But…his intentions were good!

September 18, 2018

(Guest Post by Matthew Ladner)

Reason hosted a debate between Stiglitz and Easterly on the role of markets in reducing poverty. A questioner from the audience asks Professor Stiglitz to address his endorsement of Hugo Chavez in 2006 and 2007 in a respectful but direct fashion around minute 51. Eventually after a fumbling attempt to claim that some aspects of the Chavez program were good, Stiglitz admits that in the end while Chavez rhetorically embraced higher and more inclusive rates of economic growth, in the end “he didn’t know how to do it.”

Venezuela sits atop the world’s largest proven oil reserves but production is in free-fall along with the overall economy. Starvation and hyper-inflation run rampant, and the country’s economy dives ever deeper into a humanitarian crisis. Meanwhile, a group of Texas wildcatters have a single region outproducing the country with the largest proven reserves despite the fact that we’ve been drilling in that region for a century. Friedman once said that if you put the federal government in charge of the Sahara they would produce a shortage of sand. This was not alas much of an exaggeration.

 

 

 


Happy Birthday Milton!

July 31, 2015

(Guest Post by Matthew Ladner)

Milton Friedman would have been 103 today.  As a treat, here is a 1979 interview on the Donahue program:

So am I the only wierdo who misses both Milton and Moynihan?


Can’t Get There from Here? Milton’s Been There He Knows the Way

July 31, 2014

(Guest Post by Matthew Ladner)

Today is the 102 anniversary of the birth of Milton Friedman. My favorite Friedman quote is one recently rediscovered by Stephanie Linn from a 1995 WaPo column Dr. Friedman penned:

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.

And even more important today than when Dr. Friedman typed the column. Friedman saw this clearly, and the time has come for the rest of us to catch up: today’s stock of private schools are a means to an end for an important but ultimately small group of students-even with a voucher or tax credit program in place. The stock of empty private school seats represent a vital opportunity for the students who could fill them, but in the big picture it is crucial to focus upon how to get new providers to create new opportunities for students. Voucher programs that can only be used at private schools and only provide enough funding to cover the marginal cost of adding a student to an empty seat are vitally important for the small number of students participating but ultimately represent an evolutionary dead-end.

It’s a shame that it took those of us in Milton’s intellectual debt a decade and a half to create a method to “get there from here” in the form of ESAs, but better late than never. We simply aren’t as bright as the great Milton Friedman, so we will need to work together to bring about the revolutionary improvements he saw as possible so clearly for so many decades.

Happy birthday Dr. Friedman-we are doing our best to catch up to where you got decades ago.

 

 


Milton Friedman’s case for ESAs from 1995

June 24, 2014

(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).

 


Happy 100th Dr. Friedman

July 31, 2012

(Guest Post by Matthew Ladner)

Today marks the 100th anniversary of the birth of Milton Friedman. Thomas Sowell, a former student, has a column in the Investor’s Business Daily marking the event, as does Steven Moore in the WSJ.

I’ll never forget the single chance I had to meet the Friedmans. Dr. Friedman came to testify in favor of a school voucher bill in Austin in 2003. Out of respect to Dr. Friedman’s advanced age, the legislative committee allowed him to sit at the table with them.

The barriers to entry in the Texas legislature are fairly high, and some of the members are accomplished attorneys and businessmen-quite bright. Some members made the mistake of making ineffectual attempts to cross swords with the great man on the subject of vouchers, only to find themselves quickly dispatched. A large crowd of Hispanic parents cheered the aged intellectual gladiator on as he easily disposed of his foes.

A few years ago I had the chance to author a paper on Dr. Friedman’s influence on education policy, and then to attend a symposium with five other authors who focused on different policy areas. I did not fully appreciate Milton Friedman’s greatness until I participated in that symposium. Doug Bandow’s paper on Friedman’s role in ending the draft literally made me laugh out loud on my flight to San Fransisco.

