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© 1993 by Gary North.

Dr. North is president of The Institute for Christian Economics in Tyler, Texas.

Last year the Bush administration, responding to pressure for choice in education, proposed the voucher system. “Specifically, the president’s proposal would give a $1,000 scholarship to every child of a middle- or low-income family in a participating school district. Parents must be permitted to use the scholarship at any lawfully operated school.” So wrote Lamar Alexander, President Bush’s Secretary of Education, in the conservative newspaper Washington Times (August 30, 1992).

Notice two key elements of the recommended legislation. First, there will be no vouchers for the rich, however “rich” may be defined by the statute or in subsequent legislation. When it comes to vouchers, all families are equal, but some are more equal than others. Every family will be entitled to participate, since tax money is paying for it—every family except those families that might be willing and able to buy such services apart from the voucher system. When the subsidies force up the price of private education, the way Medicare has forced up the price of American medicine, the rich or the scrupulous will have to look out for themselves. This is a compulsory wealth-redistribution program. It is not politically neutral. Neither is education.

Second, pay close attention to the key words: lawfully operated schools. What does “lawfully operated” mean? It means lawfully operated in terms of local, state, and above all, federal rules and regulations. It means that every private school that accepts a single voucher payment from one student will be as subject to federal bureaucrats as any college or university is if it enrolls a student who has received federal scholarship aid. How many Grove City Colleges are there? How many private schools will turn away students who come with government checks in hand? Not many.

There is a rule in all things associated with state funding. Anyone who ignores this rule is either naive or suicidal. Here is the rule: If you take the state’s nickel, you accept the state’s noose. You may prefer an older version: “If you take the queen’s shilling, you do the queen’s bidding.” In short, you do not get something for nothing.

The overriding economic question regarding educational vouchers is this one: “At what price will parents sell their birthright, namely, control over their children’s education?” A subordinate question is this one: “At what price will private school administrators sell their ability to deal with parents?” Sadly, we can be fairly sure of the answer: a low price.

The More Things Change . . .

The amazing fact is that the education voucher issue has changed very little since The Freeman published an earlier version of this essay in May 1976. The political conservatives are still trying to “clean up the public schools” by introducing competition through vouchers. The Christian school movement is still confident that vouchers will help them financially but without any negative side effects, such as the introduction of controls by the state. The public school teacher unions are still totally opposed to vouchers because vouchers will create “elite schools”—supposedly a very undemocratic thing to allow, at least until it is time to choose a college for your children.

Some things have changed, however. The public schools cost more to operate per child enrolled, even discounting for price inflation. Public schools are far less safe. Achievement scores have dropped. And the voters are finally aware of the extent of the decline.

What I wrote in 1976 is equally true today: the fundamental issue is the locus of sovereignty in education. We need to ask: Who is responsible for the education of children—parents, churches, or the state? My answer has not changed: parents. My political analysis has not changed: any element of coercion by the state, including financing, shifts the locus of sovereignty away from parents toward the state. My economic analysis also has not changed: to discover who is operationally sovereign over education in any society, follow the money.

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. Twenty-five 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 Locus of Sovereignty

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 sovereignty, and hence, the locus of personal responsibility. The person or institution which possesses sovereignty 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 sovereignty 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 in the 1830s and 1840s 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 compulsory local education, with subsidies to poor families.

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, as do religious zealots like Roger Williams, 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 a fortiori to government school systems. Somehow, they think, education is corrupted when churches are involved, but not so when governments are involved. 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.

Who Pays?

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 sovereignty.

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.

The bureaucrats gain their greatest control in tax-supported systems. Sovereignty 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; and (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 re-elected 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 sovereignty 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 government schools, for the educational crisis is ultimately a conflict over sovereignty. He who pays with his own funds will win; hewho continues to pay by voting cannot possibly win.

Pseudo-Market Schemes

The Bush administration’s voucher plan was inspired by a suggestion made by Professor Milton Friedman, 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. One of his most popular and widely read books, Capitalism and Freedom (1962), was a landmark of the 1960s, 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 govern ments, 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 Dr. 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 Dr. Friedman’s policy recommendations is that too often he spends many pages in devising ingenious schemes that would make government programs more efficient and, Dr. 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.

The Voucher Scheme

Perhaps the most interesting of all of the pseudo-market policy recommendations promoted by Dr. 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 local 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 a 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 sovereignty. 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, we are assured.

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 conformity of bureaucratic education would be challenged by a new diversity. 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.

The Locus of Sovereignty Revisited

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 sovereignty? 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 financing 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 sovereignty. The goal of all those who would defend market arrangements must be to determine the moral locus of sovereignty 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 principles of voluntarism and 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 another. 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 Dr. 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 sovereignty 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 who are 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 Dr. 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 Dr. Friedman wrote: “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 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 sovereignty. The state provides the funds through its monopoly of coercion; the state shah determine, coercively, how and where those funds are to be spent.

Controlling the Alternatives

What the decades-long erosion of the government school system 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 sectarian schools, ideologically prohibited from providing free market education, and apparently unable to provide competent instruction. They see their task as ensuring standards, which means ensuring educational conformity. The rise of an independent school system 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.

What we are witnessing is a conflict over sovereignty. 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 other time in this nation’s history. Pseudo-market schemes cannot solve questions of ultimate sovereignty, or at least they cannot solve them to 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 edu-cation-the quasi-parent of every child. Second, that the 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 recommend chapter nine of Dr. 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 state schools, which the boards have authorized, 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, owner of the profit-making 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.

Taxed and Taxed Again

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 Dr. Friedman back in the early 1960s is clear to us now. We will have federal guidelines operating in every vouch-er-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?

Conclusion

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 sovereignty, 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 government power 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 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. 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. The lure of vouchers almost certainly will prove too great a temptation for thousands of our struggling parents and 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. Good results stem from good principles. Vouchers are an intellectual, moral, and educational disaster. They will not work to expand the realm of freedom.