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Ray Budde

1988

Education by Charter- Restructuring School Districts Ray Budde

By Joe Nathan

December 1994

Charter Public Schools- A Brief History and Preliminary Lessons

Mike Malone, Joe Nathan, Darryl Sedio

November 1993

Facts Figures and Faces A Look At Minnesotas School Choice Programs

Public Services Redesign Project — July 1990

By Ted Kolderie

Seven years after the Nation at Risk report this country still lacks a strategy for school improvement. We are serious about improvement. But we do not know how to make it happen.

In the first effort, following the Nation At Risk report in 1983, we tried several things. We tried demonstrations, in the hope that good practice would spread. We tried mandates. We tried money: Real spending per pupil rose again in the 1980s after having risen by a quarter during the 1970s. Basically we were trying to get better performance out of the existing schools. It was not a great success.

Out of it came the conclusion that, if student performance is to improve, the schools will have to be changed. More than this: radically changed.

And out of this conclusion has come the current effort at “restructuring”. Nobody quite knows exactly what it means. But at its core there is a fairly coherent (and in a sense radical) vision: districts with professional teachers in “site-managed” schools, assessed and rewarded for the progress of the school in improving what students know and are able to do. This idea now dominates the conventional policy discussion about system-change and school-improvement.

But it is only a vision. It is not a strategy for action.

Institutions do not welcome change, especially radical change. They need a reason to change. And “re-structuring” does not give the district a reason to change. It assumes, as Jack Frymier put it in 1969, that “altruism is an adequate motivational base for change.” It expects that boards, superintendents and teachers will do things they find personally difficult and institutionally unnecessary because these things are important for the country and good for kids.

This is not very realistic.

There have been some successes. There are important demonstrations in many schools. A number of districts have “restructuring” contracts. There is now a state (Kentucky) in which the program will be tried statewide. All of these are widely reported. The media create the impression of a changing system.

But change is more than getting words on paper, in contract or in law. Change must get established. It must last. And it must spread. The concern is that even in the most-noted “restructuring districts” the implementation is proving — as the superintendent in Rochester NY, Peter McWalters, said recently -“damned hard”. In some districts the educators do not want to use all the authority they are given. In others the changes made may now be slipping away. The much-praised restructuring in East Harlem, in New York City, has been in real jeopardy. Strenuous efforts by its friends may save it. But how many such defensive battles can be fought and won? For how long?

Above all there is the problem of scale. This country has 40 million kids and 2.2 million teachers in 84,000 schools in 15,000 districts. The problems are general, and serious. The change has got to be systemic. “Re-structuring” is simply not moving fast enough for the job that has to be done. Privately there is real anxiety among those most committed to the cause.

“Re-structuring” improves on the old prescription: higher salaries, smaller classes and better training. But as it stands it does not go to the heart of the problem. It is trying to persuade districts to change, while accepting as given the system of public education that makes it hard for them to change. This makes no basic sense. We need a new approach. We need to examine the givens of the system, find what makes it so hard to change, and change that.

Why Education Resists Change

The critical given is the idea of districting itself. The state does not deal with schools; it deals with districts. Legally schools do not exist: Districts exist. The district is defined by its boundaries. These create an area in which there is one and only one organization offering public education, to whose schools the kids who live in that area are assigned. Public education is organized as a pattern of territorial exclusive franchises.

That exclusive franchise is the heart of the problem.

• It means the state agrees the district will have the final decision about improvement. Governors and legislators like to talk as if they control improvement. They don’t. They can propose and promise, plead and threaten. They can give money. They can issue orders. And often the districts do respond. But whether they do or not in the end is up to them. If the district does not give the kids a good education the state does not send in another organization that will. It accepts the pace of improvement at which the district is able or willing to move.

• The state also agrees to accept whatever reasons the district has for its decision to change or not to change, even if those reasons have to do mainly with the private and personal interests of the adults involved, as they sometimes do.

• And the state agrees to accept those decisions and the reasons for them, whether or not the students learn. Within very broad limits the state assures the districts their material success — their existence, their students, their revenues, their security; everything except their annual increases — independent of the level of student success.

Nobody should wonder why in public education “the cards are stacked against innovation”. An organization with that kind of exclusive franchise feels no need to change.

David K. Cohen put it gently when he wrote in 1986 that education contains “weak incentives for the introduction of innovations that would cause internal stress”. And proposals for radical change surely do cause internal stress. Change disrupts settled routines. It upsets people. It causes controversy. It threatens the real interests of powerful organizations.

As they consider proposals for change the superintendent, board, principal, union and teachers weigh the potential benefits to the kids against the risk of creating “internal stress”. They want to help the kids. But upsetting people might cause controversy. It might produce a grievance. It might lose an election. It might cause a strike. It might damage a career.

The risks are real. There is nothing countervailing: nothing that requires kids’ interests to be put first; nothing very bad that will happen if the decision is to say ‘no’. As things stand a ‘no’ is the end of the matter: The principal who wants to change has nowhere else to go; the teacher has nowhere else to go; parents and students have nowhere else to go.

There is almost nothing anyone can change without getting someone else’s permission. Yet almost everyone has the power to check everyone else.

And practically nothing depends on making the improvements for which the public is pressing: clear objectives, measurement of performance, new technology or better learning methods.

Unless something quite unusual happens the students and the revenues will be there anyway. Good educators tell their colleagues, “We have to change”. But that is not true in any real sense. They do not have to.

The kids get what altruism, courage and the random appearance of exceptional individuals provide in the way of improvement — which is often a lot. But the system puts them second. The system puts adults first. As Albert Shanker told the Itasca Seminar in Minnesota in 1988: “This is a system that can take its customers for granted”.

Why the State Will Have to Act

For a country serious about improvement this is an absurd arrangement. We can hardly expect the district to do the hard things involved in change if we guarantee it its success whether it does these things or not.

This unproductive situation is not the educators’ doing. The system is not one they created. Many might like to see it changed. Ted Sizer remarks near the end of Horace’s Compromise that “the people are better than the system”. That’s true; the people are as good as any. They are working in a bad system.

It is time to say this: Our system of public education is a bad system. It is terribly inequitable. It does not meet the nation’s needs. It exploits teachers’ altruism. It hurts kids.

We ought to change it. It is unproductive and unfair to put people under incentives that are not aligned with the mission they have been given to perform. That leads to blaming the people for failures that are the fault of the system . . . and we are now deeply into blaming people for the failures of public education. Parents blame teachers and administrators. Educators in response blame parents, and kids. It is all wrong. We should stop blaming people. We should fix the system.

