The Shock Doctrine

The Promise of Vouchers

Milton Friedman, Wall Street Journal, December 5, 2005

Most New Orleans schools are in ruins, as are the homes of the children who have attended them. The children are now scattered all over the country. This is a tragedy. It is also an opportunity to radically reform the educational system.

The schools that were destroyed were not serving their students well. As Chris Kinnan writes, "The New Orleans public-school system has been failing its kids for years. Fully 73 of its more than 120 schools are considered to be 'failing' according to the state's educational accountability standards." ("Vouchers for New Orleans," National Review Online, Sept. 15, 2005.)

New Orleans schools were failing for the same reason that schools are failing in other large cities, because the schools are owned and operated by the government. Government decides what is to be produced and who is to consume its products, generally assigning students to schools by their residence. The only recourse of dissatisfied parents is to change their residence or give up the government subsidy and pay for their children's schooling twice, once in taxes and once in tuition. This top-down organization works no better in the U.S. than it did in the Soviet Union or East Germany.

Rather than simply rebuild the destroyed schools, Louisiana, which has taken over the New Orleans school system, should take this opportunity to empower the consumers, i.e., the students, by providing parents with vouchers of substantial size, say three-quarters of per- pupil spending in government schools, usable only for educational expenses. Parents would then be free to choose the schooling they considered best for their children. This would introduce competition, which is missing from the present system. It would be a move to a bottom-up organization, which has proved so successful in the rest of our society.

To make competition effective, Louisiana should provide a favorable climate for new entrants, whether they be parochial, non-profit or for-profit. As part of doing so it should make clear that the vouchers are not an emergency expedient that will be terminated once the emergency is over, but are a permanent reform.

Such permanent reform would also meet the emergency needs. Vouchers would be usable by the students who are scattered all over the country to purchase educational services wherever they are. So far as New Orleans itself is concerned, they would enable the private schools that survived the hurricanes to expand and accommodate returning children. More important, the vouchers would encourage private enterprise to provide schooling. Is there any doubt that the private market would provide schooling for children returning to New Orleans faster than the state?

Whatever the promise of vouchers for the education of New Orleans children, the reform will be opposed by the teachers unions and the educational administrators. They now control a monopoly school system. They are determined to preserve that control, and will go to almost any lengths to do so.

Unions to the contrary, the reform would achieve the purposes of Louisiana far better than the present system. The state's objective is the education of its children, not the construction of buildings or the running of schools. Those are means not ends. The state's objective would be better served by a competitive educational market than by a government monopoly. Producers of educational services would compete to attract students. Parents, empowered by the voucher, would have a wide range to choose from. As in other industries, such a competitive free market would lead to improvements in quality and reductions in cost.

If, by a political miracle, Louisiana could overcome the opposition of the unions and enact universal vouchers, it would not only serve itself, it would also render a service to the rest of the country by providing a large scale example of what the market can do for education when permitted to operate.
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