History of the Voucher Idea; A. Flew

Hayek called the competitive market a "discovery procedure." As he pointed out, there are things we can know only if the market is permitted to reveal them. We don't know what we willleam tomorrow. The implications of that fact for education are enormous. Without real entrepreneur ship, we are deprived of innovations that could transform our lives in remarkable ways. Without a free market in education, we really don't know what we're missing. D HISTORY OF THE VOUCHER IDEA 343 1. Quoted in "Reding, Wrighting & Erithmatic," Wall Street Journal, October 2, 1989. 2. Israel M. Kirzner, "Foreword: Advertising in an Open ended Universe," in Robert B. Ekelund, Jr., and David S. Saurman, Advertising and the Market Process: A Modern Economic View (San Francisco: Pacific Research Institute, 1988), pp. xvi-xvii. 3. Ibid., p. xvii. 4. Ibid. 5. Ibid. 6. Thomas Sowell, Knowledge and Decisions (New York: Basic Books, 1980), p. 41. Adds Sowell, " 'The market' is no particular set of institutions. . . . Any comparison of market processes and government processes for making a particular set of decisions is a comparison between given institutions, prescribed in advance, and an option to select or create institutions ad hoc." Ibid. emphasis in original.

7. Kirzner has done yeoman's work elaborating these points. See his Competition and Entrepreneurship (Chicago: University of Chicago Press, 1973) and Perception, Opportu nity and Profit: Studies in the Theory of Entrepreneurship (Chicago: University of Chicago Press, 1979).See also Roy E. Cordato, Welfare Economics and Externalities in an Open Ended Universe: A Modern Austrian Perspective (Boston: Kluwer Academic Publishers, 1992). Historyof the VoucherIdea by Antony Flew I t is often thought-in fact it has even been said by contributors to The Freeman that education vouchers were first proposed by Milton Friedman in his Capitalism and Freedom (University of Chicago Press, 1962). But this is not true. Milton Friedman may have been the first person to introduce and apply the label "education voucher," and he has certainly popularized such pro posals both in that book and in later publi cations. But similar proposals were in fact made much, much earlier.

Thomas Paine and Education Allowances What were, apparently, the very first such proposals are to be found in Chapter 5 of Part II of Thomas Paine's Rights of Man: Professor Flew resides in Reading, England. Being an Answer to Mr. Burke's Attack on the French Revolution, a work first pub lished in 1791 and dedicated to President George Washington. This chapter is entitled "Ways and Means of Improving the Con dition of Europe, Interspersed with Miscel laneous Observations." These ways and means embrace several different but com plementary proposals. They are all carefully costed; on the assumptions that England would be the first country in which they were adopted, and that the necessary fund ing could be found by cutting out a total of four million pounds of expenditure on the monarchyandon the armedforces.The first claims on this sum, which Paine estimated would consume just under three and three quarter millionpounds were for the payment of pensions to the old and relief to the poor.

He then contends that most of the remainder should be applied as follows: 344 THE FREEMAN • JUNE 1995 After all the above cases are provided for, there willstill be a number of families, who though not properly of the class of poor, yet find it difficultto give education to their children; and such children, under such a case, would be in a worse condi tion than if their parents were actually poor. . .. Suppose then four hundred thousand children to be in this condition, which is a greater number than ought to be supposed, after the provisions already made. The method will be to allow for each of these children ten shillings a year [half a pound] for the expense of school ing, for six years each, which will give them six months schooling each year and half a crown [two and half shillings] for paper and spelling books. Paine calculates that the cost of providing these education allowances would amount to a quarter of a million pounds a year. The final task is to dispose of the comparatively modest residue of the original four million pounds in a series of miscellaneous bene factions. But before proceeding to that task Paine adds a footnote insisting that the education could and ought to. be privately provided, and that its provision would ben efit both the teachers and the children taught. For "There are always persons of both sexes to be found in every village, especially when growing into years, capable of such an undertaking," while "Twenty children at ten shillings each amounts to ten pounds a year for not more than six months work" and "there are often dis tressed clergymen's widows to whom such an income would be acceptable." So "Whatever is given on this account to chil dren answers two purposes, to them it is education, and to those who educate them it is a livelihood. "

