Milton Friedman’s Voucher Plan

More than 30 years ago – in 1979 – Milton Friedman and his wise Rose Friedman published the book Free to Choose, in which they made a (compelling) claim in favor of handing over authority to the free market, and taking it away from the government. The arguments they come up are profoundly grounded in empirical evidence, pointing at the inefficient and unequal spending of tax payers’ money on the ‘big issues’ of society (healthcare, Social Security, public assistance etc.). I want to focus at the expenditures on public education, about which the Friedmans say a lot, and in particular on the immoral and degrading effect this can have on citizens.

We humans are intelligent creatures. Some are – without a doubt – better equipped (mentally) for dealing with the whims of the free market than others, but still almost all of us are reasonably capable of fulfilling our needs in life. We can go the supermarket by ourselves, decide for ourselves what we want to eat for breakfast and dinner, and much more. The government doesn’t have to do this for us. We can decide for ourselves how we want to spend our leisure time: whether we want to go the movies or not. We don’t need the government to decide this for us. Not only because the government cannot know what each one of us wants – therefore inevitably being inefficient in the spending of its – or our – resources – but also because we know that we are intelligent beings, very much capable of making our own decisions in life.

And this intelligence of ours doesn’t have to confine itself to mundane decisions like how to spend our free time. We are equally competent in deciding for ourselves how we want to spend our money on more pressing issues in life: what hospital we want to attend, whether to assist our loved ones financially whenever the need might arise, and what school our children should attend. These issues are of such importance to our well-being – and our children’s – that, instead of putting the government in charge of these decisions, we should be the ones choosing what we consider to be best for our, and our children’s, future.

In 1979, the Friedmans noticed an upward trend in the government taking control of many of these decisions – decisions that, by the way, have a relatively big impact upon our financial resources. The most striking example of this might be the public financing of (elementary, secondary and higher) education. In 1979, the average US citizen paid 2.000 dollars per child that attended public education, even though not everyone’s child – assuming that you even have children – made use of public educational resources. The Friedmans found this state of affairs harming to the right of each individual to decide where to spend his money at, including the option to put one’s child at a privately financed educational institution.

Therefore they came up with a ‘voucher plan’: a plan in which every US citizen would – per child they have – get a voucher exchangeable for a certain amount of money – let’s say 2.000 dollars. They could cash in this voucher only if their child would attend an appropriate educational institution. This voucher plan would come in the place of the tax each US citizen is obliged to pay, irrespective of them having children and irrespective of their children attending a public educational institution. This plan would make sure that only the ones making use of pubic educational services would be charged, thereby excluding the non-using part of society.

The Friedmans made – primarily – financial arguments in favor of their voucher plan, saying that – on the whole – public educational costs would remain the same, and that parents would use their increase in autonomy to find the school that best suited the needs of their children. The relatively free market that would be created on the basis of the voucher plan, would improve the quality of both public and private education. I believe, however, that one argument in favor of the voucher plan, and the free market in general, has not received the attention it deserved – at least not in the Friedmans’ Free to Choose. And that argument has to do with human intelligence.

As pointed at above, humans are – for the biggest part – perfectly capable of deciding for themselves where to spend their money at. We wouldn’t want anyone else to do our groceries or schedule our leisure time for us – at least not for (our) money. But that is exactly what the government does when it comes down to public education. The government proclaims that – as the Friedmans explain – it is the only actor possessing the professional knowledge required for deciding what is best for our children – thereby implying that they are indispensable in order for our children to receive a qualitatively good education.

What this claim comes down to is the government saying – or not saying – that we (‘the crowd’) don’t understand what is important and what is not in regard to our children’s education, and that – because of that – they should step in and release us of this impossible duty of ours. We don’t understand what to do, but luckily they do. They are the father looking out for us, protecting us from doing harm to our children and to the rest of society.

I find this an insult to the basic level of intelligence the majority of the people has. We very well believe to know what is important in our children’s education – probably much better than the government, since, in contrast to the government, we know our children. Thus besides all the financial benefits of the voucher plan, by returning autonomy to the Average Joe, a voucher plan is required for respecting people’s intelligence. After all, we are no fools, are we?

What do you think?

Written by Rob Graumans

2 thoughts on “Milton Friedman’s Voucher Plan

  1. Hi There Rob,
    This question may be a little off-topic, Boy, some people on here are touchy! Someone asked what I considered an academic question about selection standards for Yale & Harvard, but his/her question contained a 2nd-3rd grade level grammar error with egregious subject verb disagreement. The question pertained to whether these schools would accept students from public schools or only private academies. How was pointing out that grammar that poor would put someone at a disadvantage for getting accepted to an Ivy League school? I would think I would be doing them a favor by either getting them motivated to get what they needed on their own or at least keeping them from getting their hopes up! I don’t expect my kids to get accepted there either (and couldn’t afford it if they did) but they do know how to speak proper English with their public school educations, and I expect they will go on to live successful lives without the Ivy League diploma. But since when it is an insult to try and help someone learn to do better?
    BTW great blogpost

    • Thank you for your comment Mike. I certainly don’t think that you’re to blame in any sense for the response of the respective person. He or she seems (to me) merely disappointed because of the fact that he or she realizes that you might be right; that he or she might indeed lack certain grammar skills required for admittance to a “respective” university.

      I’m from the Netherlands, in which pretty much all universities are publicly financed. Therefore we don’t have this “dilemma” between attending a public- or private institution; there simply is no choice. My question to you is: what system do you prefer? An almost entirely publicly financed university sector, or a system in which there’s a balance between public- and private institutions? And why?

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