What Are Education Markets, and Why Do They Matter?

Utah Adopts Universal Vouchers
By Robert C. Enlow (2/27/07)

Utah Governor Jon Huntsman Jr signed a universal voucher bill into law February 12. Robert C. Enlow, Executive Director, Milton and Rose D. Friedman Foundation, Indianapolis provided this commentary.- DWK
The Utah House and Senate have passed a bill to offer school vouchers to almost every student in the Beehive State; and the governor has added his signature. Utah is now the first state to adopt a universal voucher program.
This is a revolutionary breakthrough for Milton Friedman's vision of school choice. For years many, even those inside the school choice movement, dismissed the prospects for universal vouchers, preferring instead to stick to limited voucher programs targeting particular populations. While these programs do help some children – almost anything is a dramatic improvement compared to the government school monopoly –they're just too small to spur radical market innovation and fundamentally transform the way we educate all students.
When he spoke about vouchers, Dr. Friedman was never content to let them be presented simply as a way to help a few students. He would regularly point out that education is almost the only field where things are still done more or less the same way they've been done for centuries. Thanks to a stifling public monopoly, education has been left behind as our lives have been steadily changed for the better by innovation and progress in countless other areas.
Now Utah will have a chance to lead the nation in transforming education. As a critical mass of students become school choosers rather than school captives, a true market in education will emerge. Schools will be rewarded for finding new and better ways of educating students. And classroom methods that don't work will have to be abandoned or altered.
But however revolutionary this change might be, Milton Friedman himself would not have been surprised by it in the least. Right up to the end of his life, Dr. Friedman was convinced that at least one state would pass universal vouchers, and in the near future at that. Decades of political disappointments didn't dim his optimism that universal vouchers would soon prevail.
He argued that people misjudged the prospects for universal vouchers because they have a false idea of how big changes in public policy take place. And if anyone speaks with authority on the subject of how to change public policy, it is Milton Friedman.
Big policy reversals, he explained, don't come a little at a time. As a policy becomes increasingly dysfunctional, policymakers seek to preserve it – first by tinkering, then by stronger and stronger measures. They look at other options only after extended failure brings on an undeniable crisis – and then a credible alternative can often be rapidly implemented.
It's easy to see this pattern looking back on Dr. Friedman's experience with economic policy in the 1970s. The failure of Keynesianism just brought on stronger and stronger Keynesianism, until by 1980 people were ready to adopt Friedman's monetarism. After that, change came rapidly, and the result was a quarter century of unprecedented economic growth.
Now we're seeing the same pattern play out in education. People have been doubling down on the government school monopoly, trying to save it. But you can't keep doubling down forever – just as Nixon's wage and price controls couldn't save Keynes.
As Dr. Friedman put it, the water is building behind 50 state dams. Eventually, at least one dam has to break.
It looks like Utah's educational dam is now breaking, proving Dr. Friedman right – as he was right about so many other things. Having helped bring the blessings of liberty and prosperity to millions around the world, Dr. Friedman's ideas will now bring an educational revolution to the people of Utah. And after that, the rest of the nation won't be able to ignore the transformation universal vouchers will bring about.
It's a shame Dr. Friedman didn't live to see his vision of universal vouchers brought to fruition. He consistently placed vouchers at the top of the (admittedly short) list of policies he had not yet succeeded in enacting. With this triumph, the legacy of he and his lifelong spouse Rose – heavily laden as it already is with extraordinary honors – can truly be said to be complete.
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Addendum: The Program's Criteria
Program Description: The bill creates a universal school voucher program that almost every student in the state can use.
Student Eligibility: All Utah students are eligible if they meet any one of the following criteria: 1) they are in public school, 2) they are entering kindergarten, 3) they have moved into the state in the previous year, or 4) they have family incomes at or below the eligibility level for free and reduced lunch programs. In effect, this means that the only Utah students not eligible are those from high-income families who are already in private schools. Students cannot receive vouchers under both this program and the Carson Smith voucher program for disabled students at the same time; students who qualify for both may choose which voucher to receive.
Voucher Value: The dollar value of the voucher runs on a sliding scale from $500 per student (for high-income families) to $3,000 (for low-income families). This graphic from the Salt Lake Tribune shows the income scale.
Regulations: Participating private schools must be located in Utah; must have a CPA review its finances upon entering the program and every four years thereafter; must comply with health, safety, and antidiscrimination laws; must administer a norm-referenced test and make results available to parents; must make aggregate test results for participants publicly available (consistent with student confidentiality); must employ teachers with college degrees or equivalent specialized training; and must have at least 40 students and not be located in a residence or state treatment facility.
Public School Funds: When a student uses a voucher, that student's public school district will continue to be funded as though that student were still attending school in that district until five years after the student left or when the student would have graduated, whichever comes first. During that time, a portion of the funding designated for that student will be returned to the state's Uniform School Fund, and the remainder will be retained by the school district.

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