The Way of the Future: ESA over KKK

 (Guest Post by Matthew Ladner)

The United States began as an experiment in freedom, but has at times struggled with intolerance. America’s culture wars surrounding the assimilation of Catholic immigrants represented just such a struggle in the 19th and early 20th Century. In the 1920s, the Ku Klux Klan successfully abolished private schools in Oregon. The KKK, you see, wanted to standardize Oregon Catholics into “real Americans.” If that thought frightens you, and it should, read on. It’s not enough to reject having the KKK standardize children, we need to embrace a customized education for all children.

The KKK aimed to do this in Oregon with a public school curriculum of which they approved and by banning private school attendance. Thankfully, the U.S. Supreme Court struck down this incredibly illiberal measure in 1925. Today we should not only reject discrimination in schooling, but more fundamentally the notion that one size fits all. Americans can embrace customized education for all children and improve our 19th Century factory-like model of public schooling. We can do this by directly funding students through education savings accounts controlled by parents.

Looking past the ugly religious discriminatory intent of the attempt to ban private schools, this effort reflected a broader problem: an intolerant belief in a “one true way” to educate children. The Klan is not alone in having sought to control schools for their own purposes. Today we see groups on both the left and the right engaged in a never-ending battle over school curriculum. From Creationism to environmentalism to “Heather Has Two Mommies,” the struggles never cease. Worse still, American public schools fail to educate far too many of our students to an internationally competitive level.

Milton Friedman proposed a solution to these problems in the 1950s: separating the school finance from the operation of schools. This would allow parents far greater freedom to choose the sort of education they want, and reflects a liberal “to each their own” system. Over the years, advocates of greater parental choice have carried Friedman’s concept forward in the form of school vouchers and tuition tax credits. Vouchers are essentially state funded coupons that parents can redeem at public or private schools. Tax credits provide indirect aid for parents bearing the expense of a private education in addition to paying their public school taxes. The first modern voucher program began in Milwaukee in 1990, and over 26 voucher and tax-credit programs operate around the country.

Empirical research confirms significant benefits to parental choice, including Friedman’s central claim that it can serve as a catalyst for public school improvement. The need for improvement could not be clearer. Although America has a large number of excellent public schools, the recent PISA exam found that Hispanic and Black American 15 year olds score little better in literacy than their peers in Mexico. Mexico spends a mere quarter per pupil of the American average, and has substantially lower average family incomes. Those receiving the least from the status-quo have the most to gain from reform.

Last week,  Nick Dranias and I released a study for the Goldwater Institute proposing public donations to education savings accounts as a strategy for improving education outcomes. Parental choice supporters in multiple states have proposed public contributions to education savings accounts. Education saving accounts can serve as a new and more powerful method for expanding parental freedom and improving public schools. Parents should have full control over the education of their children, down to the penny, and multiple options in seeking the best possible education for their child.

ESA contributions represent a substantial improvement over school vouchers as a parental choice mechanism. Rather than simply choosing between schools, parents should be free to choose from a growing array of education services from a variety of providers. Today, students take classes online, can seek private tutoring, or enroll in community colleges or even universities for coursework.

Accounts for education and health care serve as important precedents upon which to build. Lawmakers must construct strong systems of state financial oversight and provide for the auditing of accounts. Near bankrupt states can save money by fashioning contractual agreements with parents to provide greater flexibility in return for smaller overall per pupil subsidies.

With control over funding, parents could purchase full enrollment at public or private schools. Alternatively, our parents might choose to have their child attend classes at a variety of providers, public, private or virtual. Allowing parents to save funds for later college and university expenses would provide a powerful incentive to consider cost-effectiveness from all types of providers, whether public or private.

Contrary to the demonstrably mistaken fears echoing through the parental choice debate, our existing public schools would grow stronger as a result. Public schools will always be the bedrock of our education system, but might evolve to resemble the course-by-course offerings of our universities, especially at the high-school level.

