Saturday, August 25, 2007

me and DowBlog on (education) vouchers

My good friend, Darrell Dow, recently blogged on his concerns about educational vouchers-- in response to one of my recent postings. (I'll post this here and in the comments section of DowBlog.)

Darrell's opening wraps up with:
As with many libertarian and conservative supporters of vouchers, Eric believes a voucher program would protect the religious freedom of parents and students, result in taxpayer savings, and ultimately improve educational services by breaking the monopoly of state schools.

This is accurate as far as it goes, but I would have written it somewhat differently. These differences help me address some of his later concerns, so I'll go ahead and make the points here:

1.) I would say instead that "A voucher program would not necessarily compromise the religious freedom of parents and students significantly." (In other words, I would express this as a negative rather than a positive.) Vouchers might have the worrisome impact Darrell worries about-- for a variety of reasons-- but it is not necessary.

2.) I would add that "Greater competition would be an especial boon for those in the lower income classes, especially in the inner cities." In my view, this is a vital addition to the discussion, since we're talking about fighting against gross injustices propagated by the government against many of its most vulnerable citizens. One can easily make a Biblical case for Christian advocacy in such cases.

Following up on #1:
Darrell has listed reasons for concern and examples to boot. Indeed, government control over universities has resulted in regulation (albeit modest). But food stamps have not resulted in significant regulation impacting the operation of farms or grocery stores. (The government regulation of salt shakers seems to be independent of its provision of food vouchers to the poor.) Is regulation of education a potential realm for government involvement? Yes, we see that already. Does the probability of thicker regulation increase with government funding? Yes. Is it a given? No.

Along the same lines, the Shaw vs. Wallas debate in Darrell's opening is quite interesting, but only begs the question. Their positions resulted from their predictions about what the reform might do-- not what we know that it would actually do.

OK, so that's dealing with the government's angle. What about Christian schools? Would they be tempted? Some? Yes. Many? Maybe. All? No. How many? We don't know...Is the unknown cost of the temptation (which could be refused easily enough) worth the certain and tremendous gains to the rest of society, especially many of its most vulnerable members? I think so...

Darrell also expresses concerns about vouchers inflating the cost of education:

As a practical matter, would vouchers decrease the cost of education by making services more efficient? Have Medicare and Medicaid decreased the cost of health care? Have Pell Grants, the GI Bill and other forms of federal aid decreased the cost of a college education? Similarly, it is likely that vouchers would increase the cost of private education. Dumping money willy nilly into schools that by and large operate frugally and efficiently compared to government schools is simply a recipe for educational inflation.

The analogy doesn't work (or at the least, is weaker than supposed) since the larger issues with health care and government involvement are its subsidies for purchasing health insurance. Because health insurance comes through the firm and is not taxed, it is subsidized as a non-taxed form of compensation. In addition, firms often have slight economies of scale in purchasing insurance services in bulk. The result is, ironically, over-insurance for most of those who have it-- with too many services covered and co-pays/deductibles that are too low.

This may sound counter-intuitive at first. But consider the role that insurance usually plays; it generally protects the insured from rare, catastrophic events. In contrast, health insurance covers everything-- from allergy shots to cancer. By analogy, car insurance would provide coverage for oil changes, door dings, air filter and tire changes, etc. Imagine how expensive such "insurance" would be, how screwed up our market for car insurance would become, the tremendous paperwork generated by such "insurance", how expensive such routine services would become, etc.

Second, the cost of college education has increased, mostly, due to reduced subsidies from state government. Tuition is higher as a result. Thus, the cost to consumers has increased. But the overall cost-- to consumers and taxpayers-- has increased much more modestly.

Bottom line: vouchers, if constructed well, would put little if any upward pressure on costs-- especially compared to the current cost disincentives of operating a government monopoly!

In closing:

I agree with Darrell about ideal policy and about the Christian imperative that education would be largely/primarily a matter of the family. And I share his concerns about the potential for a connection between government funding and regulation. I think we both agree about the practical impact of vouchers in the market for education. But we differ on the magnitude of that concern-- and the desire to reach for "compromise" measures that would clearly do much good in the face of current injustice.

3 Comments:

At August 29, 2007 at 10:02 AM , Blogger Unknown said...

Vouchers might have the worrisome impact Darrell worries about-- for a variety of reasons-- but it is not necessary.

It may not be necessary - but it is likely. In fact, I would say it is an inevitability. There are already large groups (i.e. the NEA) who decry various modes of private education - particularly homeschooling because "we" can't be sure what they're teaching, etc.

It is a constant battle to push these people back from fully private instruction, so that they can't set "standards" for curriculum and subject matter. It is that much more difficult when they accept government benefits - whether it be vouchers, or even just accreditation.

In my view, this is a vital addition to the discussion, since we're talking about fighting against gross injustices propagated by the government against many of its most vulnerable citizens. One can easily make a Biblical case for Christian advocacy in such cases.

