Milton Friedman vs. Gary North on School Vouchers

One month before I joined Ron Paul’s Congressional staff in Washington, my article against school vouchers was published in The Freeman (May 1976). That was a long time ago.

My article was directed against Professor Friedman’s chapter favoring school vouchers in his 1962 book, Capitalism and Freedom.

School vouchers are a way to let parents have some choice in where to send their children to school. The local government issues vouchers to parents of school-age children. Local schools can exchange vouchers for money from the government. If schools can attract parents who will pay partial tuition in the form of vouchers, they can make extra money. This, Friedman argued, would be good for parents and children.

I argued that it would be a disaster for the independence of private schools that joined the voucher-redemption program. They would have to accept government regulation for their curriculum programs and even teaching methods. After all, as Friedman taught, there are no free lunches in life. The government cannot legally hand out money willy-nilly. Recipients of government money must meet government standards. This means control.

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Here is my original article.

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“All State education is a sort of dynamo machine for polarizing the popular mind; for turning and holding its lines of force in the direction supposed to be most effective for State purposes.” Henry Adams, The Education of Henry Adams (1907)

We are continually bombarded by newspaper and magazine headlines informing us of the continuing “crisis in education,” which actually is a crisis in government-operated education. Virtually all the available data reveal that the crisis is accelerating. Inner-city schools have become literal battlefields between rival gangs, between teachers and students, between administrators and increasingly vociferous faculty unions, and most important, between outraged parents and the whole system. Yet the crisis is in no way confined to inner-city schools. The suburban schools of the white middle class are burdened with the multiple plagues of student boredom, drug addiction, and rapidly increasing alcoholism. A dozen years of falling scores on the college entrance examination reveal the steady nature of the erosion, despite the acceleration of costs associated with the public schools.

Educators cannot bring themselves to admit that the crisis is anything more than a temporary aberration–an aberration from the “normal” which itself was dead long before today’s administrators were born. The theories multiply, the explanations proliferate, and the crisis gets worse. What the last decade has brought is an understanding on the part of the public and a minority of government school employees (untenured, generally) that there is no answer. Like the sinking ship which finally takes on too much water, the government education system is irretrievable. It will be useful in the future only as scrap. But what about those millions of students who will go through the system before it finally sinks? Will they too become useful only as scrap?

Parents are becoming aware of the discussion syndrome. The endless discussions in half-empty halls between a few parents and local administrators have not altered anything. The teacher conferences, the administrator conferences, the PTA conferences, and all the other conferences have proved useful only for the cataloguing of the unsolved and increasingly unsolvable problems connected with government education. Solutions have not emerged from conferences –or at least no solutions acceptable to parents, administrators, school boards, students, state legislators, and an angry group of levy-rejecting voters. If there are no solutions, why pay higher taxes? This is the reasoning of the voters. The reasoning of the school administrators is different. They only want to discover a new source of tax money that will be acceptable to the voters, or better yet, that will not be subject to public elections at all.


The problems of American public education are the problems associated with any system of government-enforced, tax-supported coercive wealth redistribution: the system of financing conflicts with the expressly stated goals of the planning agencies. This conflict between the method of financing and the stated goals of education has been with us since the days of the Puritans of New England who set up compulsory education which was to be financed, in part, by money collected by the local property tax assessor.

There is no education apart from conformity of thought. One thing is true and another is not. Education requires indoctrination. But the conformity of thought which is basic to all education creates conflicts when parents of differing first principles are required either to finance a hostile educational system or to send their children to it. The Puritans’ solution was to enforce conformity by expelling hostile families from the community. The modern bureaucrat’s solution is to force parents to finance an alternative school system as well as the government system, and then to take control of the private system later on.

Sidney E. Mead, in his important book, The Lively Experiment: The Shaping of Christianity in America (1963), has argued perceptively that the public school system is America’s only established church. His point is well taken. Like all systems of established worship, some people are forced to finance doctrines and principles that they do not agree with. They resent this fact, but instead of seeking for the separation of “church” and state, the modern parent only seeks to “recapture” the public education system. So deeply rooted is the idea of the necessity of public-financed education that those who are being destroyed by the system — who are losing their children to the system — cannot bring themselves to abandon it on principle. If the moral answer of the free man to the socialist’s policies of coercive wealth redistribution is “not yours to give,” then the moral answer to those who would somehow take over the public school system is “not yours to recapture.”

