Category Archives: Milton Friedman

Op-Ed: Milton Friedman’s role of government in education

Milton Friedman – Public Schools / Voucher System

Published on May 9, 2012 by

JANUARY 24, 2023 3:48PM
File:President Ronald Reagan and Nancy Reagan in The East Room Congratulating Milton Friedman Receiving The Presidential Medal of Freedom.jpg

Op-Ed: Milton Friedman’s role of government in education

By William Haupt III | The Center Square contributor

“It’s a disgrace that there is more illiteracy today than there was 100 years ago.” – Milton Friedman

For decades after the American Revolution, our parents were the drivers of how and where their children were educated. Parents chose from home schools and private schools to educate their children. The first state public-funded schools appeared in the 1840s. But it was not until the 1900s during the Progressive Era that government gained control of funding and regulating education.

As government took more control of education, parents became subordinate to central education manipulation. Government dictated everything in every classroom. When Jimmy Carter married the National Teachers Union with the Department of Education in 1979, government and unions took ownership of education. If parents did not like local education, they had to pay for private schools.

Milton Friedman was an economist that rejected Keynesianism, the theory that government could control the economy better than free markets. Friedman’s view was based on the concept of free markets and “rational expectations.” Friedman theorized that free market competition is the most powerful tool in our nation to surpass any and all expectations we can expect from government.

Following the second Great War in the 1950s, Communists in Eastern Europe proved what a dangerous tool education was in the hands of government. A young economist, Milton Friedman did not want to see that in America and penned his thesis, defining “The Role of Government in Education.”

“A student’s education should not be determined by government but their parents.” – Milton Friedman

Friedman felt it was necessary for government to fund education, but it had no right to administer it. He believed monopolized government control of public education empowered the government to indoctrinate young minds into thinking the way politicians want students to think, not their parents. He blamed federal and union control of education for stagnant and declining student test scores.

Pointing to the economic success of market consumer choice and competition, Friedman blamed the lack of consumer choice on our inferior education system.

“It is unjustified for any government to have absolute monopolistic control over any commodity in the free markets.” – Milton Friedman

Milton Friedman said lack of competition in a nation built and dependent on free market principles produces inferior products. If we apply these economic principles to a non-responsive government-administered education program, competition for education dollars would vastly improve education.

According to Friedman, to improve education we must find better methods to administer it and to finance it. He insisted, instead of government making the decisions how and where children are educated, they should provide education vouchers to parents to use for schools of their choice.

Friedman believed giving parents education vouchers would empower them to “improve education” though free market competition, which in turn would force the government’s inferior public school system to improve. As more and more parents choose private and chartered schools over failing public schools, the public-school systems would be responsive to parental concerns and improve.

“Most arguments against the free market is a lack of belief in freedom itself.” – Milton Friedman

Six decades later, we have living proof that Friedman’s “The Role of Government in Education” is the logical foundation of the modern American school-choice movement. People isolated from the academic world are seldom exposed to innovative ideas and concepts. So Friedman’s article went largely unnoticed in the public. But once those seeds were planted, over time they have blossomed.

In 1989, Wisconsin put Friedman’s ideas into practice when it approved the first voucher program allowing students to use vouchers to pay tuition at private schools. Shortly after, 18 states passed similar voucher programs. Vouchers remain the most attractive private school choice programs.

“Do-it-yourself education beats factory production education anytime anyplace.”  – Milton Friedman

In 2003 during an education symposium, Friedman suggested there are many alternatives to public education. He cited education savings accounts would allow parents to use taxpayer funds to pay for tuition and other education expenses. In 2011, Arizona implemented the nation’s first education savings account option. Florida, Tennessee, Mississippi and North Carolina soon followed them.

A charter school is a tuition-free contract school, publicly funded, but independent from the public system. Friedman believed parents would support such a system. And this has come to fruition in over 40 states. According to the National Alliance for Public Charter Schools, many of the best-known charter school networks are run by nonprofit charter management organizations, or CMOs.

Private religious school choice was ruled constitutional when the Supreme Court ruled it was legal for Ohio’s Pilot Project Scholarship Program to provide vouchers for students to attend nonreligious and religious schools. The court held that the program neither advances nor inhibits religion at any school and that publicly funded school vouchers go to the parents rather than the private schools.

Milton Friedman and wife Rose founded the Friedman Foundation for Educational Choice in 1996 to promote freedom of choice in education. Today, it is simply called EdChoice. Although the name has changed, the mission lives on. There were only five education choice programs when it opened. Twenty years later, more than 400,000 students participate in 61 programs in 30 states.

Milton Friedman said, “Our mistake is to judge programs by their intentions not their results.” Our founders promised a quality education for every youth in the nation. But by the time this system was in place it was run by politicians not parents. A century later the system was in such disrepair Milton Friedman realized that the only way to repair it was to make it competitive in the free market.

The discussion of school choice stimulated by Friedman’s “The Role of Government in Education” has grown and has penetrated the broad public. Most parents and citizens now believe that more choice is needed and less government and union control. Giving parents the information about the deficiencies in public education and other education choices will result in better educated students.

The greatest flaw in public education is union run government schools. Proposed federal education reforms are the same as those that failed. They propose doing more of what we’ve already done: More money, smaller classes, increased teacher pay and benefits, more schools and expanded central control. “To the public union school system, school choice is a threat, not an improvement.”

“If we are really concerned that our children receive a quality education, we must empower parents and their children to have equal access to appropriate educational opportunities.” – Milton Friedman

Milton Friedman, School Choice Pioneer


As our new School Choice Timeline shows, calls for public funding to follow students to a variety of educational options date back centuries. However, Nobel Prize‐​winning economist Milton Friedman is often considered the father of the modern school choice movement.

In a 1955 essay, The Role of Government in Education, Friedman acknowledged some justifications for government mandates and funding when it comes to education. However, he said it’s difficult to justify government administration of education. He suggested governments could provide parents with vouchers worth a specified maximum sum per child per year to be spent on “approved” educational services.

Friedman would return to this idea repeatedly over the years in his writings and his popular Free to Choose television series. But he did more than just write and talk about his idea. In 1996, he and his wife Rose, who was also a noted economist, started the Milton and Rose D. Friedman Foundation for Educational Choice. Their original plan included the eventual removal of their name from the foundation, which happened in 2016; the organization is now known as EdChoice and is the go‐​to source for up‐​to‐​date information on school choice in America.

Milton Friedman had a remarkable life. He was born in Brooklyn in 1912 to parents who emigrated to the U.S. from eastern Europe. His father died during his senior year in high school, leaving his mother and older sisters to support the family. He managed to attend Rutgers University through a combination of scholarships and various jobs. After earning a degree in economics, he was awarded a scholarship to pursue a graduate degree at the University of Chicago, where he met his future wife, Rose. The Friedmans had two children, a son and a daughter.

Friedman’s list of accomplishments is astonishingly long. In addition to his 1976 Nobel Prize for Economic Science, he was awarded the Presidential Medal of Freedom and the National Medal of Science in 1988. He was a Senior Research Fellow at Stanford University’s Hoover Institution from 1977 to 2006, a distinguished economics professor at the University of Chicago from 1946 to 1976, and a researcher at the National Bureau of Economic Research from 1937 to 1981. He was a prolific writer of newspaper and magazine columns, essays, and books.

Milton Friedman’s focus on education choice made perfect sense in light of his other work. He had a consistent focus on preserving and expanding individual freedom. He saw parental control and the ability to choose the environment that worked best for individual children as essential to a quality education. His 1962 book Capitalism and Freedom included chapters on economic and political freedom, trade, fiscal policy, occupational licenses, and poverty, along with his earlier essay on the role of government in education.

In 1980, Milton and Rose released Free to Choose, a discussion of economics and freedom, as a book and a television series. One segment/​chapter asked, “What’s Wrong with Our Schools?” and then explained the importance of parents being able to choose what works for their individual children.

When the Friedman Foundation was launched, there were five education choice programs in the U.S. with fewer than 10,000 students participating. Today, according to EdChoice, there are 74 programs in 32 states, Washington, D.C., and Puerto Rico, with 670,000 students participating.

While there is a long and deep history of individuals and organizations calling for various forms of school choice, it is clear that Milton Friedman played an enormous role in its advance in the U.S. He helped lay the intellectual groundwork for the programs in place today, and his relatable writings and videos helped explain his ideas to parents, policymakers, and thought leaders. As we celebrate National School Choice Week—and Cato’s new School Choice Timeline—it’s a great time to commemorate Milton Friedman’s important contributions to the movement.

The School Choice Revolution

It’s time to celebrate another victory for school choice.

  • In 2021, West Virginia adopted statewide school choice.
  • In 2022, Arizona adopted statewide school choice.
  • In 2023, Iowa adopted statewide school choice.

Now Utah has joined the club, with Governor Spencer Cox approving a new law that will give families greater freedom to choose the best educational options for their children.

Here are some details from Marjorie Cortez, reporting for the Deseret News.

The Utah Senate gave final passage to legislation that will provide $8,000 scholarships to qualifying families for private schools and other private education options…The bill passed by a two-thirds margin in each legislative house, which means it cannot be challenged by referendum. …The bill creates the Utah Fits All Scholarship, which can then be used for education expenses like curriculum, textbooks, education, software, tutoring services, micro-school teacher salaries and private school tuition.

As you might expect, teacher unions and their allies are very disappointed – which is a very positive sign.

…the Utah Education Association…opposed HB215… The bill was also opposed by the Utah State Board of Education, Utah PTA, school superintendents, business administrators and school boards. The Alliance for a Better Utah was pointed in its reaction… “Conservative lawmakers just robbed our neighborhood schools of $42 million. Private school vouchers have been and continue to be opposed by Utahns but these lawmakers are instead pursuing a national agenda to ‘destroy public education.’

The Wall Street Journal opined on this great development.

School choice is gaining momentum across the country, and this week Utah joined Iowa in advancing the education reform cause. …Utah’s bill, which the Senate passed Thursday, 20-8, makes ESAs of $8,000 available to every student. There’s no income cap on families who can apply, though lower-income families receive preference and the program is capped at $42 million. The funds can be used for private school tuition, home-schooling expenses, tutoring, and more.

But the best part of the editorial is the look at other states that may be poised to expand educational freedom.

About a dozen other state legislatures have introduced bills to create new ESA programs, and several want to expand the ones they have. In Florida a Republican proposal would extend the state’s already robust scholarship programs to any student in the state. The bill would remove income limits that are currently in place for families who want to apply, though lower-income applicants would receive priority. …South Carolina legislators are mulling a new ESA program for lower-income students. In Indiana, a Senate bill would make state ESAs available to more students. An Ohio bill would remove an income cap and other eligibility rules for the state’s school vouchers. Two Oklahoma Senate bills propose new ESA programs… ESA bills are in some stage of moving in Nebraska, New Hampshire, Texas and Virginia.

Let’s hope there is more progress.

School choice is a win-win for both students and taxpayers.

P.S. Here’s a must-see chart showing how more and more money for the government school monopoly has produced zero benefit.

P.P.S. There are very successful school choice systems in CanadaSwedenChile, and the Netherlands.

P.P.P.S. Getting rid of the Department of Education would be a good idea, but the battle for school choice is largely going to be won and lost on the state and local level.

The Machine: The Truth Behind Teachers Unions

Published on Sep 4, 2012 by

America’s public education system is failing. We’re spending more money on education but not getting better results for our children.

That’s because the machine that runs the K-12 education system isn’t designed to produce better schools. It’s designed to produce more money for unions and more donations for politicians.

For decades, teachers’ unions have been among our nation’s largest political donors. As Reason Foundation’s Lisa Snell has noted, the National Education Association (NEA) alone spent $40 million on the 2010 election cycle (source: http://reason.org/news/printer/big-education-and-big-labor-electio). As the country’s largest teachers union, the NEA is only one cog in the infernal machine that robs parents of their tax dollars and students of their futures.

Students, teachers, parents, and hardworking Americans are all victims of this political machine–a system that takes money out of taxpayers’ wallets and gives it to union bosses, who put it in the pockets of politicians.

Our kids deserve better.

“The Machine” is 4:17 minutes.

Written and narrated by Evan Coyne Maloney. Produced by the Moving Picture Institute in partnership with Reason TV.

Visit http://www.MovingPictureInstitute.org to learn more.

No one did more to advance the cause of school vouchers than Milton and Rose Friedman. Friedman made it clear in his film series “Free to Choose” how sad he was that young people who live in the inner cities did not have good education opportunities available to them.

I have posted often about the voucher system and how it would solve our education problems. What we are doing now is not working. Milton Friedman’s idea of implementing school vouchers was hatched about 50 years ago.

Poor families are most affected by this lack of choice. As Friedman noted, “There is no respect in which inhabitants of a low-income neighborhood are so disadvantaged as in the kind of schooling they can get for their children.” It is a sad statement quantified by data on low levels of academic achievement and attainment. Take a look at this article below.

Lindsey Burke

September 25, 2012 at 5:46 pm

SAT scores among the nation’s test-takers are at a 40-year low.

As The Washington Post reports:

Reading scores on the SAT for the high school class of 2012 reached a four-decade low, putting a punctuation mark on a gradual decline in the ability of college-bound teens to read passages and answer questions about sentence structure, vocabulary and meaning on the college entrance exam.

The decline over the decades has been significant. The average reading (verbal) score is down 34 points since 1972. Sadly, the historically low SAT scores are only the latest marker of decline. Graduation rates have been stagnant since the 1970s, reading and math achievement has been virtually flat over the same time period, and American students still rank in the middle of the pack compared to their international peers.

On the heels of the news about the SAT score decline, President Obama filmed a segment with NBC’s Education Nation earlier today. The President notably praised the concept of charter schools and pay for performance for teachers.

But those grains of reform were dwarfed by his support of the status quo. During the course of the interview, President Obama suggested hiring 100,000 new math and science teachers and spending more money on preschool. He also stated that No Child Left Behind had good intentions but was “under-resourced.”

Efforts by the federal government to intervene in preschool, most notably through Head Start, have failed—despite a $160 billion in spending on the program since 1965. And No Child Left Behind is far from “under-resourced.” The $25 billion, 600-page law has been on the receiving end of significant new spending every decade since the original law was first passed nearly half a century ago.

President Obama was also pressed on the issue of education unions by host Savannah Guthrie:

Some people think, President Obama gets so much support from the teachers’ unions, he can’t possibly have an honest conversation about what they’re doing right or wrong. Can you really say that teachers’ unions aren’t slowing the pace of reform?

President Obama responded: “You know, I just really get frustrated when I hear teacher-bashing as evidence of reform.”

Criticizing education unions for standing in the way of reform should not be conflated with criticizing teachers, as the President does in the interview. The unions have blocked reforms such as performance pay and charter schools (which the President supports), have opposed alternative teacher certification that would help mid-career professionals enter the classroom, and have consistently fought the implementation of school choice options for children.

If we ever hope to move the needle on student achievement—or see SAT scores turn in the right direction again—we’ll need to implement many of those exact reforms, particularly school choice.

And as he has in the past, President Obama stated that his Administration wants to “use evidenced-based approaches and find out what works.” We know what works: giving families choices when it comes to finding schools that best meet their children’s needs. Instead of continuing to call for more spending and more Washington intervention in education, let’s try something new: choice and freedom.

