[Congressional Record Volume 141, Number 57 (Tuesday, March 28, 1995)]
[Extensions of Remarks]
[Pages E703-E704]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E703]]
                      PRIVATIZE AMERICAN EDUCATION

                                 ______


                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                         Tuesday, March 28, 1995
  Mr. CRANE. Mr. Speaker, the public education system in America, 
having been infiltrated by Federal regulations, has significantly 
diminished fundamental learning opportunities that should be available 
to all students.
  Since the Department of education was established in 1980, curriculum 
standards, as well as the incentive for students to succeed have 
plummeted. What many people do not recognize is that future social 
stability and adequate education run parallel--when one rises, the 
other will follow.
  It is obvious that quality education in America's schools, mainly 
public, needs to be resurrected. The fundamental step in reforming 
public school systems begins with decentralization. The power to reduce 
the standard curriculum, held by the Department of education, should 
never have been created. There is no benefit no bureaucratic control 
over our Nation's learning institutions. It literally threatens the 
level of competence that future adults will possess.
  Dr. Milton Friedman, a senior research fellow at the Hoover 
Institution in Stanford, CA, and a recipient of the Nobel Prize in 
1976, introduces the benefits of a voucher system within privatized 
schooling. In his article, ``Public Schools, Make Them Private,'' he 
illustrates how the voucher will eventually boost student performance 
and help low income families pay for school without raising taxes.
  I commend to the attention of my colleagues the following article 
written by Dr. Friedman in the hopes that we can correct the flaws in 
American education.
               [From the Washington Post, Feb. 19, 1995]

                   Public Schools: Make Them Private

                          (By Milton Friedman)

       Our elementary and secondary educational system needs to be 
     radically reconstructed. That need arises in the first 
     instance from the defects of our current system. But it has 
     been greatly reinforced by some of the consequences of the 
     technological and political revolutions of the past few 
     decades. Those revolutions promise a major increase in world 
     output, but they also threaten advanced countries with 
     serious social conflict arising from a widening gap between 
     the incomes of the highly skilled (cognitive elite) and the 
     unskilled.
       A radical reconstruction of the educational system has the 
     potential of staving off social conflict while at the same 
     time strengthening the growth in living standards made 
     possible by the new technology and the increasingly global 
     market. In my view, such a radical reconstruction can be 
     achieved only by privatizing a major segment of the 
     educational system--i.e., by enabling a private, for-profit 
     industry to develop that will provide a wide variety of 
     learning opportunities and offer effective competition to 
     public schools. Such a reconstruction cannot come about 
     overnight. It inevitably must be gradual.
       The most feasible way to bring about a gradual yet 
     substantial transfer from government to private enterprise is 
     to enact in each state a voucher system that enables parents 
     to choose freely the schools their children attend. I first 
     proposed such a voucher system 40 years ago.
       Many attempts have been made in the years since to adopt 
     educational vouchers with minor exceptions, no one has 
     succeeded in getting a voucher system adopted, thanks 
     primarily to the political power of the school establishment, 
     more recently reinforced by the National Education 
     Association and the American Federation of Teachers, together 
     the strongest political lobbying body in the United States.


                   (1) the deterioration of schooling

       The quality of schooling is far worse today than it was in 
     1955. There is no respect in which inhabitants of a low-
     income neighborhood are so disadvantaged as in the kind of 
     schooling they can get for their children. The reason is 
     partly the deterioration of our central cities, partly the 
     increased centralization of public schools--as evidenced by 
     the decline in the number of school districts from 55,000 in 
     1955 to 15,000 in 1992. Along with centralization has come--
     as both cause and effect--the growing strength of teachers' 
     unions. Whatever the reason, the fact of deterioration of 
     elementary and secondary schools is not disputable.
       The system over time has become more defective as it has 
     become more centralized. Power has moved from the local 
     community to the school district to the state, and to the 
     federal government. About 90 percent of our kids now go to 
     so-called public schools, which are really not public at all 
     but simply private fiefs primarily of the administrators and 
     the union officials.
       We all know the dismal results: some relatively good 
     government schools in high-income suburbs and communities; 
     very poor government schools in our inner cities with high 
     dropout rates, increasing violence, lower performance and 
     demoralized students and teachers.
       These changes in our educational system have clearly 
     strengthened the need for basic reform. But they have also 
     strengthened the obstacles to the kind of sweeping reform 
     that could be produced by an effective voucher system. The 
     teachers' unions are bitterly opposed to any reform that 
     lessens their own power, and they have acquired enormous 
     political and financial strength that they are prepared to 
     devote to defeating any attempt to adopt a voucher system. 
     The latest example is the defeat of Proposition 174 in 
     California in 1993.