Friedman was a determined opponent of the draft, and served on a commission appointed by President Nixon to study the transition to an all volunteer force. General Westmoreland took time out of his busy schedule of mishandling the war effort in Vietnam to vocally oppose an all-volunteer military. He made the mistake of asserting that he did not want to lead “an army of mercenaries” in a public forum. Dr. Friedman unloaded on him. Friedman described the scene in Two Lucky People:

In the course of his [General Westmoreland’s] testimony, he made the statement that he did not want to command an army of mercenaries. I [Milton Friedman] stopped him and said, ‘General, would you rather command an army of slaves?’ He drew himself up and said, ‘I don’t like to hear our patriotic draftees referred to as slaves.’

I replied, ‘I don’t like to hear our patriotic  volunteers referred to as mercenaries.’ But I went on to say, ‘If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a  mercenary general; we are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher.’ That was the last that we  heard from the general about mercenaries.

BOOOOOOOOOOOOOOOOOOOM!!!!!!!!!!!

Dr. Friedman showed us all how to go about our tasks-calm, rational and fearless devotion to logic and evidence. Happy Birthday Milton- we still need you, but will have to do our best on our own. We are in your debt.


The Desperate Need for Market Forces in Education

February 15, 2012

(Guest Post by Matthew Ladner)

Mark J. Perry provides a fantastic illustration of the tremendous power of market forces to improve the human condition. If a picture is worth a thousand words, here is three thousand for you:

So adjusted for inflation, a now obsolete piece of furniture television set that could bring in all of 12 channels and had no remote control and a terrible picture quality was going to set you back more than $5,000. What could you buy for the same amount of money today in constant dollars? Perry is glad you asked. Try this:

 

 

 

 

 

 

 

 

 

AND:

 

 

 

 

 

Now, as a good skeptic, you quickly recovered from your shock and asked yourself if this was a phenomenon restricted to electronics. Perry, as it turns out, has anticipated your question:

We live, in short, in an age wonders, except of course for areas of the economy heavily managed and financed by the government. In those areas, instead of radically improving products provided at continually lower costs, we tend to see expanded costs for no, little or ambiguous improvements. Take for instance, American K-12 education in the era of unionized workforces (HT Andrew Coulson):

We need to be far more thoughtful about incentives in the K-12 system if we want to serve the best interests of children and taxpayers.


The End of the Beginning

October 14, 2011

(Guest post by Greg Forster)

The new School Choice Advocate just arrived, and it contains a short interview with Janet Friedman Martel and David Friedman – Milton and Rose’s children.

I thought this was especially well put:

We’ve seen uprecedented strides forward in school choice this year. How does the progress of this year measure up against Milton and Rose Friedman’s vision?

We are still short of the vision of a school system where private schools compete on equal terms with public schools. Measured by the fraction of students with access to vouchers, our achievement is still small. But measured by the rate at which that number is increasing, it has been large. As Churchill put it, this is not the beginning of the end, but it might be the end of the beginning.


Enlow’s Year of School Choice

July 29, 2011

(Guest post by Greg Forster)

Yesterday Robert Enlow had a piece in Education Week heralding the “year of school choice”:

Sixteen years ago, as students were enjoying their summer break, Nobel laureate Milton Friedman issued his own report card on the American education system. In a guest commentary in The Washington Post, he described it as “backward,” often producing “dismal results.”

Not much has changed in 16 years.

Friedman noted that education had been stuck in a 19th-century model for decades, producing results that hadn’t kept up with our fast-paced world…

The explosion of new and expanded school choice programs shows that Milton Friedman got it right when it comes to mounting frustration with monopolies.

“Support for free choice of schools has been growing rapidly and cannot be held back indefinitely by the vested interests of the unions and educational bureaucracy,” Friedman wrote in the Post in 1995. “I sense that we are on the verge of a breakthrough in one state or another, which will then sweep like a wildfire through the rest of the country as it demonstrates its effectiveness.”

In 2011, that wildfire broke out.

Let’s keep rubbing it in!


Surviving a Friedman Crisis

January 6, 2011

(Guest Post by Matthew Ladner)

Isaac Asimov’s Foundation series details a future in which humans have colonized the entire galaxy, which is ruled by a great Galactic Empire.  Hari Seldon, an advanced social scientist, calculates that the empire is in terminal and unavoidable decline into chaos and anarchy. Convinced that the catastrophe cannot be prevented, Seldon sets up two Foundations at the opposite ends of the galaxy in order to preserve human knowledge and technology. The mission of these foundations: to shorten the period of barbarism, eventually restoring order, peace and prosperity.

