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The Economics of Education

It is worth exploring the economic forces that have brought us to our present state in the evolution of education. For example, why do we primarily have only one system, administered by government? Is there some good reason we all have to do education the same way? If we would prefer to have more choices and options, what is stopping us from doing that right now?

It is likely the government managed monopoly in education has evolved for much the same reasons it has formed in the energy market, the telecommunications sector, or anywhere else. The money and power associated with the education business are unimaginably enticing. Want to know why things happen the way they do? Follow the money!

Almost everyone seems unhappy with the amount of money spent on political campaigns. We commonly hear the cry: ”we need to get the money out of politics.” Yet, there is really only one way to get the money out of politics: get the money out of government.

Similarly, there is only one way to truly reform education. That is to get the funding out of the hands of politicians and back in the hands of parents and students, where it belongs.

Education is big business, controlling the flow of billions of dollars to a network of privately owned and operated providers from tuition and text books to food services. Ask your legislator which organizations are most actively lobbying government to influence the policies in your state. Chances are, these include: a teachers’ union and a large number of businesses trying to get lucrative government contracts in the education sector to provide things such as computers, software, books and curriculum content.

Perhaps even more enticing than the money to be earned in big education is the political power derived from controlling the flow of information to the next generation of voters. Whoever controls the education of the emerging generation has a great degree of influence over their perceptions and attitudes. It is like a state-owned media for children, but much more effective—and funded by the tax payers.

Imagine if we only had one television news network in the country and it was funded, owned and operated by the federal government. Then, say we passed laws to ensure that all our children were forced to watch at least 6 hours of it each day. The President would have a wide degree of control over, and members of congress could pass laws about what content the news programs would be allowed, or required to cover. Editors in the news room would be employees of the political party in power at the time and might face pressure if they ever approved stories unfriendly to that power.

This is an extreme example, and a gross exaggeration of what actually occurs in our schools. But it does illustrate an important point. We would never want our news to be controlled by our political parties, at least not any more than it already is. And the difference between where we are with education and what this extreme example illustrates is a difference of degree—not of type. The fact is, the more centralized is the control over our schools, and the more government is in charge of that control, the more political the education system will become.

Increasingly, special interests lobby government and curriculum providers to ensure their views and beliefs will be taught in the schools. And whatever is decided by a system of centralized planning, the rest of us will just have to go along with it.

In some ways, the education monopoly is even more dangerous than an energy monopoly. Although difficult, it is possible to minimize the amount of energy you have to purchase from traditional markets. You don’t have to own a car and you don’t have to buy gas or electricity if you really don’t want to. But you do have to send your kids to school. It is the law. And unless you are wealthy enough to afford to pay for a private school, or you have the time and expertise to teach your kids at home, you will be forced to consume a product that is managed from top to bottom by an all-powerful monopoly:

  • It effectively forces you to buy its product.
  • It decides how much you will pay.
  • It decides what will be taught and by what methods.
  • It decides how the business will be operated and who it will hire as employees.
  • And then it collects the money from you, by force, in order to pay itself.
  • If you don’t cooperate with all of this, you pay a fine or go to jail.

The most remarkable thing is, many of us don’t seem to have a problem with it! If any private business even dreamed of running this kind of a monopoly, we would consider it outrageous. But for some strange reason, because it is government, we don’t seem to have the same concerns.

We don’t seem as inclined to question the motives or the methods of a monopoly when it is run by the government. Yet most people have a very low opinion of the way government is run. How do we reconcile those two contradictory positions? Hopefully it is only because we haven’t yet taken the time to think it through. Are you thinking it through now?

At least in the case of roads and electrical infrastructure, there is a logical reason for establishing a government sponsored monopoly. After all, there is typically only room for one set of roads and one set of electrical lines. Perhaps in the past, there were reasons for only having a single school in a community. But in today’s world of rapid and inexpensive transportation, there is really no analogous reason for only a single educational infrastructure.

Furthermore, there are not even very good arguments for why a single system might be best for kids. It would be easy, particularly in more populated areas, to have multiple schools available for people to choose from. With today’s technology, on-line educational options make this kind of choice even more accessible. But for some reason, we just evolved to not do it that way. Instead, we have somehow become convinced that because it is democracy and we all get to vote, it must be OK to force everyone through the same program—whatever the majority decides, must be right.

