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Thursday, April 19, 2012

Is Federal Spending On Education Worth The Money?

"Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain." — Frédéric Bastiat (The Law)

Firstly I apologize for using this quote from Frédéric Bastiat once again, but I find it the most appropriate for my following post on education in America. It appears Bastiat’s writings are as valid today as they were when he first wrote them. In the case of education Bastiat hit the nail on the head 164 years ago.

Many philosophers like Locke, Montesquieu, and Smith have made important contributions to the discourse on liberty and the rights of property, Bastiat among them. But Bastiat’s greatest contribution is that he took the discourse out of the ivory tower and made ideas on liberty so clear that even the unlettered can understand them and statists cannot obfuscate them. Clarity is crucial to persuading our fellowman of the moral superiority of personal liberty.

In the nineteenth century, however, there was one champion of freedom who mastered the art of making the complexities of economic reasoning understandable to the layman: the French classical-liberal economist Frederic Bastiat (1801–1850). More than one historian of economic thought has emphasized Bastiat’s special abilities in undermining the rationales for protectionism, socialism, and interventionism.

Like others, Bastiat recognized that the greatest single threat to liberty is government. Notice the clarity he employs to help us identify and understand evil government acts such as legalized plunder. Bastiat says, “See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.” With such an accurate description of legalized plunder, we cannot deny the conclusion that most government activities, including ours, are legalized plunder, or for the sake of modernity, legalized theft.

As the economist Henry Hazlitt rightly emphasized, the central idea in much of Bastiat’s writings is captured in his essay “What Is Seen And What Is Not Seen,” which was the last piece he wrote before his death in 1850. He points out that the short-run effects of any action or policy can often be quite different from its longer-run consequences, and that these more remote consequences in fact may be the opposite from what one had hoped for or originally planned.

Bastiat was able to apply the principle of the seen and the unseen to taxes and government jobs. When government taxes, what is seen are the workers employed and the results of their labor: a road, a bridge, or a canal. What is unseen are all the other things that would have been produced if the tax money had not been taken from individuals in the private sector and if the resources and labor employed by the government had been free to serve the desires of those private citizens. Government, Bastiat explained, produces nothing independent from the resources and labor it diverts from private uses. This is also called “opportunity cost.”

This simple but profoundly important insight is the theoretical weapon through which Bastiat is able to demonstrate the errors and contradictions in the ideas of both protectionists and socialists. Thus in such essays as “Abundance and Scarcity,” “Obstacle and Cause,” and “Effort and Result,” he shows that barriers and prohibitions to freedom of trade only lead to poverty.

He points out that each of us is both a consumer and a producer. To consume a good we must either make it ourselves or make some other good that we think someone else will take in exchange for the good we want. As consumers we desire as many goods as possible at the lowest possible prices. In other words, we want abundance. But as producers we want a scarcity of the goods we bring to market. In open competition, in which all exchanges are voluntary, the only way to “capture” customers and earn the income that enables each of us, in turn, to be a consumer is to offer better, cheaper, and more goods than our competitors. The alternative to this method, Bastiat warns, is for each of us as a producer to turn to the government to gain from our neighbors what we are unable to obtain through peaceful, nonviolent trade on the market.

Herein lays Bastiat’s famous distinction between illegal and legal plunder, which is at the center of his analysis in The Law. The purpose of government, he says, is precisely to secure individuals in their rights to life, liberty, and property. Without such security men are reduced to a primitive life of fear and self-defense, with every neighbor a potential enemy ready to plunder what another has produced. If a government is strictly limited to protecting men’s rights, then peace prevails, and men can go about working to improve their lives, associating with their neighbors in a division of labor and exchange.

But government can also be turned against those whom it is meant to protect in their property. There can arise legal plunder, in which the powers of government are used by various individuals and groups to prevent rivals from competing, to restrict the domestic and foreign trading opportunities of other consumers in the society, and therefore to steal the wealth of one’s neighbors. This, Bastiat argues, is the origin and basis of protectionism, regulation, and redistributive taxation.

