, multiple private certification companies could determine the quality of schools. Ideally, we could then have families decide what schools best meet their unique criteria.
Even limited government intervention in the education system is not socially desirable. Though the limited intervention through finance and certification is well-intentioned, we should recognize the consequences of such policies. We should also recognize that the potential market failures may be more desirable than the current government failures in education.