We can do this. We do not have to take the system as given. He system is a policy-construct.

But to change it we will have to go beyond the district. “We can never turn around enough districts,” ECS President Frank Newman said in a “Statehouse to Schoolhouse” discussion, “without changing the incentives in the system”.

Changing incentives means providing reasons and opportunities for people to do in their own interest the “stressful” things that change requires. Changing incentives in the system means re-structuring the environment in which districts live.

It means withdrawing their exclusive franchise.

Only the state can do this. The districting is in state law. The responsibility for action rests with the legislatures, and with the governors whose proposals begin the legislative process.

The state’s job is not to run the schools. The state’s job is to provide a workable system for those who do. It owes boards, teachers and administrators — and the public — a system in which those who do change and improve are supported and rewarded, and in which those who do not are the ones put at risk.

Everywhere in this country the state is in default on that obligation.

What would it mean to “withdraw the exclusive”?

Districting is (a) the assignment of students to (b) an organization that has an exclusive franchise both for policy and for school-operations. It can be changed in two steps.

Step One: The state transfers the attendance decision to the student (as Minnesota, for example, has now done). This is choice. The student can now move from one franchised area to another.

Step Two: The state makes it possible for new public schools to appear; sponsored by some public organization other than the district. This is diversification.

At this stage the schools of the district remain, unchanged. But certain dynamics will have been introduced which were not there before. Suddenly, for the district, a decision not to change and improve would not be without practical consequences. No district would have to do anything. But if it did not a new and different and perhaps better school might appear. And the students would be able to enroll with whichever organization they chose.

The idea of the alternate sponsor, the ‘somebody else’, is absolutely critical to the effort to produce schools operating in new and better ways.

The local district will not want new schools appearing in its territory. It will be anxious to preserve its exclusive. It will argue that if new and different schools are necessary, it should be the organization to start them.

The district’s ability and willingness to start new schools is bound to be limited, however, by its desire not to threaten the other schools it owns. The result would be what it is today: selected demonstrations, and waiting lists — always the visible evidence of a reluctance to let change “cause internal stress”.

A district fears new schools; even its own. Its interest is entirely in re-structuring existing schools: “Help all schools” is the cry. Governors and legislators will need to resist this. They cannot let their options be limited to actions that begin with “re-“: Re-structuring, re-vitalizing, reforming and retraining old institutions is the slowest way to change. There must also be a way to create different and better schools new.

This can happen only if the state opens up the opportunity for some public organization other than the district to start a public school. New sponsors are more important than new schools, because new sponsors are the key to the appearance of new schools. Innovation almost always moves faster between organizations than within them.

It is critical, too, that the sponsor not own the school. If it did it would control through process, as the district does now. It should be required to control through performance. Then it will set objectives and measure results. The school must be separate.

What Would Such a Policy Look Like?

It is not easy to have a useful discussion about policy proposals that go outside the traditional givens. People in such a discussion start from different premises. So their arguments usually do not meet.

Typically the proponents attack the reality of the existing system and offer a new idea to replace it. The opponents defend the theory of the existing system and envision terrible things that could happen if it were to be changed. They spread fear and doubt. This makes the proponents defensive, and they fall into the trap: They accept that all the specifics and details of the new plan must be worked out in advance, and that it must solve all the old problems and create no new ones. This causes then to overpromise, and to minimize the risks. The possible problems of the new system get more attention than the real problems of the present system. Inevitably, people do see problems and risks. So the opponents seem proved right: The change should not be made.

We should have a more realistic and useful discussion.

Any strategy can be implemented in different ways. A strategy of changing education, to create incentives that will cause improvement, can clearly be implemented in different ways. It is all right for different states to take different routes. It is all right, too, to leave some decisions until later and to work out some problems as they go along: Everybody does. It is not essential to have an answer in advance for every conceivable question: Nobody does. Or for every question to have a perfect answer: The existing system does not have perfect answers.

We should not assume a fixed plan, which must be accepted or rejected. Change is a design question. We should ask: What are we trying to do? What are the various ways we might do it? Which seem best? Which are least risky? How can we work it out?

Here is an outline for a discussion along those lines.

Step One: Choice

A State canting to create incentives for improvement will want first to withdraw from the district its ability to “take its customers for granted”. The state would transfer the attendance decision from system to student . . . shifting from assignment to choice as the basis on which the student arrives at the school. It’s true: Choice alone is not enough. But choice is essential. Choice is not an improvement: Choice drives improvement.

All discussions must begin from the fact that choice exists. The legislature does not enact choice. Every state has had a choice plan since the Pierce decision in 1925. Its provisions are simple: Any kids can go to any schools, anywhere — private or public — if their parent/s can pay the tuition or the cost of moving their place of residence. It has been a popular plan. It is also unfair. It discriminates against the poor. As it stands choice is means-tested. A family with a lot of money has a lot of choice. A family with little money has little choice. The equity problem, with choice, is in the plan we have today.

What legislatures are doing is to extend choice, using public resources to offset the inequalities in family wealth.

Not every choice plan does that well. Choice is a design question. You can design a choice plan to do whatever you want. Everyone discussing choice has to decide: (a) What students are eligible? (b) What schools are eligible? and (c) Under what rules do they come together? Everything depends on how you answer those questions. You can create an elitist, segregated system. Or you can create a much more equitable system than the one that exists today.

The state that has answered these questions most fully — Minnesota — improved the equity in the system as it decriminalized the act of enrolling in a district in which you do not live. Minnesota made all kids eligible. It made only public schools eligible. It set up a set of controls on choice: for racial balance, against selectivity, etc.

But again: Choice alone is not enough. In a discussion recently at the National Governors Association David Hornbeck noted that in the last 30 years large numbers of families have exercised their power to choose, and have left the central cities. Yet their action did not improve the schools of those districts. Precisely. There was choice, but still the exclusive franchise – no opportunity for anyone else to offer public school in that area. Choice makes an alternative (as the healthcare people say) legally and financially “accessible”. But not practically “available”: The other organization the student wants to attend is always in some other place. So ‘choice’ becomes an argument about the feasibility and cost of travel.

For choice to work — to help the student and to stimulate the district to change the state will have to provide both choice and choices: different schools for kids to choose among, where they live. It is like the epoxy kit you buy at the store: Neither tube has an effect alone. In education, too, the dynamics will appear only when choice and innovation mix.