But the consequences of legal plunder are not only the political legitimizing of theft and the breakdown of morality through the blurring of the distinction between right and wrong—however crucially important and dangerous these may be for the long-term stability and well-being of society. Such policies also, by necessity, reduce the prosperity of the society.

By now you are no doubt asking what all of this has to do with government spending on education — everything.

In a recent column, David Brooks considers Charles Murray’s thesis that “America is coming apart,” and concludes that:

“The American social fabric is now so depleted that even if manufacturing jobs miraculously came back we still would not be producing enough stable, skilled workers to fill them. It’s not enough just to have economic growth policies. The country also needs to rebuild orderly communities.

This requires bourgeois paternalism: Building organizations and structures that induce people to behave responsibly rather than irresponsibly and, yes, sometimes using government to do so.

Social repair requires sociological thinking. The depressing lesson of the last few weeks is that the public debate is dominated by people who stopped thinking in 1975.”

The first recommendation is reasonable. The second suggests Brooks is not very familiar with the history of education.

For the past century and a half, the biggest single intervention by the government in American lives has been our state school systems. Prior to the mid-1800s, all education in this country was local. The majority of children attended private schools, and those who attended the local “common” or “public” schools usually paid tuition. Even “common” schooling was only free for the truly destitute. Partly as a result of this direct financial responsibility, parents had ultimate control over what and by whom their children were taught.

From the 1830s to the 1850s, Massachusetts state senator Horace Mann and his colleague in the House, James Carter, imagined and ultimately laid the foundation of the state school system we know today. They did so for a variety of reasons, one being their belief that the common man and woman could not be trusted to educate their own children. Their solution was to take educational power and responsibility out of parents’ hands and place it under the control of state-trained, state-appointed masterminds.

Shockingly, taking responsibilities away from people does not make them more responsible. Responsibility is like a muscle: use it, or lose it. The kinds of “organizations and structures that induce people to behave responsibly” are those that actually impose responsibilities upon them. When parents must not only choose but pay for their children’s education, they expect rather more from the system than when they are assigned “free” schooling by the state. And school efficiency rises as a result.

Some parents could not afford to pay for a good education for their children even without the heavy tax burden imposed by the present bloated state school monopolies. For those parents, we could easily provide financial assistance to cover most or (as necessary) all the cost of schooling. This is already being done on a small but growing scale in 8 states, thanks to k-12 education tax credit programs.

If Brooks wants “an organization and structure” that induces people to behave responsibly, he need look no further than the free enterprise system. “Using government” to achieve that end has been tried for 150 years, and the results are not impressive.

Education is, indeed, very important. But while Washington spends huge sums on things that are education-related, the riches produce almost nothing of educational value. If anything, the feds keep stuffing donuts into an already obese system.

Federal elementary and secondary education spending has risen mightily since the early 1970s, when Washington first started immersing itself in education. In 1970, according to the Federal Digest of Education Statistics, Uncle Sam spent an inflation-adjusted $31.5 billion on public K-12 education. By 2009 that had ballooned to $82.9 billion.


On a per-pupil basis, in 1970 the feds spent $435 per student. By 2006 — the latest year with available data — it was $1,015, a 133 percent increase. And it's not like state and local spending was dropping: Real, overall, per-pupil spending rose from $5,593 in 1970 to $12,463 in 2006, and today we beat almost every other industrialized nation in education funding.

What do we have to show for this?

Certainly more public school employees: Between 1969 and 2007, pupil-to-staff ratios were close to halved. Not coincidentally, these same people, through their teachers unions, powerfully and constantly politick for ever more spending and against reforms that will challenge their bloated monopoly. They also routinely defeat efforts to hold them accountable for results.

This constant feeding of special interests is why we've gotten zilch in the outcome that really matters — learning. Since the early 1970s, scores on the National Assessment of Educational Progress — the "Nation's Report Card" — have been utterly stagnant for 17-year-olds, our schools' "final products." In 1973 the average math score was 304 (out of 500). In 2008 it was just 306. In reading, the 1971 average was 285. In 2008 it was up a single point, hitting 286.

