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Schoolhouse socialism.

Public schools are part and parcel of socialism. This system of economics does not function well. Not in the Soviet Union, and not in any industry in the United States, certainly including education. The present paper attempts to show that education is no exception to this general rule.

Key Words: privatization, private schools, public schools, education, school vouchers, educational socialism


Public schools should not exist in America. Education is not a legitimate function of government. To make matters even worse, the state is a terribly inefficient manager of anything; the classroom is no exception. Despite the mountains of cash and a staggering number of human lives invested in teaching American children in public schools, the endeavor has been an abysmal failure. As such, government education should be seen as the cancer on society that it really is and removed (1). Some proponents of school vouchers have put this plan forward as a means to this noble end, but government subsidy of schools--even of this sort--will have the very opposite effect: it will not lead to greater freedom in the educational arena, but at best only to more efficient educational socialism.

Let us explore why government education is illegitimate. As a first offense, it is funded by coercive taxation (2). Under pain of incarceration, American citizens are shaken down daily to fund the system. Because of this indiscriminate taxation, a significant portion of those footing the bill for public education will never partake of any part of the services provided with these ill-gotten gains; they are forced to pay for the schooling of other people's children. The state tramples on the property rights of every taxpayer funding their equal-opportunity dream. However, this is hardly the only coercion employed in this arena.

Once upon a time, some government hireling decided that the state knew better than any parent under its dominion how and what to teach their children. They made attendance at some recognized educational institution compulsory for every school-aged child. As a result, the government gets to define what a school is and what it teaches; Big Brother is more than happy to do so, because he then gets to dictate the curriculum of any organization begging for the seal of approval. Parents--already taxed to fund a government school system to compensate for their obvious inability to teach their own offspring--are coerced a second time, now forced to educate their progeny according to the state's whim. Again, their rights are trampled. It is for everyone's good to educate the youth, right?

There is an unconscionable conflict of interest at work here. As Young and Block (1999) put it, "The individuals entrenched in positions of power in the state are those who control over what children are taught concerning history, government, economics, and so forth. The result is a citizenry educated by the operators of the state on how to choose the operators of the state!"

Also, the endeavor is not a public good, which can be defined as a one that is "neither excludable nor rival" (Mankiw, 225). For a service to qualify as a public good, it must be impossible to exclude anyone from consuming it once it is produced, and no one person's consumption of the good can detract from any other person's. How does education fare under this test? It is most certainly rival. Therefore, it fails on that one ground. For one thing, if the money is spent on schooling, it is unavailable for anything else. For another, the argument on the part of mainstream economists is that even childless people benefit from the education of other people's children due to the "market failure" of external economies. If these other children are schooled (not the same as educated, but let that pass), then they will be less likely to be criminals, more likely to be gainfully employed, vote intelligently, etc. Since these benefits undoubtedly accrue to all, goes the argument, everyone ought to be forced to pay. We pay for other goods and services we benefit from, so why not this one too? A superficial but devastating reply to this arrant nonsense is to deny the major premise and to assert that these benefits are subjective (Mises, 1998). One man's meat is another man's poison, goes the old adage. All too much of what is taught in colleges--and even high schools--is feminism, communism, statism, multiculturalism, relativism, sociology, queer studies -ism, black studies -ism, etc. ad nauseum. Were it not for the inherent subjectivism of these matters, we would be tempted to claim that public education is an externality all right, but a negative not a positive one. Thus, because of its pernicious nature, we should be taxing this activity, not subsidizing it. Rothbard's criticism of this doctrine goes far further: "A and B often benefit, it is held, if they can force C into doing something.... [A]ny argument proclaiming the right and goodness of, say, three neighbors, who yearn to form a string quartet, forcing a forth neighbor at bayonet point to learn and play the viola, is hardly deserving of sober comment." (3)

Further, public education, like any program "fueled by coercion rather than by the free market," is "grossly inefficient" (Rothbard, 1995). Free from market signals (e.g. prices, sales volumes), school administrators have very little direct communication from the men and women paying for their services. Occasional elections provide some indirect signaling, but a vote cast for any given candidate is steeped in a host of other, unrelated issues, so it seldom provides any clear positive or negative message addressed to the bureaucrats running things. Similarly, there are no incentives for schools to get better. As with all government programs, they receive the same funding, more or less, whether they perform beautifully or tragically. (4) Administrators collect their salaries and retire without ever having challenged any school structure; inertia is strong, and there is no reward for doing better.

