www-hoover.stanford.edu/publications/digest/012/friedman.html
By Making Them Private Milton Friedman The widening gap between the cognitive elite and unskilled workers is threatening to transform America, in effect dividing the Republic into two nations, one in the first world, the other in the third. Only by providing good schools for all our children--which in turn means making our public schools private. He was awarded the Nobel Prize in economic sciences in 1976. Our elementary and secondary educational system needs to be radically reconstructed. That need arises in the first instance from the defects of our current system. But it has been greatly reinforced by some of the consequences of the technological and political revolutions of the past few decades. Those revolutions promise a major increase in world output, but they also threaten advanced countries with serious social conflict arising from a widening gap between the incomes of the highly skilled, who make up what is sometimes called the cognitive elite, and the unskilled. A radical reconstruction of the educational system has the potential of staving off social conflict while at the same time strengthening the growth in living standards made possible by the new technology and the increasingly global market. In my view, such a radical reconstruction can be achieved only by privatizing a major segment of the educational system--that is, by enabling a private, for-profit industry to develop that will provide a wide variety of learning opportunities and offer effective competition to public schools. The most feasible way to bring about a gradual yet substantial transfer from government to private enterprise is to enact in each state a voucher system that enables parents to choose freely the schools their children attend. Many attempts have been made in the years since to adopt educational vouchers. With notable exceptions in Florida, Cleveland, and Milwaukee, voucher systems have not been adopted, thanks primarily to the political power of the school establishment, reinforced by the National Education Association and the American Federation of Teachers, together the strongest political lobbying body in the United States. The quality of schooling is far worse today than it was in 1955. There is no respect in which inhabitants of a low-income neighborhood are so disadvantaged as in the kind of schooling they can get for their children. The reason is partly the deterioration of our central cities, partly the increased centralization of public schools--as evidenced by the decline in the number of school districts from 55,000 in 1955 to fewer than 15,000 in 1998. Along with centralization has come--as both cause and effect--the growing strength of teachers' unions. Whatever the reason, the deterioration of elementary and secondary schools is not disputable. The system over time has become more defective as it has become more centralized. Power has moved from the local community to the school district to the state and on to the federal government. About 90 percent of our kids now go to so-called public schools, which are really not public at all but simply private fiefs, primarily of the administrators and the union officials. We all know the dismal results: some relatively good government schools in high-income suburbs and communities; These changes in our educational system have clearly strengthened the need for basic reform. But they have also strengthened the obstacles to the kind of sweeping reform that could be produced by an effective voucher system. The teachers' unions are bitterly opposed to any reform that lessens their own power, and they have acquired enormous political and financial strength that they are prepared to devote to defeating any attempt to adopt a voucher system. The latest example is California Proposition 38, which was defeated last November after the teachers' unions spent millions of their members' dollars in a successful attempt to kill the measure. Twin Revolutions A radical reconstruction of our educational system has been made more urgent by the twin revolutions that have occurred within the past few decades: a technological revolution--in particular, the development of more effective and efficient methods of communication, transportation, and transmission of data; The fall of the Berlin Wall was the most dramatic event of the political revolution. For example, communism is not dead in China and has not collapsed. And yet beginning in 1976, Premier Deng initiated a revolution within China that led to its being opened up to the rest of the world. Similarly, a political revolution took place in Latin America that, over the course of the past several decades, has led to a major increase in the fraction of people there who live in countries that can properly be described as democracies rather than military dictatorships and who are striving to enter open world markets. The technological revolution has made it possible for a company located anywhere in the world to use resources located anywhere in the world, to produce a product anywhere in the world, to be sold anywhere in the world. It's impossible to say "this is an American car" or "this is a Japanese car," and the same goes for many other products. The possibility of labor and capital anywhere cooperating with labor and capital anywhere else had dramatic effects even before the political revolution took over. It meant that there was a large supply of relatively low-wage labor to cooperate with capital from the advanced countries, capital in the form of physical capital but, perhaps even more important, capital in the form of human capital--of skills, of knowledge, of techniques, of training. In Asia, the latest to embark on a program of market reform is India. A greatly improved educational system can do more than anything else to limit the harm to our social stability from a permanent and large underclass. The political revolution greatly reinforced the technological revolution in two different ways. First, it added greatly to the pool of low-wage, yet not necessarily unskilled, labor that could be tapped for cooperation with labor and capital from the advanced countries. The fall of the Iron Curtain added perhaps a half billion people and China close to a billion, freed at least partly to engage in capitalist acts with people elsewhere. Second, the political revolution discredited the idea of central planning. It led everywhere to greater confidence in market mechanisms as opposed to central control by government. And that in turn fostered international trade and international cooperation. These two revolutions offer the opportunity for a major industrial revolution comparable to that which occurred 200 years ago--also spread by technological developments and freedom to trade. In those 200 years, world output grew more than in the preceding 2,000. That record could be exceeded in the next two centuries if the peoples of the world take full advantage of their new opportunities. The twin revolutions have produced higher wages and incomes for almost all classes in the underdeveloped countries. The effect has been somewhat different in the advanced countries. The greatly increased ratio of low-cost labor to capital has raised the wages of highly skilled labor and the return on physical capital but has put downward pressure on the wages of low-skilled labor. The result has been a sharp widening in the differential between the wages of highly skilled and low-skilled labor in the United States and other advanced countries. If the widening of the wage differential is allowed to proceed unchecked, it threatens to create within our own country a social problem of major proportions. We shall not be willing to see a group of our population move into Third World conditions at the same time that another group of our population becomes increasingly well off. The pressure to avoid it by protectionist and other similar measures will be irresistible. So far, our educational system has been adding to the tendency to stratification. Yet it is the only major force in sight capable of offsetting that tendency. Innate intelligence undoubtedly plays a major role in determining th...
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