Related posts:

Milton Friedman remembered at 100 years from his birth (Part 4)

I ran across this very interesting article about Milton Friedman from 2002: Friedman: Market offers poor better learningBy Tamara Henry, USA TODAY By Doug Mills, AP President Bush honors influential economist Milton Friedman for his 90th birthday earlier this month. About an economist Name:Milton FriedmanAge: 90Background: Winner of the 1976 Nobel Prize for economic science; […]

Milton Friedman videos and transcripts Part 11

Milton Friedman videos and transcripts Part 11 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Open letter to President Obama (Part 117.3)

A Taxing Distinction for ObamaCare Published on Jun 28, 2012 by catoinstitutevideo http://www.cato.org/publications/commentary/it-now-falls-congress http://www.cato.org/publications/commentary/taxing-decision http://www.cato-at-liberty.org/supreme-court-unlawfully-rewrites-obamacare-to… http://www.cato-at-liberty.org/congress-its-not-a-tax-scotus-yes-it-is/ The Cato Institute’s Roger Pilon, Ilya Shapiro, Michael F. Cannon, Michael D. Tanner and Trevor Burrus evaluate today’s ruling on ObamaCare at the Supreme Court. Video produced by Caleb O. Brown and Austin Bragg. ____________ President Obama c/o The […]

Milton Friedman videos and transcripts Part 10

Milton Friedman videos and transcripts Part 10 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman videos and transcripts Part 9

Milton Friedman videos and transcripts Part 9 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman’s biography (Part 2)(Interview by Charlie Rose of Milton Friedman part 3)

Biography Part 2 In 1977, when I reached the age of 65, I retired from teaching at the University of Chicago. At the invitation of Glenn Campbell, Director of the Hoover Institution at Stanford University, I shifted my scholarly work to Hoover where I remain a Senior Research Fellow. We moved to San Francisco, purchasing […]

Milton Friedman at Hillsdale College 2006 (part 2)

Milton Friedman at Hillsdale College 2006 July 2006 Free to Choose: A Conversation with Milton Friedman Milton Friedman Economist Milton Friedman is a senior research fellow at the Hoover Institution at Stanford University and a professor emeritus of economics at the University of Chicago, where he taught from 1946-1976. Dr. Friedman received the Nobel Memorial […]

Milton Friedman videos and transcripts Part 8

Milton Friedman videos and transcripts Part 8 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman remembered at 100 years from his birth (Part 2)

Testing Milton Friedman – Preview Uploaded by FreeToChooseNetwork on Feb 21, 2012 2012 is the 100th anniversary of Milton Friedman’s birth. His work and ideas continue to make the world a better place. As part of Milton Friedman’s Century, a revival of the ideas featured in the landmark television series Free To Choose are being […]

Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

Free or equal? 30 years after Milton Friedman’s Free to Choose (Part 1)

Free or Equal?: Johan Norberg Updates Milton & Rose Friedman’s Free to Choose I got this below from Reason Magazine: Swedish economist Johan Norberg is the host of the new documentary Free or Equal, which retraces and updates the 1980 classic Free to Choose, featuring Milton and Rose Friedman. Like the Friedmans, Norberg travels the globe […]

Reason Magazine’s rightly praises Milton Friedman but makes foolish claim along the way

I must say that I have lots of respect for Reason Magazine and for their admiration of Milton Friedman. However, I do disagree with one phrase below. At the end of this post I will tell you what sentence it is. Uploaded by ReasonTV on Jul 28, 2011 There’s no way to appreciate fully the […]

Video clip:Milton Friedman discusses his view of numerous political figures and policy issues in (Part 1)

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2 Uploaded by PenguinProseMedia on Oct 25, 2011 Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman’s best interviews, discussion spans Friedman’s career and his view of numerous political figures and public policy issues. ___________________ Two Lucky People by Milton and Rose Friedman […]

Milton Friedman remembered at 100 years from his birth (Part 1)

What a great man Milton Friedman was. The Legacy of Milton Friedman November 18, 2006 Alexander Tabarrok Great economist by day and crusading public intellectual by night, Milton Friedman was my hero. Friedman’s contributions to economics are profound, the permanent income hypothesis, the resurrection of the quantity theory of money, and his magnum opus with […]

Milton Friedman videos and transcripts Part 7

Milton Friedman videos and transcripts Part 7 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Transcript and video of Milton Friedman on Bill Clinton and Ronald Reagan (Part 1)

Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in […]

Dan Mitchell’s article on Chili and video clip on Milton Friedman’s influence

Milton Friedman and Chile – The Power of Choice Uploaded by FreeToChooseNetwork on May 13, 2011 In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous […]

Celebrating School Choice? Thank Milton Friedman, too

Milton Friedman – Public Schools / Voucher System

Published on May 9, 2012 by

JANUARY 24, 2023 3:48PM
File:President Ronald Reagan and Nancy Reagan in The East Room Congratulating Milton Friedman Receiving The Presidential Medal of Freedom.jpg

Celebrating School Choice? Thank Milton Friedman, too

by Dr. Robert Luebke

Director of the Center for Effective Education, John Locke Foundation

January 25, 2021
  • In the 1950s, a young Milton Friedman argued that free market principles of consumer choice and competition were needed to remedy the nonresponsive and monopolistic system that controlled and delivered public education
  • Friedman’s work provided the intellectual foundations of the modern school-choice movement
  • If Friedman were alive today and came to North Carolina, he’d see school choice flourishing

In the decades after the American Revolution, parents were the drivers of how and where their children were educated. Parents could choose from private schools, tutors, and home schools as ways to educate children. In the mid-1840s, Massachusetts became the first state to lead a push for state-controlled and -funded public education. A century later, the rise of the Progressive Era saw government gain control over how schools were financed, administered, and regulated.

Along with these changes came a weakening in the ability of parents to control their child’s education. Of course, if parents didn’t like their child’s school or didn’t think it was a good fit, they could choose a private school — if they could afford it. If not, children were forced to attend the local public school, whether parents liked it or not.

In the mid-1950s, a young economist at the University of Chicago laid out a case for the role of government in education for its citizens in an article given the unassuming title of The Role of Government in Education. In it Milton Friedman acknowledged there is a case for government subsidizing public education, but not for government administering the schools. Friedman believed increased centralization and government control of public schools had led to less freedom and efficiency in education and a decline in quality. For government not only to finance education, but also largely to deliver education services was an arrangement Friedman considered unnatural as well as unjustified.

In his article Friedman argued that free market principles of consumer choice and competition were needed to remedy the nonresponsive and monopolistic system that controlled and delivered public education.

Friedman sought nothing less than to upend how American education was financed and administered. Instead of government deciding how and where children are educated, government would provide vouchers to parents for education or educational services at approved schools.

Friedman believed giving parents the power to “vote with their feet” would force monopolistic public-school systems to be responsive to parental concerns. He also was convinced that the use of vouchers would infuse competition among schools and encourage them to innovate and be more effective, qualities conspicuously absent from most public-school systems. Moreover, Friedman also thought it critical to separate the funding of education from the delivery of education services.

Six and a half decades later, it’s not difficult to see how “The Role of Government in Education” provided the intellectual foundations of the modern school-choice movement. People don’t always hear what they need to hear, so Friedman’s article went largely unnoticed outside the policy world. Those seeds took time to grow.

In 1989, Wisconsin become the first state to put Friedman’s ideas into practice when it approved a statewide voucher program that allowed low-income students to use vouchers to pay tuition at a private school. In 2013, North Carolina approved the Opportunity Scholarship Program, a similar program that today provides over 14,000 students with scholarships of up to $4,200 to help pay tuition at a local private school.

School choice today

If Milton Friedman were alive today and came to North Carolina, he’d see school choice flourishing. Today parents can choose from a variety of public and private school-choice programs. They include public options such as charter or magnet schools as well as private options such as the Opportunity Scholarship Program or the Special Education Scholarship Grants for Children with Disabilities.

Regarding charter schools, the table below shows that the number of students enrolled in charter schools has increased dramatically from over 38,000 in 2010 to over 117,000 today. Enrollment in private schools in the Tar Heel state saw modest growth over the last 10 years, while the number of home schoolers increased by 83 percent.

Over the past decade, while the average daily membership (ADM) enrollment in traditional public schools increased by just one half of one percent, the school-choice population in North Carolina expanded by 71 percent. Today over 370,000 students attend charter, private, and home schools and have access to a better education. Ten years ago, only 13 percent of students were enrolled in choice schools. Today nearly 80 percent of students still attend traditional public schools, but the number of students enrolled in choice schools has increased to almost 21 percent, up significantly from ten years ago.

K-12 Enrollment in North Carolina, by Type of School, 2010 and 2020

Schools 2010 Enrollment 2020 Enrollment Change, 2010–20
Traditional Public Schools (ADM) 1,402,269 1,409,391 0.5%
Charter Schools 38,449 117,264 204.9%
Home Schools 81,509 149,173 83.0%
Private Schools 96,421 103,959 7.8%
Total, Choice Schools 216,379 370,396 71.2%
Schools 2010 Enrollment 2020 Enrollment Percentage Point Change
Percentage of Students in Traditional Public Schools 86.7% 79.2% –7.5
Percentage of Students in
Choice Schools
13.3% 20.8% +7.5

Source: Highlights of the North Carolina Public School Budget, Statistical Profile of North Carolina Public Schools, and North Carolina Office of Non-Public Education (for specific years).

Friedman’s legacy

Friedman’s ideas have helped to fuel an education revolution in North Carolina and across the country. Choice empowers parents to make educational decisions, challenges monopolies, and calls out bureaucracies. Choice expands personal freedom but also highlights that accountability comes in different forms. In so doing, choice has helped to shift the public discussion of education from a focus on how much money is spent to how well money is spent.

Let’s be clear: Milton Friedman got it right. Choice benefits students, families, schools, and our communities. Today school choice continues to thrive because it empowers parents and students and enriches our communities. That’s not to say there haven’t been mistakes and growing pains. Nevertheless, having choices in education is far preferable. Choice recognizes what too many of our public schools ignore: children are different and learn differently.

If we are really concerned that our children receive a quality education, we must allow parents and children to access appropriate educational opportunities. As more and more families are empowered to make these choices, we should thank Milton Friedman for laying the intellectual groundwork for many of the school choice programs we enjoy today.

Milton Friedman, School Choice Pioneer


As our new School Choice Timeline shows, calls for public funding to follow students to a variety of educational options date back centuries. However, Nobel Prize‐​winning economist Milton Friedman is often considered the father of the modern school choice movement.

In a 1955 essay, The Role of Government in Education, Friedman acknowledged some justifications for government mandates and funding when it comes to education. However, he said it’s difficult to justify government administration of education. He suggested governments could provide parents with vouchers worth a specified maximum sum per child per year to be spent on “approved” educational services.

Friedman would return to this idea repeatedly over the years in his writings and his popular Free to Choose television series. But he did more than just write and talk about his idea. In 1996, he and his wife Rose, who was also a noted economist, started the Milton and Rose D. Friedman Foundation for Educational Choice. Their original plan included the eventual removal of their name from the foundation, which happened in 2016; the organization is now known as EdChoice and is the go‐​to source for up‐​to‐​date information on school choice in America.

Milton Friedman had a remarkable life. He was born in Brooklyn in 1912 to parents who emigrated to the U.S. from eastern Europe. His father died during his senior year in high school, leaving his mother and older sisters to support the family. He managed to attend Rutgers University through a combination of scholarships and various jobs. After earning a degree in economics, he was awarded a scholarship to pursue a graduate degree at the University of Chicago, where he met his future wife, Rose. The Friedmans had two children, a son and a daughter.

Friedman’s list of accomplishments is astonishingly long. In addition to his 1976 Nobel Prize for Economic Science, he was awarded the Presidential Medal of Freedom and the National Medal of Science in 1988. He was a Senior Research Fellow at Stanford University’s Hoover Institution from 1977 to 2006, a distinguished economics professor at the University of Chicago from 1946 to 1976, and a researcher at the National Bureau of Economic Research from 1937 to 1981. He was a prolific writer of newspaper and magazine columns, essays, and books.

Milton Friedman’s focus on education choice made perfect sense in light of his other work. He had a consistent focus on preserving and expanding individual freedom. He saw parental control and the ability to choose the environment that worked best for individual children as essential to a quality education. His 1962 book Capitalism and Freedom included chapters on economic and political freedom, trade, fiscal policy, occupational licenses, and poverty, along with his earlier essay on the role of government in education.

In 1980, Milton and Rose released Free to Choose, a discussion of economics and freedom, as a book and a television series. One segment/​chapter asked, “What’s Wrong with Our Schools?” and then explained the importance of parents being able to choose what works for their individual children.

When the Friedman Foundation was launched, there were five education choice programs in the U.S. with fewer than 10,000 students participating. Today, according to EdChoice, there are 74 programs in 32 states, Washington, D.C., and Puerto Rico, with 670,000 students participating.

While there is a long and deep history of individuals and organizations calling for various forms of school choice, it is clear that Milton Friedman played an enormous role in its advance in the U.S. He helped lay the intellectual groundwork for the programs in place today, and his relatable writings and videos helped explain his ideas to parents, policymakers, and thought leaders. As we celebrate National School Choice Week—and Cato’s new School Choice Timeline—it’s a great time to commemorate Milton Friedman’s important contributions to the movement.

The School Choice Revolution

It’s time to celebrate another victory for school choice.

  • In 2021, West Virginia adopted statewide school choice.
  • In 2022, Arizona adopted statewide school choice.
  • In 2023, Iowa adopted statewide school choice.

Now Utah has joined the club, with Governor Spencer Cox approving a new law that will give families greater freedom to choose the best educational options for their children.

Here are some details from Marjorie Cortez, reporting for the Deseret News.

The Utah Senate gave final passage to legislation that will provide $8,000 scholarships to qualifying families for private schools and other private education options…The bill passed by a two-thirds margin in each legislative house, which means it cannot be challenged by referendum. …The bill creates the Utah Fits All Scholarship, which can then be used for education expenses like curriculum, textbooks, education, software, tutoring services, micro-school teacher salaries and private school tuition.

As you might expect, teacher unions and their allies are very disappointed – which is a very positive sign.

…the Utah Education Association…opposed HB215… The bill was also opposed by the Utah State Board of Education, Utah PTA, school superintendents, business administrators and school boards. The Alliance for a Better Utah was pointed in its reaction… “Conservative lawmakers just robbed our neighborhood schools of $42 million. Private school vouchers have been and continue to be opposed by Utahns but these lawmakers are instead pursuing a national agenda to ‘destroy public education.’

The Wall Street Journal opined on this great development.

School choice is gaining momentum across the country, and this week Utah joined Iowa in advancing the education reform cause. …Utah’s bill, which the Senate passed Thursday, 20-8, makes ESAs of $8,000 available to every student. There’s no income cap on families who can apply, though lower-income families receive preference and the program is capped at $42 million. The funds can be used for private school tuition, home-schooling expenses, tutoring, and more.

But the best part of the editorial is the look at other states that may be poised to expand educational freedom.

About a dozen other state legislatures have introduced bills to create new ESA programs, and several want to expand the ones they have. In Florida a Republican proposal would extend the state’s already robust scholarship programs to any student in the state. The bill would remove income limits that are currently in place for families who want to apply, though lower-income applicants would receive priority. …South Carolina legislators are mulling a new ESA program for lower-income students. In Indiana, a Senate bill would make state ESAs available to more students. An Ohio bill would remove an income cap and other eligibility rules for the state’s school vouchers. Two Oklahoma Senate bills propose new ESA programs… ESA bills are in some stage of moving in Nebraska, New Hampshire, Texas and Virginia.

Let’s hope there is more progress.

School choice is a win-win for both students and taxpayers.

P.S. Here’s a must-see chart showing how more and more money for the government school monopoly has produced zero benefit.

P.P.S. There are very successful school choice systems in CanadaSwedenChile, and the Netherlands.

P.P.P.S. Getting rid of the Department of Education would be a good idea, but the battle for school choice is largely going to be won and lost on the state and local level.

The Machine: The Truth Behind Teachers Unions

Published on Sep 4, 2012 by

America’s public education system is failing. We’re spending more money on education but not getting better results for our children.

That’s because the machine that runs the K-12 education system isn’t designed to produce better schools. It’s designed to produce more money for unions and more donations for politicians.

For decades, teachers’ unions have been among our nation’s largest political donors. As Reason Foundation’s Lisa Snell has noted, the National Education Association (NEA) alone spent $40 million on the 2010 election cycle (source: http://reason.org/news/printer/big-education-and-big-labor-electio). As the country’s largest teachers union, the NEA is only one cog in the infernal machine that robs parents of their tax dollars and students of their futures.

Students, teachers, parents, and hardworking Americans are all victims of this political machine–a system that takes money out of taxpayers’ wallets and gives it to union bosses, who put it in the pockets of politicians.

Our kids deserve better.

“The Machine” is 4:17 minutes.

Written and narrated by Evan Coyne Maloney. Produced by the Moving Picture Institute in partnership with Reason TV.