The religious nature of the conflict has been noted by R. J. Rushdoony: “The state is [seen as] the order of liberty, and the school is the means whereby citizens are prepared for the good life. The state has become the saving institution, and the function of the school has been to proclaim a new gospel of salvation. Education in this era is a messianic and utopian movement, a facet of the Enlightenment hope of regenerating man in terms of the promises of science and that new social order to be achieved in the state.” Yet precisely because the new state religious establishment has become messianic, it has also become the center of men’s criticism.

Education today occupies an equivocal position in contemporary life, functioning both as a scapegoat for every failure and as a catch-all for every hope and expectation of society. The schools and colleges are berated for extending their authority beyond the fundamentals of learning into a program which envelopes the whole child or the whole man, and, at the same time, are given additional responsibilities which can only extend their scope even further. Fundamental to this unhappy and contradictory approach is a messianic expectation of education coupled with a messianic attitude on the part of educators. The attitude of people towards education is that it is a god that has failed and yet a god who can perhaps still be whipped into fulfilling his mission. The decade which has just passed — one which began only a few months after these words were published — has brought a massive disillusionment concerning education. Nevertheless, the public’s faith in government-financed and administered education still persists, at least to the extent that people think the system can still be reformed, transformed, or recaptured.

The pluralism of American life is now, and always has been, in direct opposition to a philosophy of public education. Yet the irreconcilable conflict between these two principles has never been faced by the vast bulk of our citizens and virtually any of its educational theorists. The financing of a pluralistic culture must be voluntary, springing from the deeply felt needs of the various religious, intellectual, and cultural groups.

Three centuries of conflict over the control, content, and financing of public education serve as a testimony to the futility of combining a system of tax-financed schools with a pluralistic culture financed by free men. The system of education is elitist, as all professional systems must be, but with taxation as its base, the system is in conflict with democratic principles. It leads to a system of minority rule. Weber was quite correct when he argued that bureaucracy is antidemocratic by nature; control is separated from those who bear the financial burdens.³ Tenure and civil service protection assure that control and financing are kept separate.


An implicit schizophrenia undermines every system of public education. On the one hand, a primary justification for the existence of government-financed education is that the nation needs citizens who are educated for the responsibilities of democratic participation in the political processes. The schools are to educate men in terms of the “ethics of democracy” or “democratic values” or just plain “patriotism.” Schools must inculcate “values,” although the more vague these are, the better for the administrators.

On the other hand, in order to ward off criticism from various religious and ideological groups, public education is simultaneously defended as a system which inculcates no religious or ideological values whatsoever. Public education is simply technical, making possible a better, more productive, and more profitable life for all of its students. The stated goals of democratic education and strictly vocational or technical training are in absolute opposition to each other. The first absolutely affirms the value-laden nature of public education, while the second absolutely denies it. The schizophrenia of public education can be seen in the doctrine of academic freedom. The doctrine was first developed by the professors employed by the Prussian universities that were the products of state financing. (Prussia invented the kindergarten and the graduate seminar, two of the least productive educational developments on record.) The universities were supposed to be extensions of the Prussian state, and they were understood as such by everyone, but professors wanted to be exempted from any form of censorship or control by the agents of the state. Thus, they invented the idea of academic freedom — the freedom of inquiry belonging to any certified scholar in his area of expertise. He is to be entirely neutral, however; his instruction must be based only on facts. He must not indulge in propaganda.

Yet, steadily, as the implications of epistemology have been recognized, the idea that “facts” somehow create a neutral world of scholarship has been abandoned. The so-called sociology of knowledge (sociology of prejudice) indicates that men can investigate only a tiny fraction of the infinite number of facts, gleaning facts and assembling them in terms of a philosophical framework. Presuppositions therefore influence interpretations, and interpretations are now recognized as ultimately religious in nature, i.e., they are accepted as unchallengeable first principles. While few students recognized this fact as recently as the early 1960’s, the effects of the Vietnam war and the counter culture have reversed this. The students, and many of their professors, now acknowledge what has always been true: education is not neutral. But if education cannot be neutral, then the public school system’s legal pillar — the assumption of neutrality — is exposed as a false justification for the maintenance of an established church and a tenured priesthood.


The ultimate source of the educational crisis stems from an error in first principles. Once committed to this error, the public education system has floundered repeatedly. To locate the source of the error, men need only ask themselves a single question: Who is responsible for the education of a child? The answers, of course, are varied: the parents, the church, the civil government, or a combination of the three.

