Milton Friedman and The Confederates

Milton Friedman takes a half punch in today’s NY Times Opinion Section.  Given that it is the 105th anniversary of his birth, let’s take a closer look at the punch.   Before I start, I am happy to see that the New York Times has treated Milton Friedman’s ideas rather well over the last year.

But, today’s NY Times Opinion piece zig-zags from discussing Friedman’s ideas for vouchers and then provides a history lesson that criticism of public schools (and thus support for private schools) is really a U.S Confederate idea meant to perpetuate bigotry and slavery.   The initial intent of the Confederate policy back in the 1860s  is interesting but I don’t know if it is relevant for today’s debate.

Here is what I do know.

1. Human capital is the key to economic growth for both a family and for a nation.  My family’s income soared as my father invested in human capital.  South Korea has recreated its economy over the last 60 years as it has invested in human capital.

2. Most Americans attend public schools.  Many U.S public schools are under-performing.  Most public schools are unionized and this compresses the pay schedule (and thus affects who enters the field), ties pay to seniority (rather than performance) and stifles innovation (such as using Khan Academy and other new approaches to teaching).  Teacher tenure weakens effort incentives and decays morale.

3.  In markets where consumers have more choice, their consumer surplus increases.  Yes, it is an interesting question whether parents “know how to shop” for a good school for their kid and how they would tradeoff perceived school quality, commute time and the market tuition price but markets work in many other settings.

4.  If Schools had to compete for students, would they compete on human capital quality or on frivolous attributes such as free candy for students who attend and free t-shirts?   This is a serious question.

5.  Under Friedman’s school voucher approach, who would now enter teaching as a career?   Would the prestige and pay in teaching improve?  What is the medium term supply curve for high quality schools?   Standard NBER reduced form economics research cannot answer this general equilibrium question.

NOW, returning to the piece by Katherine Stewart — what interests me here is the following “bundling point”.   Public schools serve at least 2 functions. First, by investing time at a publich school , I raise my own human capital.  Second,  I assimilate into the broader culture.  Each morning when you say the Pledge of Allegiance, you are assimilating.   It is possible that private schools are better at function #1 but worse at function #2 while public schools are worse at #1 and better at #2 (because they pool diverse students, ignoring opt outs by private school students).  How do we evaluate this tradeoff?

 I believe that Stewart is concerned that in a world of private schools that full “Tiebout Sorting” would occur (so climate skeptics wouldn’t be confronted with climate science) and that there wouldn’t be the intellectual assimilation required for a society to operate.  This is an interesting claim.  She must be thinking that a child’s world view is a function of parents and school.  If parents have  a certain set of beliefs that they teach at home such as that the world is flat, and if the parent picks the child’s private school, then the child will have a different Bayesian posterior beliefs about the world relative to what the child’s worldview would be if she has the same parents but attended a public school.  This “persistence” of beliefs across generations and the role that public institutions play in attenuating such inter-generational correlations would be a great research question.