Visit http://www.MovingPictureInstitute.org to learn more.

No one did more to advance the cause of school vouchers than Milton and Rose Friedman. Friedman made it clear in his film series “Free to Choose” how sad he was that young people who live in the inner cities did not have good education opportunities available to them.

I have posted often about the voucher system and how it would solve our education problems. What we are doing now is not working. Milton Friedman’s idea of implementing school vouchers was hatched about 50 years ago.

Poor families are most affected by this lack of choice. As Friedman noted, “There is no respect in which inhabitants of a low-income neighborhood are so disadvantaged as in the kind of schooling they can get for their children.” It is a sad statement quantified by data on low levels of academic achievement and attainment. Take a look at this article below.

Lindsey Burke

September 25, 2012 at 5:46 pm

SAT scores among the nation’s test-takers are at a 40-year low.

As The Washington Post reports:

Reading scores on the SAT for the high school class of 2012 reached a four-decade low, putting a punctuation mark on a gradual decline in the ability of college-bound teens to read passages and answer questions about sentence structure, vocabulary and meaning on the college entrance exam.

The decline over the decades has been significant. The average reading (verbal) score is down 34 points since 1972. Sadly, the historically low SAT scores are only the latest marker of decline. Graduation rates have been stagnant since the 1970s, reading and math achievement has been virtually flat over the same time period, and American students still rank in the middle of the pack compared to their international peers.

On the heels of the news about the SAT score decline, President Obama filmed a segment with NBC’s Education Nation earlier today. The President notably praised the concept of charter schools and pay for performance for teachers.

But those grains of reform were dwarfed by his support of the status quo. During the course of the interview, President Obama suggested hiring 100,000 new math and science teachers and spending more money on preschool. He also stated that No Child Left Behind had good intentions but was “under-resourced.”

Efforts by the federal government to intervene in preschool, most notably through Head Start, have failed—despite a $160 billion in spending on the program since 1965. And No Child Left Behind is far from “under-resourced.” The $25 billion, 600-page law has been on the receiving end of significant new spending every decade since the original law was first passed nearly half a century ago.

President Obama was also pressed on the issue of education unions by host Savannah Guthrie:

Some people think, President Obama gets so much support from the teachers’ unions, he can’t possibly have an honest conversation about what they’re doing right or wrong. Can you really say that teachers’ unions aren’t slowing the pace of reform?

President Obama responded: “You know, I just really get frustrated when I hear teacher-bashing as evidence of reform.”

Criticizing education unions for standing in the way of reform should not be conflated with criticizing teachers, as the President does in the interview. The unions have blocked reforms such as performance pay and charter schools (which the President supports), have opposed alternative teacher certification that would help mid-career professionals enter the classroom, and have consistently fought the implementation of school choice options for children.

If we ever hope to move the needle on student achievement—or see SAT scores turn in the right direction again—we’ll need to implement many of those exact reforms, particularly school choice.

And as he has in the past, President Obama stated that his Administration wants to “use evidenced-based approaches and find out what works.” We know what works: giving families choices when it comes to finding schools that best meet their children’s needs. Instead of continuing to call for more spending and more Washington intervention in education, let’s try something new: choice and freedom.

Related posts:

Milton Friedman remembered at 100 years from his birth (Part 4)

I ran across this very interesting article about Milton Friedman from 2002: Friedman: Market offers poor better learningBy Tamara Henry, USA TODAY By Doug Mills, AP President Bush honors influential economist Milton Friedman for his 90th birthday earlier this month. About an economist Name:Milton FriedmanAge: 90Background: Winner of the 1976 Nobel Prize for economic science; […]

Milton Friedman videos and transcripts Part 11

Milton Friedman videos and transcripts Part 11 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Open letter to President Obama (Part 117.3)

A Taxing Distinction for ObamaCare Published on Jun 28, 2012 by catoinstitutevideo http://www.cato.org/publications/commentary/it-now-falls-congress http://www.cato.org/publications/commentary/taxing-decision http://www.cato-at-liberty.org/supreme-court-unlawfully-rewrites-obamacare-to… http://www.cato-at-liberty.org/congress-its-not-a-tax-scotus-yes-it-is/ The Cato Institute’s Roger Pilon, Ilya Shapiro, Michael F. Cannon, Michael D. Tanner and Trevor Burrus evaluate today’s ruling on ObamaCare at the Supreme Court. Video produced by Caleb O. Brown and Austin Bragg. ____________ President Obama c/o The […]

Milton Friedman videos and transcripts Part 10

Milton Friedman videos and transcripts Part 10 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman videos and transcripts Part 9

Milton Friedman videos and transcripts Part 9 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman’s biography (Part 2)(Interview by Charlie Rose of Milton Friedman part 3)

Biography Part 2 In 1977, when I reached the age of 65, I retired from teaching at the University of Chicago. At the invitation of Glenn Campbell, Director of the Hoover Institution at Stanford University, I shifted my scholarly work to Hoover where I remain a Senior Research Fellow. We moved to San Francisco, purchasing […]

Milton Friedman at Hillsdale College 2006 (part 2)

Milton Friedman at Hillsdale College 2006 July 2006 Free to Choose: A Conversation with Milton Friedman Milton Friedman Economist Milton Friedman is a senior research fellow at the Hoover Institution at Stanford University and a professor emeritus of economics at the University of Chicago, where he taught from 1946-1976. Dr. Friedman received the Nobel Memorial […]

Milton Friedman videos and transcripts Part 8

Milton Friedman videos and transcripts Part 8 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman remembered at 100 years from his birth (Part 2)

Testing Milton Friedman – Preview Uploaded by FreeToChooseNetwork on Feb 21, 2012 2012 is the 100th anniversary of Milton Friedman’s birth. His work and ideas continue to make the world a better place. As part of Milton Friedman’s Century, a revival of the ideas featured in the landmark television series Free To Choose are being […]

Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

Free or equal? 30 years after Milton Friedman’s Free to Choose (Part 1)

Free or Equal?: Johan Norberg Updates Milton & Rose Friedman’s Free to Choose I got this below from Reason Magazine: Swedish economist Johan Norberg is the host of the new documentary Free or Equal, which retraces and updates the 1980 classic Free to Choose, featuring Milton and Rose Friedman. Like the Friedmans, Norberg travels the globe […]

Reason Magazine’s rightly praises Milton Friedman but makes foolish claim along the way

I must say that I have lots of respect for Reason Magazine and for their admiration of Milton Friedman. However, I do disagree with one phrase below. At the end of this post I will tell you what sentence it is. Uploaded by ReasonTV on Jul 28, 2011 There’s no way to appreciate fully the […]

Video clip:Milton Friedman discusses his view of numerous political figures and policy issues in (Part 1)

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2 Uploaded by PenguinProseMedia on Oct 25, 2011 Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman’s best interviews, discussion spans Friedman’s career and his view of numerous political figures and public policy issues. ___________________ Two Lucky People by Milton and Rose Friedman […]

Milton Friedman remembered at 100 years from his birth (Part 1)

What a great man Milton Friedman was. The Legacy of Milton Friedman November 18, 2006 Alexander Tabarrok Great economist by day and crusading public intellectual by night, Milton Friedman was my hero. Friedman’s contributions to economics are profound, the permanent income hypothesis, the resurrection of the quantity theory of money, and his magnum opus with […]

Milton Friedman videos and transcripts Part 7

Milton Friedman videos and transcripts Part 7 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Transcript and video of Milton Friedman on Bill Clinton and Ronald Reagan (Part 1)

Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in […]

Dan Mitchell’s article on Chili and video clip on Milton Friedman’s influence

Milton Friedman and Chile – The Power of Choice Uploaded by FreeToChooseNetwork on May 13, 2011 In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous […]

Arizona’s New School Choice Bill Moves Us Closer to Milton Friedman’s Vision

Milton Friedman – Public Schools / Voucher System

Published on May 9, 2012 by

JANUARY 24, 2023 3:48PM
File:President Ronald Reagan and Nancy Reagan in The East Room Congratulating Milton Friedman Receiving The Presidential Medal of Freedom.jpg

Arizona’s New School Choice Bill Moves Us Closer to Milton Friedman’s Vision

The education disruption over the past two years has re-energized parents and taxpayers alike.

“Our goal is to have a system in which every family in the U.S. will be able to choose for itself the school to which its children go,” the Nobel Prize-winning economist Milton Friedman stated in 2003. “We are far from that ultimate result. If we had that, a system of free choice, we would also have a system of competition, innovation, which would change the character of education.”

Last week, Arizona lawmakers moved us much closer to that ultimate result. Legislators in that state, which already had some of the most robust school choice policies in the US, passed the country’s first universal education savings account bill, extending education choice to all K-12 students.

The education savings accounts, or Empowerment Scholarship Accounts as they are known in Arizona, had previously been available to certain Arizona students who met specific criteria, including special needs students and children in active-duty military families. This new bill, which the Governor Doug Ducey is expected to sign, extends education choice to all school-age children throughout Arizona.

Every family will now have access to 90 percent of the state-allocated per pupil education dollars, or about $7,000 per student, to use toward approved education-related resources, including private school tuition, tutors, curriculum materials, online learning programs, and more.

“Arizona is now the gold standard for school choice,” Corey DeAngelis, senior fellow at the American Federation for Children, told me this week. “Every other state should follow Arizona’s lead and fund students instead of systems. Education funding is meant for educating children, not for protecting a particular institution. School choice is the only way to truly secure parental rights in education.”

Several states have introduced or expanded school choice policies over the past couple of years, enabling taxpayer funding of education to go directly to students rather than bureaucratic school systems. In this week’s LiberatED podcast episode, I spoke with one education entrepreneur, Michelle McCartney, whose homeschool resource center is an approved vendor for New Hampshire’s Education Freedom Accounts, an education savings account program for income-eligible students that was implemented last year.

While McCartney sees a fully private, free market in education as the ideal circumstance, she recognizes that education choice policies are an important first step toward expanding education options for more families, and reducing government involvement in the education sector.

“If it was up to me we wouldn’t pay any money to the government and school would be entirely privatized,” said McCartney. “That’s how I believe it should be, but it’s not. So I think we can all sit here and have discussions about what would be the ideal circumstance, but I think sometimes we’ve got to roll with what we have, and if we can get any of that money back to the families I think that’s an important first step.”

Indeed, Milton Friedman also saw school choice policies such as vouchers as a first step in education reform, not a final one. Friedman popularized the idea of school choice policies, specifically universal school vouchers, in his 1955 paper, “The Role of Government in Education,” and elaborated on his views over the following decades up until his death in 2006 at the age of 94.

Friedman and his economist wife Rose wrote in their influential book, Free To Choose: “We regard the voucher plan as a partial solution because it affects neither the financing of schooling nor the compulsory attendance laws. We favor going much farther.”

While Arizona’s new legislation now makes it the forerunner in education choice policies across the country, West Virginia is close behind and begins to address compulsory attendance. Lawmakers there recently passed legislation that loosens state compulsory school attendance laws for participants in learning pods and microschools, two emerging, decentralized K-12 learning models that are gaining popularity across the country. West Virginia also passed an education savings account program last year, known as the Hope Scholarship, that extends education choice to nearly all K-12 students.

The education disruption over the past two years has re-energized parents and taxpayers alike. They are demanding more options beyond an assigned district school, embracing innovative learning models, and loosening the government grip on education. As Friedman envisioned, a choice-based system of education weakens the government monopoly on schooling and sparks innovation and competition to ultimately “change the character of education.”

We are seeing that change occur right before our eyes.

Listen to the weekly LiberatED Podcast on Apple, Spotify, Google, and Stitcher, and sign up for Kerry’s weekly LiberatED email newsletter to stay up-to-date on educational news and trends from a free-market perspective.

Milton Friedman, School Choice Pioneer


As our new School Choice Timeline shows, calls for public funding to follow students to a variety of educational options date back centuries. However, Nobel Prize‐​winning economist Milton Friedman is often considered the father of the modern school choice movement.

In a 1955 essay, The Role of Government in Education, Friedman acknowledged some justifications for government mandates and funding when it comes to education. However, he said it’s difficult to justify government administration of education. He suggested governments could provide parents with vouchers worth a specified maximum sum per child per year to be spent on “approved” educational services.

Friedman would return to this idea repeatedly over the years in his writings and his popular Free to Choose television series. But he did more than just write and talk about his idea. In 1996, he and his wife Rose, who was also a noted economist, started the Milton and Rose D. Friedman Foundation for Educational Choice. Their original plan included the eventual removal of their name from the foundation, which happened in 2016; the organization is now known as EdChoice and is the go‐​to source for up‐​to‐​date information on school choice in America.

Milton Friedman had a remarkable life. He was born in Brooklyn in 1912 to parents who emigrated to the U.S. from eastern Europe. His father died during his senior year in high school, leaving his mother and older sisters to support the family. He managed to attend Rutgers University through a combination of scholarships and various jobs. After earning a degree in economics, he was awarded a scholarship to pursue a graduate degree at the University of Chicago, where he met his future wife, Rose. The Friedmans had two children, a son and a daughter.

Friedman’s list of accomplishments is astonishingly long. In addition to his 1976 Nobel Prize for Economic Science, he was awarded the Presidential Medal of Freedom and the National Medal of Science in 1988. He was a Senior Research Fellow at Stanford University’s Hoover Institution from 1977 to 2006, a distinguished economics professor at the University of Chicago from 1946 to 1976, and a researcher at the National Bureau of Economic Research from 1937 to 1981. He was a prolific writer of newspaper and magazine columns, essays, and books.

Milton Friedman’s focus on education choice made perfect sense in light of his other work. He had a consistent focus on preserving and expanding individual freedom. He saw parental control and the ability to choose the environment that worked best for individual children as essential to a quality education. His 1962 book Capitalism and Freedom included chapters on economic and political freedom, trade, fiscal policy, occupational licenses, and poverty, along with his earlier essay on the role of government in education.

In 1980, Milton and Rose released Free to Choose, a discussion of economics and freedom, as a book and a television series. One segment/​chapter asked, “What’s Wrong with Our Schools?” and then explained the importance of parents being able to choose what works for their individual children.

When the Friedman Foundation was launched, there were five education choice programs in the U.S. with fewer than 10,000 students participating. Today, according to EdChoice, there are 74 programs in 32 states, Washington, D.C., and Puerto Rico, with 670,000 students participating.

While there is a long and deep history of individuals and organizations calling for various forms of school choice, it is clear that Milton Friedman played an enormous role in its advance in the U.S. He helped lay the intellectual groundwork for the programs in place today, and his relatable writings and videos helped explain his ideas to parents, policymakers, and thought leaders. As we celebrate National School Choice Week—and Cato’s new School Choice Timeline—it’s a great time to commemorate Milton Friedman’s important contributions to the movement.

The School Choice Revolution

It’s time to celebrate another victory for school choice.

  • In 2021, West Virginia adopted statewide school choice.
  • In 2022, Arizona adopted statewide school choice.
  • In 2023, Iowa adopted statewide school choice.

Now Utah has joined the club, with Governor Spencer Cox approving a new law that will give families greater freedom to choose the best educational options for their children.

Here are some details from Marjorie Cortez, reporting for the Deseret News.

The Utah Senate gave final passage to legislation that will provide $8,000 scholarships to qualifying families for private schools and other private education options…The bill passed by a two-thirds margin in each legislative house, which means it cannot be challenged by referendum. …The bill creates the Utah Fits All Scholarship, which can then be used for education expenses like curriculum, textbooks, education, software, tutoring services, micro-school teacher salaries and private school tuition.

As you might expect, teacher unions and their allies are very disappointed – which is a very positive sign.

…the Utah Education Association…opposed HB215… The bill was also opposed by the Utah State Board of Education, Utah PTA, school superintendents, business administrators and school boards. The Alliance for a Better Utah was pointed in its reaction… “Conservative lawmakers just robbed our neighborhood schools of $42 million. Private school vouchers have been and continue to be opposed by Utahns but these lawmakers are instead pursuing a national agenda to ‘destroy public education.’

The Wall Street Journal opined on this great development.