The conflicts in education are in fact conflicts over a much more fundamental issue: the locus of authority, and hence, the locus of personal responsibility. The person or institution which possesses authority must be the one which takes on the responsibility. By affirming the legitimacy of tax-supported education, voters have attempted to transfer their responsibilities for the education of their children to another agency, the state. Yet at the same time, they affirm their own authority over the content and structure of the educational system. That they have lost almost every battle in their war with tenured, state-supported educational bureaucrats, is the direct result of the public’s abdication of personal responsibility, family by family, for the education of their children. The war was lost on the day that parents, as voters, decided to transfer the financial responsibilities of educating their own children to other members of the body politic. While Horace Mann can be regarded as the general who was victorious over private education in Massachusetts, he was only conducting mopping-up operations. The end had been determined two centuries earlier when the Puritans of Massachusetts affirmed the principle of tax-supported education.

Any system of education must ultimately be the reflection of and product of the philosophical principles of those who finance the system. The decision about the financing of any institution inescapably determines the shape and content of that institution. Modern men, being secular, now recognize this fact when applied to the institution of the church. They see that a state-supported church is antithetical to the principle of freedom of conscience. They see, and religious zealots like Roger Williams see, that state-financed churches become the tools of the state which supplies the funds. But modern men do not see that this strict relationship between financing and operations applies equally well to government school systems. Somehow, the relationship is ad hoc; it works when churches are involved, but it is irrelevant in the field of public education. Like the established churchmen of two centuries ago, today’s priests and parishioners of the public schools refuse to recognize the nature of their relationship to the state.


Do men finance their children’s educations directly, through the personal financial sacrifice of the family unit? If so, then the family is sovereign over education. The school is then merely an extension of the family. The family makes use of the efficiencies associated with the division of labor. Parents hire professional educators to train their children, but those who are hired are paid to adapt their educational skills to the needs of the families that are financing the education. This can be done directly, through family-controlled school boards, but it can also be accomplished through the indirect means of the market. The family hires the tutor, or the school, in the same way that it hires any other servant. The parents are directly responsible for their children, and the selection of a school is an act of responsible stewardship. The family has not delegated the responsibility of educating the children to anyone else. It controls the purse strings — the ultimate affirmation of earthly authority.

The more distant the source of the school’s funds from the family, the less control the family has over the selection of the teachers and equipment. If the church finances the education of its members’ children, then a layer of institutional bureaucracy is interposed between parents and teachers. This may be agreeable to many parents, but if church members other than the parents are expected to finance the school (as is the case in most instances), then they too have a legitimate right to determine school policies.

By transferring some of the burdens of financing education to other church members, the family thereby relinquishes a portion of its authority over the educators. The educators then serve someone other than the parents, or at least in addition to the parents: the deacons, the elders, the minister, the school committee, or whatever. By diluting authority, the educational bureaucrats gain more autonomy, since they can play off one church faction against another until everyone gives up and grants more autonomy to the administrators.

The bureaucrats gain their greatest control in tax-supported systems. Authority is so diluted at the level of the individual citizen that the expertise of the professional and tenured bureaucrats is overwhelmingly powerful. But their power is not tied to a personal relationship with the children (as it is with a parent), nor is it linked to a financial dependence on the parents, nor is it even linked to a community of shared values, as in the case of a church school. Their power stems from the unwillingness of legislators to turn off the funds. And the legislators’ unwillingness to interfere stems from two primary facts of political life: 1) the experts have an aura of invincibility about them, plus tenure; 2) the voters still believe in the establishment of the public school church. It is easier to give speeches than to take action, so legislators give speeches. Most of them are reelected most of the time, so the policy pays off in the coin of the political realm: votes. The crisis of education is therefore a crisis in the realm of values, with the values of the parents coming into conflict with the values, philosophies, and incompetence of those in control of the tax-supported educational system. If the parents continue to capitulate to the philosophy of public education, then they will continue to be defeated in their attempts to gain the kind of education they want for their children. There is only one way that all parents can gain such satisfaction: they must pay for the education of their children. They can earn the money or they can convince some third party to give them or their children the necessary funds on a voluntary basis, but the parents must pay. If they want to get what they pay for, they must pay directly, rather than paying through the coercive means of state taxation.

Until men are willing to cut off the political funding of the established church of America, they will see the educational crisis escalate. The visible sign of authority is the ability to pay for a service and the willingness to do so. Nothing short of this will suffice to solve the crisis in the schools, for the educational crisis is ultimately a conflict over authority. He who pays with his own funds will win; he who continues to pay by voting cannot possibly win.


