What Nevada can learn from Milton Friedman

Patrick Gibbons

Born July 31, 1912 to Jewish immigrants, it was natural for Milton Friedman to grow up accepting "progressive" — left-wing — ideas. In the rapidly changing American republic of his youth, progressives were intoxicated with the idea that they, using big government in collusion with big industry, could produce a wondrous human utopia.

As the United States centralized power and virtually nationalized industry both before and during World War II, Friedman, because of his brilliance, was twice pulled into the federal government and given exceptional responsibilities for someone of his age. In the mid-Thirties he helped design the largest and most comprehensive budget study that had ever been conducted. During the war, he played a significant role in a major revision of the national tax structure.

Out of those experiences, Friedman's searching mind began to notice that certain problems always inhered in political and governmental "solutions." Though he was still a Keynesian at the time, his understanding was maturing. He was recognizing the inherent dangers that government-enforced solutions pose to American freedoms and democracy.

As Friedman's economic research bore further fruit, he predicted — correctly — that Keynesian economics would collapse under rising inflation and unemployment. Lecturing across the globe, he made it easy for audiences to understand how free markets and private property are necessary conditions of freedom. His worldwide influence would help usher in democracy. As left-wing economic policies collapsed in one nation after another during the 1970s and 80s, Friedman's stature continued to grow, and he was ultimately recognized with the Nobel Prize in economics.

Milton was sensitive to an accelerating trend in U.S. politics toward collectivization and a de facto nationalization of education under expanding government monopolies that — like nearly all government monopolies — generally provide low-quality services at high prices. Friedman reasoned that the public could be better educated if government had no monopoly on education. His solution: vouchers.

Thus, long before recognition of his intellectual prowess had moved Friedman into the national spotlight, he proposed school vouchers in 1955 as an alternative to government education monopolies.

He wrote:

Governments could require a minimum level of education which they could finance by giving parents vouchers redeemable for a specified maximum sum per child per year if spent on "approved" educational services.

Parents would then be free to spend this sum and any additional sum on purchasing educational services from an "approved" institution of their own choice. The educational services could be rendered by private enterprises operated for profit, or by non-profit institutions of various kinds. The role of the government would be limited to assuring that the schools met certain minimum standards such as the inclusion of a minimum common content in their programs….

Friedman argued the lack of choice and competition in public education encouraged subpar results in much the same way the Post Office's public monopoly resulted in poor-quality service. Without choice and competition, the average American has no real way to hold service providers accountable. Under an effectively socialist system, only the rich, generally speaking, can escape mediocrity.

Milton Friedman eviscerated the arguments against vouchers decades before empirical analysis proved his ideas correct. Today, nine out of 11 random-assignment studies show vouchers have a statistically significant positive impact on student achievement. Interestingly, one of the two studies that find no impact on student achievement nevertheless found a mammoth voucher-linked 21-point gain in high school graduation rates. Vouchers also have proven positive effects system-wide — as public schools facing the threat of competition improve quality in order to retain students and funding.

Nevada needs Friedman's ideas more than ever. The Silver State has a high drop-out rate and the worst graduation rate in the nation. Less than a third of Hispanic, African American and Native American students graduate with a traditional diploma in four years. Meanwhile, minority and low-income children struggle to read at grade level.

This pathetic performance of Nevada's public school system has occurred despite a 180 percent inflation-adjusted increase in per pupil spending in the last 50 years.

Milton Friedman may have proposed school choice long ago, but it's not too late to put his idea in place now.

Patrick R. Gibbons is an education policy analyst at the Nevada Policy Research Institute. For more information visit http://npri.org/.