Step Two: Diversification

In opening up the opportunity for more than one organization to offer public school on the same piece of ground the state will again have to answer some key design questions.

Who would the sponsors be? There is a variety of public organizations among which the state can choose.

1. a) One local district could offer school in the territory of another. A city district could set up (say) an alternative school for at-risk kids in a suburb The kids would enroll in the city district but attend in the suburb, where they live.

1. b) Many colleges and universities once ran K-12 schools, and could reopen these. Same colleges and universities already admit 11th- and 12th-graders as a “post-secondary option”.

1. c) Units of general local government. Most states have a ‘joint powers’ law. Some let two governmental units do together what either one is allowed to do separately. This means a city, county, housing authority, etc. could through agreement with a district acquire the authority to sponsor a school.

1. d) The state itself. The legislature could create schools directly – as some have, for the arts or for math-and-science. Or it could give the state board of education general authority to sponsor new schools. Or set up a new agency for this purpose.

1. e) The federal government. Instead of writing checks to states and superintendents it could open schools on the TVA principle, as a ‘yardstick’ for local performance. The District of Columbia might be an appropriate and useful place to begin. Congress is in effect the ‘state legislature’ for the District.

What would the school be? Some kind of separate and independent organization. It might be a public corporation. A non-profit. A ‘professional association’. Or a cooperative.

Who would form the school? Perhaps a business firm. Or an investor group. Or a group of parents. Or perhaps educators; administrators or teachers. A state might be open to all of these; or might not. It might think “affinitygroup” schools are OK; or might not. (Minnesota worries a lot about schools attracting hockey players.)

How would the school be accountable? In two ways: To its sponsor, through the contract and to its families, through choice.

Contract relationships force accountability in ways that employment relationships do not. The sponsor has to know what it wants. The school, like any independent contractor, would decide how the job is to be done. An evaluation is required. So there is measurement. And there are consequences. A contract can be terminated for cause. Or not renewed.

Both sponsor and school would be operating under general requirements set by the state. These would cover civil rights, health and safety and in a general way what students ought to know and be able to do.

The state might write new performance standards for these new schools. Or it might adopt the solution worked out by Minnesota, for its home-school controversy: Students in the new schools would have to meet whatever standards the local district is willing to impose on its own students.

What about liability? Accidents happen. People sue. Somebody has to buy insurance. It could be the sponsor. It could be the school, with money built into the contract payment.

Where would the school find space? It seems unlikely the new school would build or buy its own space. Probably it would get up in space it leased, from the district or in the community.

On what basis would kids be admitted? The laws against discrimination would be respected. Beyond this, a state might let the new schools select the students most interested in or best fitted for the program it offers. Alternatively, the state might require the school to give everyone who applies an equal chance of being admitted. The state might itself limit eligibility: to students of color, or to poor kids, or to those living in a certain area. Whatever, it should require that good information be made widely available.

What is the revenue-mechanism? This will depend on how the state pays for education today. A state with a foundation program (which most have) could simply deduct the full cost from aid it pays to the resident district and send that amount to the new school or its sponsor. A state might want to give a new school slightly less than what a district spends. Or it might decide to pay more for the education of less-advantaged kids. States without foundation programs could perhaps require the resident district to transfer its revenue directly to the new school. Some states might need to enact a foundation program.

How would the school be organized? On this the state should be silent. The whole point is to leave to the school decisions about the use of time, the method of instruction and the roles of the teachers and administrators.

Could the district schools have this opportunity too? Yes. The state should provide a way for an existing school to get the same opportunity to innovate and to decide its own program and administration. This was Jack Coons’ notion of the “new public school”. It is the “site-management” idea, essentially. A state could put in law a ‘standard plan’ for the authority that would be delegated, and the procedure by which this would be accomplished.

A variation: Divestiture

A state that wanted to act more decisively on the problems of its big city schools might take a somewhat different approach. Diversification is an in-direct strategy. And in-direct strategies take time. To get improvement faster a state could introduce opportunity and incentive directly, by spinning off the ownership of the schools into an independent organization.

There is a real case for this. The school board sits in a fundamental conflict of interest. It represents the parents and the public, to whom it promises the best possible education for the kids. But it also sits as the board of the only teaching business in town. This is a self-dealing arrangement. And because it can take the kids for granted the board is inevitably led to spend most of its time and energy worrying about its staff. Divestiture would clarify the board’s role dramatically. The program of instruction . . . the old school administration’ . . . would be spun off and organized separately, on contract to the board. The board would become a policy body, much like a sponsor under ‘diversification’.

• The board would see its policy role expand substantially. It would decide what the kids should know and be able to do. It would decide how much to tax and spend. It would become a buyer; selecting the organizations rather than hiring the individuals to teach the kids for whom it is responsible. It would have an official to ‘superintend’ instruction: literally, to watch how well the job is going. It would assess and report performance.

• The board could also continue to own the buildings and the central support organization. These facilities and services would be organized as an enterprise, from which the instructional groups could buy space and service if they chose. The staff who had worked in the schools — principals teachers – would form into two or more instructional groups. (In Minneapolis this might mean four groups, each with about 20 schools.) Each would be an independent organization; a public corporation or (if the educators preferred) a private organization; perhaps a professional association or co-operative.

• Each of the groups would operate district-wide. And there would be no attendance areas. So parents in every neighborhood would have two or more different organizations accessible and available. Two or more groups might even set up school in a single building. Elementary schools especially might become smaller; their locations more numerous.

• Schools, and individual teachers, could shift between groups. They could form a new group and seek a contract from the board. or form a new school and seek a contract with a group.

• Each group could organize its learning program in whatever way it thought best. One might use conventional instruction; another, cooperative learning, or electronic technology.

• Each could also arrange its own administration. One might re-create the model of a traditional, centralized district. Another might prefer site managed (i.e., contract) schools. The multi-school scale of the group is important: The individual school would not have to become the unit of administration.

This is an unfamiliar arrangement. We are used to thinking of schools organized on the public-bureau model of the Army, or the Postal Service, or the Fire Department. But it is a conceivable arrangement.

How Can This Benefit the Teachers?

Withdrawing the exclusive franchise would put at risk for teachers, as for districts, the security of the traditional arrangement. This is necessary: No more than anyone else should educators be able to “take their customers for granted”. But as the state makes this change it should in fairness offset the risk it creates for educators with some opportunity for reward.