Professor Milton Friedman of the University of Chicago is one of the most technically proficient economists in America. As a defender of the principle of market efficiency, he has been able to gain many adherents within the economics profession. He has been especially successful in challenging the inefficiencies of the Federal regulatory commissions. His most popular and widely read book, Capitalism and Freedom (1962), was a landmark of the 1960’s, for it was popularly written by a professional economist who had long before established his technical proficiency before his peers. Some of the policy recommendations of the book, such as the abolition of occupational licensure by civil governments, have not been taken seriously by most economists and certainly not by professionals who now hold occupational licenses from the civil government. Yet from the point of view of those who are convinced of the technical superiority of the free market over governmental regulation, it is this kind of uncompromising stand taken by Prof. Friedman which is most valuable in the defense of freedom, not to mention capitalism.

The problem that many free market advocates have with some of Prof. Friedman’s policy recommendations is that too often he spends many pages in devising ingenious schemes that would make government programs more efficient and, Prof. Friedman fervently hopes, less burdensome to the taxpayers, businessmen, and innocent citizens of the land. These policy recommendations have one feature in common: they are pseudo-market devices. They would create a kind of shadow market — “almost a free market” — that could provide success indicators analogous to those provided by a truly free market. In doing so, he argues, these pseudo-market alterations would make government more responsive to the needs of citizens.


Back in 1920, Professor Ludwig von Mises wrote the most famous essay of his academic career, “Economic Calculation in a Socialist Commonwealth.” Mises argued that the inescapable weakness of all systems of central planning is the inability of the planners to assess the actual value of any product or service in the economy. Without freely fluctuating prices that are the product of the private ownership of both consumer and capital goods, there can be no means of imputing value accurately by any of the participants in the economy. What should anything cost? What is it worth? What should be given up to attain any particular goal? Without market prices, meaning without open entry to markets by buyers and sellers, there can be only random guesses by the planning bodies. Randomness is not efficient, except on random occasions. Thus, concluded Mises, the socialist commonwealth is of necessity inefficient. It cannot plan rationally. So long as the monopoly character of the state-controlled markets continues, the planning authorities will remain blind to the true conditions of supply and demand.

Understandably, Mises had no use for pseudo-market schemes of any kind. In fact, the most important (though ineffectual) reply to Mises from the socialist camp was made by Oskar Lange, and it consisted of a system of hypothetical pseudo-market responses by central planners: artificial and arbitrary prices to be set by the planners, followed by adjustments in the price system in order for planning agencies to stimulate the desired response from buyers and producers. The problem, as always, was the closed nature of the system. The planners could never be sure that they were not wasting resources in their attempt to attain any goal. Those who set prices are sovereign, and in the case of the socialist commonwealth, the sovereign is economically blind.

In short, the creation of a pseudo-market cannot guarantee increased government efficiency or increased economic power on the part of consumers. All that will be accomplished is the irrationalization of the central economic plan by mixing it with non-socialist yet non-market elements. Lange’s scheme was never adopted by the Polish planning agency he belonged to, nor have the Soviets adopted it. It is neither socialist nor market; it is only economically irrational.


Perhaps the most interesting of all of the pseudo-market policy recommendations promoted by Prof. Friedman is his educational voucher plan. Under such a school financing system, each family would receive one voucher for each school age child in the family. The voucher would be redeemable in money upon presentation by a private school to the state or country government. Its value would be equal to the average per student cost of education in the district. (This figure, by the way, is seldom even calculated by school boards, for obvious political and public relations reasons, and when it is calculated, it virtually never includes such crucial items as the interest which the government might have earned had it sold off the school buildings and invested the money elsewhere, such as in the bank which would loan the purchase money to a local profit-making school.) The parents could then send their students to a public school or to a private school. If the cost of tuition were higher in the private school than the value of the voucher, the parents could make up the difference by paying more money.

The advantages of this scheme, argue the supporters of school vouchers, would be considerable. The parents gain back their lost authority. They decide where the children will attend school. The public schools would be forced to compete for students, thereby increasing their efficiency. Private schools would spring up everywhere in response to the existence of vouchers. The diversity of educational opportunities would be fostered. The costs of administration would be very low. (One advocate back in 1962 — a respected libertarian philosopher — announced that it would only take a computer and four secretaries to run the whole system for the state of California. If this were true –and it certainly is not true — it would insure the doom of the program in the eyes of the most potent group of special-interest pleaders in the state, the civil service employees.) The state could establish specialty schools of all kinds to lure back parents and their vouchers. The authority of parents would be re-established, and this would guarantee a truly progressive educational system.