American parents deserve their own experiment in freedom. The question is not whether we should have public schools, but rather who should be in charge of them, and how many other options should our system provide. I believe the answers to these two questions are “parents” and “as many as possible.” Students all have unique needs and aspirations they are not widgets to be mass-produced. The time has come to let go of our attempts to standardize the educations of children, and instead give parents the liberty to customize them.

8 Responses to The Way of the Future: ESA over KKK

  1. Greg Forster says:


    A few months back the Journal ran an article about whether Milton Friedman would have supported quantitative easing. One of his former colleagues said this: “Friedman was such an original thinker that one could never guess how he would react to a new question.” Shortly after that appeared I forwarded it to a friend with this comment: “That was Milton all over. He was full of surprises. That’s part of why he was so influential. He attracted very loyal disciples from among the smartest people in the field because he didn’t just repeat the same formulas over and over; every time opened his mouth, he had something fresh and original to say.”

    We’ll never know what Milton would have thought of this idea, but it’s not outrageous to suggest he would have found this a better way to go. Only I don’t think he would have said this was better than vouchers, I think he would have said this is just vouchers delivered in a better way!

    One quibble: I think we need to stop referring to the status quo as a “19th century” model. That’s deeply insulting to the 19th century schools, which had no teacher or staff unions and were organized in such tiny units (there were over 150,000 districts in the U.S. then, compared to 16,000 today, despite a much smaller population) that parental control was strong and opportunities for school choice through residential switching were available to almost everyone rather than merely the social elite. They provided an education adequate to the needs of the day in what would be regarded today as a miraculously efficient manner.

  2. matthewladner says:

    True that! How about “a 19th Century model frozen by bureaucracy and hamstrung by unionization?”

  3. Parry says:

    I’m still wrapping my head around this.

    How do you mitigate against fraud? If you’ve got four kids and I’ve got three kids, could I say I’m a “tutor” and you give me your ESA money to “tutor” your kids, and I give you my ESA money for you to “tutor” my kids? And the whole time the kids just play in the backyard and eat Cheerios while we cash taxpayer-subsidized checks?


  4. Matthew Ladner says:


    You’ve put your finger on a key issue-financial accountability. I would first like to say that there are a percentage of children who may as well be in the backyard eating Cheerios right now. Having said that, it is certainly desirable to minimize financial fraud, but it is a part of any government program. Estimates on Food Stamp Fraud range from 1% to 4% for instance. It would be great if someone could get that number nearer to zero, but I don’t hear many calling for the elimination of food stamps based on fraud.

    In health care, some reformers have suggested making contributions to health savings accounts for state workers and medicaid recipients as a method for improving incentives. HSA accounts are managed by private financial firms who monitor account use and approve transactions at the point of purchase.

    Ergo, you can’t use your HSA card to buy poker chips in Vegas.

    With public funds involved, obviously a heightened level of oversight should be employed. Nick and I suggest that a state enacting an ESA system put out an RFP to private firms to manage the day to day account transactions with a fixed term. In addition, the state can audit accounts, and refer cases of possible fraud to the authorities for investigation.

    States will have to work out penalties for abuse and monitor accounts.

  5. Parry says:

    Just for the record, my kids do love Cheerios, and playing in the backyard.

    Thanks for the response.


  6. Daniel Earley says:

    I just finished reading the policy brief. A brilliant argument for what amounts to universal education funding — backpack style — and the myriad legal and societal benefits.

    “. . . the maximum potential for generating innovation and taxpayer savings will remain unrealized if the state simply funds [tuition] at an arbitrary fraction of what it provides to district or charter schools. Instead, the state should fund students directly and then allow competition to set a market price . . . .”

    I believe Milton would be quite pleased, and this could prove revolutionary. Matt, you and Nick are to be congratulated.

  7. MatthewLadner says:

    Thanks Daniel!

  8. Mike luka says:

    The effort to checkmate the education system must be our major fucus.The government should ensure an easy acess to shcools,invisible hand of progress.

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