Thursday, December 13, 2012

Competition and free thought: Friedman, Mill, and educational choice

John Stuart Mill’s ideas on education are not as well known as Milton Friedman’s. But they may deserve to be. Mill and Friedman agreed that government should not run schools, but for different reasons. (At least each emphasized different things.) Friedman was mainly concerned with productivity improvements that arise through competition. Mill was more concerned with freedom of thought. Mill valued the diversity of opinion that comes from people pursuing their own intellectual journeys, and all compulsion in opinion was anathema to him. The consequences of state schooling in America suggest Friedman and Mill were correct.

School Productivity

The public schools are a productivity disaster. In principle, public schools should thrive in the Information Age. Schools are in the information business, tasked with inculcating knowledge, and the processing and distribution of information has been vastly accelerated by interconnected computing technologies. Moreover, schools should benefit from the Flynn effect—the pattern cognitive psychologists have observed in which aggregate IQ rises a little bit each generation.

And schools are getting more money, too. In real terms, school spending per pupil rose from $2,835 in 1961–62 to $10,694 in 2008–09, according to the National Center for Education Statistics—a 177 percent increase. Yet SAT scores for college-bound seniors are stagnant. High school graduation rates seem to have hit a plateau, and high school graduates are less prepared for college than ever. Better raw material, more money, new technology—and yet no improvement.

The state education system is centrally planned and run by committees, so choice and competition are lost from the system. Stagnation is therefore inevitable. Where market forces prevail, productivity improvement is normal. Computers and cell phones are vastly better than they were twenty years ago. Cars and planes less dramatically so, but they are safer, more fuel-efficient and have new features. In the energy sector, hydraulic fracturing (fracking) has vastly increased the supply of fossil fuels, so that the United States may become a net energy exporter within the next couple of decades. Less innovative sectors can still use technologies invented in other industries to raise productivity (e.g., by lowering their energy costs or improving their logistics) if competitive market forces are at work. But productive innovation is difficult and competition is the best school in which to learn it. Public schools don’t go to that school, so the schools fail to learn.

Poor public schools are a major bottleneck holding back the entire U.S. economy. The recent increase in inequality has been driven not by capital but by labor income, as Saez and Piketty stress. This reflects sharply rising demand for certain kinds of skilled, educated workers, combined with little supply response. The public schools and universities are unable and/or unwilling to train the kinds of people the market wants. Eric Brynjolffson argues in his book Race Against the Machine that workers are unable to keep up with new technology.

The fact that wages of high school graduates have fallen is a painful remark about how much the market values what the public schools produce. In spite of these high labor premiums, college completion rates among men have actually fallen. College is overregulated and oversubsidized, and there is too much power in the hands of accreditation agencies answerable to the Department of Education. But there is still far more competition and choice there than at the K–12 level. Thanks to competition, the U.S. university system is generally regarded as the best in the world and as an important source of U.S. economic competitiveness. Of course, the top universities—Harvard, Yale, Princeton, Stanford, etc.—are private. And the consensus in academia is that universities would be equipped to produce many more bright college graduates if the public schools provided more students with basic skills.

Milton Friedman wanted to make K–12 education more like the university system through vouchers. Under a voucher system, financing K–12 education would still be the government’s job, but running K–12 education would be opened up to competition and largely privatized. Each student’s family would get a certain dollar value’s worth of vouchers, which could only be spent on education. “Government” schools would get their money by collecting the vouchers of students who chose to attend them and converting those to cash through the government. Direct financing of public schools through the government budget would be curtailed or eliminated. Meanwhile, vouchers could also be used to pay for private school tuition.

Today, the Friedman Foundation for Educational Choice seeks to “advance Milton and Rose Friedman’s vision of school choice for all children.” Voucher programs have been adopted in several countries, including free-market Chile and social-democratic Sweden. In the United States, there has been progress in overcoming legal challenges to school vouchers (especially Zelman v. Simmons-Harris), and voucher programs have been adopted in cities like Cleveland and Milwaukee and states like Indiana. Where tried, vouchers have improved educational outcomes, just as economic theory says they should.