There is no doubt that the logic of the voucher program is initially impressive. Parents would seem to have far more power in selecting educational alternatives under the voucher system. The below-market pricing monopoly of the state would be eliminated. The conformity of bureaucratic education would be challenged by a new diversity. A new educational pluralism would be the creation of vouchers. It would save money and increase freedom. What more could we ask for? In any case, what more can we expect in an age of wealth redistribution? This is always the key argument in favor of the creation of pseudo-market schemes: no way exists to re-establish a truly free market, so this is the best we can hope for.


It all sounds so plausible. Yet it overlooks the fundamental problem of voucher-financed education. The question must still be asked: Where is the locus of authority? And the answer must still be the same: the civil government. The voucher program violates the most important principle of education: parents are responsible for the financing of their children’s education. He who is responsible is also legally sovereign, and vice versa. Operationally, the source of the funding determines the locus of authority. The goal of all those who would defend market arrangements must be to determine the moral locus of authority in any particular circumstance, and then see to it that the sovereign agent be made legally and economically responsible for the exercise of his power. By failing to demand that parents be the source of funding for their own children’s education, the promoters of the voucher scheme have abdicated their responsibility in extending the principle of voluntarism and its concomitant, personal responsibility.

In the voucher system, the source of the funding is still the taxation system. The financing is based on the principle that it is legitimate to use political power in order to grant benefits to one group at the expense of the other. The principle of coercion is still dominant. The dominant principle, over time, will thwart the elements of voluntarism in any pseudo-market scheme. The state is still the operational sovereign over education, simply because the threat of violence, which is the state’s legal monopoly, is the source of the funds for education.

There is no doubt that Prof. Friedman recognizes this fact, yet he does not emphasize it. He believes that the technical alteration of the way in which coercively collected taxes are redistributed can overcome the authority of the state. He acknowledges that the authority of the parents in a voucher scheme cannot be absolute. The state-financed “educational diversity” under a voucher system is a diversity operating within government-established guidelines. Money spent by the state can never be on a “no strings attached” basis. There is always more demand for government money than there is money available to meet the demand (unless the purchasing power of government money falls to zero). Those legally responsible for the distribution of tax money must have legal guidelines, or else rampant waste and dishonesty will instantly appear, and the treasury will be emptied overnight. This is why statist education must be bureaucratic education, with guidelines imposed from above, since the money comes from the state. There is no escape from the rules of bureaucracy in a voucher system. Friedman acknowledges this fact:

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 key word, of course, is “approved.” Why Prof. Friedman has chosen to put the word in quotes is not altogether clear. Does he mean “kind of approved”? Certainly, he is wise enough to know that when the state bureaucrats approve or disapprove, they do not hide their actions in quotation marks. They simply decide. They decide in terms of criteria appropriate to the continued functioning of the statist educational bureaucracy. As Prof. Friedman writes: “Any subsidy should be granted to individuals to be spent at institutions of their own choosing, provided only that the schooling is of a kind that it is desired to subsidize.” Desired by whom to subsidize? The parents? Hardly; they are the ones to be dictated to, not dictated by. The parents will be told where they can freely spend their vouchers, and they have to that degree lost their authority. The state provides the funds through its monopoly of coercion; the state shall determine, coercively, how and where those funds are to be spent.


What the decades-long erosion of the government school systems has provided is a long list of reasons why it would be profitable for each family to remove its children from the subsidized schools. A small but growing minority of parents is doing just that. The state bureaucrats are legally prohibited from providing religious schools, ideologically prohibited from providing free market education, and apparently unable to provide competent instruction. They see their task as insuring standards, which means insuring educational conformity. The rise of an independent school system, which is replacing the declining number of Roman Catholic parochial schools, is a threat to public school administrators. They are as hostile to alternative educational programs as the postal system’s administrators are to United Parcel Service or anyone else carrying first-class mail.

Private school administrators in Indiana were recently imprisoned temporarily for having cooperated with parents who attempted to remove their son from the public school system against his will. Parents in Ohio have been threatened with the removal of their children to foster homes if they persist in sending their children to unaccredited schools. This is warfare, not some simple debate over financing. Technical solutions are insufficient to solve problems of ideological and religious warfare.

