Dear Friends,

By now, readers have surely become aware that I believe our society is heading in a grievously wrong direction. We are abdicating to "authorities" responsibilities that should be undertaken by individuals. We do this in the name of "helping the poor," but in fact our social spending (education, health care, social security, etc.) is bestowed upon the total population, rich or poor. It is "forced generosity" because it is financed though taxes, deductions from wages, or by our grandchildren. Often we are denied our free choice.

For example, I have osteoporosis. This year my HMO told me I could have no more bone density tests, for the rest of my life, even it I paid for them myself. Medicare, which helps finance my HMO, has ruled against more tests because, once osteoporosis stops advancing, it "probably" will not advance again. If I want to be sure, I must either quit my HMO or pay twice for my tests (once for my regular HMO dues and again for the test elsewhere).

Furthermore, when budgetary problems arise, the poorest are the first to be cut. "Virtually all the states have already tried to cut their Medicaid bills. [Medicaid is a government program providing the poorest with health care.] A recent survey by the Kaiser Foundation found that, halfway through their fiscal year, 49 states have cut, or plan to cut, Medicaid expenses. Over 30 have already had two rounds of Medicaid cost-cutting" (The Economist, 1/25/04).

Still furthermore, aggregate social expenditures are under attack, in a new report by the International Monetary Fund: "fund economists [predicted] that underfunding for Social Security and Medicare will lead to shortages as high as $47 trillion over the next 70 years or nearly 500 percent of the current gross domestic product in the coming decades." Retiring baby boomers will constitute a threat to social security in the next few decades (New York Times, 1/8/04).

In TQE #93 I asked: Why should employers pay for our health care? Why should the government buy health care for the affluent? Unlike my libertarian friends, I favor paying cash to the poor, so they may spend it as they will, and be as good as the rest of us. (If you don't think they will spend it well, OK, give them vouchers for specific purposes, e.g., health care, housing.) But what about public education?

Universal public education in the United States is of recent origin, less than 170 years old. Before that time, some states and some municipalities, in Europe and the United States, offered free education. But mostly, education was considered a private matter, or else for the church. Thomas Jefferson proposed public education in Virginia but was voted down. After he died (1826), his proposal was widely debated and finally adopted in Massachusetts, in 1837. Gradually it has spread, to become the educational system of today.

Universal public education has been both a success and a failure. As a success, it transformed us into a primarily literate nation and brought about a great social leveling. But it is also a failure. Schools in the inner city of New York, Los Angeles, and elsewhere are shoddy, dilapidated (one student in New York was killed when a brick from the wall fell on him). Teachers are often delinquent in their fields and/or unable to control the misbehaviors of their classes.

To counter this, President Bush has passed his "No child left behind" act, which requires local communities to bring their schools up to standard, or else students may opt out of "failing" schools and move into better ones. But he has provided no money for this; he has relied on the communities to finance his mandates, and many are unable to do so.

"Under federal law, by 2006 every classroom must have a highly qualified teacher" (New York Times, 1/14/04). But the money is not available. Once again, the administration has mandated without financing.

Proposals abound to correct these failures. Poorer students might be given vouchers, to be cashed as tuition payments in better schools. Charter schools are publicly financed but removed from the supervision of school boards. Many turn to home schooling. The Supreme Court has upheld the use of vouchers, but they have been voted down in some jurisdictions. Charter schools are criticized, particularly by teachers' unions, for failing to meet certain criteria. Although home schooling is legal in all fifty states, not all parents have the time or ability to provide it.

But as these movements coalesce over time, where — in general — are we heading? I believe we are heading toward all-privatized education. In about fifty years (I predict), public school buildings will be auctioned off to private companies (both profit and non-profit), just as many state-owned companies (in Russia, China, and the less developed world) are now being privatized. Selling state-owned companies obtains money for the public coffers and turns the companies over to entrepreneurs who will compete for customers. Why not the same for schools?

Mainly, it is not the same because public education has become a religion in the West. School: The Story of America's Public Education tells of "America's noble experiment — universal education for all citizens is a cornerstone of our democracy ... Public education continues to play a crucial role in how we see our nation in the future." In Europe in 1750 the same words might have been said about church education, in the Middle Ages about private apprenticeship, and in Roman times about home schooling. Just as there was never anything sacred about these forms, so over the next half century we will find nothing sacred about universal public education.