That ‘reward’ could be the opportunity for the teachers to control the schools: to grow in professional responsibility and perhaps to increase their personal income.

The “schools” would not be the buildings, of course, but the instructional program. Educators might have charge of one of the groups of schools. Or a single school. Or a part of a school: the math or language or science department, say, or the music program.

This option is not available today. [To be a] teacher you have to be an employee.

Some teachers (and former teachers) are likely to sense the potential in the idea of taking charge of the school. Customers are required by law to use the service and have universal coverage, tax-financed. The public wants improvement. The kids are disaffected. The employees are frustrated, and leaving. There is real potential to do better: There are good ideas about how to get kids to learn better and there is a good deal of expensive overhead that could be cut. The capital costs are low. All that has been missing is some public organization willing to contract with educators who “have a better idea”, and the opportunity for those teachers to got the benefits of their idea if it works.

Educators who want to own their group, school or program would receive the per-student cost for the total enrolled. They would set up their program as they thought best. They would employ (or contract for) their administration. They would be accountable for results, and they would have to persuade their students to come and to stay. But they could keep either for use in the program or as personal income what they did not need to spend.

The employment option would remain for educators who prefer to be employed, as many will.

The union could serve both employee-teachers and own-teachers. It would bargain only for the former: Teachers who own their organization would obviously set their compensation themselves. But it could have the owner-teachers as dues paying “affiliate” members, and provide other services they require. The concept of “affiliate membership” has recently appeared within the AFL-CIO. Its author is Albert Shanker.

Can It Happen?

Perhaps nothing like this could be done. Diversification and divestiture would threaten the system. The decision would have to be made in the legislature. The education organizations would probably resist. They are powerful politically.

But perhaps it could be done. Improvement is necessary. Re-structured schools are necessary for improvement. And districts need incentives, to produce re-structured schools. Things that are necessary do happen, in time.

Diversification and divestiture might offer a middle way between the ‘re-structuring’ idea that accepts too much of what now exists and the voucher idea that accepts too little.

• An ‘alternate sponsor’ would create the opportunity to start new schools more quickly than the district would ever do itself, while still maintaining a real public accountability.

• The contract relationship — between state and sponsor and between sponsor and school — would create a need to define objectives and to measure performance.

• The idea of teacher-ownership would open up an incentive for teachers (and for administrators, who could start schools too) to accept change. We do need to find some way out of the present stalemate.

The public wants accountability. Educators refuse to accept it. Many teachers argue they are responsible only for their professional practice; not for what students learn. They will not agree to measurement if it involves published comparisons of performance. And they will not agree to sanctions for poor performance. (The concept of accountability in the “restructuring” discussion is essentially that if you do well you get more money; if you do badly you get more training.)

Educators want autonomy. And the public refuses to allow that. People are receptive to the idea of teachers having professional status; and autonomy is of course the essence of professional status. (“Tell me what you want. Don’t tell me how to do it. I know how to do it.”) But governors, legislators, school boards, parents, taxpayers and citizens are not likely to give up control . . . are not likely to turn over the decisions about the instructional program . . . while still allowing teachers to keep the protection both of tenured employment and of union contract. That does not pass the ‘accountability’ test.

The idea of teacher-ownership might break this impasse. It would give teachers a reason to accept accountability. And that would give the public a reason to grant the autonomy. Teachers might soon find, as some other professionals have, that “the more, accountable we are the more autonomous we are”.

There are some other reasons to be optimistic.

• First is the appearance of the idea of incentives in the proposals from leaders in public education. This is recent, and still tentative; probably associated mainly with Shanker’s Quest speech in 1989 and his Kappan article in January 1990.

Incentives remain controversial. Some see them as rewarding people for doing what they ought to be done anyway. Some warn about unintended side effects.

Some think there can be ‘up-side’ incentives but never ‘down-side’ incentives: good things for schools that do change but nothing bad for those that do not. Still, the willingness now to discuss incentives at all suggests a recognition that appeals to altruism will not be enough. All of the talk, however, has been about incentives for schools and teachers. The need is to create incentives for districts.

• Second is the success of the choice legislation. That was outside the givens. And was resisted. But it succeeded. The key was to take an idea previously associated with private schools and apply it to public schools instead. People could always choose their school: It simply had to be a private school. Similarly, people could always start a school: It simply had to be a private school. In the same way that the state made it possible to choose a public school the state can make it possible to start a public school.

• Third is the rapidly growing role of elected officials of general government in decisions about the basic organization of public education. They are the ones who can do something radical; and might. It is quite new and enormously important for the power of the presidency to be oriented now not toward the Congress, which does not have the power to change the structure of public education, but toward the states, which do.

• Fourth is the growing sophistication of the business leadership. This is slow. Business is still ambivalent. Many chief executives still shrink from confrontation. Some still hope major change will result from ‘partnerships’. Most serious: Many still think the discussion today is about how to structure an organization rather than about how to structure an industry.

But many are impatient now with “feel good” partnerships. And more and more now sense that state action is the key. The Business Roundtable has a network of CEOs organized to work with the governor in every state. In some states the CEOs are willing to contemplate radical action despite the certainty of conflict: Chicago may have been a watershed, for business.

• Fifth is the possibility that thoughtful people inside education will find the change in their own interest. They will not save public education by not changing it. A bad system will not attract good people. The pressure could grow to let kids go to the non-public schools at public expense. The legislation this year in Wisconsin, for Milwaukee, was a straw in the wind.

• Sixth is the awareness of the consequences of not getting it right this time. Something like 20 million kids went through high school during the seven years after the Nation At Risk report. It would be a serious problem — for educators and for the political leadership — to have to confess, after another 20 million had cycled through, that once again the adults had not got it right.

• Finally, there is something to be said for the feasibility as well as for the desirability of state action that confines itself to a single, radical stroke: introducing simply the dynamics for change, with the districts and the schools left free to introduce improvements themselves in their own way over time. The public is ready, the Gallup survey for The Kappan reported in 1989, for radical change.

We Have Got to Go to the Heart of the Problem

It is popular today to put down strategies like this. “There are no silver bullets”, some people like to say when they want to steer you toward conventional action.

But sometimes it is possible to do a single thing that will change everything else for good. Technology sometimes does it; as the satellite forced the re-structuring of the telephone industry. Business actions sometimes do it; as the money-market fund set in motion a chain of events that is re-structuring the financial industry. Public policy can sometimes do it.

