From The Collected Works of Milton Friedman, compiled and edited by Robert Leeson and Charles G. Palm.

“The Promise of Vouchers”

by Milton Friedman
Wall Street Journal, 5 December 2005
Reprinted from The Wall Street Journal © 2005 Dow Jones & Company. All rights reserved.

Most New Orleans schools are in ruins, as are the homes of the children who have attended
them. The children are now scattered all over the country. This is a tragedy. It is also an
opportunity to radically reform the educational system. The schools that were destroyed were
not serving their students well. As Chris Kinnan writes, “The New Orleans public-school system
has been failing its kids for years. Fully 73 of its more than 120 schools are considered to be
‘failing’ according to the state’s educational accountability standards.” (“Vouchers for New
Orleans,” National Review Online, Sept. 15, 2005.)

New Orleans schools were failing for the same reason that schools are failing in other large
cities, because the schools are owned and operated by the government. Government decides what
is to be produced and who is to consume its products, generally assigning students to schools by
their residence. The only recourse of dissatisfied parents is to change their residence or give up
the government subsidy and pay for their children’s schooling twice, once in taxes and once in
tuition. This top-down organization works no better in the U.S. than it did in the Soviet Union or
East Germany.

Rather than simply rebuild the destroyed schools, Louisiana, which has taken over the New
Orleans school system, should take this opportunity to empower the consumers, i.e., the students,
by providing parents with vouchers of substantial size, say three-quarters of per- pupil spending
in government schools, usable only for educational expenses. Parents would then be free to
choose the schooling they considered best for their children. This would introduce competition,
which is missing from the present system. It would be a move to a bottom-up organization,
which has proved so successful in the rest of our society.

To make competition effective, Louisiana should provide a favorable climate for new entrants,
whether they be parochial, non-profit or for-profit. As part of doing so it should make clear that
the vouchers are not an emergency expedient that will be terminated once the emergency is over,
but are a permanent reform.

Such permanent reform would also meet the emergency needs. Vouchers would be usable by the
students who are scattered all over the country to purchase educational services wherever they
are. So far as New Orleans itself is concerned, they would enable the private schools that
survived the hurricanes to expand and accommodate returning children. More important, the
vouchers would encourage private enterprise to provide schooling. Is there any doubt that the
private market would provide schooling for children returning to New Orleans faster than the
state?

Whatever the promise of vouchers for the education of New Orleans children, the reform will be
opposed by the teachers unions and the educational administrators. They now control a
monopoly school system. They are determined to preserve that control, and will go to almost any
lengths to do so.
From The Collected Works of Milton Friedman, compiled and edited by Robert Leeson and Charles G. Palm.

Unions to the contrary, the reform would achieve the purposes of Louisiana far better than the
present system. The state’s objective is the education of its children, not the construction of
buildings or the running of schools. Those are means not ends. The state’s objective would be
better served by a competitive educational market than by a government monopoly. Producers of
educational services would compete to attract students. Parents, empowered by the voucher,
would have a wide range to choose from. As in other industries, such a competitive free market
would lead to improvements in quality and reductions in cost.

If, by a political miracle, Louisiana could overcome the opposition of the unions and enact
universal vouchers, it would not only serve itself, it would also render a service to the rest of the
country by providing a large scale example of what the market can do for education when
permitted to operate.

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Reprinted in Hoover Digest, no. 1 (2006), pp. 46-48.

10/10/12