Why will we go for private education, and who will finance it? We will go for it because it allows individual choice (or parent choice). Schools will compete with each other in providing the education that students or parents want, and not what school boards tell them. They might even choose religious schools (e.g., Catholic or Quaker). "Failing" schools will fail. Also, we will pay for what we get. Many schools are underfunded today because of heavy budgetary pressure. But if we have to pay for education, we will value it, and pay what it is worth.

Education is actually worth much more than the money paid for it. The educated person has a higher quality of life. He or she has more choices than the uneducated, in terms of marriage, travel, cultural events, friends, and much more. Remember also, our local taxes will be much less because they will not have to pay for education. What we save in taxes, we can pay for education. But that will not be enough, for poorer students. So, I propose a borrowing plan for them.

On average, educated people earn more than uneducated. Let us take an example: If a person could earn $60,000 a year educated but only $40,000 uneducated, then for the rest of his or her employed life the education yields a $20,000 return, each year. Suppose a four-year college education costs $150,000. If one borrows that amount at age 20, at 6%, annual payments of $9,750 would retire the debt by the year of the borrower's retirement (at age 65). Therefore, the net surplus value of the education is $10,250 a year (or $20,000 minus $9,750). Examples employing different amounts would yield similar, but differing, results.

If there were no free public education, the individual would have incentive to borrow at least $150,000 to pay for that education, and pay it off like a mortgage, over his or her period of employment. What, borrow? Be saddled with debt for the rest of your employed life? You already are, my friend, for every year you must pay (in taxes) for a public school system over which you have little control. In one way or another, each generation pays for the education of the next. At present, we all pay it in taxes. By my plan, only the educated people, by repaying their "mortgages," would supply the funds for the next generation.

I have selected $150,000 as the approximate cost of four years at a private college. But the total cost is much more, if we consider public education at lower levels. Mostly, we have no idea of how expensive education is, because we do not pay for it individually, like buying a house. My plan does not increase that cost; it merely shifts the responsibility for paying it from the general public (taxes) to those who have been educated in the past and who replenish the fund by repaying their debts.

But where would the money come from initially? The government? No, it is only government "competition" (by providing student loans) that prevents education from being a promising investment for an investor unrelated to the borrowing student. Mutual funds would provide investors a (say) 6% return (not bad!) and supply the funds for young people to borrow. These students would also value the education more highly because they would have to pay back whatever they borrowed!

But, what about the person who makes little money after graduation, such as a missionary or religious worker? The repayment of some "mortgages" might be based on earnings (like income tax). In that case, those who earn much would repay more than they borrowed, while those who earn little would repay less. A firm agreement would be necessary at the beginning. Yale tried this, but those alumni who ended paying more complained. We would have to figure out a way of enforcing original agreements.

So, why does not such a sensible plan happen immediately? Because universal public education is a religion. Parents worship the grade schools and high schools that make our "democracy." University students (in Europe) believe free education is their "right," while in the U.S. inexpensive public universities offer something close to a "right." Students go on strike if the subsidized university is threatened. Two centuries ago, this would never have happened, because our culture was much different. It could be made different again, over time.

With a privatized system, cost would be equalized from state to state, and students could theoretically move around the country or the world without being penalized as aliens — hence, shopping for the best of the best for which they could gain admission.

Believe it or not, I have been told by some students that they chose Colorado because they wanted to study under me (more often, under Gilbert White or the late Kenneth Boulding). Suppose someone from (say) Kansas wants to study in Colorado. He or she pays out-of-state tuition, considerably greater than the Colorado resident. Wouldn't it be terrific if I faced a panoply of students from all over the world? (Come on, Jack, Colorado kids are great, but, well, suppose a more diverse student body argued many different viewpoints in my discussion course on Global Issues in Economics...)