It is not easy to get to the heart of the problem and to find that one action that will lead on to everything else. A lot of people do not want to go to the heart of the problem.

But surely that is what it means to “be strategic”. And the effort to change schooling needs to be strategic. At the moment it has mainly an idea of what a district and school should look like, passing for a strategy about how to get there. That vision, and exhortation, is not enough; not radical enough.

The state cannot ‘do’ improvement. The state must do things that will cause improvement. Incentives are best: better than mandates; better than money. The state should remove from the district its ability to take its students for granted, by making it possible for new and different public schools to appear, where the kids live and which kids can choose. The district will then find improvement necessary, in its own interest.

All efforts to improve public education will fail unless the district finds improvement necessary.

We are not serious about improvement if we do not withdraw the exclusive franchise. — Ted Kolderie

(From Facts, Figures and Faces: A Look at Minnesota’s School Choice Programs, Mike Malone, Joe Nathan, and Darryl Sedio November 1993, Center for School Change, Hubert H. Humphrey Institute of Public Affairs)

The 1985 – 1993 Minnesota Legislatures passed several laws expanding educator and parental choice among schools.

Post-Secondary Options (1985) allows public school 11th and 12th graders to attend colleges, universities and vocational schools. Participants increased from about 3,600 students in 1985-86 to more than 7,000 In 1991-92. First year results showed that about 6% of the participants had dropped out of school, that 2/3 of the students had average grades of B, C or D, that the high school students had done as well or better in post-secondary courses, that 90% of the parents said their children learned more, and 95% of the students said they were satisfied with the program. Ninety-four per cent of 221 high school students at the University of Minnesota in 1989 rated their experience “excellent or good.” Since 1985 more than 90 high schools have established courses in their high schools which allow students to earn both high school and college credit. The College Board also reports that the number of Minnesota high schools offering Advanced Placement Courses has more than doubled since 1985-86.

Area Learning Centers and High School Graduation Incentives (1987) permit students ages 12-21 who have not succeeded In one public school to attend another public school outside the district, so long as the receiving district has room and a student’s transfer does not have a negative impact on desegregation. Criteria used to indicate lack of success include low test scores or grades, chemical dependency, excessive truancy or expulsion. Research carried out in 1990 found that almost 8,000 students used these programs in 1989-90, and that about 1/3 of the students were returning after having dropped out. Students reported much higher levels of achievement and satisfaction. After attending an area learning center, the percentages of students planning to graduate after having dropped out Increased from 19% to 39%. After attending a private non-sectarian school under the

HSGI law, the percentage of youngsters planning to graduate increased from 6% to 41%. (Nathan and Jennings, 1991)

The fourth law is called the Enrollment Options Program (“open enrollment”). Parents of children ages five-eighteen may transfer their children to public schools outside their resident district unless the receiving district does not have room or the transfer will have a negative impact on desegregation. About 440 students used the law in 1988-89 (when the home district could refuse permission to leave), about 3,400 applied to use it in 1989-90 (when resident districts of less than 1000 students could deny transfers), and more than 12,000 applied to use it in 1992-93. A 1992 survey of parents found that parents’ most important reason for shifting schools was academics. (Rubenstein, et al., 1992) A survey of 126 principals around the state found that most felt choice had “stimulated improvements to school curricula, promoted greater parent and teacher involvement in planning and decision-making and increased ethnic diversity in schools.” (Tenbusch, 1992)

Charter public schools (1991, revised 1993): Permits up to 20 schools to be established which do not have to follow most state rules and regulations, but are responsible for improved student achievement specified in a contract between the school and a local district. More than 25 groups have proposed charter schools in rural, urban and suburban areas. Most have been turned down by their local board.

Eight have been approved by the local and state boards of education. The 1993 legislation allows proponents to appeal to the State Board of Education if at least 2 members of a local board support the proposal. The original Minnesota charter school proposal would have allowed either a local or the State Board of Education to authorize a school. As of 1993, California, Colorado, Georgia, Massachusetts, and New Mexico have authorized charter schools. Legislation varies from state to state.

Within district options: Since Governor Perpich proposed cross-district school choice in 1985, 163 new schools or schools within schools have been created in urban, suburban and rural Minnesota districts. For example, “schools within schools” have been created in Blackduck, Coon Rapids, Fairmont, Grand Rapids, Minneapolis, Morris, Princeton, Rosemount, St. Cloud, St. Paul, Thief River Falls, Virginia and Westbrook-Walnut Grove.

Rural magnet schools have been created in Belview, Cyrus, Delavan, Miltona and Randall. The Cyrus Magnet School was selected in 1993 by Redbook Magazine as one of the nation’s 51 best public elementary schools in the country. This school is run by a committee of teachers. It has no principal.

Suburban districts like Bloomington, Minnetonka, Robbinsdale, Roseville and Stillwater have created distinctive elementary and middle schools which families have [chosen]. These programs serve a cross section of students.

The participants in the above “within district” programs are not counted as participants in “cross district” plans because they transfer within their district. Most previous reports have ignored this important dimension of Minnesota choice plans.

More than 75 new programs also have been created since 1985 which serve secondary students who do not succeed in traditional schools. Some of these are called “alternative schools.” Others are called Area Learning Centers. Some of their students come from within the district. Others transfer across district lines, using the “Second Chance” laws adopted in 1987.

The Friedman Foundation

From “Captalism and Freedom” | 1962/1982

Formal schooling is today paid for and almost entirely administered by government bodies or non-profit institutions. This situation has developed gradually and is now taken so much for granted that little explicit attention is any longer directed to the reasons for the special treatment of schooling even in countries that are predominantly free enterprise in organization and philosophy. The result has been an indiscriminate extension of governmental responsibility.

Governmental intervention into education can be rationalized on two grounds: The first is the existence of substantial “neighborhood effects,” i.e., circumstances under which the action of one individual imposes significant costs on other individuals for which it is not feasible to make him compensate them, or yields significant gains to other individuals for which it is not feasible to make them compensate him — circumstances that make voluntary exchange impossible. The second is the paternalistic concern for children and other irresponsible individuals. Neighborhood effects and paternalism have very different implications for (1) general education for citizenship, and (2) specialized vocational education. The grounds for governmental intervention are widely different in these two areas and justify very different types of action.

One further preliminary remark: it is important to distinguish between “schooling” and “education.” Not all schooling is education nor all education, schooling. The proper subject of concern is education. The activities of government are mostly limited to schooling.