What we are witnessing is a conflict over authority. Who is responsible for the training of children, the state or the parents? The lines are being drawn far more sharply today than at any time in this nation’s history. Pseudo-market schemes cannot solve questions of ultimate authority, or at least they cannot solve them for the benefit of free market institutions. State schools rest on a whole series of erroneous assumptions. First, that the state is ultimately sovereign in the field of education — the pseudo-parent of every child. Second, that state schools can teach children totally neutral values — universally acceptable principles that all education must provide. Third, that it is the moral as well as legal obligation of taxpayers to finance the school system. Fourth, that the professional, tenured, and civil-service-protected officials of the educational monopoly are the people best prepared to operate the educational system.


The voucher system challenges directly only the last of these assumptions, and then only superficially. (After all, state schools will still be permitted to operate.) The voucher system necessarily requires the licensing of schools. For those who favor bureaucratic licensing of alternative educational systems by the state bureaucrats whose jobs are threatened by alternative educational systems, I can only recommend chapter 9 of Prof. Friedman’s Capitalism and Freedom — the chapter on occupational licensing.

As private schools continue to replace the disintegrating government schools at the primary and secondary levels, the state’s educational bureaucrats will have to take decisive action to protect their monopoly. One way to accomplish this is to refuse to certify any more schools. (I am assuming that outright abolition will not be tolerated politically or in the courts.) This approach may work for a time, since parents are concerned about quality schools. By some peculiar twist of logic, the parents of private school children somehow believe that the state licensing boards are competent to certify educational performance, despite the fact that the schools that they themselves operate are anathema to the parents in question.

Private school administrators, who come to parents in the name of a superior educational program, are equally hypnotized by the boards of certification. The most intelligent response is that made by Robert Thoburn, principal and owner of the profit-making and highly successful Fairfax Christian School of Fairfax, Virginia: “If the bureaucrats want me to certify their schools, they can come to me and I’ll look over their programs. That’s my view of certification.”

If the certification ploy does not work, then the last hope of state educational bureaucrats is the voucher system. If parents continue to send their children to uncertified schools, then the state must find a way to convince private school administrators that they must register with the state and conform their programs to state educational standards. The voucher system is the most logical means of achieving this goal. Vouchers will create a second, pseudo-free market school system, using “free” in both senses: independent and without cost to the users. The state-operated schools will then compete with the state-licensed schools. Almost no third alternative will be economically possible.


Those parents who want their children out of the government-operated schools (which their taxes support) will also be paying for the operation of voucher-supported, state-licensed schools. These parents must turn down the first subsidy (free public education in a government school), turn down a second subsidy (vouchers for government-licensed schools), and come up with after-tax income to finance their children’s education in a truly independent school.

This is assuming they can find such a school. To do so, they must locate other parents equally committed religiously and ideologically to the principle of independent education, and also financially able to put their preference into action. How many concerned parents will do this? How many private school administrators will be able to operate a school while denying admittance to those who would pay with vouchers? How many of these schools with total commitment to private education will there be? I can tell you: very, very few.

Not until the blight so obvious in the government-operated schools has spread to the government-licensed voucher schools will parents even consider bearing the second tax (vouchers) and find money to pay for an independent education. In short: vouchers are the most promising tool for the suppression of independent private education now at the disposal of state educational bureaucrats.

What will the price be? What may not have been clear to Prof. Friedman back in the early 1960’s is clear to us now. We will have HEW guidelines operating in every voucher-using school — equal opportunity policies, quota systems of every kind, teacher hiring and firing policies, racially and religiously mixed student bodies. There will be a whole army of Federal bureaucrats, not to mention state bureaucrats, policing every private school. The so-called private educational system will be swallowed up in a mountain of red tape. How much imagination does it take to see what is coming? Isn’t it sufficient to look at what our independent private colleges are now going through? Can you imagine the kinds of controls in store for schools that are set up to permit an escape hatch for the crumbling state educational monopoly — the most horrendous visible failure of socialism in America?

The statist educators and politicians of Great Britain are calling for the abolition of all independent schools in Britain, not because they think the government schools will be improved, but because it is intolerable in a society guided by the politics of envy to let any class, any family, any religious group escape the blight of the socialist educational system. If the sons and daughters of the laboring class must suffer the terrors of the government school system, why should the sons and daughters of the rich be permitted to escape? The logic is impeccable. After the Civil War we abolished the right of men to buy their way out of conscription by paying the government a fine sufficient to enlist another man. This practice was thought to be undemocratic.

The same will be true, I fear, for those who would escape conscription into the public school system.