All in all, government education of the young has been a failure. In July of 1990, the National Education Goals Panel (1999) came into being as a bipartisan committee operating under the executive branch. Four years later, it became an independent federal agency in charge of monitoring academic progress. According to their 1999 report, only 40% of U.S. high school seniors were proficient in reading. Even more dismally, only 22% were proficient in writing and a scant 16% were proficient in mathematics. These are the products of the system for which American taxpayers paid $71.5 billion dollars in 2005! (Department of Education, 2006). The only possible, realistic and rational solution? Dismantle the public school system and let the market take over education for good. (5)

School vouchers have been put forwards as a means for fixing education in America. One is faced with a major question when considering a policy of this sort: is this a step forward or a step back? The system as it is presently incarnated--with its funding and demand garnered at the point of a gun and with its obviously deficient and wasteful teaching methods--can only be improved by razing it to the ground. A good policy also requires that "it clearly lead to more liberty and less government intrusion in our lives" (Gregory, 2005). School vouchers satisfy neither of these requirements. (6)

They do not take money away from the public school system. Administration costs increase to handle the allocation of the voucher funds, to cover the synthesis and distribution of voucher informational materials, and the policing of voucher schools. What about budget cuts within the existing system to balance the new costs? Surely, with all those students moving to private schools, some teachers, administrators, and schools could be closed. Such a rational reaction will not likely happen, not, at least, on a large scale. For the educational system operates without the profit-loss system hanging over its head. There is little or no incentive to cut back on costs and produce more efficiently.

This certainly does not sound like a movement in the right direction. It is simply a restructuring, leaving its flaws intact. It is a dangerous game to undertake this sort of sideways movement, Gregory (1995) warns us, "when the policy goal of those in power implementing it is to increase the efficiency and fairness of an inherently inefficient and unfair system." This author wrote specifically about tax reform, but the same principles of one step forward, one step backward and their results apply here.

The money sending children to private school on the public dime flows whence all "public money" does: from taxpayers' pocketbooks. However, it is more insidious than a straight tax; it is a double tax. Parents, who have already been taxed once to fund public education and have been forced by the threat of jail time to send their child to a government approved school, are now taxed a second time to pay for school vouchers. These chits then go to all parents and then into the pockets of the private individuals running voucher schools. In short, "the taxpayer foots the bill for both public and private schools," (Vance, 2005) regardless of his desire to patronize either. This is not an improvement.

Let us assume for the sake of argument that the funding for a government voucher program could be legitimately done. Does the policy meet the second requirement? Does it increase liberty? Hardly.

Take, for instance, the voucher program as implemented in Milwaukee, Wisconsin. The stated purpose is to "[allow] students from low-income families who reside in the City of Milwaukee to attend any participating private school located in the city at no charge" [emphasis theirs] (Wisconsin Department of Public Instruction.) It is terribly invasive both to the parents using it and the schools who decide to take government monies.

First, one of the eligibility requirements is that a student's family must have "a total family income that does not exceed an amount equal to 1.75 times the poverty level," defined by the federal office of management and budget (Wisconsin Statutes [section] 119.23 (2)(a)(1) (2004)). This, by itself, erodes the privacy of any family seeking to use the newly-available public service. To get onto the dole, they must prostrate themselves before the system's administration, prove that they are impoverished, and ask politely for the honor of filling out a series of forms.

Even if they were to swallow their pride and make the pilgrimage, the vast majority of taxpayers are ineligible based on either the income restriction or the arbitrary cutoff imposed by the legislature. "No more than 15% of the school district's membership may attend private schools" (Wisconsin Statutes [section] 119.23 (2)(b) (2004)).

Rothbard (1995) makes the observation that "expanding the 'choices' of poor parents by giving them more taxpayer money also restricts the 'choices' of the" [emphasis his] more affluent parents. It cannot be said that victimizing the majority of a society (the middle and upper classes) to pay for goodies for the underclass constitutes more liberty.

