What follows on this and the linked sub-pages is an excerpt from chapter 9 “From Here To There: Education” of the book:
Apart from the direct influence of your parents, nothing is more important than a good basic education for setting you up for success in life. Back when discussing higher education in chapter 5, we explained that, tragically, education is a sector especially damaged by welfare statist taxation, regulations, and subsidies. Welfare statism has made education worse, more expensive, and massively time-wasting. Parents are not allowed to vote with their values and their wallets, and educators are not allowed to create curricula and teaching methods without regulatory approval. And entrepreneurs and investors are not permitted to pursue their educational vision on a level playing field without competing with subsidized government (public) schools and dealing with costly government regulations.
We pointed out that education is the only major sector that hasn’t seen major improvements in quality and, besides healthcare, the only sector where costs haven’t been reduced in real terms over the past 100 years. You may not think of today’s government (public) education as expensive because you don’t get a regular bill in the mail. But you pay for it dearly in the form of federal and state taxes, and property taxes or rent (depending on if you own or rent your home). And you, your parents, and grandparents have paid a very steep price through the lack of progress in education.
And we also touched on the subject when discussing K–12 education in the same chapter, explaining that whether you own or rent your home, part of the property taxes you or your landlord are forced to pay fund the local government (public) schools. The fact that a good chunk of your hard-earned money goes to the local schools makes school choice unaffordable for all but the wealthy, who can afford to enroll their children in private schools, or the extremely dedicated, who decide to teach their children at home. However, they cannot fully escape either, because private, and to some extent home schools, are subject to stifling regulations as well.
As a contrast, we described the vision of what a basic education would look like in a capitalist social system, explaining that, as you prepare for the birth of your child, you start to explore education alternatives. You’re probably inundated by childcare and education providers offering their services. You focus on the options that best fit your values and your wallet. With property taxes for education a thing of the past, you have more money available for education. Your choices include everything from the Walmart of basic education in your neighborhood to costly boutique alternatives. And the online education equivalent of Amazon offers stiff competition to brick-and-mortar schools.
The comparison we used was that just as an inexpensive small car today is almost of as good quality as a large luxury model, your child’s education is a good one, whether the Walmart, Amazon, or boutique version. Many schools offer scholarships and scaled tuition rates to attract families of different background. And if you need it, affordable private financing is easy to come by because, under capitalism, a child’s education is considered one of the best and safest investments around.
And in the section about higher education, we also said that in a capitalist social system, concerns about college affordability is a marginal issue as most people likely won’t need higher education because basic education will be inexpensive and high quality. Under capitalism, your parents’ values and wallets guide them to what they think is best for you, and they have an abundance of affordable, quality options to choose from.
And we outlined how, as you finish your basic, high-quality education, perhaps around age 15, you entertain (with your parents’ consent) exciting job offers from a variety of employers, many that provide training programs for skills that you didn’t learn in school. We explained that in today’s high-tech, industrial world, generally employers look to hire you for the thinking skills that you developed while in school. With that base, they can teach you, and you can learn, pretty much anything on-the-job. A few specialized professions such as medicine, law, engineering, and natural science require additional study for which future employers, banks, and other financial institutions compete to provide financial support. But most professions are taught on-the-job through a mix of on- and offsite classroom theory and real-life practice without the need for financial aid. To cover the costs involved, some employers who offer extensive training might offer employment contracts that require either a certain term of employment or a repayment option should you choose to leave early.
As with healthcare and retirement, we need to set a moral groundswell in motion to lay the foundation for transitioning from the current welfare statist government (public) education model to a system where the individual rights of parents, educators, entrepreneurs, and investors are respected. Education is possibly the hardest nut to crack in this respect. As we commented earlier, for most Americans, government (public) education is as American as apple pie. Going back to the 19th century, education has been considered a “common good” to be provided for by society. But as we learned back in chapter 2, the “common good” is not a justification for violating individual rights. Many realize the shortcomings of government (public) education and have tried and are trying to reform the system, but few advocate abolition. Yet, abolition is what is needed for the morally Right to triumph and for your right to be fully in control of your child’s education to be respected.
So how do we achieve it? As in other areas, options abound. Here are but a few examples of initiatives that will get us there:
1. Repeal all federal education laws and regulations.
The federal government regulates curricula (Common Core, Head Start, etc.) and sets conditions for receiving federal funding (see below). Repealing both education laws and regulations will allow state governments and local school districts to experiment with transition solutions without federal interference.
2. Phase out federal funding of education over a predetermined period.
Today the federal government subsidizes both K–12 and higher education through some 110 different programs.24 The subsidies come with strings attached that limit the flexibility of states and school districts. One approach to disengage the federal government is to turn today’s subsidies into block grants to states and school district without any strings attached, and to cut federal funds by 10% per year. This will give the recipients 10 years to gradually adjust and encourage them to pursue alternative funding solutions.
3. Phase out federal income tax deductions for local property taxes funding education over a predetermined period.
The federal income tax deduction for the education portion of your property taxes is a hidden subsidy for government (public) education, as a large part of education funding comes from property taxes. Phasing out the deduction, say, over 5 years, will help level the playing field between school districts and private educational initiatives, as it will move us closer to a true cost comparison between the two. The comparison is not perfect as all property owners pay government (public) school taxes, not just parents with school age children, but phasing out property tax deductions is an important step in the right direction.
4. Repeal state education regulations.
States heavily regulate myriad aspects of education, including class sizes, school environments, curricula, and teacher licensing. Repealing these regulations will prompt reforms by local governments. More importantly, getting rid of state regulations will make room for more private initiatives by small educational coops, neighborhood schools, and larger Walmart-style schools, as well as by tutoring and online education ventures.
The main driver for repeal will be the moral groundswell we talked about earlier. As state and local politicians sense where the wind is blowing, they will start to adjust their positions to remain electable. Some states and school districts will be faster to transition than others. The early successes of those taking the lead will both set examples for and put pressure on states that lag behind.
5. Phase out federal student loans.
Phasing out federal student loans by, for example, reducing the maximum available loan amounts by 10% per year will force higher education institutions to innovate in order to stay relevant, to prioritize and prune their offerings, and to compete more on price. We’ll most likely see a continued surge in online education alternatives. And we’ll see more private financing by for-profit institutions and charities favoring curricula that actually help students land a job. And as basic education improves in quality, higher ed will start to shrink. Because, as we mentioned earlier, why spend time and money on an expensive degree when employers will train you on the job?
What about charter schools? Today, to receive government funding, they must abide by most of the same regulations applied to traditional government (public) schools, and they face strong opposition from teachers’ unions. In a transition to capitalism in education, charter schools will most likely play a limited role. But those already in existence will likely morph into blossoming private schools once the above deregulatory efforts are underway.
And home schooling will most likely diminish in importance as parents find affordable school alternatives catering to their particular values and their vision for how their children should be educated. Admittedly, some of this is the stuff that dreams are made of. But hopefully this discussion helps you get a glimpse of the possibilities that abound in transitioning from welfare statism to capitalism in education once the moral groundswell has created a climate for change. If you are in school today, you may not reap the benefits. But your children and grandchildren will face a brighter educational future.
Think Right or Wrong, Not Left or Right 