The higher education tale is much the same, especially for student aid, the primary college dumping ground for federal dollars. According to the College Board, in 1971 Washington provided $3,814 in inflation-adjusted aid per full-time equivalent student. By 2009-10 that figure had more than tripled, hitting $12,894.

By most available indicators this has been money down the drain. For instance, only about 58 percent of bachelor's seekers finish their programs within six years, if at all. Literacy levels among people with degrees are low and falling. And colleges have raised their prices at astronomical rates to capture ever-growing federal aid. Why shouldn’t they? After all if the taxpayer money is on the table why not take it for their bloated staffs and grandiose expansion schemes and programs.

Millions of the people taxpayers are sending to college are getting little if anything out of it, while the colleges rake in heavy dough. But that means the root problem isn’t the colleges — they are just taking the people government sends them — it is the federally dominated funding system that insists on giving dollars to almost any warm body that declares it wants to experience ivy-covered walls and frat parties.

Nobody wants to be the guy — especially the Congress-guy — who says that we need to cut education spending. Nobody wants to be the target of attacks from both the well-intentioned and politically opportunistic that they hate children, only care about “the rich,” or any of the other deviousness that long ago snuck up behind reasoned debate, threw a rope around its neck, and pulled it backwards. As Bastiat stated; “Then the socialists say that we are opposed to any education.”

If you address it honestly, it’s nearly impossible to deny that federal education meddling has been not just a failure, but a failure with all sorts of bizarre tendencies and unseen consequences. Several months ago, Education Secretary Arne Duncan warned that this year 82 percent of the nation’s public schools would be identified as failing under the No Child left Behind Act. A lot of people smelled pure politics behind the pronouncement — the administration wanted to unilaterally issue waivers from the law in exchange for states adopting POTUS-dictated policies — and today the Center on Education Policy released a report finding that only about 48 percent of schools “need improvement” under NCLB.

Wait, 48 percent? Isn’t that still really high?

It certainly seems so, but who the heck even knows? Every state sets its own standards-and-testing regime and most appear to have gamed the system wildly to stay out of trouble. So are all our schools failing? Half? And what even constitutes failing? No one knows, and few politicians appear willing to talk straight about it. Of course, most probably have no idea what should constitute math and reading “proficiency” — the law’s goal — to begin with. Indeed, it’s an extremely subjective designation for anyone to make, though some in Washington act like they pretty much know what it is.

Obviously, no sane individual would ever construct a system like this. But politically, all this illusion and contortion makes sense: Every politician wants to be seen as the savior of our children, but never wants the abuse that would come with creating and enforcing high standards, or being honest about progress made — or not made — under his or her watch. So we get all this sound, fury, and when you compare spending to test scores, educational nothing.

Now, you’d think just the sheer lunacy of federal education policy making would make it clear to all that Washington should get out of education. And if that didn’t do it, the abysmal track record absolutely would. But no: Today the U.S. House of Representatives – the legislative body supposedly full of angry, tea-guzzling Republicans — produced their FY 2012 appropriations bill. And by how much did they cut the U.S. Department of Education budget? 20 percent? 2 percent? No, a microscopic 0.2 percent! A $153 million quark out of a $71.3 billion whale!

While office holders are wrongly considered our leaders by some — they are, in fact, our employees — you’d hope they’d lead a bit by ignoring short-term political consequences and cutting utterly failed programs. But that would be the triumph of hope over reality; politicians are as self-interested as anyone else, and will generally do only those things that help them keep or gain votes. So what must happen is that the public gets intimately familiar with the sick reality of federal education policy and votes based on it. And that means those of us who know the truth, must do a better job of getting that word out and helping education policy to finally meet reality.

If Brooks wants “an organization and structure” that induces people to behave responsibly, he needs look no further than the free enterprise system. “Using government” to achieve that end has been tried for 150 years, and the results are not impressive.

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