The plight of the private schools, however, is even more troubling. They are faced with the twin demons of losing their identities or losing their businesses entirely. With subsidies come chains--light at first. but more onerous as the days pass.

Probably the most alarming clause in the Parental Choice legislation is the one regarding admissions (Wisconsin Statutes [section] 119.23 (3)(a) (2004)): "The state superintendent shall ensure that the private school determines which pupils to accept on a random basis" [emphasis, present authors']. Selective admissions is a cornerstone of private education. Under a regime of economic freedom, schools are started because available alternatives do not meet consumer demand, whether that is for a school for gifted artists or for convicted criminals retreading tires. If an applicant will not or cannot meet the requirements for that particular school, he is not admitted. But voucher schools cannot turn away an applicant for any reason: religion, gender, past behavior, or test scores included. Under this system, an Islamic boy could demand and receive admission to a Catholic girls preparatory academy, even though testing indicates that he is uneducable and stabbed three other students on the playground of his last school. Far-fetched? Hardly.

This brings us to the question of religion in the teachings of the school. "The very purpose of these [religious] schools is to weave religious values into the process of learning" (Rockwell, 1998). However, voucher students have a state-mandated right to opt out of all religious teachings (Wisconsin Statutes [section] 119.23 (7)(c) (2004)). This is a wholesale exemption of the student from a huge portion of the teachings of a religious school. To avoid lawsuits, a school might model itself more closely on public schools, which have failed. Mingling public funds in private schools destroys those schools' individuality.

Public oversight also yokes the voucher schools to the caprice of bureaucrats, especially in financial matters. Wisconsin state law requires that every voucher school must annually submit to the school department "evidence of financial viability, as prescribed by the department", "proof that the private school's administrator has participated in a fiscal management training program approved by the department", "evidence of sound fiscal practices, as prescribed by the department", and "an independent financial audit of the private school" (Wisconsin Statutes [section] 119.23 (7)(b), (d) (2004)). First the system robs a school of its ability to discriminate on admissions, then its financial autonomy. When a consumer buys a tire at a tire store, he does not demand to see the merchant's last five years of tax records. Somehow, purchasing education gives Leviathan that right. In this way, the state's grip on private schools would be even stronger than it is already.

With that being said, why would a school decide to accept government vouchers? It would be necessary in order to remain competitive. Vouchers would effectively make some private schools "free," while the ones that refused oversight or admissions diktats--and hence vouchers--would be expensive. Demand for paid schools would fall. At some point, the bare operating costs (including health, safety, and curricular constraints placed by the state itself) of the school would outstrip the price supported by the market. Then, the private school would either have to accept its new master or fold. Without the price system, private education is no longer market-based. Instead of tearing down the old system, vouchers just expand it laterally into the virgin territory of once-private schools.

In summary, can one recommend school vouchers as a good policy? The answer is a resounding "no." They increase government invasion in parents' daily lives. They give the state free reign to bury its nose deeply into the private business of private schools. They end up destroying private schools, turning them instead into relabeled state schools. Finally, vouchers will not fix the ailing public school system in any way, shape or form. At present, we have an illegitimate and wasteful government educational establishment; we also have a successful free-enterprise private and parochial school system. Burdening the strong schools with regulation and government invasion is not the solution to fixing the weak schools. Here, instead, is a solution put forth by Rothbard (1995):

1. Repeal regulations on private schools;

2. Cut swollen public school budgets;

3. Insure strictly local control of public schools by the parents and taxpayers of the respective neighborhoods;

4. Cut taxes so people can opt out of public schools.

Returning control to the market is the answer, not another round of legislation.


Arnold, N. S. 1994. The Philosophy and Economics of Market Socialism: A Critical Study New York: Oxford University Press

Block, W. (1983). Public Goods and Externalities: The Case of Roads. The Journal of Libertarian Studies, 7(1), 1-34.

Bradley, R. (1981). Market Socialism: A Subjectivist Evaluation. The Journal of Libertarian Studies, 5(l), 23-40.