Sincerely your friend,

Jack Powelson

---

Readers' Comments

Whether to accept the education vouchers that are inevitably coming should be high on the minds of Quaker educators. My own feeling is that vouchers will eventually neutralize religious schools.  New codes and state regulations will be instituted whenever the private schools have their own little crises and legislatures rush to correct them. Also, they will become addicted to the vouchers and increasingly want to keep the children who hold them whether they are members of the school's religious body or not. Most Friends schools have significantly watered down their religious content to accommodate the majority non-Quaker student bodies. Vouchers would accelerate that trend.

I've seen too many of the alleged religious schools in action to want to see them get vouchers.  There's a huge federal investigation here in Philadelphia surrounding a large Islamic school.  And who gets to discipline whom when a pedophile priest or nun is discovered in one of the Catholic schools?  I'll go back to the 1701 Pennsylvania Charter of Privileges which not only allows freedom of religion but guarantees that one person doesn't have to pay for another's religious activities.  First in the country and it took Massachussetts over 70 years to get anything as progressive.

— Signe Wilkinson, Chestnut Hill (PA) Meeting.

---

I agree education should be "privatised" — though that has become such an inflammatory term I've also come to agree the West is heading in a grievously wrong direction.  How can the word "private" be evil?  But I believe it will be dissatisfaction with the bureaucratic "mass production" model of education currently in use that drives reform.  It is increasingly out of synch with our decentralised, custom-design economy and society, and too susceptible to fads and moral panics.

— Paul Connor, Toronto

---

The problem with parochial school credits, I understand, is that they can "cherry pick" students and don't take Special Ed or emotionally maladjusted students.  This leaves a seriously select group of students for ordinary teachers in public schools with much more complicated learning environment.

Instead of borrowing $150,000 and being saddled with an annual payment of $9,000+ annually, why not let society — which benefits the most — take the burden of supporting successful passing students and let progressive taxes reimburse the educational kitty?

I've always been suspicious about the rationale that higher income for college educated is only because of education when cultural and personal attitudes toward education can be deterninative.   This is where pre-school education can be most important, even if college education does not immediately follow.

— Bob Michener,  Boulder (CO) Meeting.

---

In listing the many problems of public education, you missed one that is specific to PA (and perhaps elsewhere). Our legislature has no problem following the example of our federal gov't in mandating unfunded duties. The one I want to mention, representing a considerable percentage of the school board budget, is providing transportation. Every student is entitled, even if going to an expensive private school some distance from home. Thus, in my community of Kennett Square, our schools send students into DE and to Philadelphia, perhaps a round trip distance in certain cases of 100 miles. How bizarre!

— Scudder G. Stevens, Kennett Meeting, Kennett Square, PA.

---

I feel that basic universal education is one of the most important undertakings of modern countries. As basic literacy and numeracy skills are essential for normal functioning in today's society, this cannot be left voluntary in the hands of parents because not all parents are motivated or able to provide it. Parents who have the means to do better than the state should be allowed to do so subject to verification by the state but the state has an obligation to society and the child to ensure that at least certain minimum standards are met. Tertiary education is another matter. Not everyone wants or needs it and the life-time earnings of those who get are generally much higher than those who do not. Therefore teritary tuition should be paid by the consumer supported by student loans and bursaries as appropriate but the tax payer should not have to shoulder the cost of something for which the individual will get the greatest returns.

— Bruce Kennedy, Sojourning Friend, Chiangrai Thailand

---

One thing you didn't bring up is the new forms of home schooling!  Now one doesn't need a school building to educate one's young, just a PC!  As long as there are museums, and other public facilities that supplement their education, home schoolers can meet together for such outings. Problems with socialization may arise, but from  what I understand, local home schoolers get together for their sports and other outings.

— Arlene Reduto, Manhasset Friends Meeting (NY)

---

Under a system of privatized education with no public education, would that also dispense with compulsory education?  If so, what effect would that have on literacy? Under privatized education, would people shop among providers for the education they could afford, or were willing to pay for, accepting the quality that fit their budget?  If a new car or house was more important to them, would they skimp on education of their children?  Would privatization re-establish a class system of education as was the case before free public education? Would standards simply be what the market was willing to pay for?  Who or what would look after the well-being of the society as a whole?

— Henry Halsted, Racine, WI.