Liberty. Economics. Common Sense. These are the guiding posts for this blog, and we hope, for the way most of us live our lives. This blog comes to the conclusion that the proper direction for society is one of personal liberty, both economic and political, and limited government that follows sound economic policy.

This blog will offer economic analysis on many political issues of the day along with political theory from time to time. The major inspirations for this blog are writers and thinkers like John Locke, Adam Smith, David Ricardo, Alfred Marshall, F.A. Hayek, Milton Friedman and James Madison among others.

Thursday, December 10, 2009

The Case For Private Schools

Educating our children is one of the most important responsibilities we have. The benefits of education are very clear. In developing countries virtually any effort to help would be moot if that society doesn’t receive education first. Women in our society and around the world are breaking out of their submissive roles and proving that they have something to contribute. People who try to control and exploit women and children argue vehemently against education because they know it’s a path to freedom.

In our society education is often seen as a “positive externality” – something that one person has or does that has positive spillover benefits to the rest of us. The evolution of our economy from agriculture to manufacturing to technology and services could not be possible without education. It’s pretty easy to argue for increased education and the benefits that come with it and there are very few that need convincing.

Therefore, it now seems logical to not argue for education, but rather to argue the best way to go about educating our children.

Public schooling in this country has had support from the very beginning, including such famous supporters as Thomas Jefferson, Noah Webster, Benjamin Rush and George Washington. These men believed that education was so important that it should be free, available to every child regardless of circumstances, and absent religious coercion. Despite this early and formidable support, public education did not make it into the constitution.

Many state constitutions specifically call for public education, but it wasn’t until 1918 that at least elementary school enrollment became compulsory. Oregon passed a law in 1922 saying that all children must attend public school and private schools would no longer be allowed to operate. The law was appealed to the Supreme Court as Pierce v. Society of Sisters and was unanimously ruled unconstitutional.

The Opinion of the Court was delivered by Justice James Clark McReynolds:
“We think it entirely plain that the Act of 1922 unreasonably interferes with the liberty of parents and guardians to direct the upbringing and education of children under their control: as often heretofore pointed out, rights guaranteed by the Constitution may not be abridged by legislation which has no reasonable relation to some purpose within the competency of the State. The fundamental theory of liberty upon which all governments in this Union repose excludes any general power of the State to standardize its children by forcing them to accept instruction from public teachers only. The child is not the mere creature of the State; those who nurture him and direct his destiny have the right, coupled with the high duty, to recognize and prepare him for additional obligations.”
Okay, now that we have a little history out of the way, let’s look at the real issue, the one that has been raging before and after the Supreme Court case just mentioned. Which is better, public school or private school? They both have their merits and they both have their drawbacks. On the whole, it is my opinion that private school provides the most quality education, provides the best choices and makes the most economic sense.

Before I make my case for private school, let me lift up an area where public school provides a valuable service that private school cannot – integration. I think it’s good for kids to be exposed to people that are different from them. In public school, kids and parents have no choice in where they go to school, except of course by selecting what school district to live in. In public school kids will be taught alongside those of other races, religions, creeds, languages and socio-economic backgrounds. It’s a good life experience to learn from and listen to those that are different than us.

Private school, on the other hand, runs the risk of isolation. Since parents will choose what school they want their kids to go to, they will choose on that reflects their own values. As such children of religious parents will go to religious schools, children of atheistic parents will go atheistic schools, etc. This opens the door to extremism, narrow-mindedness and possibly even xenophobia. While those dangers are certainly a possibility, I think the reality of their fruition is very slight. On the whole, the benefits of private school largely outweigh their costs.

With private school (or charter schools) parents have a choice in where to send their children. They do not have to accept being stuck at a failing school with failing teachers. If they feel their child is not getting an adequate education, they can simply change schools. If a school is failing, enough parents will pull their children out and that school will be forced to shut down due to lack of tuition. Failing schools should be allowed to fail, not be continually propped up with tax-payer dollars.

The quality of teachers and curriculum would be greatly increased if we went exclusively to a private or charter school system. Once schools have to start competing with each other, the race will be on to attract the best, most qualified teachers. You will see teachers’ salaries spiral upwards as good teachers suddenly become in demand and bad teachers are no longer able to find jobs. The increase in wages will attract other intelligent and capable people into the field of teaching; an area they might overlook now because of the low pay and poor working conditions.