The state is not about to adopt pseudo-market schemes unless the bureaucrats believe that the adoption of the scheme will remove competition from consistently independent private competitors. The state is not going to consider the latest pseudo-market proposal to come out of the graduate seminars of the pro-free market professors unless the scheme can be rewritten to enhance the authority, power, and efficiency of those who would suppress the independence of private men. This should be the lesson of the age: statist ideologues and their tenured hirelings do not commit suicide voluntarily. They do not abandon the ideology of the control economy simply because some new scheme promises to make the government benign or reduce the tax burden of the public.

Pseudo-market schemes, promoted in the name of the free market, are adopted by the enemies of freedom for very specific purposes: to reduce the zones of freedom. Those who believe in increasing all state sovereignty will adopt pseudo-market schemes only when they are convinced that the free market is too great a threat to pure, uncompromising bureaucratic failure — the same reason why the Soviets allow semi-market pricing in a few restricted areas of the economy.

The state may adopt vouchers for education on an experimental basis, in order to test the scheme. If it does foster independent education, vouchers will be scrapped. But they will not have to be scrapped. Vouchers may well become a permanent fixture of our government education system. If so, it will be for a reason: the school voucher offers vast new powers of control over a vibrant and growing independent school system that threatens to undercut government schools.

The great threat to freedom from school vouchers is that they strike at the heart of society: the family. As a pseudo-market device, they promise to be remarkably successful in destroying a tiny but important pure free market development. I am reminded of Lenin’s dictum that if the communists announced that all capitalists were to be hanged tomorrow, the capitalists would trip over each other today trying to sell Lenin the rope. The profit system does not regard the origins of profits, at least short-run profits. Men act to improve their positions in life. Private school administrators and most of the private colleges have been eager to receive Federal aid; only a minority of a minority have held out against the lure of Federal money. (Their schools, it should be remembered, are very small and may grow smaller.) The lure of vouchers almost certainly will prove too great a temptation for thousands of our struggling little private schools. It may take another generation to recover from the defection of these schools, should that defection have an opportunity to manifest itself.

If vouchers are to be stopped, they will have to be stopped by parents who recognize the double taxation nature of the voucher scheme. Those who truly want independent schools and are willing to pay for them must not seek after vouchers, for vouchers are the very seal of doom for the independent school system. Pseudo-market schemes generally lead to anti-market results. The opposition to vouchers must be made on principle and in opposition to the superficial logic of the pseudo-market. He who is morally responsible must pay. Abandon this principle, and you abandon your authority as a free man. Good results stem from good principles. Vouchers are an intellectual, moral, and educational disaster. They will not work to expand the realm of freedom.

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The only changes I made are these: First, I switched the word “sovereignty” to “authority.” Second, I dropped the footnotes.

The original article is here.

In 1993, The Freeman reprinted my article. This time, Professor Friedman responded.

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To the Editor:

Re: the article by Gary North in the February 1993 Freeman on “Educational Vouchers,” may I call the attention of your readers to the following quotation from my wife’s and my book Free to Choose (pp. 161-163):

This plan [the voucher plan we propose] would relieve no one of the burden of taxation to pay for schooling. It would simply give parents a wider choice as to the form in which their children get the schooling that the community has obligated itself to provide. The plan would also not affect the present standards imposed on private schools in order for attendance at them to satisfy the compulsory attendance laws.

We regard the voucher plan as a partial solution because it affects neither the financing of schooling nor the compulsory attendance laws . . . .

The compulsory attendance laws are the justification for government control over the standards of private schools. But it is far from clear that there is any justification for the compulsory attendance laws themselves. Our own views on this have changed over time. When we first wrote extensively a quarter of a century ago on this subject, we accepted the need for such laws on the ground that “a stable democratic society is impossible without a minimum degree of literacy and knowledge on the part of most citizens” [Capitalism and Freedom, p. 86]. We continue to believe that, but research that has been done in the interim on the history of schooling in the United States, the United Kingdom, and other countries has persuaded us that compulsory attendance at schools is not necessary to achieve that minimum standard of literacy and knowledge. As already noted, such research has shown that schooling was well-nigh universal in the United States before attendance was required. In the United Kingdom, schooling was well-nigh universal before either compulsory attendance or government financing of schooling existed. Like most laws, compulsory attendance laws have costs as well as benefits. We no longer believe the benefits justify the costs.