                   (2) The New Industrial Revolution

       A radical reconstruction of our educational system has been 
     made more urgent by the twin revolutions that have occurred 
     within the past few decades: a technological revolution--the 
     development, in particular, of more effective and efficient 
     methods of communication, transportation and transmission of 
     data; and a political revolution that has widened the 
     influence of the technological revolution.
       The fall of the Berlin Wall was the most dramatic event of 
     the political revolution. But it was not necessarily the most 
     important event. For example communism is not dead in China 
     and has not collapsed. And yet beginning in 1976, Premier 
     Deng initiated a revolution within China that led to its 
     being opened up to the rest of the world. Similarly, a 
     political revolution took place in Latin America that, over 
     the course of the past several decades, has led to a major 
     increase in the fraction of people there who live in 
     countries that can properly be described as democracies 
     rather than military dictatorships and that are striving to 
     enter open world markets.
       The technological revolution has made it possible for a 
     company located anywhere in the world to use resources 
     located anywhere in the world, to produce a product anywhere 
     in the world, to be sold anywhere in the world. It's 
     impossible to say, ``this is an American car'' or ``this is a 
     Japanese car,'' and the same goes for many other products.
       The possibility for labor and capital anywhere to cooperate 
     with labor and capital anywhere else had dramatic effects 
     even before the political revolution took over. It meant that 
     there was a large supply of relatively low-wage labor to 
     cooperate with capital from the advanced countries, capital 
     in the form of physical capital, but perhaps even more 
     important, capital in the form of human capital--of skills, 
     of knowledge, of techniques, of training.
       Before the political revolution came along, this 
     international linkage of labor, capital and know-how had 
     already led to a raid expansion in world trade, to the growth 
     of multinational companies and to a hitherto unimaginable 
     degree of prosperity in such formerly underdeveloped 
     countries in East Asia as the ``Four Tigers.'' Chile was the 
     first to benefit from these developments in Latin America, 
     but its example soon spread to Mexico, Argentina and other 
     countries in the
      region. In Asia, the latest to embark on a program of market 
     reform is India.
       The political revolution greatly reinforced the 
     technological revolution in two different ways. First, it 
     added greatly to the pool of low-wage, yet not necessarily 
     unskilled labor that could be tapped for cooperation with 
     labor and capital from the advanced countries. The fall of 
     the Iron Curtain added perhaps a half-billion people and 
     China close to a billion, freed a least partly to engage in 
     capitalist acts with people elsewhere.
       Second, the political revolution discredited the idea of 
     central planning. It led everywhere to greater confidence in 
     market mechanisms as opposed to central control by 
     government. And that in turn fostered international trade and 
     international cooperation.
       These two revolutions offer the opportunity for a major 
     industrial revolution comparable to that which occurred 200 
     years ago--also spread by technological developments and 
     freedom to trade. In those 200 years, world output grew more 
     than in the preceding 2000. That record could be exceeded in 
     the next two centuries if the peoples of the world take full 
     advantage of their new opportunities.


                         (3) WAGE DIFFERENTIALS

       The twin revolutions have produced higher wages and incomes 
     for almost all classes in the underdeveloped countries. The 
     effect has been somewhat different in the advanced countries. 
     The greatly increased ratio of low-cost labor to capital has 
     raised the wages of 
     [[Page E704]] highly skilled labor and the returns on 
     physical capital but has put downward pressure on the wages 
     of low-skilled labor. The result has been a sharp widening in 
     the differential between the wages of highly skilled and low-
     skilled labor in the United States and other advanced 
     countries.
       If the widening of the wage differential is allowed to 
     proceed unchecked, it threatens to create within our own 
     country a social problem of major proportions. We shall not 
     be willing to see a group of our population move into Third 
     World conditions at the same time that another group of our 
     population becomes increasingly well off. Such stratification 
     is a recipe for social disaster. The pressure to avoid it by 
     protectionist and other similar measures will be 
     irresistible.