Interestingly, if we had more strictly applied the principles well understood by the American founders, we would be much less centralized than we are today. Specifically, the US Constitution clearly prohibits the Federal government from taking on any power or duty except those explicitly delegated to it somewhere else in the Constitution. This notion implies two very important principles: First, the powers of the Federal government are supposed to be limited. There are only so many things it is intended to do. Secondly, the powers it does enjoy are delegated to it by and from people.

The job of managing an education system is not mentioned anywhere in the Constitution so it should be considered as a duty intended to be retained by the states and the people. And yet we now have a federal department of education. And the federal government is now allowed to collect scarce resources in the form of taxes, and then distribute that money back out only to those states who are willing to go along with whatever regulatory requirements they may wish to establish. The implication is clear: they can take your money and they won’t give it back unless you cooperate. Play ball or you will be punished. That is regulatory force as the federal government does it best.

In the first amendment of the Constitution, the federal government is clearly prohibited from establishing any particular denomination as an official state religion. By that same amendment, the government is also not allowed to restrict the way in which we may choose to exercise our own religion, or our Faith. We have become quite good at objecting when government gets anywhere near helping or supporting religious organizations—at least when they are of the traditional variety. But for some reason, we don’t always apply this notion of separation of church and state when it comes to newer, less traditional Faiths or ways people may choose to think and believe.

Traditional religions have typically consisted of some kind of an organization people can belong to with other members who have similar beliefs about the kind of things we have to accept on faith. Each different Faith organization has a slightly different way of answering the “big questions” like how we came into existence and what, if anything, we should be doing while we are here. There are a variety of religions we consider to be traditional simply because they have been around for a long time. These tend to focus on the notion of a God, a creation, and typically include various forms worship that might occur in a temple, a church, a mosque or a synagogue. Most people agree, government should not be singling one of these out or promoting above the others.

But what if a new Faith arises—one that believes in a large explosion which happened spontaneously 14 billion years ago with no particular cause or intervention from anyone or anything? What if it declares no truth can exist except that which can be contained and explained within the context of its own chosen formal system of logic, truth-finding, and thought? And yet it accepts this very axiom without any such proof, but rather on faith. Is that not as much a religion as any other Faith?

Some people seek to explain their universe in a spiritual way. Some seek to explain it through science. Others may have some entirely different approach. The point is, none of us are yet in a position to prove that our way of thinking or believing is inherently more valid than anyone else’s. Over the centuries, religious thought and beliefs have helped millions of people better explain and understand their own purpose and existence. In many instances, new light and truth has come later and shown that certain previous ways of looking at things may not have been entirely accurate. And yet, they were still valid to the degree they helped people accomplish what was needed.

Isn’t it interesting, this sounds just like science? Science, like religion, is a way to discover truth. Over the centuries, it has produced a great many theories which have helped people to better cope with their world and understand their own existence. In nearly every instance, new light and knowledge has come along later to show that earlier theories were not entirely true. And yet, they were true enough to serve their intended purpose at the time. And as newer, better theories emerge, the discipline continued to be refined.

The point is, we can use neither Faith in science nor Faith in God to rule the other out. Human knowledge in both realms is clearly incomplete. And yet both systems of truth seeking appear to be critical to different people in explaining and understanding the things we experience in our human existence. As we attempt to understand and predict the physical phenomena around us, science is an indispensable tool. And yet when it comes to addressing spiritual dilemmas and answering big questions, millions find success by employing a spiritual tool.

The point is, science-based Faith and traditional god-centered religions are both ways of approximating our understanding of ultimate truth. They are both ways of thinking and believing and they share many things in common, including the requirement to accept certain fundamental axioms purely on faith. Both kinds of Faith continue to progress as our understandings and our ways of thinking and believing continue to evolve. And men and women should not be restrained from freely seeking truth through either method or a combination of both.

Unfortunately, we have not approached education in this way. Rather, there seems to be a notion that truth, as sanctioned by science, is concrete, absolute and reliable. But truth, as sanctioned by a traditional religion, is not to be trusted. As it relates to education, we have extended this notion into the Constitutional principle of keeping government out of the business of establishing religion.