John Stuart Mill versus State Education In 1859, in a much too rarely noticed and quoted passage of his classic essay On Liberty, John Stuart Millrepudiated not just public school monopolies but any state inThomas Paine (1737-1809) volvement at all in education: " ... that the whole or any part of the education of the people should be in State hands, I go as far as anyone in deprecating .... A general State education is a mere contrivance for molding people to be exactly like one an other. . . ." It was in this context that Mill-without, it would seem, any aware ness that he had been anticipated by Thomas Paine-offered his own education voucher proposal: Were the duty of enforcing universal education once admitted .... If the gov ernment would make up its mind to re quire for every child a good education, it might save itself the trouble of providi~g one. It mightleave to parents to obtain the education where and how they pleased, and content itself with helping to pay the school fees of the poorer classes of chil dren, and defraying the entire school expenses of those who have no one else to pay for them.

HISTORY OF THE VOUCHER IDEA 345 Writing On Liberty in 1859-well before the first establishment by· the Forster Act of 1870 of a state-maintained system of primary education in Britain-Mill under standably had nothing to say about the economic costs as opposed to the ideologi cal dangers ofa state monopoly in the supply of educational services. But earlier, in his 1848 Principles of Political Economy, he was as wholehearted as could be wished in his assault on monopoly in general. Mill argued there against socialists: "I utterly dissent from the most conspicuous and ve hement part of their teaching, their decla mations against competition .... They for get that wherever competition is not, monopoly is; and that monopoly, in all its forms, is the taxation of the industrious for the support of indolence, if not of plun der. " Indolence and plunder are strong and scarcely appropriate charges to level against the teachers and the officials in the monop olistic public school systems of either the United States or the United Kingdom. But the fact that both systems have in recent years been consuming ever more taxpayer funding with no corresponding increases, and in some directions actual declines, in education quality does reveal the motivation for the united and implacable opposition within those systems to the introduction of any measure of competition. For competi tion supplies customers with better value for their money. In 1861, two years after Mill wrote the passages just quoted, a witness with long and wide experience of British schools, which were still at that time all private, testified before a Royal Commis sion on Popular Education that: It is subject of wonder how people so destitute of education as labouring par ents commonly are, can be such just judges as they also commonly are of the etfective qualifications of a teacher. Good school buildings and the apparatus of education are found for years to be prac tically useless and deserted, when if a master chance to be appointed who understands his work, a few weeks suffice to make the fact known, and his school is soon filled, and perhaps found to be in adequate to the demand of the neighbour hood.

State education in Britain was first estab lished by the Forster Act of 1870. But WilliamEdward Forster, who gave his name to that Act of Parliament, was himself a classical Gladstonian liberal. (In the United States today the liberal media would de nounce him as an extreme conservative!) Certainly the system established by that Act eventually developed into one catering for over 90 percent of the relevant age groups, and one from which parents can withdraw their children only if they are able and willing to pay twice, once through taxation and then again through school fees. But that was not how it was in the beginning, or how Forster himself ever wanted it to become. He insisted-against some (then) Conserva tive opposition-that poor parents unable to pay school fees for their children should be enabled to choose an independent de nominational school if they so wished in stead of having to use the state system. The Forster Act therefore included the following Section 25: The school board may, if they think fit, from time to time, for a renewable period not exceeding six months, pay the whole or any part of the school fees ... [for] ...

any child resident in their district whose parent is in their opinion unable from poverty to pay the same; but no such payment shall be made or refused on condition of the child attending any public elementary school other than such as may be selected by the parent; and such pay ment shall not be deemed to be parochial relief given to such parent. Unfortunately the embryo contained in this Section 25 was killed in infancy by the growing bureaucracy established under the Act as a whole and the foundation was laid for national compulsory education in England. D THEFREEMAN IDEASON L1BERlY Vouchers:Politically CorrectMoney by Gary North T he standard argument in favor of school vouchers is that vouchers will restore lost parental authority over their children's education. This argument reveals a failure to understand the crucial relationship be tween moral authority, legal authority, and economic authority. It has persuaded a·lot of parents to promote a reform that will not only not fulfill its stated goals but will actually undermine some parents' authority even further.