School choice is gaining momentum across the country, and this week Utah joined Iowa in advancing the education reform cause. …Utah’s bill, which the Senate passed Thursday, 20-8, makes ESAs of $8,000 available to every student. There’s no income cap on families who can apply, though lower-income families receive preference and the program is capped at $42 million. The funds can be used for private school tuition, home-schooling expenses, tutoring, and more.

But the best part of the editorial is the look at other states that may be poised to expand educational freedom.

About a dozen other state legislatures have introduced bills to create new ESA programs, and several want to expand the ones they have. In Florida a Republican proposal would extend the state’s already robust scholarship programs to any student in the state. The bill would remove income limits that are currently in place for families who want to apply, though lower-income applicants would receive priority. …South Carolina legislators are mulling a new ESA program for lower-income students. In Indiana, a Senate bill would make state ESAs available to more students. An Ohio bill would remove an income cap and other eligibility rules for the state’s school vouchers. Two Oklahoma Senate bills propose new ESA programs… ESA bills are in some stage of moving in Nebraska, New Hampshire, Texas and Virginia.

Let’s hope there is more progress.

School choice is a win-win for both students and taxpayers.

P.S. Here’s a must-see chart showing how more and more money for the government school monopoly has produced zero benefit.

P.P.S. There are very successful school choice systems in CanadaSwedenChile, and the Netherlands.

P.P.P.S. Getting rid of the Department of Education would be a good idea, but the battle for school choice is largely going to be won and lost on the state and local level.

The Machine: The Truth Behind Teachers Unions

Published on Sep 4, 2012 by

America’s public education system is failing. We’re spending more money on education but not getting better results for our children.

That’s because the machine that runs the K-12 education system isn’t designed to produce better schools. It’s designed to produce more money for unions and more donations for politicians.

For decades, teachers’ unions have been among our nation’s largest political donors. As Reason Foundation’s Lisa Snell has noted, the National Education Association (NEA) alone spent $40 million on the 2010 election cycle (source: http://reason.org/news/printer/big-education-and-big-labor-electio). As the country’s largest teachers union, the NEA is only one cog in the infernal machine that robs parents of their tax dollars and students of their futures.

Students, teachers, parents, and hardworking Americans are all victims of this political machine–a system that takes money out of taxpayers’ wallets and gives it to union bosses, who put it in the pockets of politicians.

Our kids deserve better.

“The Machine” is 4:17 minutes.

Written and narrated by Evan Coyne Maloney. Produced by the Moving Picture Institute in partnership with Reason TV.

Visit http://www.MovingPictureInstitute.org to learn more.

No one did more to advance the cause of school vouchers than Milton and Rose Friedman. Friedman made it clear in his film series “Free to Choose” how sad he was that young people who live in the inner cities did not have good education opportunities available to them.

I have posted often about the voucher system and how it would solve our education problems. What we are doing now is not working. Milton Friedman’s idea of implementing school vouchers was hatched about 50 years ago.

Poor families are most affected by this lack of choice. As Friedman noted, “There is no respect in which inhabitants of a low-income neighborhood are so disadvantaged as in the kind of schooling they can get for their children.” It is a sad statement quantified by data on low levels of academic achievement and attainment. Take a look at this article below.

Lindsey Burke

September 25, 2012 at 5:46 pm

SAT scores among the nation’s test-takers are at a 40-year low.

As The Washington Post reports:

Reading scores on the SAT for the high school class of 2012 reached a four-decade low, putting a punctuation mark on a gradual decline in the ability of college-bound teens to read passages and answer questions about sentence structure, vocabulary and meaning on the college entrance exam.

The decline over the decades has been significant. The average reading (verbal) score is down 34 points since 1972. Sadly, the historically low SAT scores are only the latest marker of decline. Graduation rates have been stagnant since the 1970s, reading and math achievement has been virtually flat over the same time period, and American students still rank in the middle of the pack compared to their international peers.

On the heels of the news about the SAT score decline, President Obama filmed a segment with NBC’s Education Nation earlier today. The President notably praised the concept of charter schools and pay for performance for teachers.

But those grains of reform were dwarfed by his support of the status quo. During the course of the interview, President Obama suggested hiring 100,000 new math and science teachers and spending more money on preschool. He also stated that No Child Left Behind had good intentions but was “under-resourced.”

Efforts by the federal government to intervene in preschool, most notably through Head Start, have failed—despite a $160 billion in spending on the program since 1965. And No Child Left Behind is far from “under-resourced.” The $25 billion, 600-page law has been on the receiving end of significant new spending every decade since the original law was first passed nearly half a century ago.

President Obama was also pressed on the issue of education unions by host Savannah Guthrie:

Some people think, President Obama gets so much support from the teachers’ unions, he can’t possibly have an honest conversation about what they’re doing right or wrong. Can you really say that teachers’ unions aren’t slowing the pace of reform?

President Obama responded: “You know, I just really get frustrated when I hear teacher-bashing as evidence of reform.”

Criticizing education unions for standing in the way of reform should not be conflated with criticizing teachers, as the President does in the interview. The unions have blocked reforms such as performance pay and charter schools (which the President supports), have opposed alternative teacher certification that would help mid-career professionals enter the classroom, and have consistently fought the implementation of school choice options for children.

If we ever hope to move the needle on student achievement—or see SAT scores turn in the right direction again—we’ll need to implement many of those exact reforms, particularly school choice.

And as he has in the past, President Obama stated that his Administration wants to “use evidenced-based approaches and find out what works.” We know what works: giving families choices when it comes to finding schools that best meet their children’s needs. Instead of continuing to call for more spending and more Washington intervention in education, let’s try something new: choice and freedom.

Related posts:

Milton Friedman remembered at 100 years from his birth (Part 4)

I ran across this very interesting article about Milton Friedman from 2002: Friedman: Market offers poor better learningBy Tamara Henry, USA TODAY By Doug Mills, AP President Bush honors influential economist Milton Friedman for his 90th birthday earlier this month. About an economist Name:Milton FriedmanAge: 90Background: Winner of the 1976 Nobel Prize for economic science; […]

Milton Friedman videos and transcripts Part 11

Milton Friedman videos and transcripts Part 11 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Open letter to President Obama (Part 117.3)

A Taxing Distinction for ObamaCare Published on Jun 28, 2012 by catoinstitutevideo http://www.cato.org/publications/commentary/it-now-falls-congress http://www.cato.org/publications/commentary/taxing-decision http://www.cato-at-liberty.org/supreme-court-unlawfully-rewrites-obamacare-to… http://www.cato-at-liberty.org/congress-its-not-a-tax-scotus-yes-it-is/ The Cato Institute’s Roger Pilon, Ilya Shapiro, Michael F. Cannon, Michael D. Tanner and Trevor Burrus evaluate today’s ruling on ObamaCare at the Supreme Court. Video produced by Caleb O. Brown and Austin Bragg. ____________ President Obama c/o The […]

Milton Friedman videos and transcripts Part 10

Milton Friedman videos and transcripts Part 10 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman videos and transcripts Part 9

Milton Friedman videos and transcripts Part 9 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman’s biography (Part 2)(Interview by Charlie Rose of Milton Friedman part 3)

Biography Part 2 In 1977, when I reached the age of 65, I retired from teaching at the University of Chicago. At the invitation of Glenn Campbell, Director of the Hoover Institution at Stanford University, I shifted my scholarly work to Hoover where I remain a Senior Research Fellow. We moved to San Francisco, purchasing […]

Milton Friedman at Hillsdale College 2006 (part 2)

Milton Friedman at Hillsdale College 2006 July 2006 Free to Choose: A Conversation with Milton Friedman Milton Friedman Economist Milton Friedman is a senior research fellow at the Hoover Institution at Stanford University and a professor emeritus of economics at the University of Chicago, where he taught from 1946-1976. Dr. Friedman received the Nobel Memorial […]

Milton Friedman videos and transcripts Part 8

Milton Friedman videos and transcripts Part 8 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman remembered at 100 years from his birth (Part 2)

Testing Milton Friedman – Preview Uploaded by FreeToChooseNetwork on Feb 21, 2012 2012 is the 100th anniversary of Milton Friedman’s birth. His work and ideas continue to make the world a better place. As part of Milton Friedman’s Century, a revival of the ideas featured in the landmark television series Free To Choose are being […]

Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

Free or equal? 30 years after Milton Friedman’s Free to Choose (Part 1)

Free or Equal?: Johan Norberg Updates Milton & Rose Friedman’s Free to Choose I got this below from Reason Magazine: Swedish economist Johan Norberg is the host of the new documentary Free or Equal, which retraces and updates the 1980 classic Free to Choose, featuring Milton and Rose Friedman. Like the Friedmans, Norberg travels the globe […]

Reason Magazine’s rightly praises Milton Friedman but makes foolish claim along the way

I must say that I have lots of respect for Reason Magazine and for their admiration of Milton Friedman. However, I do disagree with one phrase below. At the end of this post I will tell you what sentence it is. Uploaded by ReasonTV on Jul 28, 2011 There’s no way to appreciate fully the […]

Video clip:Milton Friedman discusses his view of numerous political figures and policy issues in (Part 1)

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2 Uploaded by PenguinProseMedia on Oct 25, 2011 Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman’s best interviews, discussion spans Friedman’s career and his view of numerous political figures and public policy issues. ___________________ Two Lucky People by Milton and Rose Friedman […]

Milton Friedman remembered at 100 years from his birth (Part 1)

What a great man Milton Friedman was. The Legacy of Milton Friedman November 18, 2006 Alexander Tabarrok Great economist by day and crusading public intellectual by night, Milton Friedman was my hero. Friedman’s contributions to economics are profound, the permanent income hypothesis, the resurrection of the quantity theory of money, and his magnum opus with […]

Milton Friedman videos and transcripts Part 7

Milton Friedman videos and transcripts Part 7 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Transcript and video of Milton Friedman on Bill Clinton and Ronald Reagan (Part 1)

Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in […]

Dan Mitchell’s article on Chili and video clip on Milton Friedman’s influence

Milton Friedman and Chile – The Power of Choice Uploaded by FreeToChooseNetwork on May 13, 2011 In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous […]

Why Milton Friedman Saw School Choice as a First Step, Not a Final One

Milton Friedman – Public Schools / Voucher System

Published on May 9, 2012 by

JANUARY 24, 2023 3:48PM
File:President Ronald Reagan and Nancy Reagan in The East Room Congratulating Milton Friedman Receiving The Presidential Medal of Freedom.jpg

Why Milton Friedman Saw School Choice as a First Step, Not a Final One

On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.

Libertarians and others are often torn about school choice. They may wish to see the government schooling monopoly weakened, but they may resist supporting choice mechanisms, like vouchers and education savings accounts, because they don’t go far enough. Indeed, most current choice programs continue to rely on taxpayer funding of education and don’t address the underlying compulsory nature of elementary and secondary schooling.

Skeptics may also have legitimate fears that taxpayer-funded education choice programs will lead to over-regulation of previously independent and parochial schooling options, making all schooling mirror compulsory mass schooling, with no substantive variation.

Friedman Challenged Compulsory Schooling Laws

Milton Friedman had these same concerns. The Nobel prize-winning economist is widely considered to be the one to popularize the idea of vouchers and school choice beginning with his 1955 paper, “The Role of Government in Education.” His vision continues to be realized through the important work of EdChoice, formerly the Friedman Foundation for Education Choice, that Friedman and his economist wife, Rose, founded in 1996.

July 31 is Milton Friedman’s birthday. He died in 2006 at the age of 94, but his ideas continue to have an impact, particularly in education policy.

Friedman saw vouchers and other choice programs as half-measures. He recognized the larger problems of taxpayer funding and compulsion, but saw vouchers as an important starting point in allowing parents to regain control of their children’s education. In their popular book, Free To Choose, first published in 1980, the Friedmans wrote:

We regard the voucher plan as a partial solution because it affects neither the financing of schooling nor the compulsory attendance laws. We favor going much farther. (p.161)

They continued:

The compulsory attendance laws are the justification for government control over the standards of private schools. But it is far from clear that there is any justification for the compulsory attendance laws themselves. (p. 162)

The Friedmans admitted that their “own views on this have changed over time,” as they realized that “compulsory attendance at schools is not necessary to achieve that minimum standard of literacy and knowledge,” and that “schooling was well-nigh universal in the United States before either compulsory attendance or government financing of schooling existed. Like most laws, compulsory attendance laws have costs as well as benefits. We no longer believe the benefits justify the costs.” (pp. 162-3)

Still, they felt that vouchers would be the essential starting point toward chipping away at monopoly mass schooling by putting parents back in charge. School choice, in other words, would be a necessary but not sufficient policy approach toward addressing the underlying issue of government control of education.

Vouchers as a First Step

In their book, the Friedmans presented the potential outcomes of their proposed voucher plan, which would give parents access to some or all of the average per-pupil expenditures of a child enrolled in public school. They believed that vouchers would help create a more competitive education market, encouraging education entrepreneurship. They felt that parents would be more empowered with greater control over their children’s education and have a stronger desire to contribute some of their own money toward education. They asserted that in many places “the public school has fostered residential stratification, by tying the kind and cost of schooling to residential location” and suggested that voucher programs would lead to increased integration and heterogeneity. (pp. 166-7)

To the critics who said, and still say, that school choice programs would destroy the public schools, the Friedmans replied that these critics fail to

explain why, if the public school system is doing such a splendid job, it needs to fear competition from nongovernmental, competitive schools or, if it isn’t, why anyone should object to its “destruction.” (p. 170)

What I appreciate most about the Friedmans discussion of vouchers and the promise of school choice is their unrelenting support of parents. They believed that parents, not government bureaucrats and intellectuals, know what is best for their children’s education and well-being and are fully capable of choosing wisely for their children—when they have the opportunity to do so.

They wrote:

Parents generally have both greater interest in their children’s schooling and more intimate knowledge of their capacities and needs than anyone else. Social reformers, and educational reformers in particular, often self-righteously take for granted that parents, especially those who are poor and have little education themselves, have little interest in their children’s education and no competence to choose for them. That is a gratuitous insult. Such parents have frequently had limited opportunity to choose. However, U.S. history has demonstrated that, given the opportunity, they have often been willing to sacrifice a great deal, and have done so wisely, for their children’s welfare. (p. 160).

Sign-Up: Receive Kerry’s Weekly Parenting and Education Newsletter!

Voucher Programs Today

Today, school voucher programs exist in 15 states plus the District of Columbia. These programs have consistently shown that when parents are given the choice to opt-out of an assigned district school, many will take advantage of the opportunity. In Washington, D.C., low-income parents who win a voucher lottery send their children to private schools.

The most recent three-year federal evaluation of voucher program participants found that while student academic achievement was comparable to achievement for non-voucher students remaining in public schools, there were statistically significant improvements in other important areas. For instance, voucher participants had lower rates of chronic absenteeism than the control groups, as well as higher student satisfaction scores. There were also tremendous cost-savings.

In Wisconsin, the Milwaukee Parental Choice Program has served over 28,000 low-income students attending 129 participating private schools.

According to Corey DeAngelis, Director of School Choice at the Reason Foundation and a prolific researcher on the topic, the recent analysis of the D.C. voucher program “reveals that private schools produce the same academic outcomes for only a third of the cost of the public schools. In other words, school choice is a great investment.”

In Wisconsin, the Milwaukee Parental Choice Program was created in 1990 and is the nation’s oldest voucher program. It currently serves over 28,000 low-income students attending 129 participating private schools. Like the D.C. voucher program, data on test scores of Milwaukee voucher students show similar results to public school students, but non-academic results are promising.

Increased Access and Decreased Crime

Recent research found voucher recipients had lower crime rates and lower incidences of unplanned pregnancies in young adulthood. On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.According to Howard Fuller, an education professor at Marquette University, founder of the Black Alliance for Educational Options, and one of the developers of the Milwaukee voucher program, the key is parent empowerment—particularly for low-income minority families.

In an interview with NPR, Fuller said: “What I’m saying to you is that there are thousands of black children whose lives are much better today because of the Milwaukee parental choice program,” he says.
“They were able to access better schools than they would have without a voucher.”

