Education and Capitalism

Education and Capitalism

How Overcoming Our Fear of Markets and Economics Can Improve America's Schools

Editors: Herbert J. Walberg, Joseph L. Bast
ISBN: 978-0-8179-3972-4
Publication Date: 10/23/2003
Pages: 364

Unless popular myths about capitalism are challenged, school reform will stall well short of success.
—From the introduction to Education and Capitalism
"This is a thoughtful, thorough examination of the virtues of capitalism and free markets as a way to organize elementary and secondary education in a democracy."
—Milton Friedman Senior research fellow, Hoover Institution Nobel Prize winner in economic sciences

For parents, teachers, policymakers, taxpayers, and scholars who want better schools for children regardless of their race, social background, or parents' income, this book asserts that, if schools were "privatized" (moved from the public to the private sector), they could once again do a superior job providing kindergarten to twelfth-grade (K–12) education.

Drawing on insights and findings from history, psychology, sociology, political science, and economics, the authors reveal

  • Why schools and past efforts at school reform have failed
  • Why capitalism can be trusted to produce safe and effective schools—and why economics is an appropriate tool for studying how schooling is delivered
  • What history tells us about the government's role in schooling—and why keeping most schooling in the hands of government does not help achieve equality and democracy
  • How guidelines for voucher programs that protect the poorest and most vulnerable members of society otherwise work as well as their proponents predict
  • Why conservatives and libertarians should support school voucher programs
The authors show that, unless popular myths about capitalism are challenged, school reform will stall well short of success. Without a broader understanding of how and why markets work, the small steps in the right direction taken at the end of the twentieth century risk being swept away at the start of the twenty-first.


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Herbert J. Walberg

Herbert J. Walberg, a distinguished visiting fellow at the Hoover Institution and a member of the Koret Task Force on K-12 Education, is a University Scholar at the University of Illinois at Chicago. His research focuses on educational productivity and human accomplishments.

continued




Joseph L. Bast

Joseph L. Bast is the president of The Heartland Institute and author of Rewards: How to use rewards to help children learn – and why teachers don’t use them well.




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TABLE OF CONTENTS


About the Authors

xiii

   

Preface

xv

   

Introduction

xvii

   Milton Friedman’s Legacy

xvii

   New Research and Political Breakthroughs

xxi

   What Other Books Overlook

xxii

   How to Read This Book

xxiv

   

Part One     The Need for School Reform

1

Chapter 1     Failure of the Public School Monopoly

3

   Dismal Performance and Rising Costs

5

   Importance of Scholastic Achievement

9

   Declining School Productivity

12

   Other Problems Afflicting Government Schools

14

   Schools of Choice Are Not Similarly Failing

15

   Schools of Choice Are More Productive

21

   Excuses for the Failure of Government Schools

24

   The Public Wants School Choice

29

   Recommended Reading

32

   

Chapter 2     Why Government Schools Fail

33

   Lack of Competition

33

   Ineffectual School Boards

35

   Union Opposition to Reform

37

   Conflicts of Interest

40

   Political Interference

42

   Lack of Standards

44

   Centralized Control and Funding

47

   Antiacademic Classroom Incentives

50

   Conclusion

52

   Recommended Reading

52

   

Chapter 3     How a Capitalist School System Would Work

53

   Private Schools in U.S. History

54

   Democratic Values and Private Schools

60

   Can Parents Be Informed Consumers? 64

   Who Would Educate the Poor?

68

   Is Competition in Education Appropriate?

71

   Conclusion

77

   Recommended Reading

78

   

Part Two     Can Capitalism Be Trusted?

79

Chapter 4     What Is Capitalism?

81

   A Good Time to Reconsider

81

   The Rise of Exchange

83

   The Coordination Problem

84

   How Capitalism Works

87

   Origins in England

91

   The Founders’ Values Today

95

   Capitalist versus Government Schools

97

   Conclusion

100

   Recommended Reading

101

   

Chapter 5     Nine Myths about Capitalism

103

   The Rich Get Richer and the Poor Get Poorer

104

   Capitalism Caused the Great Depression

106

   Corporations Earn Obscene Profits

110

   Corporations Lie, Cheat, and Steal

112

   Capitalism Harms the Environment

117

   Monopolies and Cartels Are Common

121

   Globalism Hurts Workers and the Poor

124

   Labor Unions Protect Workers from Exploitation

128

   Capitalism Rewards Racism and Segregation

131

   Conclusion

136

   Recommended Reading

136

   

Chapter 6     Capitalism and Morality

137

   The Reality of Greed and Ambition

138

   Capitalist Values

140

   Capitalism and Justice

145

   Utilitarianism and Income Redistribution

148

   One Institution among Many

151

   Capitalism and Religion

154

   Capitalism and Postmodern Values

158

   Conclusion

159

   Recommended Reading

160

   

Chapter 7     Capitalism and Intellectuals

161

   Libertarians Are Not Anarchists

161

   Government Is Force; Capitalism Is Freedom

163

   Capitalism and Politics

167

   Capitalism’s Debt to the State

170

   Capitalism and Intellectuals

173

   Conclusion

175

   Recommended Reading

176

   

Part Three     Education and Capitalism

177

Chapter 8     What Is Economics?