For some reason, we get uncomfortable with the idea of a teacher in a public school teaching a principle of Christianity or Judaism, yet we don’t seem to mind them teaching a principal of quantum physics. It takes just as much faith to believe in an uncaused singularity coming into existence independent of space and time as it does to believe in an intelligent creator—maybe more. And yet, we apply the concept of separation of church and state to only one class of Faith-based knowledge, rather than considering them all equally. In reality, we may be missing the point.

If we really think government should stay entirely out of matters of Faith, then it clearly has no business establishing requirements for what is taught in school. For a large amount of what should be appropriately taught will, by necessity, involve the latest thinking from a variety of theorists on a variety of subjects. While much of reading, writing and math may be less than controversial, certainly any time we go beyond that into literature, social sciences, physics, biology and ethics, we are bound to enter the realm of Faith to one degree or another. When this happens, who gets to decide what will be taught? Who can decide what is fact and what is religious theory? Scientists? Politicians? The clergy? If, by law, we exclude one class of human knowledge simply because it has evolved from traditional religious thought, then by default, we end up with an established state religion constituted by the teaching of whatever is left.

More and more often, we see lawsuits arising in one place or another over a religious song being sung by a school choir or a religious icon being displayed on school property. Schools are often not allowed to refer to Christmas, but must instead refer to “the holidays.” We are so concerned about offending one group or another, we begin to ban words and phrases from our text books. Anything not deemed politically correct, according to current notions, must be purged from the language and the curriculum. Who gets to decide what will be purged and what will be kept? And are we really comfortable with the idea of turning these decisions over to the process of partisan politics?

The more consistent approach is not to ban schools from teaching anything that one person or another might deem to be “religion.” Rather, we can better avoid the whole problem by getting government out of the education business in the first place. If government doesn’t run it, then it can’t find itself in a conflict of interest over matters of church and the state. Education is the process by which the current generation teaches the next generation the knowledge it has accumulated through all past generations. This is sure to be incomplete and it is bound to be theoretical, to one degree or another. And if we are going to teach what we know, this is going to include the ways we have learned to think and believe. This includes our Faith and our culture. And we don’t need the government to sanction or ban one particular version of truth or another. There is plenty of room for the whole diversity of human thought and belief.

Before presenting a particular solution, let us first consider the issue of fairness and equity. It is clear, government often does have a legitimate place in regulating certain core infrastructures such as roads and electrical grids—particularly when no technological solution is available whereby such services can be effectively provided by competing private markets. In like manner, there are aspects of education for which the public has both an interest and an obligation. Government does have a duty to promote the general welfare. By this, we mean to implement programs that benefit everyone equally—not just one favored class over another.

In the case of education, there are a variety of social problems that arise when children do not receive at least a basic education sufficient to prepare them to hold productive roles in society. People who lack basic skills in reading, writing, and math are much less likely to become productive enough to be able to sustain their own lives and the lives of their dependent family members. As such, they are more likely to become parasites or predators, either willingly or unwillingly. Crime statistics are dramatically higher among those who lack basic math and literacy skills. So we can likely minimize crimes against innocent people by helping as many children as possible to receive a basic education.

However education, like any other service, is provided by people—not by nature. It is also a scarce, labor-driven resource just like wheat or corn. So we cannot really declare it as a right without consigning one class of our population to become the involuntary servants of the rest. What then do we do?

First, we must remain true to the critical guiding principles of free will and choice. Remember, principles are what remind us to do what is right, even when what is wrong may seem right.

Secondly, we recognize that some things can better be done as a group than as individuals. So we try to find a reasonable compromise between the principles of education for all, and the freedom to choose. Just as in the case of energy production and distribution, let us socialize only that portion of the job that cannot effectively be done any other way. And let us leave the rest to the private market, individual free will, and the natural laws of economics.