Putting parents back in charge of their child’s education through school choice measures was Milton Friedman’s goal. It was not his ultimate goal, as it would not fully address the funding and compulsion components of government schooling; but it was, and remains, an important first step. As the Friedmans wrote in Free To Choose:

The strong American tradition of voluntary action has provided many excellent examples that demonstrate what can be done when parents have greater choice. (p. 159).

On his birthday, let’s celebrate Milton Friedman’s vision of enabling parents, not government, to be in control of a child’s education.

Celebrating School Choice? Thank Milton Friedman, too

by Dr. Robert Luebke

Director of the Center for Effective Education, John Locke Foundation

January 25, 2021
  • In the 1950s, a young Milton Friedman argued that free market principles of consumer choice and competition were needed to remedy the nonresponsive and monopolistic system that controlled and delivered public education
  • Friedman’s work provided the intellectual foundations of the modern school-choice movement
  • If Friedman were alive today and came to North Carolina, he’d see school choice flourishing

In the decades after the American Revolution, parents were the drivers of how and where their children were educated. Parents could choose from private schools, tutors, and home schools as ways to educate children. In the mid-1840s, Massachusetts became the first state to lead a push for state-controlled and -funded public education. A century later, the rise of the Progressive Era saw government gain control over how schools were financed, administered, and regulated.

Along with these changes came a weakening in the ability of parents to control their child’s education. Of course, if parents didn’t like their child’s school or didn’t think it was a good fit, they could choose a private school — if they could afford it. If not, children were forced to attend the local public school, whether parents liked it or not.

In the mid-1950s, a young economist at the University of Chicago laid out a case for the role of government in education for its citizens in an article given the unassuming title of The Role of Government in Education. In it Milton Friedman acknowledged there is a case for government subsidizing public education, but not for government administering the schools. Friedman believed increased centralization and government control of public schools had led to less freedom and efficiency in education and a decline in quality. For government not only to finance education, but also largely to deliver education services was an arrangement Friedman considered unnatural as well as unjustified.

In his article Friedman argued that free market principles of consumer choice and competition were needed to remedy the nonresponsive and monopolistic system that controlled and delivered public education.

Friedman sought nothing less than to upend how American education was financed and administered. Instead of government deciding how and where children are educated, government would provide vouchers to parents for education or educational services at approved schools.

Friedman believed giving parents the power to “vote with their feet” would force monopolistic public-school systems to be responsive to parental concerns. He also was convinced that the use of vouchers would infuse competition among schools and encourage them to innovate and be more effective, qualities conspicuously absent from most public-school systems. Moreover, Friedman also thought it critical to separate the funding of education from the delivery of education services.

Six and a half decades later, it’s not difficult to see how “The Role of Government in Education” provided the intellectual foundations of the modern school-choice movement. People don’t always hear what they need to hear, so Friedman’s article went largely unnoticed outside the policy world. Those seeds took time to grow.

In 1989, Wisconsin become the first state to put Friedman’s ideas into practice when it approved a statewide voucher program that allowed low-income students to use vouchers to pay tuition at a private school. In 2013, North Carolina approved the Opportunity Scholarship Program, a similar program that today provides over 14,000 students with scholarships of up to $4,200 to help pay tuition at a local private school.

School choice today

If Milton Friedman were alive today and came to North Carolina, he’d see school choice flourishing. Today parents can choose from a variety of public and private school-choice programs. They include public options such as charter or magnet schools as well as private options such as the Opportunity Scholarship Program or the Special Education Scholarship Grants for Children with Disabilities.

Regarding charter schools, the table below shows that the number of students enrolled in charter schools has increased dramatically from over 38,000 in 2010 to over 117,000 today. Enrollment in private schools in the Tar Heel state saw modest growth over the last 10 years, while the number of home schoolers increased by 83 percent.

Over the past decade, while the average daily membership (ADM) enrollment in traditional public schools increased by just one half of one percent, the school-choice population in North Carolina expanded by 71 percent. Today over 370,000 students attend charter, private, and home schools and have access to a better education. Ten years ago, only 13 percent of students were enrolled in choice schools. Today nearly 80 percent of students still attend traditional public schools, but the number of students enrolled in choice schools has increased to almost 21 percent, up significantly from ten years ago.

K-12 Enrollment in North Carolina, by Type of School, 2010 and 2020

Schools 2010 Enrollment 2020 Enrollment Change, 2010–20
Traditional Public Schools (ADM) 1,402,269 1,409,391 0.5%
Charter Schools 38,449 117,264 204.9%
Home Schools 81,509 149,173 83.0%
Private Schools 96,421 103,959 7.8%
Total, Choice Schools 216,379 370,396 71.2%
Schools 2010 Enrollment 2020 Enrollment Percentage Point Change
Percentage of Students in Traditional Public Schools 86.7% 79.2% –7.5
Percentage of Students in
Choice Schools
13.3% 20.8% +7.5

Source: Highlights of the North Carolina Public School Budget, Statistical Profile of North Carolina Public Schools, and North Carolina Office of Non-Public Education (for specific years).

Friedman’s legacy

Friedman’s ideas have helped to fuel an education revolution in North Carolina and across the country. Choice empowers parents to make educational decisions, challenges monopolies, and calls out bureaucracies. Choice expands personal freedom but also highlights that accountability comes in different forms. In so doing, choice has helped to shift the public discussion of education from a focus on how much money is spent to how well money is spent.

Let’s be clear: Milton Friedman got it right. Choice benefits students, families, schools, and our communities. Today school choice continues to thrive because it empowers parents and students and enriches our communities. That’s not to say there haven’t been mistakes and growing pains. Nevertheless, having choices in education is far preferable. Choice recognizes what too many of our public schools ignore: children are different and learn differently.

If we are really concerned that our children receive a quality education, we must allow parents and children to access appropriate educational opportunities. As more and more families are empowered to make these choices, we should thank Milton Friedman for laying the intellectual groundwork for many of the school choice programs we enjoy today.

Milton Friedman, School Choice Pioneer


As our new School Choice Timeline shows, calls for public funding to follow students to a variety of educational options date back centuries. However, Nobel Prize‐​winning economist Milton Friedman is often considered the father of the modern school choice movement.

In a 1955 essay, The Role of Government in Education, Friedman acknowledged some justifications for government mandates and funding when it comes to education. However, he said it’s difficult to justify government administration of education. He suggested governments could provide parents with vouchers worth a specified maximum sum per child per year to be spent on “approved” educational services.

Friedman would return to this idea repeatedly over the years in his writings and his popular Free to Choose television series. But he did more than just write and talk about his idea. In 1996, he and his wife Rose, who was also a noted economist, started the Milton and Rose D. Friedman Foundation for Educational Choice. Their original plan included the eventual removal of their name from the foundation, which happened in 2016; the organization is now known as EdChoice and is the go‐​to source for up‐​to‐​date information on school choice in America.

Milton Friedman had a remarkable life. He was born in Brooklyn in 1912 to parents who emigrated to the U.S. from eastern Europe. His father died during his senior year in high school, leaving his mother and older sisters to support the family. He managed to attend Rutgers University through a combination of scholarships and various jobs. After earning a degree in economics, he was awarded a scholarship to pursue a graduate degree at the University of Chicago, where he met his future wife, Rose. The Friedmans had two children, a son and a daughter.

Friedman’s list of accomplishments is astonishingly long. In addition to his 1976 Nobel Prize for Economic Science, he was awarded the Presidential Medal of Freedom and the National Medal of Science in 1988. He was a Senior Research Fellow at Stanford University’s Hoover Institution from 1977 to 2006, a distinguished economics professor at the University of Chicago from 1946 to 1976, and a researcher at the National Bureau of Economic Research from 1937 to 1981. He was a prolific writer of newspaper and magazine columns, essays, and books.

Milton Friedman’s focus on education choice made perfect sense in light of his other work. He had a consistent focus on preserving and expanding individual freedom. He saw parental control and the ability to choose the environment that worked best for individual children as essential to a quality education. His 1962 book Capitalism and Freedom included chapters on economic and political freedom, trade, fiscal policy, occupational licenses, and poverty, along with his earlier essay on the role of government in education.

In 1980, Milton and Rose released Free to Choose, a discussion of economics and freedom, as a book and a television series. One segment/​chapter asked, “What’s Wrong with Our Schools?” and then explained the importance of parents being able to choose what works for their individual children.

When the Friedman Foundation was launched, there were five education choice programs in the U.S. with fewer than 10,000 students participating. Today, according to EdChoice, there are 74 programs in 32 states, Washington, D.C., and Puerto Rico, with 670,000 students participating.

While there is a long and deep history of individuals and organizations calling for various forms of school choice, it is clear that Milton Friedman played an enormous role in its advance in the U.S. He helped lay the intellectual groundwork for the programs in place today, and his relatable writings and videos helped explain his ideas to parents, policymakers, and thought leaders. As we celebrate National School Choice Week—and Cato’s new School Choice Timeline—it’s a great time to commemorate Milton Friedman’s important contributions to the movement.

The School Choice Revolution

It’s time to celebrate another victory for school choice.

  • In 2021, West Virginia adopted statewide school choice.
  • In 2022, Arizona adopted statewide school choice.
  • In 2023, Iowa adopted statewide school choice.

Now Utah has joined the club, with Governor Spencer Cox approving a new law that will give families greater freedom to choose the best educational options for their children.

Here are some details from Marjorie Cortez, reporting for the Deseret News.

The Utah Senate gave final passage to legislation that will provide $8,000 scholarships to qualifying families for private schools and other private education options…The bill passed by a two-thirds margin in each legislative house, which means it cannot be challenged by referendum. …The bill creates the Utah Fits All Scholarship, which can then be used for education expenses like curriculum, textbooks, education, software, tutoring services, micro-school teacher salaries and private school tuition.

As you might expect, teacher unions and their allies are very disappointed – which is a very positive sign.

…the Utah Education Association…opposed HB215… The bill was also opposed by the Utah State Board of Education, Utah PTA, school superintendents, business administrators and school boards. The Alliance for a Better Utah was pointed in its reaction… “Conservative lawmakers just robbed our neighborhood schools of $42 million. Private school vouchers have been and continue to be opposed by Utahns but these lawmakers are instead pursuing a national agenda to ‘destroy public education.’

The Wall Street Journal opined on this great development.

School choice is gaining momentum across the country, and this week Utah joined Iowa in advancing the education reform cause. …Utah’s bill, which the Senate passed Thursday, 20-8, makes ESAs of $8,000 available to every student. There’s no income cap on families who can apply, though lower-income families receive preference and the program is capped at $42 million. The funds can be used for private school tuition, home-schooling expenses, tutoring, and more.

But the best part of the editorial is the look at other states that may be poised to expand educational freedom.

About a dozen other state legislatures have introduced bills to create new ESA programs, and several want to expand the ones they have. In Florida a Republican proposal would extend the state’s already robust scholarship programs to any student in the state. The bill would remove income limits that are currently in place for families who want to apply, though lower-income applicants would receive priority. …South Carolina legislators are mulling a new ESA program for lower-income students. In Indiana, a Senate bill would make state ESAs available to more students. An Ohio bill would remove an income cap and other eligibility rules for the state’s school vouchers. Two Oklahoma Senate bills propose new ESA programs… ESA bills are in some stage of moving in Nebraska, New Hampshire, Texas and Virginia.

Let’s hope there is more progress.

School choice is a win-win for both students and taxpayers.

P.S. Here’s a must-see chart showing how more and more money for the government school monopoly has produced zero benefit.

P.P.S. There are very successful school choice systems in CanadaSwedenChile, and the Netherlands.

P.P.P.S. Getting rid of the Department of Education would be a good idea, but the battle for school choice is largely going to be won and lost on the state and local level.

The Machine: The Truth Behind Teachers Unions

Published on Sep 4, 2012 by

America’s public education system is failing. We’re spending more money on education but not getting better results for our children.

That’s because the machine that runs the K-12 education system isn’t designed to produce better schools. It’s designed to produce more money for unions and more donations for politicians.

For decades, teachers’ unions have been among our nation’s largest political donors. As Reason Foundation’s Lisa Snell has noted, the National Education Association (NEA) alone spent $40 million on the 2010 election cycle (source: http://reason.org/news/printer/big-education-and-big-labor-electio). As the country’s largest teachers union, the NEA is only one cog in the infernal machine that robs parents of their tax dollars and students of their futures.

Students, teachers, parents, and hardworking Americans are all victims of this political machine–a system that takes money out of taxpayers’ wallets and gives it to union bosses, who put it in the pockets of politicians.

Our kids deserve better.

“The Machine” is 4:17 minutes.

Written and narrated by Evan Coyne Maloney. Produced by the Moving Picture Institute in partnership with Reason TV.

Visit http://www.MovingPictureInstitute.org to learn more.

No one did more to advance the cause of school vouchers than Milton and Rose Friedman. Friedman made it clear in his film series “Free to Choose” how sad he was that young people who live in the inner cities did not have good education opportunities available to them.

I have posted often about the voucher system and how it would solve our education problems. What we are doing now is not working. Milton Friedman’s idea of implementing school vouchers was hatched about 50 years ago.

Poor families are most affected by this lack of choice. As Friedman noted, “There is no respect in which inhabitants of a low-income neighborhood are so disadvantaged as in the kind of schooling they can get for their children.” It is a sad statement quantified by data on low levels of academic achievement and attainment. Take a look at this article below.

Lindsey Burke

September 25, 2012 at 5:46 pm

SAT scores among the nation’s test-takers are at a 40-year low.

As The Washington Post reports:

Reading scores on the SAT for the high school class of 2012 reached a four-decade low, putting a punctuation mark on a gradual decline in the ability of college-bound teens to read passages and answer questions about sentence structure, vocabulary and meaning on the college entrance exam.

The decline over the decades has been significant. The average reading (verbal) score is down 34 points since 1972. Sadly, the historically low SAT scores are only the latest marker of decline. Graduation rates have been stagnant since the 1970s, reading and math achievement has been virtually flat over the same time period, and American students still rank in the middle of the pack compared to their international peers.

On the heels of the news about the SAT score decline, President Obama filmed a segment with NBC’s Education Nation earlier today. The President notably praised the concept of charter schools and pay for performance for teachers.

But those grains of reform were dwarfed by his support of the status quo. During the course of the interview, President Obama suggested hiring 100,000 new math and science teachers and spending more money on preschool. He also stated that No Child Left Behind had good intentions but was “under-resourced.”

Efforts by the federal government to intervene in preschool, most notably through Head Start, have failed—despite a $160 billion in spending on the program since 1965. And No Child Left Behind is far from “under-resourced.” The $25 billion, 600-page law has been on the receiving end of significant new spending every decade since the original law was first passed nearly half a century ago.

President Obama was also pressed on the issue of education unions by host Savannah Guthrie:

Some people think, President Obama gets so much support from the teachers’ unions, he can’t possibly have an honest conversation about what they’re doing right or wrong. Can you really say that teachers’ unions aren’t slowing the pace of reform?

President Obama responded: “You know, I just really get frustrated when I hear teacher-bashing as evidence of reform.”

Criticizing education unions for standing in the way of reform should not be conflated with criticizing teachers, as the President does in the interview. The unions have blocked reforms such as performance pay and charter schools (which the President supports), have opposed alternative teacher certification that would help mid-career professionals enter the classroom, and have consistently fought the implementation of school choice options for children.

If we ever hope to move the needle on student achievement—or see SAT scores turn in the right direction again—we’ll need to implement many of those exact reforms, particularly school choice.

And as he has in the past, President Obama stated that his Administration wants to “use evidenced-based approaches and find out what works.” We know what works: giving families choices when it comes to finding schools that best meet their children’s needs. Instead of continuing to call for more spending and more Washington intervention in education, let’s try something new: choice and freedom.