General Education for Citizenship

A stable and democratic society is impossible without a minimum degree of literacy and knowledge on the part of most citizens and without widespread acceptance of some common set of values. Education can contribute to both. In consequence, the gain from the education of a child accrues not only to the child or to his parents but also to other members of the society. The education of my child contributes to your welfare by promoting a stable and democratic society. It is not feasible to identify the particular individuals (or families) benefited and so to charge for the services rendered. There is therefore a significant “neighborhood effect.”

What kind of governmental action is justified by this particular neighborhood effect? The most obvious is to require that each child receive a minimum amount of schooling of a specified kind. Such a requirement could be imposed upon the parents without further government action, just as owners of buildings, and frequently of automobiles, are required to adhere to specified standards to protect the safety of others. There is, however, a difference between the two cases. Individuals who cannot pay the costs of meeting the standards required for buildings or automobiles can generally divest themselves of the property by selling it. The requirement can thus generally be enforced without government subsidy. The separation of a child from a parent who cannot pay for the minimum required schooling is clearly inconsistent with our reliance on the family as the basic social unit and our belief in the freedom of the individual. Moreover, it would be very likely to detract from his education for citizenship in a free society.

If the financial burden imposed by such a schooling requirement could readily be met by the great bulk of the families in a community, it might still be both feasible and desirable to require the parents to meet the cost directly. Extreme cases could be handled by special subsidy provisions for needy families. There are many areas in the United States today where these conditions are satisfied. In these areas, it would be highly desirable to impose the costs directly on the parents. This would eliminate the governmental machinery now required to collect tax funds from all residents during the whole of their lives and then pay it back mostly to the same people during the period when their children are in school. It would reduce the likelihood that governments would also administer schools, a matter discussed further below. It would increase the likelihood that the subsidy component of school expenditures would decline as the need for such subsidies declined with increasing general levels of income. If, as now, the government pays for all or most schooling, a rise in income simply leads to a still larger circular flow of funds through the tax mechanism, and an expansion in the role of the government. Finally, but by no means least, imposing the costs on the parents would tend to equalize the social and private costs of having children and so promote a better distribution of families by size.¹

Differences among families in resources and in number of children, plus the imposition of a standard of schooling involving very sizable costs, make such a policy hardly feasible in many parts of the United States. Both in such areas, and in areas where such a policy would be feasible, government has instead assumed the financial costs of providing schooling. It has paid, not only for the minimum amount of schooling required of all, but also for additional schooling at higher levels available to youngsters but not required of them. One argument for both steps is the “neighborhood effects” discussed above. The costs are paid because this is the only feasible means of enforcing the required minimum. Additional schooling is financed because other people benefit from the schooling of those of greater ability and interest, since this is a way of providing better social and political leadership. The gain from these measures must be balanced against the costs, and there can be much honest difference of judgment about how extensive a subsidy is justified. Most of us, however, would probably conclude that the gains are sufficiently important to justify some government subsidy.

These grounds justify government subsidy of only certain kinds of schooling. To anticipate, they do not justify subsidizing purely vocational training which increases the economic productivity of the student but does not train him for either citizenship or leadership. It is extremely difficult to draw a sharp line between the two types of schooling. Most general schooling adds to the economic value of the student — indeed it is only in modern times and in a few countries that literacy has ceased to have a marketable value. And much vocational training broadens the student’s outlook. Yet the distinction is meaningful. Subsidizing the training of veterinarians, beauticians, dentists, and a host of other specialists, as is widely done in the United States in governmentally supported educational institutions, cannot be justified on the same grounds as subsidizing elementary schools or, at a higher level, liberal arts colleges. Whether it can be justified on quite different grounds will be discussed later in this chapter.

The qualitative argument from “neighborhood effects” does not, of course, determine the specific kinds of schooling that should be subsidized or by how much they should be subsidized. The social gain presumably is greatest for the lowest levels of schooling, where there is the nearest approach to unanimity about content, and declines continuously as the level of schooling rises. Even this statement cannot be taken completely for granted. Many governments subsidized universities long before they subsidized lower schools. What forms of education have the greatest social advantage and how much of the community’s limited resources should be spent on them must be decided by the judgment of the community expressed through its accepted political channels. The aim of this analysis is not to decide these questions for the community but rather to clarify the issues involved in making a choice, in particular whether it is appropriate to make the choice on a communal rather than individual basis.

As we have seen, both the imposition of a minimum required level of schooling and the financing of this schooling by the state can be justified by the “neighborhood effects” of schooling. A third step, namely the actual administration of educational institutions by the government, the “nationalization,” as it were, of the bulk of the “education industry” is much more difficult to justify on these, or, so far as I can see, any other, grounds. The desirability of such nationalization has seldom been faced explicitly. Governments have, in the main, financed schooling by paying directly the costs of running educational institutions. Thus this step seemed required by the decision to subsidize schooling. Yet the two steps could readily be separated. Governments could require a minimum level of schooling financed 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 they themselves provided 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. The role of the government would be limited to insuring that the schools met certain minimum standards, such as the inclusion of a minimum common content in their programs, much as it now inspects restaurants to insure that they maintain minimum sanitary standards. An excellent example of a program of this sort is the United States educational program for veterans after World War II. Each veteran who qualified was given a maximum sum per year that could be spent at any institution of his choice, provided it met certain minimum standards. A more limited example is the provision in Britain whereby local authorities pay the fees of some students attending non-state schools. Another is the arrangement in France whereby the state pays part of the costs for students attending non-state schools.

One argument for nationalizing schools resting on a “neighborhood effect” is that it might otherwise be impossible to provide the common core of values deemed requisite for social stability. The imposition of minimum standards on privately conducted schools, as suggested above, might not be enough to achieve this result. The issue can be illustrated concretely in terms of schools run by different religious groups. Such schools, it can be argued, will instill sets of values that are inconsistent with one another and with those instilled in nonsectarian schools; in this way, they convert education into a divisive rather than a unifying force.

Carried to its extreme, this argument would call not only for governmentally administered schools, but also for compulsory attendance at such schools. Existing arrangements in the United States and most other Western countries are a halfway house. Governmentally administered schools are available but not compulsory. However, the link between the financing of schooling and its administration places other schools at a disadvantage: they get the benefit of little or none of the governmental funds spent on schooling — a situation that has been the source of much political dispute, particularly in France and at present in the United States. The elimination of this disadvantage might, it is feared, greatly strengthen the parochial schools and so render the problem of achieving a common core of values even more difficult.

