All Commentary
Tuesday, April 1, 1997

What Money Can’t Buy

There Is an Almost Inverse Correlation between Spending and Educational Achievement

Dr. London is John M. Olin Professor of Humanities at New York University, New York.

Education is very much in the policy air, and virtually everyone says that we must spend more to improve our schools. In fact, the way politicians seek to prove that they are in favor of education is by promising to increase outlays for government schools and education programs.

A little perspective is in order. From the end of World War II until 1965 per student expenditures (adjusted for inflation) doubled. In the next two decades, 1965-1985, real per student outlays doubled again, and from 1985 to 1995 per pupil expenditures increased by 20 percent. In short, over the last half century the price of education nearly quintupled. By any standard, that’s a big jump. It is an especially remarkable increase considering the dramatic decline in the price of technologies deployed as educational aids.

If outlays determined educational quality, we would expect students today to be five times smarter than students in 1945, or at least a little bit better informed than students of a generation ago.

However, the results of SAT and other tests demonstrate an almost inverse correlation with spending. For example, when median SAT scores reached their apogee in 1963, per pupil expenditures were about $2,400. Today expenditures are well over $6,000 per student, but median SAT scores have fallen about 150 points. Factors like the expansion in the number of students taking the test account for part of the decline, but the results are still dismal. In short, it is time to debunk the claim, once and for all, that achievement and expenditures are correlated. If they were, Iowa, which spends less on education than almost any state in the union, should not routinely score first or second in the nation on the SAT.

Expensive specialized government programs have no greater effect. A 1995 Department of Education report concluded that the gap between disadvantaged students and others had not closed despite the expenditure of $100 billion on Title I programs since 1965. In fact, there is scarcely an initiative one can cite, including Head Start, that demonstrates spending more money leads inexorably to greater achievement.

This reality is starting to sink in. Gary Burtless, in his study The Effect of School Resources on Student Achievement, published by the liberal Brookings Institution, concludes that on balance, the case for additional school resources is far from overwhelming. . . . Increased spending on school inputs without any change in the current arrangements for managing schools offers little promise of improving either student performance or adult earnings.

Thus, reformers genuinely concerned about student performance should look first to the more basic issue as to who runs the schools. Unfortunately, many supposed reformers are not serious. Rather, soi-disant reformers, such as the National Education Association, have a stake in maintaining the status quo and ensuring an infusion of additional money.

The primary hope for the future lies with parents coming to the conclusion that a bigger tax bite does not result in smarter children. When parents refuse to spend more money for poorer performance, genuine reform may finally be possible.

Forty Years Ago in The Freeman . . .

Edmund A. Opitz: There is little in our culture—even in our religion—which serves to bring our minds to bear upon the great human themes. . . . Our minds are preoccupied more with the means of getting a living than with the ends for which life should be lived. Our lives are so fragmentary and full of distractions that we seldom get around to those things for which, in our more thoughtful moments, we feel a need. Yet even the least of us occasionally entertains angels unawares by acts of kindness, by doing more than our duty, by striving for justice, by spreading beauty, and by speaking the truth. Our lives are shot through with eternity, and we live in the midst of things of permanent value which serve to remind us what we really are and to what we are called.

F. A. Harper: [Government] is constantly insolvent, obligating itself to spend something it does not yet have. It has no earned revenues from prior services rendered and sold in the market at a net gain, as you do when you go shopping with money you earned at yesterday’s work. The government, instead, must obtain by force of taxation the revenue with which to pay its bills. . . .

Tax assessments to pay almost all the costs of government are imposed by force. Payment is obligatory on everyone, whether he wants the ‘service’ or not—whether he uses it or not. He must accept it from the government source at a dictated price, even though he may know a better and cheaper way of obtaining a service he wants.

—APRIL 1957