British government to relax rules on foreign students

Foreign PhD will be allowed to stay in Britain after completing their degrees but Britain will take further steps to "root out abuses" by fake ones trying to get visas, Theresa May said today.

In a key speech, the Home Secretary said foreign PhD students will be allowed to stay in the UK for a year after their studies to encourage more talented immigrants to remain in Britain.

But she will also roll out more face-to-face interviews for overseas applicants, which could make it more difficult for them to get permission to study in the UK in the first place.

Mrs May is trying to bring down immigration to tens of thousands, rather than hundreds of thousands. She said today immigration can increase pressure on property prices and reduce wages for low earners. High immigration can make it difficult to have an integrated society, she added.

In an interview with the Financial Times last night, she also hit out at universities, saying they have a responsibility to make Britain more attractive to foreign students.

"The universities have got a job here as well in making sure that people actually understand that we're open for university students coming into the UK," she told the newspaper. "There's a job here not just for the government, I think there's a job for the universities as well to make sure that people know that we are open."

The Home Secretary is also expected to address concerns about tough visa restrictions on Chinese tourists, with plans to roll out more online applications and offer forms in Mandarin.

There have been a number of rows within the Coalition about immigration policy, with accusations that the Home Office's tough restrictions are holding back growth.

Sources said Mrs May, the Prime Minister, Vince Cable, the Business Secretary, and George Osborne, the Chancellor, have now reached an agreement on sounding more welcoming to students at the same time as remaining tough over security concerns.

Some cabinet ministers have backed university chancellors who argue that including legitimate students in net migration figures is driving them to other countries and deterring billions of pounds in investment.

Boris Johnson, the London mayor, has also attacked the Government's "crazy" policies on immigration for throttling tourism and discouraging students.

There has been mounting concern about the shifting attitude towards foreign students since London Met University was stripped of its right to teach foreign students.

The Home Office has cracked down on bogus colleges letting in immigrants pretending to be students as part of a drive to being down immigration to the tens rather than hundreds of thousands.


British private school fees are often subsidized -- for promising students from poor families in particular

The great taboo topic among parents of children at private schools is how (or by whom) the fees are being paid. Looking around the room at their first parents' evening, many of the mothers and fathers will be wondering what arrangements their contemporaries have come to with the bursar, and the common conversational opening gambit of "What do you do for a living?" is often no more than a coded version of "How on Earth are you paying the fees?"

In fact, any such evening will be well populated with those who have done their homework - and made sure that their offspring have done theirs - in order to benefit from bursaries and scholarships.

According to the latest figures from the Independent Schools Council, one third of the children at private schools are being educated at a reduced cost of one kind or another: because they are receiving a grant, or because the school is giving them a bursary. And head teachers report that the number of parents applying for assisted places has trebled in the past six years, as the outlook in the economy has remained grim.

In recent decades the rise in private school fees has far outstripped any rise in wages in most professions, so that whole groups of society for whom private education had been an accepted part of the lifestyle now find themselves struggling to afford it.

But while fees have been rising, so have the sums available to pay them. The amount of money available through bursaries has increased by 11.4 per cent in the past two years, comfortably ahead of the official rate of inflation.

Charitable grants for educational expenses are another possibility worth pursuing: these are often tied to parents in specific careers or professions.

Parents who wish to benefit from scholarships, bursaries or grants will, however, have to prove that their need is genuine and that they have exhausted every other avenue of assitance.

They should prepare for searching questions from school Bursars, and should expect bank and mortgage statements to be inspected. The financial circumstances of the children's grandparents may also be called into question.

But the support is there to be taken up: it is in the interests of most private schools to attract intelligent and hardworking pupils by any means at their disposal, in order to maintain a high placing in the academic league tables so they can continue to attract those parents who can afford the full amount. And the great benefit for head teachers is that they get to choose the children who will be eligible for scholarships and bursaries on ability and attitude, rather than weight of cheque.

As Andrew Halls, head of King's College School, Wimbledon, puts it: "Most good schools will bend over backwards to take the pupils they want."


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