Before getting specific, let us state some goals and objectives that hopefully, a large number of us can agree on:

  • I prefer to have, and exercise my free will, and to choose the direction of my own life.
  • I prefer to choose the type and manner of education I, and my minor children will receive.
  • I accept that other people also want to choose in this way for themselves and their families.
  • I want to live within a civil society where there is a maximum of freedom, peace and security.
  • I am willing to contribute reasonably to the maintenance of that civil society.
  • Educating children in basic productivity skills will enhance security and promote self sufficiency in our society.
  • Not all families can afford to pay what it costs to educate their children.
  • State governments have a valid role in funding basic education for families who can not afford it on their own.
  • Government is not the only institution able or qualified to provide the service of education.
  • Any qualified institution should be eligible to provide publicly funded educational services.
  • If we make the management of education less centralized, we can expect to have a more diverse array of options available to choose from.

How many of these assertions can you agree with? Is there something specific you disagree with? They are pretty basic and intuitive. And they are centered on the principles of free will and choice.

Most importantly, if we could agree on them, reform would be pretty easy and nearly all of us could get what we want. Here is how we could start:

The first step is to return to the Constitutional value that federal government has no place in funding or otherwise regulating education. This is consistent with the principle of keeping Congress out of the business of establishing a state sanctioned religion. We don’t need a single, centrally managed way of thinking and believing. It is good to allow a diversity of cultures and Faiths to flourish. Education is the method by which diversity and culture propagate from generation to generation. It is bound to involve the teaching of theories and concepts which rely on a degree of faith.

The method the federal government uses to attempt to manage the direction of education is to tax individual citizens directly and then grant some of that money back to states and school districts on the condition they comply with federal directives. States must organize together to bring this practice to a halt. If the economy is able to support such taxation, then let it be collected directly by the states and not the federal government. Then, states can structure their own educational systems as they may freely choose, according to their own democratic process, and the prevailing values of their respective populations.

The next step is for parents and communities to organize to petition their state government for further reforms at the state level. We have 50 different states, all trying their best to make education the best it can be. All we need is for one or two states to begin to adopt true reforms. And if the results are good, the methods will naturally begin to spread to other states over time.

In most states, people will likely continue to support the notion of state government taking a strong role in the collection of funding for education—particularly for those who cannot otherwise afford it on their own. But hopefully, a number of states will try breaking up the government monopoly on the parts of the process that involve the actual delivery of education service to the student. We can allow the funding raised publicly to be used at whatever school the parent chooses for her child, regardless of whether the school is operated by the state, a private company, a church group, or a local community organization. This will encourage a wide diversity of organizations to begin providing educational services for the children of that state.

If this is done, more and more options will begin to become available. Where consumers are expected to make a choice from among multiple available services, we can expect consumer advocacy groups to begin to rate various schools on how they may perform in providing a quality education to children. As parents begin to access such statistics, they can then decide what kind of educational experience will be best for their individual children. This is the part that causes the most heartburn for central planners. Can we really trust parents to choose?

We should recognize, a parent’s choice may not always be the same as would have been made in a centralized system of control. But it will be a choice, born out of true love and a desire to do what is best for the child. It will be a choice that fosters diversity. And in the very act of making the choice, parents will gain additional buy-in, commitment and devotion to the process of getting the child effectively prepared for his adult life.

Some parents might not make their choice solely on the basis of test scores. They may also look for the availability of extracurricular activities such as athletics, music and arts, foreign language, or computer science. Some parents might choose to school at home using resources they can subscribe to on the Internet. Creative programs such as this might allow some families to travel to locations of historical significance, learning by seeing and feeling to a greater degree than is possible in a more traditional classroom setting. Some may choose to integrate work-place experiences such as internships and other mentoring programs. Some are certain to come up with new and exciting methods we haven’t even dreamed of yet.

In a brave, new world of education, the public role is limited to making sure all parents have the necessary resources to fulfill their responsibility to see that basic skills are taught to their children so they can go on to take care of themselves and their families throughout the course of their lives. Then we trust parents to select the rest of the equation, deciding what additional experiences the child will receive until coming to the age of legal accountability.

At this point, remember, we can now trust the young adult herself to begin to make choices. She can pursue further education if she wants, or she can begin to pursue a life using the skills she has already attained. In either case, let us be accepting of that path. Let us value the act of choosing as much as we value the outcome itself.
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