Related posts:

Milton Friedman remembered at 100 years from his birth (Part 4)

I ran across this very interesting article about Milton Friedman from 2002: Friedman: Market offers poor better learningBy Tamara Henry, USA TODAY By Doug Mills, AP President Bush honors influential economist Milton Friedman for his 90th birthday earlier this month. About an economist Name:Milton FriedmanAge: 90Background: Winner of the 1976 Nobel Prize for economic science; […]

Milton Friedman videos and transcripts Part 11

Milton Friedman videos and transcripts Part 11 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Open letter to President Obama (Part 117.3)

A Taxing Distinction for ObamaCare Published on Jun 28, 2012 by catoinstitutevideo http://www.cato.org/publications/commentary/it-now-falls-congress http://www.cato.org/publications/commentary/taxing-decision http://www.cato-at-liberty.org/supreme-court-unlawfully-rewrites-obamacare-to… http://www.cato-at-liberty.org/congress-its-not-a-tax-scotus-yes-it-is/ The Cato Institute’s Roger Pilon, Ilya Shapiro, Michael F. Cannon, Michael D. Tanner and Trevor Burrus evaluate today’s ruling on ObamaCare at the Supreme Court. Video produced by Caleb O. Brown and Austin Bragg. ____________ President Obama c/o The […]

Milton Friedman videos and transcripts Part 10

Milton Friedman videos and transcripts Part 10 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman videos and transcripts Part 9

Milton Friedman videos and transcripts Part 9 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman’s biography (Part 2)(Interview by Charlie Rose of Milton Friedman part 3)

Biography Part 2 In 1977, when I reached the age of 65, I retired from teaching at the University of Chicago. At the invitation of Glenn Campbell, Director of the Hoover Institution at Stanford University, I shifted my scholarly work to Hoover where I remain a Senior Research Fellow. We moved to San Francisco, purchasing […]

Milton Friedman at Hillsdale College 2006 (part 2)

Milton Friedman at Hillsdale College 2006 July 2006 Free to Choose: A Conversation with Milton Friedman Milton Friedman Economist Milton Friedman is a senior research fellow at the Hoover Institution at Stanford University and a professor emeritus of economics at the University of Chicago, where he taught from 1946-1976. Dr. Friedman received the Nobel Memorial […]

Milton Friedman videos and transcripts Part 8

Milton Friedman videos and transcripts Part 8 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman remembered at 100 years from his birth (Part 2)

Testing Milton Friedman – Preview Uploaded by FreeToChooseNetwork on Feb 21, 2012 2012 is the 100th anniversary of Milton Friedman’s birth. His work and ideas continue to make the world a better place. As part of Milton Friedman’s Century, a revival of the ideas featured in the landmark television series Free To Choose are being […]

Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

Free or equal? 30 years after Milton Friedman’s Free to Choose (Part 1)

Free or Equal?: Johan Norberg Updates Milton & Rose Friedman’s Free to Choose I got this below from Reason Magazine: Swedish economist Johan Norberg is the host of the new documentary Free or Equal, which retraces and updates the 1980 classic Free to Choose, featuring Milton and Rose Friedman. Like the Friedmans, Norberg travels the globe […]

Reason Magazine’s rightly praises Milton Friedman but makes foolish claim along the way

I must say that I have lots of respect for Reason Magazine and for their admiration of Milton Friedman. However, I do disagree with one phrase below. At the end of this post I will tell you what sentence it is. Uploaded by ReasonTV on Jul 28, 2011 There’s no way to appreciate fully the […]

Video clip:Milton Friedman discusses his view of numerous political figures and policy issues in (Part 1)

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2 Uploaded by PenguinProseMedia on Oct 25, 2011 Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman’s best interviews, discussion spans Friedman’s career and his view of numerous political figures and public policy issues. ___________________ Two Lucky People by Milton and Rose Friedman […]

Milton Friedman remembered at 100 years from his birth (Part 1)

What a great man Milton Friedman was. The Legacy of Milton Friedman November 18, 2006 Alexander Tabarrok Great economist by day and crusading public intellectual by night, Milton Friedman was my hero. Friedman’s contributions to economics are profound, the permanent income hypothesis, the resurrection of the quantity theory of money, and his magnum opus with […]

Milton Friedman videos and transcripts Part 7

Milton Friedman videos and transcripts Part 7 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Transcript and video of Milton Friedman on Bill Clinton and Ronald Reagan (Part 1)

Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in […]

Dan Mitchell’s article on Chili and video clip on Milton Friedman’s influence

Milton Friedman and Chile – The Power of Choice Uploaded by FreeToChooseNetwork on May 13, 2011 In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous […]

Milton Friedman, School Choice Pioneer

Milton Friedman – Public Schools / Voucher System

Published on May 9, 2012 by

JANUARY 24, 2023 3:48PM
File:President Ronald Reagan and Nancy Reagan in The East Room Congratulating Milton Friedman Receiving The Presidential Medal of Freedom.jpg

Milton Friedman, School Choice Pioneer


As our new School Choice Timeline shows, calls for public funding to follow students to a variety of educational options date back centuries. However, Nobel Prize‐​winning economist Milton Friedman is often considered the father of the modern school choice movement.

In a 1955 essay, The Role of Government in Education, Friedman acknowledged some justifications for government mandates and funding when it comes to education. However, he said it’s difficult to justify government administration of education. He suggested governments could provide parents with vouchers worth a specified maximum sum per child per year to be spent on “approved” educational services.

Friedman would return to this idea repeatedly over the years in his writings and his popular Free to Choose television series. But he did more than just write and talk about his idea. In 1996, he and his wife Rose, who was also a noted economist, started the Milton and Rose D. Friedman Foundation for Educational Choice. Their original plan included the eventual removal of their name from the foundation, which happened in 2016; the organization is now known as EdChoice and is the go‐​to source for up‐​to‐​date information on school choice in America.

Milton Friedman had a remarkable life. He was born in Brooklyn in 1912 to parents who emigrated to the U.S. from eastern Europe. His father died during his senior year in high school, leaving his mother and older sisters to support the family. He managed to attend Rutgers University through a combination of scholarships and various jobs. After earning a degree in economics, he was awarded a scholarship to pursue a graduate degree at the University of Chicago, where he met his future wife, Rose. The Friedmans had two children, a son and a daughter.

Friedman’s list of accomplishments is astonishingly long. In addition to his 1976 Nobel Prize for Economic Science, he was awarded the Presidential Medal of Freedom and the National Medal of Science in 1988. He was a Senior Research Fellow at Stanford University’s Hoover Institution from 1977 to 2006, a distinguished economics professor at the University of Chicago from 1946 to 1976, and a researcher at the National Bureau of Economic Research from 1937 to 1981. He was a prolific writer of newspaper and magazine columns, essays, and books.

Milton Friedman’s focus on education choice made perfect sense in light of his other work. He had a consistent focus on preserving and expanding individual freedom. He saw parental control and the ability to choose the environment that worked best for individual children as essential to a quality education. His 1962 book Capitalism and Freedom included chapters on economic and political freedom, trade, fiscal policy, occupational licenses, and poverty, along with his earlier essay on the role of government in education.

In 1980, Milton and Rose released Free to Choose, a discussion of economics and freedom, as a book and a television series. One segment/​chapter asked, “What’s Wrong with Our Schools?” and then explained the importance of parents being able to choose what works for their individual children.

When the Friedman Foundation was launched, there were five education choice programs in the U.S. with fewer than 10,000 students participating. Today, according to EdChoice, there are 74 programs in 32 states, Washington, D.C., and Puerto Rico, with 670,000 students participating.

While there is a long and deep history of individuals and organizations calling for various forms of school choice, it is clear that Milton Friedman played an enormous role in its advance in the U.S. He helped lay the intellectual groundwork for the programs in place today, and his relatable writings and videos helped explain his ideas to parents, policymakers, and thought leaders. As we celebrate National School Choice Week—and Cato’s new School Choice Timeline—it’s a great time to commemorate Milton Friedman’s important contributions to the movement.

The School Choice Revolution

It’s time to celebrate another victory for school choice.

  • In 2021, West Virginia adopted statewide school choice.
  • In 2022, Arizona adopted statewide school choice.
  • In 2023, Iowa adopted statewide school choice.

Now Utah has joined the club, with Governor Spencer Cox approving a new law that will give families greater freedom to choose the best educational options for their children.

Here are some details from Marjorie Cortez, reporting for the Deseret News.

The Utah Senate gave final passage to legislation that will provide $8,000 scholarships to qualifying families for private schools and other private education options…The bill passed by a two-thirds margin in each legislative house, which means it cannot be challenged by referendum. …The bill creates the Utah Fits All Scholarship, which can then be used for education expenses like curriculum, textbooks, education, software, tutoring services, micro-school teacher salaries and private school tuition.

As you might expect, teacher unions and their allies are very disappointed – which is a very positive sign.

…the Utah Education Association…opposed HB215… The bill was also opposed by the Utah State Board of Education, Utah PTA, school superintendents, business administrators and school boards. The Alliance for a Better Utah was pointed in its reaction… “Conservative lawmakers just robbed our neighborhood schools of $42 million. Private school vouchers have been and continue to be opposed by Utahns but these lawmakers are instead pursuing a national agenda to ‘destroy public education.’

The Wall Street Journal opined on this great development.

School choice is gaining momentum across the country, and this week Utah joined Iowa in advancing the education reform cause. …Utah’s bill, which the Senate passed Thursday, 20-8, makes ESAs of $8,000 available to every student. There’s no income cap on families who can apply, though lower-income families receive preference and the program is capped at $42 million. The funds can be used for private school tuition, home-schooling expenses, tutoring, and more.

But the best part of the editorial is the look at other states that may be poised to expand educational freedom.

About a dozen other state legislatures have introduced bills to create new ESA programs, and several want to expand the ones they have. In Florida a Republican proposal would extend the state’s already robust scholarship programs to any student in the state. The bill would remove income limits that are currently in place for families who want to apply, though lower-income applicants would receive priority. …South Carolina legislators are mulling a new ESA program for lower-income students. In Indiana, a Senate bill would make state ESAs available to more students. An Ohio bill would remove an income cap and other eligibility rules for the state’s school vouchers. Two Oklahoma Senate bills propose new ESA programs… ESA bills are in some stage of moving in Nebraska, New Hampshire, Texas and Virginia.

Let’s hope there is more progress.

School choice is a win-win for both students and taxpayers.

P.S. Here’s a must-see chart showing how more and more money for the government school monopoly has produced zero benefit.

P.P.S. There are very successful school choice systems in CanadaSwedenChile, and the Netherlands.

P.P.P.S. Getting rid of the Department of Education would be a good idea, but the battle for school choice is largely going to be won and lost on the state and local level.

The Machine: The Truth Behind Teachers Unions

Published on Sep 4, 2012 by

America’s public education system is failing. We’re spending more money on education but not getting better results for our children.

That’s because the machine that runs the K-12 education system isn’t designed to produce better schools. It’s designed to produce more money for unions and more donations for politicians.

For decades, teachers’ unions have been among our nation’s largest political donors. As Reason Foundation’s Lisa Snell has noted, the National Education Association (NEA) alone spent $40 million on the 2010 election cycle (source: http://reason.org/news/printer/big-education-and-big-labor-electio). As the country’s largest teachers union, the NEA is only one cog in the infernal machine that robs parents of their tax dollars and students of their futures.

Students, teachers, parents, and hardworking Americans are all victims of this political machine–a system that takes money out of taxpayers’ wallets and gives it to union bosses, who put it in the pockets of politicians.

Our kids deserve better.

“The Machine” is 4:17 minutes.

Written and narrated by Evan Coyne Maloney. Produced by the Moving Picture Institute in partnership with Reason TV.

Visit http://www.MovingPictureInstitute.org to learn more.

No one did more to advance the cause of school vouchers than Milton and Rose Friedman. Friedman made it clear in his film series “Free to Choose” how sad he was that young people who live in the inner cities did not have good education opportunities available to them.

I have posted often about the voucher system and how it would solve our education problems. What we are doing now is not working. Milton Friedman’s idea of implementing school vouchers was hatched about 50 years ago.

Poor families are most affected by this lack of choice. As Friedman noted, “There is no respect in which inhabitants of a low-income neighborhood are so disadvantaged as in the kind of schooling they can get for their children.” It is a sad statement quantified by data on low levels of academic achievement and attainment. Take a look at this article below.

Lindsey Burke

September 25, 2012 at 5:46 pm

SAT scores among the nation’s test-takers are at a 40-year low.

As The Washington Post reports:

Reading scores on the SAT for the high school class of 2012 reached a four-decade low, putting a punctuation mark on a gradual decline in the ability of college-bound teens to read passages and answer questions about sentence structure, vocabulary and meaning on the college entrance exam.

The decline over the decades has been significant. The average reading (verbal) score is down 34 points since 1972. Sadly, the historically low SAT scores are only the latest marker of decline. Graduation rates have been stagnant since the 1970s, reading and math achievement has been virtually flat over the same time period, and American students still rank in the middle of the pack compared to their international peers.

On the heels of the news about the SAT score decline, President Obama filmed a segment with NBC’s Education Nation earlier today. The President notably praised the concept of charter schools and pay for performance for teachers.

But those grains of reform were dwarfed by his support of the status quo. During the course of the interview, President Obama suggested hiring 100,000 new math and science teachers and spending more money on preschool. He also stated that No Child Left Behind had good intentions but was “under-resourced.”

Efforts by the federal government to intervene in preschool, most notably through Head Start, have failed—despite a $160 billion in spending on the program since 1965. And No Child Left Behind is far from “under-resourced.” The $25 billion, 600-page law has been on the receiving end of significant new spending every decade since the original law was first passed nearly half a century ago.

President Obama was also pressed on the issue of education unions by host Savannah Guthrie:

Some people think, President Obama gets so much support from the teachers’ unions, he can’t possibly have an honest conversation about what they’re doing right or wrong. Can you really say that teachers’ unions aren’t slowing the pace of reform?

President Obama responded: “You know, I just really get frustrated when I hear teacher-bashing as evidence of reform.”

Criticizing education unions for standing in the way of reform should not be conflated with criticizing teachers, as the President does in the interview. The unions have blocked reforms such as performance pay and charter schools (which the President supports), have opposed alternative teacher certification that would help mid-career professionals enter the classroom, and have consistently fought the implementation of school choice options for children.

If we ever hope to move the needle on student achievement—or see SAT scores turn in the right direction again—we’ll need to implement many of those exact reforms, particularly school choice.

And as he has in the past, President Obama stated that his Administration wants to “use evidenced-based approaches and find out what works.” We know what works: giving families choices when it comes to finding schools that best meet their children’s needs. Instead of continuing to call for more spending and more Washington intervention in education, let’s try something new: choice and freedom.