Those schools that have the best teachers will attract the most students. If one school becomes too in-demand that it can justifiably raise its tuition rates, another school will pop up with lower tuition in an effort to compete. This constant competition among schools will keep teachers’ salaries high and tuition low.

Also, similar with colleges, you will see private schools recruiting. Having the best students reflects well on them so the incentive is there to offer free bussing, scholarships, and other perks like tutoring. And nobody will be left out. Since students will now be paying customers, it wouldn’t be in a school’s interest to deny enrollment. If there is a block of students that cannot be accepted into the “elite schools,” there is still demand for their education. In the private sector, if there is a demand, a service will be provided to meet it.

There are many teachers that enter the profession to teach the “unteachables.” These great men and women willingly accept the challenge of teaching those children to whom learning does not come naturally. These teachers will gravitate and be recruited by schools that will specialize in that type of education. For those children that need extra help, they will get much better schooling and much more needed attention in private or charter schools than they will in public school.

And it doesn’t have to be specialized or elite schools that enter the business. There will be schools that fit neighborhood demand or cater certain localities just like our public schools do today. The only difference is you can be assured the school will be of very high quality.

Now, compare this outcome with that of our current public school system. Public schools obviously aren’t socialist, but in many respects they have the same drawbacks as with any socialist system.

In public schools, there are no prices (tuition) to send signals. With private schools, those schools that are charging a higher tuition do so as a reflection of increased demand. The increased demand comes from a quality service provided. Because parents have very little choice in where to send their kids, they cannot “vote with their feet” if they feel a school is failing. In private schools, the market is able to send signals as to which schools are failing and which schools are thriving. These signals come in the form of tuition rates and whether the school is attracting or losing students.

Public school, on the other hand, has no such signals. Schools are in no danger of going out of business because they are paid for by the state and therefore don’t have to worry about losing money. Also, parents don’t really have a choice in sending their kids somewhere else so public schools are virtually guaranteed students, even if they are terrible. These two facts (guaranteed money and students) work to remove the incentive for public schools to increase their performance and also ensure that failing schools are allowed to continue failing.

Now obviously every teacher and principal (well, most) wants to do well and increase their performance and quality. The problem is that the system is constructed in such a way that it’s impossible to gauge if you’re doing well or not. Because there are no free-market signals, public schools must rely on aptitude and other scholastic tests to measure the performance of their students.

Obviously testing students is a good thing, but not when it’s your only measure to gauge success. Since it’s public schools’ only option, what happens is that schools start “teaching to the test”, with their only aim to pass the test to ensure they receive continued funding. This is a perverse incentive. The true aim of schools should be a comprehensive education, not to tailor it some way the state deems appropriate, with the goal being, not education, but securing more money.

Remember Justice McReynolds’ quote from Pierce v. Society of Sisters, “The child is not the mere creature of the State.” When the state creates the tests, and says you must teach the children is such a way that they pass this test, you’ve created a potentially dangerous situation.

Also with public schools, and related to the performance-gauging problem, we end up with strange legislation like “No Child Left Behind.” All this legislation did was cement the fact that schools had to teach to a state-written test, but left it up to the schools themselves to set the benchmarks. This created the incentive to set the benchmarks very low so that they’re easily met. All of these results in children being taught to a test – a test that isn’t at all rigorous, challenging, educational, or intellectually stimulating. Clearly a losing situation.

Okay, so how do we go about achieving this vision of all private or charter schools? Really, not much has to change. Property taxes are largely based on what school district you live in. This can be amended so everybody everywhere pays a flat property tax (instead of it being higher or lower depending on the school district).

Government will take this tax revenue, and instead of giving it directly to schools, will give it to the parents in the form of a voucher. The parents can use this voucher toward tuition at any private or charter school they want. The schools still get their revenue, even poor families will still be able to attend private school, the government will be able to say it helped, failing schools will go out of business, quality of education and teachers salaries will spiral upwards and economic principles and liberty will be maintained. Private schools are truly a win for us all.

As an aside, here is a very intersting report from the Cato Institute very clearly shows how the public school dilemma cannot be solved simply by "throwing money at it."

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