First, I don't think it is 'injustice' for there to be some people who can afford better and more education than others. Is it injustice that some people could afford to go to Harvard and Yale when I could only afford a small private college?

Second, if they are truly that bad off, then a voucher is not likely to help them. Even if we assume no inflation from the voucher program the amount such people would get back out of just their own taxes would not be sufficient to cover the costs of private education. So then you get into redistribution of wealth.

Third, if there is an injustice, it is (as you stated) a result of government action. The existence of "free" (in the view of the masses) public education drives down the available market for private schools and raises costs for everyone. If you want to solve this injustice, we do it by eliminating government schools, or at least eliminating them as a federal entity - and maybe even a state entity.

But food stamps have not resulted in significant regulation impacting the operation of farms or grocery stores.

Actually, they have, and it is that regulation that prevents what I think you're looking for. Those grocery stores are only allowed to sell certain kinds of items in exchange for those stamps. While we can argue that if you're going to have a program like food stamps that makes sense (you don't want them using it to buy twinkies and cigarettes) it is still not a big leap between that and vouchers that require that subjects A, B, and C be taught and not D, E, and F.

Perhaps we could also look at the federal government and how it deals with the states in terms of "Road money". It never hesitates to use the threat of withholding that money to twist their arms into doing what they want.

Is the unknown cost of the temptation (which could be refused easily enough) worth the certain and tremendous gains to the rest of society, especially many of its most vulnerable members? I think so...

I would say no, it's not worth it. This is the problem with so many politicians (and voters) today. Short-sightedness and no respect for the law of unintended consequences. It is already very difficult to find a good school, and it is difficult for the school to function in that manner. It is already difficult for a Christian private school - especially one that sees itself as a ministry - to make ends meet. Especially when trying to help lower-income families. That's a pretty serious temptation to accept from them, and could come with very serious consequences.

When that regulation does come, now they are faced with a choice. Lose the vouchers and the additional operating income they mean for the school - as well as likely throwing out a number of lower income families who will no longer be able to afford the tuition - or accept this "little" compromise. And then that compromise, and that one, etc.

As for inflation, I still agree with Darrell. I understand what you're saying about Health insurance, and you aren't entirely wrong. I would just argue that the current state of things is the end of a long path. Government inflating the cost of health care through its social programs is undeniable IMO. As that cost inflated, the private cost of insuring against it had to go up too. Now, it is difficult for most individuals to get their own coverage and it has become what you described below which has only made the problem worse.

Second, the cost of college education has increased, mostly, due to reduced subsidies from state government.

Reduced subsidies would potentially lead to the higher cost - but it's unlikely. The real problem here isn't the institutions just asking for more money. The problem is that the government providing "free money" or "cheap credit" itself inflates the currency causing a reduction in the buying power of the very money they give out - not to mention the additional money paid to cover the total cost. By its very nature, federal grants and loans increase the cost of education.

Vouchers, at least, are not "creating money", but they are targeted at a different group of schools. There is a wide market for private high-quality colleges. This is not the case for private schools on the same scale.

Some schools then, operate extremely frugally. For them vouchers would be a huge temptation to raise the cost of tuition a bit to give more breathing room.

Others have a very high cost, because that's what the market will bear for the quality of education they are providing. For these schools, the vouchers will raise the price, and no benefit will be seen to the families.

Lastly, something Darrell didn't cover but which has always been an issue for me is that vouchers are a bone. They're not an answer to the real problem. Worse, their opponents will not give up just because they're passed. They will become the locus of a new debate, and parents who use them will be blamed for stealing money from the school system and for any failures it sees going forward.

From there, it isn't a far leap from abolishing them becoming a campaign issue for liberals. Now what happens to the schools that have come to depend on them? To the *parents* that are depending on them? The parents who were not depending on them, but will now have to bear the increased costs of tuition now that they're gone?

 
At September 2, 2007 at 11:20 PM , Blogger Eric Schansberg said...

Shamgar, that was quite a post! To respond to a few things beyond what I said earlier, to clarify a few things-- where it would have some value-added (beyond just he said/he said speculation about the impact of vouchers)...

-Allowing the same government monies to go to parents instead of schools is a clear improvement for the plight of the poor and lower middle classes, especially in the inner cities.
-I would prefer a state role in all of this over a federal role.
-The amount of inflation on private school tuition is a function of the size of the voucher. If the voucher is modest (as is commonly proposed), the impact would be modest as well.
-We didn't mention this previously, but if the voucher is less than the per-student spending at present, taxpayers are better off.
-I agree that govt has contributed to the increasing cost of health care-- through subsidies and a variety of regulations in the health care field. But those factors pale beside the subsidy for health insurance and the over-insurance that follows.

 
At September 3, 2007 at 4:19 PM , Blogger Unknown said...

Shamgar, that was quite a post!

Yes....I can be quite long-winded. I neglected to check how long it was when I finished writing it before posting. :-)

 

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