Persuasive as this argument is, it is by no means clear that it is valid or that denationalizing schooling would have the effects suggested. On grounds of principle, it conflicts with the preservation of freedom itself. Drawing a line between providing for the common social values required for a stable society, on the one hand, and indoctrination inhibiting freedom of thought and belief, on the other is another of those vague boundaries that is easier to mention than to define.

In terms of effects, denationalizing schooling would widen the range of choice available to parents. If, as at present, parents can send their children to public schools without special payment, very few can or will send them to other schools unless they too are subsidized. Parochial schools are at a disadvantage in not getting any of the public funds devoted to schooling, but they have the compensating advantage of being run by institutions that are willing to subsidize them and can raise funds to do so. There are few other sources of subsidies for private schools. If present public expenditures on schooling were made available to parents regardless of where they send their children, a wide variety of schools would spring up to meet the demand. Parents could express their views about schools directly by withdrawing their children from one school and sending them to another, to a much greater extent than is now possible. In general, they can now take this step only at considerable cost by sending their children to a private school or by changing their residence. For the rest, they can express their views only through cumbrous political channels. Perhaps a somewhat greater degree of freedom to choose schools could be made available in a governmentally administered system, but it would be difficult to carry this freedom very far in view of the obligation to provide every child with a place. Here, as in other fields, competitive enterprise is likely to be far more efficient in meeting consumer demand than either nationalized enterprises or enterprises run to serve other purposes. The final result may therefore be that parochial schools would decline rather than grow in importance.

A related factor working in the same direction is the understandable reluctance of parents who send their children to parochial schools to increase taxes to finance higher public school expenditures. As a result, those areas where parochial schools are important have great difficulty raising funds for public schools. Insofar as quality is related to expenditure, as to some extent it undoubtedly is, public schools tend to be of lower quality in such areas and hence parochial schools are relatively more attractive.

Another special case of the argument that governmentally conducted schools are necessary for education to be a unifying force is that private schools would tend to exacerbate class distinctions. Given greater freedom about where to send their children, parents of a kind would flock together and so prevent a healthy intermingling of children from decidedly different backgrounds. Whether or not this argument is valid in principle, it is not at all clear that the stated results would follow. Under present arrangements, stratification of residential areas effectively restricts the intermingling of children from decidedly different backgrounds. In addition, parents are not now prevented from sending their children to private schools. Only a highly limited class can or does do so, parochial schools aside, thus producing further stratification.

Indeed, this argument seems to me to point in almost the diametrically opposite direction — toward the denationalizing of schools. Ask yourself in what respect the inhabitant of a low-income neighborhood, let alone of a Black neighborhood in a large city, is most disadvantaged. If he attaches enough importance to, say, a new automobile, he can, by dint of saving, accumulate enough money to buy the same car as a resident of a high-income suburb. To do so, he need not move to that suburb. On the contrary, he can get the money partly by economizing on his living quarters. And this goes equally for clothes, or furniture, or books, or what not. But let a poor family in a slum have a gifted child and let it set such high value on his or her schooling that it is willing to scrimp and save for the purpose. Unless it can get special treatment, or scholarship assistance, at one of the very few private schools, the family is in a very difficult position. The “good” public schools are in the high-income neighborhoods. The family might be willing to spend something in addition to what it pays in taxes to get better schooling for its child. But it can hardly afford simultaneously to move to the expensive neighborhood.

Our views in these respects are, I believe, still dominated by the small town that had but one school for the poor and rich residents alike. Under such circumstances, public schools may well have equalized opportunities. With the growth of urban and suburban areas, the situation has changed drastically. Our present school system, far from equalizing opportunity, very likely does the opposite. It makes it all the harder for the exceptional few — and it is they who are the hope of the future — to rise above the poverty of their initial state.

Another argument for nationalizing schooling is “technical monopoly.” In small communities and rural areas, the number of children may be too small to justify more than one school of reasonable size, so that competition cannot be relied on to protect the interests of parents and children. As in other cases of technical monopoly, the alternatives are unrestricted private monopoly, state-controlled private monopoly, and public operation — a choice among evils. This argument, though clearly valid and significant, has been greatly weakened in recent decades by improvements in transportation and increasing concentration of the population in urban communities.

The arrangement that perhaps comes closest to being justified by these considerations — at least for primary and secondary education — is a combination of public and private schools. Parents who choose to send their children to private schools would be paid a sum equal to the estimated cost of educating a child in a public school, provided that at least this sum was spent on education in an approved school. This arrangement would meet the valid features of the “technical monopoly” argument. It would meet the just complaints of parents that if they send their children to private non-subsidized schools they are required to pay twice for education, once in the form of general taxes and once directly. It would permit competition to develop. The development and improvement of all schools would thus be stimulated. The injection of competition would do much to promote a healthy variety of schools. It would do much, also, to introduce flexibility into school systems. Not least of its benefits would be to make the salaries of schoolteachers responsive to market forces. It would thereby give public authorities an independent standard against which to judge salary scales and promote a more rapid adjustment to changes in conditions of demand and supply.

It is widely urged that the great need in schooling is more money to build more facilities and to pay higher salaries to teachers in order to attract better teachers. This seems a false diagnosis. The amount of money spent on schooling has been rising at an extraordinarily high rate, far faster than our total income. Teachers’ salaries have been rising far faster than returns in comparable occupations. The problem is not primarily that we are spending too little money — though we may be — but that we are getting so little per dollar spent. Perhaps the amounts of money spent on magnificent structures and luxurious grounds at many schools are properly classified as expenditures on schooling. It is hard to accept them equally as expenditures on education. And this is equally clear with respect to courses in basket weaving, social dancing, and the numerous other special subjects that do such credit to the ingenuity of educators. I hasten to add that there can be no conceivable objection to parents’ spending their own money on such frills if they wish. That is their business. The objection is to using money raised by taxation imposed on parents and non-parents alike for such purposes. Wherein are the “neighborhood effects” that justify such use of tax money?