Much of the rest of the series concerns how the initially tiny First Foundation faces one “Seldon Crisis” after another over the course of many centuries. The Foundation knew that their founder, Seldon, had the ability to peer deep into the future. Whenever the Foundation faced an existential threat, they knew that it had been anticipated by Seldon, and that it had a solution. They just had to figure it out. Upon the resolution of a Seldon crisis, a holographic recording of the long dead Seldon (see picture above) would appear to explain how he had calculated the situation would play out, congratulate them for overcoming the crisis and urge them on. The Foundation emerged from each crisis stronger than ever.

The last few years of the parental choice movement feel like a crisis. The ballot loss in Utah was quite a blow. Sunshine patriots deserted. Teacher union stooges in Congress began the process of pillow-smothering the DC Opportunity Scholarship Program.   Articles proclaimed the death of the private choice movement.

I’m feeling pretty spry, for a dead guy.

There will be further Seldon challenges in the years ahead, but I am ready to call this one over. In fact, I think the best is yet to come.

I am half-expecting Robert Enlow to discover a dvd from Milton Friedman recorded in 2006 congratulating us on surviving, telling us that he knew we would figure it out, and urging us on to still greater things.


Did Milton Friedman Support School Choice Tax Credits?

October 15, 2008

(Guest post by Greg Forster)

Did Milton Friedman support school choice programs where the financing runs through the tax code rather than the treasury? He always made it clear that if he had a choice between them, he preferred vouchers (funded through the treasury) over either of the two alternatives forms of school choice that use the tax code (direct tax credits for families to offest thier tuition costs or scholarships distributed by charitable organizations and funded by donations that make the donor eligible for a tax credit). But that doesn’t mean he didn’t support the tax-code alternatives or didn’t consider them to be “true” school choice programs.

I bring this up because Robert Enlow of the Friedman Foundation has dug up a letter that Milton wrote in support of Florida’s tax-credit scholarship program. The letter was written on May 17, 2005 and was addressed to a Florida corporate leader who was considering whether or not to support the program.

Milton wrote:

I agree with you completely that the tax code should be used solely to raise revenue to fund necessary government spending and not to create social policy. Unfortunately, in schooling, the tax code is already being used to create social policy, by devoting tax funds to maintaining a socialist education system. If the state decides to subsidize the schooling of children, the straightforward way is to provide a voucher to each parent and let the parent choose the school that he believes is best for his or her children. Let the private market provide the schools. If the state wants to set up schools, let them charge tuition and compete with private schools on a level playing field.

Unfortunately, for reasons we are both well aware of, ranging from unions to school administrators and religious concerns, that ideal solution is not feasible.** Where it has been feasible to any significant extent, as in Milwaukee and the Florida Opportunity Scholarship Program, it has worked well. But again and again, as currently in Florida, an inferior tax credit program seems the only political option. Tax credits are an indirect, and I believe less efficient, way to do what vouchers do more directly. But they do promote the basic objective, of expanding parental choice and thereby introducing more competition into the educational industry. As a result, I have reluctantly supported tax credit programs in a number of states.

Let me just repeat, the tax system is being used for social purposes with both vouchers and tax credits.

**I think we may take it as given that he means “not currently feasible in Florida.” Any attmept to attribute to Milton Friedman the view that vouchers were “not feasible” in general would be absurd in light of his continuing active support for voucher efforts right up to the end of his life.

Milton was always completely open about his opinions, even to a fault. If he was thinking about whether to change his mind about something, but wasn’t yet sure whether to change his position, he would say so – and this would sometimes drive people to claim he had in fact changed his position.

We see that openness in this letter. He admits that his support for tax credits is only as a second-best option and even says the he supports them “reluctantly.” But if you knew Milton even a little bit – and I was only privileged to know him a little bit before he died – you know that he wouldn’t say he supported them at all unless he really supported them. The emphasis here is on the support, not the reluctance; the reluctance only comes in because (as the opening sentence makes clear) he’s addressing an audience that shares his concerns about tax credits.