Cowen, T., ed. (1988). The Theory of Market Failure: A Critical Examination. Fairfax, VA: George Mason University Press

Goolsby, J. & Block, W. (2003-4). Education and Bureaucracy: National Testing and School Privatization. Texas Education Review; 2003GoolsbyBlock.html

Gregory, A. (2005). Looking Forward and Sideways. [webpage] 5 March [cited 12 May 2005]; < gregory65.html.

Department of Education. Fiscal Year 2006 President's Budget. Cited 12 May 2005, <http:// summary/appendix4.pdf>.

Hoppe, H., ed. (2003). National Defense and the Theory of Externalities, Public Goods and Clubs. The Myth of National Defense: Essays on the Theory and History of Security Production, Hoppe, Hans-Hermann, ed., Auburn: Mises Institute

Mankiw, G. (2004). Principles of Microeconomics. Thomson South-Western

McGee, R. W. & Block W. (1994). Pollution Trading Permits as a Form of Market Socialism and the Search for a Real Market Solution to Environmental Pollution. Fordham University Law and Environmental Journal, 6(1), 51-77

Mises, L. [1949] (1998). Human Action, Scholars' Edition. Auburn: Mises Institute. http://

Murrell, P. (1983). Did the Theory of Market Socialism Answer the Challenge of Ludwig von Mises? A Reinterpretation of the Socialist Controversy. History of Political Economy, 15(1), 92-105.

National Education Goals Panel. (1999). The National Education Goals report: Building a nation of learners. Washington, DC: U.S. Government Printing Office.

Rockwell, L. (1998). Vouchers: Enemy of Religion." [webpage] 1 September. [cited 12 May 2005]. < aspx?control=106&id=79>.

Roemer, J. & Bardhan, P. (1992). Market Socialism: A Case for Rejuvenation. Journal of Economic Perspectives. Summer.

Rothbard, M. N. (1982). The Ethics of Liberty. Humanities Press: Atlantic Highlands, N.J.

Rothbard, M. N. (1995). Making Economic Sense. Auburn, AL: Mises Institute. <http://www.>. ch. 43.

Rothbard, M. N. (1997). The Fallacy of the 'Public Sector: 'The Logic of Action: Applications and Criticism from the Austrian School, Vol. II. Cheltenham, UK: Edward Elgar

Vance, L. (2005). The Great Voucher Fraud. [webpage] 25 March. [cited 12 May 2005], <http://>.

Wisconsin Department of Public Instruction. (2005-6). The Milwaukee Parental Choice Program: Information for parents. Madison, WI: Wisconsin Department of Public Instruction.

Young, A. & Block, W. (1999). Enterprising Education: Doing Away with the Public School System. International Journal of Value-Based Management, 12, 198.

Yunker, J. A. (1995). Post-Lange Market Socialism: An Evaluation of Profit-Oriented Proposals. Journal of Economic Issues, September. postlang.htm


(1) For the case in behalf of educational privatization, see Goolsby and Block (2003-2004).

(2) States Rothbard (1982, 162): "Taxation is theft, purely and simply, even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match."

(3) For further elaboration of this critique of public goods and the externalities market failure argument, see Hoppe (2003), Block (1983), Cowen (1988).

(4) If anything, the system is more often per verse. Since the "squeaky wheel tends to get the grease," it is often the case that the worst schools get the lion's share of the funding, thus encouraging their mismanagement even more.

(5) Of course, this does not mean that this course of action is politically feasible, an entirely different matter.

(6) School vouchers are a variant of socialism called market socialism (Arnold, 1994; Bradley, 1981: Murrell, 1983; Roemer and Bardhan, 1992. Yunker, James A. 1995; http://en.wikipedia. org/wiki/Market_socialism). The government still retains overall control of the industry, but incorporates a veneer of pricing. This was the economic model adopted by Tito. For a critique of the economic system in the arena of environmentalism, see McGee and Block, 1994.

Gregory Rome, Loyola University. Walter Block, Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics, College of Business Administration, Loyola University New Orleans.

Correspondence concerning this article should be addressed to Walter Block at
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Author:Block, Walter
Publication:Journal of Instructional Psychology
Geographic Code:1USA
Date:Mar 1, 2006
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