A major reason for this kind of use of public money is the present system of combining the administration of schools with their financing. The parent who would prefer to see money used for better teachers and texts rather than coaches and corridors has no way of expressing this preference except by persuading a majority to change the mixture for all. This is a special case of the general principal that a market permits each to satisfy his own taste-effective proportional representation; whereas the political process imposes conformity. In addition, the parent who would like to spend some extra money on his child’s education is greatly limited. He cannot add something to the amount now being spent to school his child and transfer his child to a correspondingly more costly school. If he does transfer his child, he must pay the whole cost and not simply the additional cost. He can only spend extra money easily on extra-curricular activities — dancing lessons, music lessons, etc. Since the private outlets for spending more money on schooling are so blocked, the pressure to spend more on the education of children manifests itself in ever higher public expenditures on items ever more tenuously related to the basic justification for governmental intervention into schooling. As this analysis implies, the adoption of the suggested arrangements might well mean smaller governmental expenditures on schooling, yet higher total expenditures. It would enable parents to buy what they want more efficiently and thereby lead them to spend more than they now do directly and indirectly through taxation. It would prevent parents from being frustrated in spending more money on schooling by both the present need for conformity in how the money is spent and by the understandable reluctance on the part of persons not currently having children in school, and especially those who will not in the future have them in school, to impose higher taxes on themselves for purposes often far removed from education as they understand the term.²

With respect to teachers’ salaries, the major problem is not that they are too low on the average — they may well be too high on the average — but that they are too uniform and rigid. Poor teachers are grossly overpaid and good teachers grossly underpaid. Salary schedules tend to be uniform and determined far more by seniority, degrees received, and teaching certificates acquired than by merit. This, too, is largely a result of the present system of governmental administration of schools and becomes more serious as the unit over which governmental control is exercised becomes larger. Indeed, this very fact is a major reason why professional educational organizations so strongly favor broadening the unit, from the local school district to the state, from the state to the federal government. In any bureaucratic, essentially civil service organization, standard salary scales are almost inevitable; it is next to impossible to simulate competition capable of providing wide differences in salaries according to merit. The educators, meaning the teachers themselves, come to exercise primary control. The parent or local community comes to exercise little control. In any area, whether it be carpentry or plumbing or teaching, the majority of workers favor standard salary scales and oppose merit differentials, for the obvious reason that the especially talented are always few. This is a special case of the general tendency for people to seek to collude to fix prices, whether through unions or industrial monopolies. But collusive agreements will generally be destroyed by competition unless the government enforces them, or at least renders them considerable support.

If one were to seek deliberately to devise a system of recruiting and paying teachers calculated to repel the imaginative and daring and self-confident and to attract the dull and mediocre and uninspiring, one could hardly do better than imitate the system of requiring teaching certificates and enforcing standard salary structures that has developed in the larger city and state-wide systems. It is perhaps surprising that the level of ability in elementary and secondary school teaching is as high as it is under these circumstances. The alternative system would resolve these problems and permit competition to be effective in rewarding merit and attracting ability to teaching.

Why has governmental intervention in schooling in the United States developed along the lines it has? I do not have the detailed knowledge of educational history that would be required to answer this question definitively. A few conjectures may nonetheless be useful to suggest the kinds of considerations that may alter the appropriate social policy. I am by no means sure that the arrangements I now propose would in fact have been desirable a century ago. Before the extensive growth in transportation, the “technical monopoly” argument was much stronger. Equally important, the major problem in the United States in the nineteenth and early twentieth century was not to promote diversity but to create the core of common values essential to a stable society. Great streams of immigrants were flooding the United States from all over the world, speaking different languages and observing diverse customs. The “melting pot” had to introduce some measure of conformity and loyalty to common values. The public school had an important function in this task, not least by imposing English as a common language. Under the alternative voucher scheme, the minimum standards imposed on schools to qualify for approval could have included the use of English. But it might well have been more difficult to insure that this requirement was imposed and satisfied in a private school system. I do not mean to conclude that the public school system was definitely preferable to the alternative, but only that a far stronger case could have been made for it then than now. Our problem today is not to enforce conformity; it is rather that we are threatened with an excess of conformity. Our problem is to foster diversity, and the alternative would do this far more effectively than a nationalized school system.

Another factor that may have been important a century ago was the combination of the general disrepue of cash grants to individuals (“handouts”), with the absence of an efficient administrative machinery to handle the distribution of vouchers and check their use. Such machinery is a phenomenon of modern times that has come to full flower with the enormous extension of personal taxation and of social security programs. In its absence, the administration of schools may have been regarded as the only possible way to finance education.

As some of the examples cited above (England and France) suggest, some features of the proposed arrangements are present in existing educational systems. And there has been strong and, I believe, increasing pressure for arrangements of this kind in most Western countries. This is perhaps partly explained by modern developments in governmental administrative machinery which facilitate such arrangements.

Although many administrative problems would arise in changing over from the present to the proposed system and in its administration, these seem neither insoluble nor unique. As in the denationalization of other activities, existing premises and equipment could be sold to private enterprises that wanted to enter the field. Thus, there would be no waste of capital in the transition. Since governmental units, at least in some areas, would continue to administer schools, the transition would be gradual and easy. The local administration of schooling in the United States and some other countries would similarly facilitate the transition, since it would encourage experimentation on a small scale. Difficulties would doubtless arise in determining eligibility for grants from a particular governmental unit but this is identical with the existing problem of determining which unit is obligated to provide schooling facilities for a particular child. Differences in size of grants would make one area more attractive than another, just as differences in the quality of schooling now have the same effect. The only additional complication is a possibly greater opportunity for abuse because of the greater freedom to decide where to educate children.

Supposed difficulty of administration is a standard defense of the status quo against any proposed change; in this particular case, it is an even weaker defense than usual because existing arrangements must master not only the major problems raised by the proposed arrangements but also the additional problems raised by the administration of schools as a governmental function.

Notes

1. It is by no means so fantastic as may appear that such a step would noticeably affect the size of families. For example, one explanation of the lower birth rate among higher than among lower socioeconomic groups may well be that children are relatively more expensive to the former, thanks in considerable measure to the higher standards of schooling they maintain, the costs of which they bear.

2. A striking example of the same effect in another field is the British National Health Service. In a careful and penetrating study, D. S. Lees establishes rather conclusively that, “Far from being extravagant, expenditure on NHS has been less than consumers would probably have chosen to spend in a free market. The record of hospital building in particular has been deplorable.” (“Health Through Choice,” Hobart Paper 14, London: Institute of Economic Affairs, 1961 p. 58.)

3. See George J. Stigler, Employment and Compensation in Education “Occasional Paper” No. 33, New York: National Bureau of Economic Research, 1950, p. 33.

4. I am abstracting from expenditures on basic research. I have interpreted schooling narrowly so as to exclude considerations that would open up an unduly wide field.