Milton Friedman’s case for ESAs from 1995

(Guest Post by Matthew Ladner)

Stephanie Linn from the Friedman Foundation with a great piece on ESAs noting that the great Milton Friedman foresaw the ESA design with a proposal for “partial vouchers”

“Vouchers are not an end in themselves,” Friedman wrote. “The purpose of vouchers is to enable parents to have free choice, and the purpose of having free choice is to provide competition and allow the educational industry to get out of the 17th century and get into the 21st century.” 
“Why not add partial vouchers?” Friedman asked. “Why not let (parents) spend part of a voucher for math in one place and English or science somewhere else.”
A longer quote from the original Milton Friedman column is well worth consideration:
No one can predict in advance the direction that a truly free market educational system would take. We know from the experience of every other industry how imaginative competitive free enterprise can be, what new products and services can be introduced, how driven it is to satisfy the customers — that is what we need in education. We know how the telephone industry has been revolutionized by opening it to competition; how fax has begun to undermine the postal monopoly in first-class mail; how UPS, Federal Express and many other private enterprises have transformed package and message delivery and, on the strictly private level, how competition from Japan has transformed the domestic automobile industry.

The private schools that 10 percent of children now attend consist of a few elite schools serving at high cost a tiny fraction of the population, and many mostly parochial nonprofit schools able to compete with government schools by charging low fees made possible by the dedicated services of many of the teachers and subsidies from the sponsoring institutions. These private schools do provide a superior education for a small fraction of the children, but they are not in a position to make innovative changes. For that, we need a much larger and more vigorous private enterprise system.

The problem is how to get from here to there. Vouchers are not an end in themselves; they are a means to make a transition from a government to a market system. The deterioration of our school system and the stratification arising out of the new industrial revolution have made privatization of education far more urgent and important than it was 40 years ago.

In other words, it is time for the parental choice movement to include but also look beyond the stock of private schools we have today. Friedman had this figured out long ago, it is time for the rest of us to catch up (as usual).


8 Responses to Milton Friedman’s case for ESAs from 1995

  1. Greg Forster says:

    Milton was also prophetic (in both the predictive and normative senses of that term) on digital delivery of education and the possibility of school without buildings.

  2. matthewladner says:

    Sometimes I half-expect a recording of Milton to pop up a la Hari Seldon, in which he details some problem he expected us to face long after his passing, and how he had predicted that we would solve it.

  3. Greg Forster says:

    Of course that’s not going to happen. If he had done that, he’d have had to have founded, funded and left behind to continue his work . . . a foundation.

    • matthewladner says:

      You can imagine the appearance of the first Milton Friedman video after the first “Friedman Crisis”

      An image of the long since passed Milton Friedman appeared on the screen to address the stunned onlookers “Congratulations-you’ve passed the first Crisis! In addition to economics, I dabbled in psycho-history, and my calculations led to the unavoidable conclusion that choice programs designed only to fund the marginal student to a pre-existing stock of non-profit private schools represented a useful reform but ultimately an evolutionary dead-end. Your viewing of this video however means that you figured out how to broaden the uses of a choice program to create real competition just in time. Better late than never.

      Both you and your successors will face additional challenges along the way, but if you keep using your brain you will be getting more video messages from me in the future as you solve more problems. The fall of the Galactic Empir…err…I mean the education status-quo remains assured, but only your efforts can prevent centuries of barbarism.”

  4. this is like hospitals built on the backs of the nurses; quote: “made possible by the dedicated services of many of the teachers and subsidies from the sponsoring institutions. ” I don’t think you can depend on the altruism of females to continue this over the next several generations.
    In Massachusetts so many parents pulled out students because of the sexual abuse (of boys) by priests that they now recruit their students from China etc. My neighbors serve as host parents for the Chinese children to attend the local parochial high school. I don’t see how you can ignore these major social /cultural issues with your analysis

  5. Former Commissioner of Texas Robert Scott (a lawyer whom I admire greatly for his stand against the Race to the top) was quoted at Rice University saying that the voucher will be turned into a “coupon”…. the coupon will be then viewed as food stamps (section 8 or welfare) will be totally denigrated and will wither away because of the social cultural forces ….. the families with “coupons” will be seen as “welfare” section 8 families . When we set up a children’s health project with Boston Children’s Hospital, the doctors and nurses served ALL comers in the schools without any knowledge of who had private health insurance, who had CHIP or state insurance, who was on medicaid etc. These are very important considerations that you haven’t thought through.

  6. matthewladner says:


    The point of an ESA program is to have an account managed by parents, not a coupon which is the school voucher design.

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