01 February 2006

School Choice and Free Markets

Judging from the dearth of negative comments responding to my School Choice piece I'm guessing most (if not all) of my readership agrees vouchers are a good way to reform public education. Pro-union people, where are you?

I recall a conversation in high school with my erstwhile mentor regarding the merits of vouchers. He is intelligent and yet he opposed vouchers for several different reasons. For the life of me I can't remember a one of them. I'll try and recruit a response from him and post it here. If, indeed, it is possible to have an intellectually tenable position opposing vouchers.

The idea of vouchers appeals to me for several reasons. For one, it is a Republican idea (or at least a conservative one), and secondly it is one that benefits the underprivileged. It seems like every attack on Republican programs derives from Marx's call for class warfare. Social Security reform? An assault on the poor. War in Iraq? Fought only by poor, minority volunteers. Tax cuts? For the rich, of course. Vouchers? Here again, they benefit only the rich. These non-sequitur arguments find resonance because they are first expressed by a class of politicians who were born protesting Viet-Nam and Nixon and are then repeated by a media class educated in the revolutionary traditions of the 1960's.

The word "conservative" and phrase "benefits the underprivileged" may seem oxymoronic. It's a sign of the success of the aforementioned class warfare propaganda campaign that makes it so. According to Kevin A. Hassett of National Review, the truth is that since the election of King Conservative--Ronald Reagan--in 1980, "the proportion of the world's population living in extreme poverty has plummeted." This is due to the promotion of free markets that began to take off under Reagan. This success has not been limited to simply reducing poverty. Their (the poor) "relative share of resources has increased as well."
Looking farther back into history, it is possible to cobble together from the literature a measure of income inequality going back to around 1800, and the data present a similar, striking story. World income inequality generally increased from 1800 to about 1980; since then, it has dropped steadily--for the first time in recorded history.
What's even more striking is the market liberalization by formerly communist countries (the ones who really embraced Marx and his redistribution of income) and the success this has achieved.
This market liberalization is reflected in the Fraser Institute's Economic Freedom of the World Report, which measures the degree to which policies and institutions support personal choice, voluntary exchange, competition, and private-property rights. From 1981 to 2001, the world-wide average economic freedom score rose from 5.1 (out of 10) to 6.5. This increase in economic freedom led to the astonishing economic growth that has made almost everyone, especially the poor, better off. Just think of the change in circumstances over the past 20 years for the typical resident of China, India, or the former Soviet Union.
Okay, so here's the link. The same people who oppose free markets, oppose application of market principles to education. In both instances, the poor are the ones who pay the price.

Recently Jeb Bush gave a speech about the "Five Rules for School Reform" to the Hoover Institute at Stanford University. Responding to a recent decision by the Florida State Supreme Court which struck down vouchers, he outlined the keys to successful education reform. In support of his plan to use vouchers as a way to combat failing schools he cited an important study.
Researchers from the Manhattan Institute, Harvard and Cornell have independently studied Florida's private school choice programs. All three studies concluded that the threat of vouchers actually creates the greatest improvement in struggling schools. Given the choice between losing students and raising the quality of education, schools rise to the challenge and make tremendous gains.

The Florida Supreme Court recently struck down one of Florida's three choice programs on the grounds that it created competition for public schools -- the very competition that has helped drive improvement in Florida's schools. The ruling not only threatens the future of the 733 students in the Opportunity Scholarship program, but in varying degrees could also impact the 29,641 other low-income, minority and disabled students who currently use tuition vouchers.
This isn't a question of conservative vs. liberal or Republican vs. Democrat. These economic principles are not limited to a single ideology. That they seem to be so in this case is ludicrous. Anyone who has taken an entry level economics course at any institute of higher learning in any state in the union knows that these principles work. Opposing them because of ideological bias, interest group support (read: teachers unions) or plain ignorance is completely inexcusable

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