The danger North raises that a parental choice scheme that made vouchers available for both government and private schools would lead to efforts to control the curriculum of private schools is very real, but it is present now because of compulsory attendance laws. Moreover, in a well-drawn voucher initiative, such as the one that will be on the California ballot at the next general election, provision can be made for avoiding that outcome. To quote from the California Parental Choice Initiative:

Private schools shall be accorded maximum flexibility to educate their students and shall be free from unnecessary, burdensome, or onerous regulation. No regulation of private schools, scholarship-redeeming or not, beyond that required by this Section and that which applied to private schools on October 1, 1991, shall be issued or enacted, unless approved by a three-fourths vote of the legislature or, alternatively, as to any regulation pertaining to health, safety or land use imposed by any county, city, district, or subdivision of the State, a majority vote of qualified electors within the affected jurisdiction. In any local proceeding challenging such a regulation it shall have the burden of establishing that the regulation: (A) is essential to assure the health, safety, or education of students; (B) does not unduly burden private schools or the parents of students therein; and (C) will not harass, impede, injure, or suppress private schools.

My ultimate objective is precisely the same as Gary North’s, but I do not believe that we can get there from here without a transitional measure. That is what the voucher proposal is intended to provide.

–Milton FriedmanSenior Research FellowHoover Institution, Stanford, California

Dr. North replies:

In his letter, Dr. Friedman cites his 1980 book, Free to Choose: “This plan would relieve no one of the burden of taxation for schooling.” This is the heart (and soul) of the problem with vouchers. The problem is not primarily one of economic efficiency; it is a problem far more fundamental: the locus of judicial authority over education. He who pays for schooling is asserting this authority.

Here is the crucial question: Who is responsible before God for the education of children, their parents or the state? I contend that it is the parents. I therefore reject educational vouchers on principle. But more to the point, I reject them even as a transitional tactic, for vouchers will reduce the freedom of sectarian parents to choose by reducing the supply of sellers who will supply sectarian education.

When I wrote the first version of my essay “Educational Vouchers: The Double Tax” in 1976, I had Dr. Friedman’s Capitalism and Freedom (1962) in hand. That book has become a classic in the literature of free market economics. But it has a flaw. It promotes educational vouchers (chapter 6), while denying the efficiency and the necessity of occupational licensing (chapter 9).

What I argued in my essay is that state-funded vouchers are part of a program of state licensing. For the state to establish mandatory standards of performance in any profession is to proclaim its authority over that profession. Licensing involves the creation of legal barriers to entry against those who cannot meet the state’s standards and also those who work in terms of rival standards. Similarly, for the state to establish subsidies for any profession is to proclaim its authority over that profession. Subsidies involve the creation of legal barriers to economic survival against those who cannot meet the state’s standards and also those who work in terms of rival standards. So, I conclude, if there is no legitimate reason to license a profession, there is no legitimate reason for the state to create a voucher system to fund it.

There can be no state subsidies apart from criteria that restrict access to the subsidies; otherwise, there would be greater demand for the “free” money than supply of the “free” money. The state uses regulations to ration access to the “free” money. In Dr. Friedman’s proposed system, all parents (“buyers”) will have access to the state’s “free” money (vouchers). I contend that all schools (“sellers”) will not. Those schools that deny the legitimacy of the state’s standards will be denied legal access to the money. Why? Because the money used to subsidize some schools at the expense of others does not belong to the parents; it belongs to the state.

An educational voucher program enlists the parents as the state’s agents in a program of judicial discrimination against those schools that proclaim state-disapproved standards. Vouchers are, in the vernacular, “hush money.” Teachers are bribed with tax money to keep silent on certain topics, most notably the topic of God and his sovereignty over history . . . .

Here is our problem: Modern education rests on the myth of religious neutrality. Modern education asserts: “By means of a religiously neutral methodology, teachers and students can come to an accurate understanding of cause and effect.” Any discussion of cause and effect which appeals to God’s sovereignty over history is dismissed as “religious,” and is thereby barred by the U.S. Supreme Court from any tax-funded classroom. Only a methodology which systematically ignores the question of God has legal access to a tax-funded classroom or educational program . . . .

Thus, it is irrelevant that the language of a California voucher proposal appears to protect the authority of parents to choose any school they desire for their children. The U.S. Supreme Court has determined what curriculum standard must apply in state-funded education: a compelling secular purpose (see Lemon v. Kurtzman and Hunt v. McNair, 1971). Parents will be free to choose when they use the state’s money, but their choices will be limited to state-approved schools. They will be free to choose only what the state approves.

I learned all this from Capitalism and Freedom–excluding chapter 6.

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Those articles are here.