Related posts:

Milton Friedman remembered at 100 years from his birth (Part 4)

I ran across this very interesting article about Milton Friedman from 2002: Friedman: Market offers poor better learningBy Tamara Henry, USA TODAY By Doug Mills, AP President Bush honors influential economist Milton Friedman for his 90th birthday earlier this month. About an economist Name:Milton FriedmanAge: 90Background: Winner of the 1976 Nobel Prize for economic science; […]

Milton Friedman videos and transcripts Part 11

Milton Friedman videos and transcripts Part 11 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Open letter to President Obama (Part 117.3)

A Taxing Distinction for ObamaCare Published on Jun 28, 2012 by catoinstitutevideo http://www.cato.org/publications/commentary/it-now-falls-congress http://www.cato.org/publications/commentary/taxing-decision http://www.cato-at-liberty.org/supreme-court-unlawfully-rewrites-obamacare-to… http://www.cato-at-liberty.org/congress-its-not-a-tax-scotus-yes-it-is/ The Cato Institute’s Roger Pilon, Ilya Shapiro, Michael F. Cannon, Michael D. Tanner and Trevor Burrus evaluate today’s ruling on ObamaCare at the Supreme Court. Video produced by Caleb O. Brown and Austin Bragg. ____________ President Obama c/o The […]

Milton Friedman videos and transcripts Part 10

Milton Friedman videos and transcripts Part 10 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman videos and transcripts Part 9

Milton Friedman videos and transcripts Part 9 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman’s biography (Part 2)(Interview by Charlie Rose of Milton Friedman part 3)

Biography Part 2 In 1977, when I reached the age of 65, I retired from teaching at the University of Chicago. At the invitation of Glenn Campbell, Director of the Hoover Institution at Stanford University, I shifted my scholarly work to Hoover where I remain a Senior Research Fellow. We moved to San Francisco, purchasing […]

Milton Friedman at Hillsdale College 2006 (part 2)

Milton Friedman at Hillsdale College 2006 July 2006 Free to Choose: A Conversation with Milton Friedman Milton Friedman Economist Milton Friedman is a senior research fellow at the Hoover Institution at Stanford University and a professor emeritus of economics at the University of Chicago, where he taught from 1946-1976. Dr. Friedman received the Nobel Memorial […]

Milton Friedman videos and transcripts Part 8

Milton Friedman videos and transcripts Part 8 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman remembered at 100 years from his birth (Part 2)

Testing Milton Friedman – Preview Uploaded by FreeToChooseNetwork on Feb 21, 2012 2012 is the 100th anniversary of Milton Friedman’s birth. His work and ideas continue to make the world a better place. As part of Milton Friedman’s Century, a revival of the ideas featured in the landmark television series Free To Choose are being […]

Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

Free or equal? 30 years after Milton Friedman’s Free to Choose (Part 1)

Free or Equal?: Johan Norberg Updates Milton & Rose Friedman’s Free to Choose I got this below from Reason Magazine: Swedish economist Johan Norberg is the host of the new documentary Free or Equal, which retraces and updates the 1980 classic Free to Choose, featuring Milton and Rose Friedman. Like the Friedmans, Norberg travels the globe […]

Reason Magazine’s rightly praises Milton Friedman but makes foolish claim along the way

I must say that I have lots of respect for Reason Magazine and for their admiration of Milton Friedman. However, I do disagree with one phrase below. At the end of this post I will tell you what sentence it is. Uploaded by ReasonTV on Jul 28, 2011 There’s no way to appreciate fully the […]

Video clip:Milton Friedman discusses his view of numerous political figures and policy issues in (Part 1)

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2 Uploaded by PenguinProseMedia on Oct 25, 2011 Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman’s best interviews, discussion spans Friedman’s career and his view of numerous political figures and public policy issues. ___________________ Two Lucky People by Milton and Rose Friedman […]

Milton Friedman remembered at 100 years from his birth (Part 1)

What a great man Milton Friedman was. The Legacy of Milton Friedman November 18, 2006 Alexander Tabarrok Great economist by day and crusading public intellectual by night, Milton Friedman was my hero. Friedman’s contributions to economics are profound, the permanent income hypothesis, the resurrection of the quantity theory of money, and his magnum opus with […]

Milton Friedman videos and transcripts Part 7

Milton Friedman videos and transcripts Part 7 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Transcript and video of Milton Friedman on Bill Clinton and Ronald Reagan (Part 1)

Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in […]

Dan Mitchell’s article on Chili and video clip on Milton Friedman’s influence

Milton Friedman and Chile – The Power of Choice Uploaded by FreeToChooseNetwork on May 13, 2011 In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous […]

Dan Mitchell: It’s time to celebrate another victory for school choice!!!

Milton Friedman – Public Schools / Voucher System

Published on May 9, 2012 by

The School Choice Revolution

It’s time to celebrate another victory for school choice.

  • In 2021, West Virginia adopted statewide school choice.
  • In 2022, Arizona adopted statewide school choice.
  • In 2023, Iowa adopted statewide school choice.

Now Utah has joined the club, with Governor Spencer Cox approving a new law that will give families greater freedom to choose the best educational options for their children.

Here are some details from Marjorie Cortez, reporting for the Deseret News.

The Utah Senate gave final passage to legislation that will provide $8,000 scholarships to qualifying families for private schools and other private education options…The bill passed by a two-thirds margin in each legislative house, which means it cannot be challenged by referendum. …The bill creates the Utah Fits All Scholarship, which can then be used for education expenses like curriculum, textbooks, education, software, tutoring services, micro-school teacher salaries and private school tuition.

As you might expect, teacher unions and their allies are very disappointed – which is a very positive sign.

…the Utah Education Association…opposed HB215… The bill was also opposed by the Utah State Board of Education, Utah PTA, school superintendents, business administrators and school boards. The Alliance for a Better Utah was pointed in its reaction… “Conservative lawmakers just robbed our neighborhood schools of $42 million. Private school vouchers have been and continue to be opposed by Utahns but these lawmakers are instead pursuing a national agenda to ‘destroy public education.’

The Wall Street Journal opined on this great development.

School choice is gaining momentum across the country, and this week Utah joined Iowa in advancing the education reform cause. …Utah’s bill, which the Senate passed Thursday, 20-8, makes ESAs of $8,000 available to every student. There’s no income cap on families who can apply, though lower-income families receive preference and the program is capped at $42 million. The funds can be used for private school tuition, home-schooling expenses, tutoring, and more.

But the best part of the editorial is the look at other states that may be poised to expand educational freedom.

About a dozen other state legislatures have introduced bills to create new ESA programs, and several want to expand the ones they have. In Florida a Republican proposal would extend the state’s already robust scholarship programs to any student in the state. The bill would remove income limits that are currently in place for families who want to apply, though lower-income applicants would receive priority. …South Carolina legislators are mulling a new ESA program for lower-income students. In Indiana, a Senate bill would make state ESAs available to more students. An Ohio bill would remove an income cap and other eligibility rules for the state’s school vouchers. Two Oklahoma Senate bills propose new ESA programs… ESA bills are in some stage of moving in Nebraska, New Hampshire, Texas and Virginia.

Let’s hope there is more progress.

School choice is a win-win for both students and taxpayers.

P.S. Here’s a must-see chart showing how more and more money for the government school monopoly has produced zero benefit.

P.P.S. There are very successful school choice systems in CanadaSwedenChile, and the Netherlands.

P.P.P.S. Getting rid of the Department of Education would be a good idea, but the battle for school choice is largely going to be won and lost on the state and local level.

The Machine: The Truth Behind Teachers Unions

Published on Sep 4, 2012 by

America’s public education system is failing. We’re spending more money on education but not getting better results for our children.

That’s because the machine that runs the K-12 education system isn’t designed to produce better schools. It’s designed to produce more money for unions and more donations for politicians.

For decades, teachers’ unions have been among our nation’s largest political donors. As Reason Foundation’s Lisa Snell has noted, the National Education Association (NEA) alone spent $40 million on the 2010 election cycle (source: http://reason.org/news/printer/big-education-and-big-labor-electio). As the country’s largest teachers union, the NEA is only one cog in the infernal machine that robs parents of their tax dollars and students of their futures.

Students, teachers, parents, and hardworking Americans are all victims of this political machine–a system that takes money out of taxpayers’ wallets and gives it to union bosses, who put it in the pockets of politicians.

Our kids deserve better.

“The Machine” is 4:17 minutes.

Written and narrated by Evan Coyne Maloney. Produced by the Moving Picture Institute in partnership with Reason TV.

Visit http://www.MovingPictureInstitute.org to learn more.

No one did more to advance the cause of school vouchers than Milton and Rose Friedman. Friedman made it clear in his film series “Free to Choose” how sad he was that young people who live in the inner cities did not have good education opportunities available to them.

I have posted often about the voucher system and how it would solve our education problems. What we are doing now is not working. Milton Friedman’s idea of implementing school vouchers was hatched about 50 years ago.

Poor families are most affected by this lack of choice. As Friedman noted, “There is no respect in which inhabitants of a low-income neighborhood are so disadvantaged as in the kind of schooling they can get for their children.” It is a sad statement quantified by data on low levels of academic achievement and attainment. Take a look at this article below.

Lindsey Burke

September 25, 2012 at 5:46 pm

SAT scores among the nation’s test-takers are at a 40-year low.

As The Washington Post reports:

Reading scores on the SAT for the high school class of 2012 reached a four-decade low, putting a punctuation mark on a gradual decline in the ability of college-bound teens to read passages and answer questions about sentence structure, vocabulary and meaning on the college entrance exam.

The decline over the decades has been significant. The average reading (verbal) score is down 34 points since 1972. Sadly, the historically low SAT scores are only the latest marker of decline. Graduation rates have been stagnant since the 1970s, reading and math achievement has been virtually flat over the same time period, and American students still rank in the middle of the pack compared to their international peers.

On the heels of the news about the SAT score decline, President Obama filmed a segment with NBC’s Education Nation earlier today. The President notably praised the concept of charter schools and pay for performance for teachers.

But those grains of reform were dwarfed by his support of the status quo. During the course of the interview, President Obama suggested hiring 100,000 new math and science teachers and spending more money on preschool. He also stated that No Child Left Behind had good intentions but was “under-resourced.”

Efforts by the federal government to intervene in preschool, most notably through Head Start, have failed—despite a $160 billion in spending on the program since 1965. And No Child Left Behind is far from “under-resourced.” The $25 billion, 600-page law has been on the receiving end of significant new spending every decade since the original law was first passed nearly half a century ago.

President Obama was also pressed on the issue of education unions by host Savannah Guthrie:

Some people think, President Obama gets so much support from the teachers’ unions, he can’t possibly have an honest conversation about what they’re doing right or wrong. Can you really say that teachers’ unions aren’t slowing the pace of reform?

President Obama responded: “You know, I just really get frustrated when I hear teacher-bashing as evidence of reform.”

Criticizing education unions for standing in the way of reform should not be conflated with criticizing teachers, as the President does in the interview. The unions have blocked reforms such as performance pay and charter schools (which the President supports), have opposed alternative teacher certification that would help mid-career professionals enter the classroom, and have consistently fought the implementation of school choice options for children.

If we ever hope to move the needle on student achievement—or see SAT scores turn in the right direction again—we’ll need to implement many of those exact reforms, particularly school choice.

And as he has in the past, President Obama stated that his Administration wants to “use evidenced-based approaches and find out what works.” We know what works: giving families choices when it comes to finding schools that best meet their children’s needs. Instead of continuing to call for more spending and more Washington intervention in education, let’s try something new: choice and freedom.

Related posts:

Milton Friedman remembered at 100 years from his birth (Part 4)

I ran across this very interesting article about Milton Friedman from 2002: Friedman: Market offers poor better learningBy Tamara Henry, USA TODAY By Doug Mills, AP President Bush honors influential economist Milton Friedman for his 90th birthday earlier this month. About an economist Name:Milton FriedmanAge: 90Background: Winner of the 1976 Nobel Prize for economic science; […]

Milton Friedman videos and transcripts Part 11

Milton Friedman videos and transcripts Part 11 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Open letter to President Obama (Part 117.3)

A Taxing Distinction for ObamaCare Published on Jun 28, 2012 by catoinstitutevideo http://www.cato.org/publications/commentary/it-now-falls-congress http://www.cato.org/publications/commentary/taxing-decision http://www.cato-at-liberty.org/supreme-court-unlawfully-rewrites-obamacare-to… http://www.cato-at-liberty.org/congress-its-not-a-tax-scotus-yes-it-is/ The Cato Institute’s Roger Pilon, Ilya Shapiro, Michael F. Cannon, Michael D. Tanner and Trevor Burrus evaluate today’s ruling on ObamaCare at the Supreme Court. Video produced by Caleb O. Brown and Austin Bragg. ____________ President Obama c/o The […]

Milton Friedman videos and transcripts Part 10

Milton Friedman videos and transcripts Part 10 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman videos and transcripts Part 9

Milton Friedman videos and transcripts Part 9 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman’s biography (Part 2)(Interview by Charlie Rose of Milton Friedman part 3)

Biography Part 2 In 1977, when I reached the age of 65, I retired from teaching at the University of Chicago. At the invitation of Glenn Campbell, Director of the Hoover Institution at Stanford University, I shifted my scholarly work to Hoover where I remain a Senior Research Fellow. We moved to San Francisco, purchasing […]

Milton Friedman at Hillsdale College 2006 (part 2)

Milton Friedman at Hillsdale College 2006 July 2006 Free to Choose: A Conversation with Milton Friedman Milton Friedman Economist Milton Friedman is a senior research fellow at the Hoover Institution at Stanford University and a professor emeritus of economics at the University of Chicago, where he taught from 1946-1976. Dr. Friedman received the Nobel Memorial […]

Milton Friedman videos and transcripts Part 8

Milton Friedman videos and transcripts Part 8 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Milton Friedman remembered at 100 years from his birth (Part 2)

Testing Milton Friedman – Preview Uploaded by FreeToChooseNetwork on Feb 21, 2012 2012 is the 100th anniversary of Milton Friedman’s birth. His work and ideas continue to make the world a better place. As part of Milton Friedman’s Century, a revival of the ideas featured in the landmark television series Free To Choose are being […]

Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

Free or equal? 30 years after Milton Friedman’s Free to Choose (Part 1)

Free or Equal?: Johan Norberg Updates Milton & Rose Friedman’s Free to Choose I got this below from Reason Magazine: Swedish economist Johan Norberg is the host of the new documentary Free or Equal, which retraces and updates the 1980 classic Free to Choose, featuring Milton and Rose Friedman. Like the Friedmans, Norberg travels the globe […]

Reason Magazine’s rightly praises Milton Friedman but makes foolish claim along the way

I must say that I have lots of respect for Reason Magazine and for their admiration of Milton Friedman. However, I do disagree with one phrase below. At the end of this post I will tell you what sentence it is. Uploaded by ReasonTV on Jul 28, 2011 There’s no way to appreciate fully the […]

Video clip:Milton Friedman discusses his view of numerous political figures and policy issues in (Part 1)

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2 Uploaded by PenguinProseMedia on Oct 25, 2011 Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman’s best interviews, discussion spans Friedman’s career and his view of numerous political figures and public policy issues. ___________________ Two Lucky People by Milton and Rose Friedman […]

Milton Friedman remembered at 100 years from his birth (Part 1)

What a great man Milton Friedman was. The Legacy of Milton Friedman November 18, 2006 Alexander Tabarrok Great economist by day and crusading public intellectual by night, Milton Friedman was my hero. Friedman’s contributions to economics are profound, the permanent income hypothesis, the resurrection of the quantity theory of money, and his magnum opus with […]

Milton Friedman videos and transcripts Part 7

Milton Friedman videos and transcripts Part 7 On my blog http://www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching […]

Transcript and video of Milton Friedman on Bill Clinton and Ronald Reagan (Part 1)

Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan. February 10, 1999 | Recorded on February 10, 1999 audio, video, and blogs » uncommon knowledge PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union with guest Milton Friedman Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in […]

Dan Mitchell’s article on Chili and video clip on Milton Friedman’s influence

Milton Friedman and Chile – The Power of Choice Uploaded by FreeToChooseNetwork on May 13, 2011 In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous […]

Dan Mitchell article: The Continuing Failure of Government-Run Healthcare in the United Kingdom

The Continuing Failure of Government-Run Healthcare in the United Kingdom

I’m routinely critical of the many ways that government intervention has created an expensiveand inefficient health system in the United States.

But there are countries where government causes even greater problems. So when I want to feel good about America’s clunky healthcare system,I look at the mess across the ocean.

The United Kingdom has a socialist health system. And it’s real socialism, with government running the hospitals and employing the doctors and nurses.

And this produces predictably bad results.

I’ve shared numerous horror stories about that approach (see here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here), but this report from David Parsley is so astounding that even some of my knee-jerk leftist friends may reconsider their support for big government.

Ukrainian refugees who travelled to the UK to escape the war are risking their lives by returning to their homeland to seek urgent medical treatments after giving up on the NHS. Due the NHS pressures and long waiting lists for procedures, Ukrainians living with families across the UK are taking the perilous trip back into a war zone where they are treated by doctors immediately despite Russian bombardments of their towns and cities.…Maiia Habruk escaped Kyiv last spring along with around five million fellow citizens and found a safe haven with a couple in south east London. But she returned to Ukraine in mid-December after failing to get the treatment she needed from her local hospital in Lewisham. …She decided the only way to get the treatment she believed she required was to make the 24-hour trip back to Ukraine, which includes a flight to Poland and a long and dangerous train journey to Kyiv. …Maiia, who witnessed almost daily bombing raids by the Russians while in Kyiv, knows three other Ukrainians in London who sought emergency health procedures back in their war-torn country due to the lack of availability of quick treatment from the NHS.

These people were engaging in cost-benefit analysis. They compared the risk of death, injury, or suffering from Russian bombs to the risk of death, injury, or suffering from languishing on a waiting list in the United Kingdom.