179

   Attacks on Economics

180

   Why People Fear Economics

181

   What Is Economics?

183

   Individuals versus Groups

184

   Rational Action

186

   The Subjectivity of Values

189

   Economics and Ethics

191

   The Role of Assumptions

196

   Ideology and Economics

199

   Public-Choice Theory

202

   Recommended Reading

206

   

Chapter 9     The Economics of Education

207

   Is Information an Exception?

208

   Schooling as a Market Phenomenon

210

   More Than a Commodity

214

   Not Like Blueberries

216

   Eight Public-Choice Propositions

217

   Why Choose Markets?

221

   Reforms That Reach Students

224

   Recommended Reading

227

   

Chapter 10     Privatization and School Choice

229

   The Privatization Movement

229

   Contracting Out for Services

235

   Charter Schools

238

   Privately Funded Vouchers

240

   Tuition Tax Credits and Deductions

241

   Homeschooling

244

   School Vouchers

246

   Conclusion

248

   Recommended Reading

248

   

Part Four     Doing It Right

251

Chapter 11     School Vouchers

253

   Demand for Private Schooling

255

   Private School Capacity Would Increase

257

   Avoiding New Regulations

260

   Constitutionality

264

   Vouchers As a Reform Strategy

272

   Vouchers versus Tax Credits

276

   Long-Term Consequences of Vouchers

283

   Recommended Reading

288

   

Chapter 12     Design Guidelines for School Vouchers

289

   Choices to Be Made

289

   Phasing In and Incrementalism

291

   Value of Vouchers

295

   Tuition Add-ons

297

   Funding Sources

299

   Education Savings Accounts

301

   Fiscal Impact

302

   Testing and Vouchers

306

   Vouchers for Homeschoolers

308

   Closing Unneeded Government Schools

309

   Administration and Voucher Redemption

311

   Transportation

312

   Conclusion

314

   Recommended Reading

314

   

Conclusion

317

   The Choice Paradox

318

   The Need for School Reform

320

   Can Capitalism Be Trusted?

321

   Education and Capitalism

323

   Using Economics

324

   Doing It Right

325

   

Postscript

329

Why Conservatives and Libertarians Should Support Vouchers

331

   Not a New Entitlement

332

   Let Parents and Educators Decide

334

   Government Control Is Not Inevitable

336

   Overlooking Reality

338

   Separation in a Single Bound?

340

   A Moral Duty

341

   

Index

345


The Hoover Institution on War, Revolution and Peace, founded at Stanford University in 1919 by Herbert Hoover, who went on to become the thirty-first president of the United States, is an interdisciplinary research center for advanced study on domestic and international affairs. The views expressed in its publications are entirely those of the authors and do not necessarily reflect the views of the staff, officers, or Board of Overseers of the Hoover Institution.

www.hoover.org

Hoover Institution Press Publication No. 521

Copyright © 2003 by the Board of Trustees of the Leland Stanford Junior University All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission of the publisher.

First printing, 2003

10 09 08 07 06 05 04 03 9 8 7 6 5 4 3 2 1

Manufactured in the United States of America

The paper used in this publication meets the minimum requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48–1984.

Library of Congress Cataloging-in-Publication Data

Walberg, Herbert J., 1937–
Education and capitalism : how overcoming our fear of markets and economics can improve America’s schools / Herbert J. Walberg, Joseph L. Bast. p. cm. — (Hoover Institution Press publication ; no. 521) Includes bibliographical references and index.

ISBN 0-8179-3972-5 (pbk.)—ISBN 0-8179-3971-7 (cloth)

1. Education—Economic aspects—United States. 2. Privitization in education—United States. 3. School improvement programs—United States. 4. Capitalism—United States. I. Bast, Joseph L. ( Joseph Lee), 1958– II. Title. III. Hoover Institution Press publication ; 521

LC66.W35 2003 338.4'337973—dc22

2003056691

 



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