                             (4) EDUCATION

       So far, our educational system has been adding to the 
     tendency to stratification. Yet it is the only major force in 
     sight capable of offsetting that tendency. Innate 
     intelligence undoubtedly plays a major role in determining 
     the opportunities open to individuals. Yet it is by no means 
     the only human quality that is important, as numerous 
     examples demonstrate. Unfortunately, our current educational 
     system does little to enable either low-IQ or high-IQ 
     individuals to make the most of other qualities. Yet that is 
     the way to offset the tendencies to stratification. A greatly 
     improved educational system can do more than anything else to 
     limit the harm to our social stability from a permanent and 
     large underclass.
       There is enormous room for improvement in our educational 
     system. Hardly any activity in the United States is 
     technically more backward. We essentially teach children in 
     the same way that we did 200 years ago: one teacher in front 
     of a bunch of kids in a closed room. The availability of 
     computers has changed the situation, but not fundamentally. 
     Computers are being added to public schools, but they are 
     typically not being used in an imaginative and innovative 
     way.
       I believe that the only way to make a major improvement in 
     our educational system is through privatization to the point 
     at which a substantial fraction of all educational services 
     are rendered to individuals by private enterprises. Nothing 
     else will destroy or even greatly weaken the power of the 
     current educational establishment--a necessary precondition 
     for radical improvement in our educational system. And 
     nothing else will provide the public schools with the 
     competition that will force them to improve in order to hold 
     their clientele.
       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.
       Vouchers can promote rapid privatization only if they 
     create a large demand for private schools to constitute a 
     real incentive for entrepreneurs to enter the industry. That 
     requires first that the voucher be universal, available to 
     all who are now entitled to send their children to government 
     schools, and second that the voucher, though less than the 
     government now spends per pupil on education, be large enough 
     to cover the costs of a private profit-making school offering 
     a high-quality education. If that is achieved there will in 
     addition be a substantial number of families that will be 
     willing and able to supplement the voucher in order to get an 
     even higher quality of education. As in all cases, the 
     innovations in the ``luxury'' product will soon spread to the 
     basic product.
       For this image to be realized, it is essential that no 
     conditions be attached to the acceptance of vouchers that 
     interfere with the freedom of private enterprisers to 
     experiment, to explore and to innovate. If this image is 
     realized, everybody, except a small group of vested 
     interests, will win; parents, students, dedicated teachers, 
     taxpayers--for whom the cost of the educational system will 
     decline--and especially the residents of central cities, who 
     will have a real alternative to the wretched schools so many 
     of their children are now forced to attend.
       The business community has a major interest in expanding 
     the pool of well-schooled potential employees and in 
     maintaining a free society with open trade and expanding 
     markets around the world. Both objectives would be promoted 
     by the right kind of voucher system.
       Finally, as in every other area in which there has been 
     extensive privatization, the privatization of schooling would 
     produce a new, highly active and profitable private industry 
     that would provide a real opportunity for many talented 
     people who are currently deterred from entering the teaching 
     profession by the dreadful state of so many of our schools.
       This is not a federal issue. Schooling is and should remain 
     primarily a local responsibility. 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. 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.
       To get a majority of the public to support a general and 
     substantial voucher, we must structure the proposal so that 
     (1) it is simple and straightforward so as to be 
     comprehensible to the voter, and (2) guarantees that the 
     proposal will not add to the tax burden in any way but will 
     rather reduce net government spending on education. A group 
     of us in California has produced a tentative proposition that 
     meets these conditions. The prospects for getting sufficient 
     backing to have a real chance of passing such a proposition 
     in 1996 are bright.
     

                          ____________________