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The Wrong Path to Reform

Mises Daily: Thursday, September 30, 1999 by

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The big conundrum after the collapse of the Soviet Union was how to move from socialism to capitalism. The US faces the same problem now with the public-school system. Everyone knows that the status quo has got to go. With the newest report that most high-school graduates can’t even write a coherent sentence, what else are we to conclude? The questions that remain are, first, how are we to manage the transition from a communist system of education to something else? and, second, what should that something else be?

These are the exact questions faced by Russia and its former client states in the early 1990s. The sad truth is that none of them managed the transition well. Each state made its own mistakes. Russia freed prices before privatizing industry and ended up on the IMF dole. The Czech Republic tried to privatize while leaving the state banking system intact, which ended up owning formerly public industries. East Germany adopted a West German welfare state it couldn’t afford. None of them did anything about their socialist health-care systems. And so on.

What do all of these experiments in transition have in common? Despite the continuing outcry against "shock therapy," none of these states went far enough, fast enough toward a full market economy .They ended up creating mixed systems–part capitalist, part socialist–that have foundered on their own internal contradictions ever since. In each case, too, the leaders of the transition have borne the brunt of a public backlash that has improperly blamed the free market.

So far, the only options for school reform that have entered the political arena consist of a mixture of public and private means. If the experiments so far are an indication, they will not accomplish a transition but merely spread the problems of the current system in new directions and create new problems.

Let’s dispense with the first reform plan immediately. The idea of federal vouchers for education was recently suggested by John McCain, whose website brags about all the education pork he’s voted for. Do you want the central state running your private school? That’s precisely what would result. The idea might appeal to a person who thinks the military model is ideal for all of society. But if you don’t think that the feds ought to be collecting taxes to subsidize and control private academies, federal vouchers are no answer. Conservatives ought to be on the front lines fighting such a scheme.

Another variety would contract out the present school system to private firms. The major advantage here is cost. It turns out that private firms can administer schools with better results at a fraction of the cost. This is why the Dallas Independent School District is considering inviting a company called the Edison Project, which operates 51 schools in 14 states, to come in and try their hand at educating kids.

Would contracting out (please don’t call it privatization!) be an improvement? Not in the long term. Taxpayers will still be on the hook, paying for education they may or may not be using, and the government would still be in control. Moreover, the Edison Project will be forever hamstrung by the requirement that its schools meet state educational standards. That means a huge focus on raising the scores in basic skills, but, like the public schools now, neglecting students, or sending them to babysitting programs, once they have shown competence in those basics.

Finally, as with all contracting out, such a system would be rife with corruption, as potential bidders exchange favors with bureaucrats and politicians for the contracts. The people paying the tuition are not parents but employees of the state. And the students themselves remain a captive audience, coerced by the state to be in the classroom even when they and their parents have other ideas in mind.

What about charter schools? Under this system, the state creates schools which it then permits private managers to administer partially on their own terms. The only difference between charter schools and regular public schools is the locus of control within the school itself. Seems fair enough until you consider the impact that charter schools have on authentic private schools. In Grand Rapids, Michigan, tuition-charging Christian schools are losing students to the no-tuition charter schools. This has dramatically increased financial strains on those attempting to educate on a free enterprise basis.

Once all the private schools are driven out of business, it would be very easy for education regulators to rip away the right of the charter school to control its curriculum. Already they must accept all comers based on a lottery. And its only a matter of time before the ACLU is successful at getting the courts to prevent charter schools from including the religious context in history and other subjects.

All three of these measures–vouchers, contracting out, and charter schools–suffer from the same problem: they take us only half way there, and threaten to discredit the whole reform movement because of their failures. They do not come to terms with the crucial reality that state involvement in education is the source of the failure in the first place. Until we stop attempting to supply educational services according to the socialist principle, we will not be addressing the real issue.

In the ideal world, government would have nothing to do with education. But that is not to say there aren’t interim reforms worth undertaking. All regulations on private and home-schooling could be repealed, giving them complete autonomy to teach students without maddening and often malign interference from bureaucrats. Compulsory schooling can be repealed. Tuition payments of any sort and to any school could be made tax deductible. Funding and control of public schools could be entirely localized. Right now, the Department of Education could be abolished.

That such small steps appear to the newest class of education reformers as too radical tells you all you need to know about their misunderstanding of the problem, and their lack of moral courage. Like the economic reformers in the days after the fall of communism, they have yet to figure out that all attempts to involve government in education have failed and will continue to fail. We need a clean break with the past.

As Ludwig von Mises wrote in 1929, "the state, the government, the laws must not in any way concern themselves with schooling or education. Public funds must not be used for such purposes. The rearing and instruction of youth must be left entirely to parents and to private associations and institutions."

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Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute in Auburn, Alabama.

See Murray Rothbard's Education: Free and Compulsory.