And they decided Russian bombs were the better option.

This disaster is attracting attention in other nations. The Wall Street Journal opined two days ago about the NHS.

The American left can’t seem to quit its desire for single-payer Medicare for All. So it’s worth noting that the United Kingdom, which already has a system resembling that socialist dream, is rethinking it amid another winter of healthcare misery. …Waiting times for ambulances for the most serious calls are getting longer, with the average response time reaching 10 minutes 57 seconds in December, compared to a target of seven.Once patients reach the emergency room, 35% now face waits above four hours… As of November, some 7.2 million patients have been referred for treatment but are waiting for it to start. Of those, 2.9 million have been waiting more than 18 weeks. The NHS considers itself a success if it starts treatment within that four-month window, which is the epitome of defining failure down. …Excess deaths in 2022 were the most since 1951, excluding the pandemic. …The U.S. suffers a chronic problem of healthcare financing but not of health-care delivery. Britain shows that with single-payer you end up with both. The U.K. also shows that single-payer’s biggest victims are low-income people who can’t afford to opt out.

Yet there are nonetheless American politicians who want to copy this failed system.

Allister Heath of the U.K.-based Telegraph has a grim assessment of his nation’s government-run system.

…the NHS is finished. It is broken beyond repair, ruining the lives of hundreds of thousands, and threatening the social fabric and economic performance of our nation. …this 75-year experiment in health socialism has failed appallingly, culminating in a surge in excess deaths, waiting lists that aren’t worthy of a civilised nation, inhumane strikes, intolerable delays for ambulances, explicit rationing…NHS spending is up 12 per cent in real terms since 2019-20; there are 13 per cent more doctors and 11 per cent more nurses, and yet the service delivered 5 per cent fewer treatments in the first nine months of 2022 than in the same period in 2019. …Its six pillars – that it is “free” at the point of use, the full state ownership of hospitals, its complete dependence on taxpayer funding, its supposed culture of altruism, its nature as a shared moral project uniting rich and poor, and its centrally planned workforce – are the very causes of its disintegration.

P.S. I can’t resist some closing comments about the politics of government-run health care.

The first story cited above includes these comments from left-of-center U.K. politicians.

Labour’s shadow health secretary Wes Streeting told i “Vladimir Putin is dropping bombs on Ukrainian hospitals, yet patients are travelling back to Kyiv rather than face NHS waiting lists. …Liberal Democrat health spokesperson Daisy Cooper said: “It’s a damning indictment of the government’s record on the NHS that Ukrainian refugees are returning to a war-torn country to access health care.”

Accurate criticisms, to be sure. But both Labour and the Lib Dems simply want to dump more money in the system.

But the so-called Conservative Party does exactly the same thing, as the Wall Street Journal noted in its editorial.

Former Prime Minister Boris Johnson in 2021 pledged an additional £36 billion over three years for the NHS and related home and nursing-home care, funded by a payroll-tax increase. Mr. Sunak and Chancellor Jeremy Hunt followed in November with another £3.3 billion a year for the next two years.

And Allister Heath made a similar observation in his column.

The Cameron-May-Johnson survival strategy was to “neutralise” the NHS by refusing to contemplate difficult reforms, genuflecting endlessly at its altar, prioritising it in every Budget, greatly boosting its funding after Brexit and worshipping it hysterically during the lockdowns; yet, in the end, it was the NHS that neutralised the Tories. Small-state, high-growth Toryism is incompatible with an unreconstructed NHS, with its need for ever-higher taxes. How long will the Conservatives continue to lie to themselves about this?

This is a good opportunity to revisit my “what’s the alternative?” argument.

Self-styled right-of-center parties have to choose whether to become tax collectors for the welfare state or whether to push for entitlement reform. There’s no other alternative.

P.P.S. There is one group of people who are net winners from the U.K.’s government-run system.


Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

Milton Friedman – Health Care Reform (1992) pt 1/4

Milton Friedman – Health Care Reform (1992) pt 2/4

Winter 2001
Since the end of World War II, the provision of medical care in the United States and other advanced countries has displayed three major features: first, rapid advance in the science of medicine; second, large increases in spending, both in terms of inflation-adjusted dollars per person and the fraction of national income spent on medical care; and third, rising dissatisfaction with the delivery of medical care, on the part of both consumers of medical care and physicians and other suppliers of medical care.

Rapid technological advance has occurred repeatedly since the industrial revolution – in agriculture, steam engine, railroad, telephone, electricity, automobile, radio, television, and, most recently, computers and telecommunication. The other two features seem unique to medicine. It is true that spending initially increased after nonmedical technical advances, but the fraction of national income spent did not increase dramatically after the initial phase of widespread acceptance. On the contrary, technological development lowered cost, so that the fraction of national income spent on food, transportation, communication, and much more has gone down, releasing resources to produce new products or services. Similarly, there seems no counterpart in these other areas to the rising dissatisfaction with the delivery of medical care.

I. International comparison

These developments in medicine have been worldwide. By their very nature, scientific advances know no geographical boundaries. Data on spending are readily available for 29 Organization for Economic Cooperation and Development (OECD) countries. In every one, medical spending has gone up both in inflation-adjusted dollars per person and as a fraction of national income. Data are available for both 1960 and 1997 for 21 countries. In 13, spending more than doubled as a fraction of gross domestic product. The smallest increase was 67 percent, the largest, 378 percent. In 1997, 16 of the 29 OECD countries spent between 7 percent and 9 percent of gross domestic product on medical care. The United States spent 14 percent, the highest of any OECD country. Germany was a distant second at 11 percent; Turkey was the lowest at 4 percent.

A key difference between medical care and the other technological revolutions is the role of government. In other technological revolutions, the initiative, financing, production, and distribution were primarily private, though government sometimes played a supporting or regulatory role. In medical care, government has come to play a leading role in financing, producing, and delivering medical service. Direct government spending on health exceeds 75 percent of total health spending for 15 OECD countries. The United States is next to the lowest of the 29 countries, at 46 percent. In addition, some governments indirectly subsidize medical care through favorable tax treatment. For the United States, such subsidization raises the fraction of health spending financed directly or indirectly by government to over 50 percent.

What are countries getting for the money they are spending on medical care? What is the relation between input and output? Spending on medical care provides a reasonably good measure of input, but, unfortunately, there is no remotely satisfactory objective measure of output. For the hospital segment, number of beds occupied may at first seem like an objective measure. However, improvements in medicine have included a reduction in the length of hospital stay required for various medical procedures or illnesses. So, fewer patient days may be a sign of greater, not lesser, output. The desired output of medical care is “good health.” But how can we quantify “good health,” and equally important, allow for the role that factors other than medical care – such as plentiful food, pure water, and protective clothing – play in producing “good health”?

The least objectionable measure I have been able to find is expected length of life at birth or at various later ages, though that too is a far from unambiguous measure of the output attributable to spending on medical care. The remarkable increase in life span in advanced countries during the past century reflects much more than spending on medical care proper. Moreover, it does not allow for changes in the quality of life-attempted measurement of which is still in its infancy.

Figure 1 (see Appendix) shows the relation in 1996 for the 29 OECD countries between the percentage of the gross domestic product spent on medical care and the expected length of life at birth for females.1 The relation is clearly positive, though very loose.2 The United States and Germany are clear outliers, ranking first and second in spending but twentieth and seventeenth in length of life. As another indication of looseness, nine countries spent between 7 and 8 percent of GDP on medicine. The group includes Japan, which has the highest expected length of life (83.6 years), and the Czech Republic, fourth from the bottom (77.3 years). Clearly, many factors other than spending on medical care affect expected length of life.

Exploring that relation more fully, however worthwhile a project, is not the purpose of this article, which is to examine the situation in the United States. I have presented the data on the OECD countries primarily to document the two (related?) respects in which the United States is an outlier: We spend a higher percentage of national income on medical care (and more per capita) than any other OECD country, and government finances a smaller fraction of that spending than all except Korea.

II. Why third-party payment?

Two simple observations are key to explaining both the high level of spending on medical care and the dissatisfaction with that spending. The first is that most payments to physicians or hospitals or other caregivers for medical care are made not by the patient but by a third party – an insurance company or employer or governmental body. The second is that nobody spends somebody else’s money as wisely or as frugally as he spends his own. These statements apply equally to other OECD countries. They do not by themselves explain why the United States spends so much more than other countries.

No third party is involved when we shop at a supermarket. We pay the supermarket clerk directly. The same for gasoline for our car, clothes for our back, and so on down the line. Why, by contrast, are most medical payments made by third parties? The answer for the United States begins with the fact that medical-care expenditures are exempt from the income tax if, and only if, medical care is provided by the employer. If an employee pays directly for medical care, the expenditure comes out of the employee’s income after income tax. If the employer pays for the employee’s medical care, the expenditure is treated as a tax-deductible expense for the employer and is not included as part of the employee’s income subject to income tax. That strong incentive explains why most consumers get their medical care through their employer or their spouse’s or their parents’ employer. In the next place, the enactment of Medicare and Medicaid in 1965 made the government a third-party payer for persons and medical care covered by those measures.

We have become so accustomed to employer-provided medical care that we regard it as part of the natural order. Yet it is thoroughly illogical. Why single out medical care? Food is more essential to life than medical care. Why not exempt the cost of food from taxes if provided by the employer? Why not return to the much-reviled company store when workers were in effect paid in kind rather than in cash?

The revival of the company store for medicine has less to do with logic than pure chance. It is a wonderful example of how one bad government policy leads to another. During World War II, the government financed much wartime spending by printing money while, at the same time, imposing wage and price controls. The resulting repressed inflation produced shortages of many goods and services, including labor. Firms competing to acquire labor at government-controlled wages started to offer medical care as a fringe benefit. That benefit proved particularly attractive to workers and spread rapidly.

Initially, employers did not report the value of a fringe benefit to the Internal Revenue Service as part of their workers’ wages. It took some time before the IRS realized what was going on. When it did, it issued regulations requiring employers to include the value of medical care as part of reported employees’ wages. By this time, workers had become accustomed to the tax exemption of that particular fringe benefit and made a big fuss. Congress responded by legislating that medical care provided by employers should be tax-exempt.

III. Effect of third-party payment on medical costs

The tax exemption of employer-provided medical care has two different effects, both of which raise health costs. First, it leads employees to rely on their employer, rather than themselves, to make arrangements for medical care. Yet employees are likely to do a better job of monitoring medical-care providers, because it is in their own interest, than is the employer or the insurance company or companies designated by the employer. Second, it leads employees to take a larger fraction of their total remuneration in the form of medical care than they would if spending on medical care had the same tax status as other expenditures.

If the tax exemption were removed, employees could bargain with their employers for a higher take-home pay in lieu of medical care and provide for their own medical care either by dealing directly with medical-care providers or by purchasing medical insurance. Removal of the tax exemption would enable governments to reduce the tax rate on income while raising the same total revenue. This hidden subsidy for medical care, currently more than $100 billion a year, is not included in reported figures on government health spending.

Extending the tax exemption to all medical care – as in the current limited provision for medical savings accounts and the proposals to make such accounts more widely available – would reduce reliance on third-party payment. But, by extending the hidden subsidy to all medical-care expenditures, it would increase the tendency of employees to take a larger portion of their remuneration in the form of medical care. (I will more fully discuss medical savings accounts in the conclusion.)

Enactment of Medicare and Medicaid provided a direct subsidy for medical care. The cost grew much more rapidly than originally estimated – as the cost of all handouts invariably do. Legislation cannot repeal the non-legislated law of demand and supply. The lower the price, the greater the quantity demanded; at a zero price, the quantity demanded becomes infinite. Some method of rationing must be substituted for price and that invariably means administrative rationing.

Figure 2 provides an estimate of the effect on medical costs of tax exemption and the subsequent enactment of Medicare and Medicaid. The top line in the chart is actual per capita spending on medical care expressed in constant 1992 prices, to allow for the effect of inflation. Spending multiplied more than 23-fold from 1919 to 1997, going from $155 per capita to $3,625. The bottom line shows what would have happened to per capita spending if it had continued to rise at the same rate as it did from 1919 to 1940 (3.1 percent per year). On that assumption, per capita spending would have risen to $1,751, instead of $3,625 by 1997, or less than half as much.3,4

To estimate the separate effects of tax exemption and of Medicare and Medicaid, the second line shows what would have happened to spending if, after Medicare and Medicaid were enacted, spending had continued to rise at the same rate as it did from 1946 to 1965 (4 percent per year). The segment between the two bottom lines shows the effect of tax exemption; the segment between the two top lines shows the effect of the enactment of Medicare and Medicaid. According to these estimates, tax exemption accounts for 57 percent of the increase in cost; Medicare and Medicaid, 43 percent.

Figure 3 presents a different breakdown of the cost of medical care: between the part paid directly by the government and the part paid privately. As the figure shows, the government share has been growing over the whole period. Government’s share went from one-eighth of the total in 1919 to nearly a quarter in 1946 to a quarter in 1965 to nearly half in 1997. The rise in the government’s share has been accompanied by centralization of spending – from primarily by state and local governments to primarily by the federal government. We are headed toward completely socialized medicine and are already halfway there, if in addition to direct costs, we include indirect tax subsidies.

Expressed as a fraction of national income, spending on medical care went from 3 percent of the national income in 1919 to 4.5 percent in 1946, to 7 percent in 1965 to a mind-boggling 17 percent in 1997.5 No other country in the world approaches that level of spending as a fraction of national income no matter how its medical care is organized. The change in the role of medical care in the U.S. economy is truly breathtaking. To illustrate, in 1946, seven times as much was spent on food, beverages, and tobacco as on medical care; in 1996, 50 years later, more was spent on medical care than on food, beverages, and tobacco. In 1946, twice as much was spent on transportation as on medical care; in 1996, one-and-a-half times as much was spent on medical care as on transportation.

IV. The changing meaning of insurance

Employer financing of medical care has caused the term “insurance” to acquire a rather different meaning in medicine than in most other contexts. We generally rely on insurance to protect us against events that are highly unlikely to occur but involve large losses if they do occur – major catastrophes, not minor regularly recurring expenses. We insure our houses against loss from fire, not against the cost of having to cut the lawn. We insure our cars against liability to others or major damage, not against having to pay for gasoline. Yet in medicine, it has become common to rely on insurance to pay for regular medical examinations and often for prescriptions.

This is partly a question of the size of the deductible and the co-payment, but it goes beyond that. “Without medical insurance” and “without access to medical care” have come to be treated as nearly synonymous. Moreover, the states and the federal government have increasingly specified the coverage of insurance for medical care to a detail not common in other areas. The effect has been to raise the cost of insurance and to limit the options open to individuals. Many, if not most, of the “medically uninsured” are persons who for one reason or another do not have access to employer-provided medical care and are not willing to pay the cost of the only kinds of insurance contracts available to them.

If tax exemption for employer-provided medical care and Medicare and Medicaid had never been enacted, the insurance market for medical care would probably have developed as other insurance markets have. The typical form of medical insurance would have been catastrophic insurance – i.e., insurance with a very high deductible.

V. Bureaucratization and Gammon’s Law

Third-party payment has required the bureaucratization of medical care and, in the process, has changed the character of the relation between physicians or other caregivers and patients. A medical transaction is not simply between a caregiver and a patient; it has to be approved as “covered” by a bureaucrat and the appropriate payment authorized. The patient, the recipient of the medical care, has little or no incentive to be concerned about the cost – since it’s somebody else’s money. The caregiver has become, in effect, an employee of the insurance company or, in the case of Medicare and Medicaid, the government. The patient is no longer the one, and the only one, the caregiver has to serve. An inescapable result is that the interest of the patient is often in direct conflict with the interest of the caregiver’s ultimate employer. That has been manifest in public dissatisfaction with the increasingly impersonal character of medical care.

Some years ago, the British physician Max Gammon, after an extensive study of the British system of socialized medicine, formulated what he called “the theory of bureaucratic displacement.” In Health and Security, he observed that in “a bureaucratic system … increase in expenditure will be matched by fall in production…. Such systems will act rather like ‘black holes,’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of ’emitted production.'” Gammon’s observations for the British system have their exact parallel in the partly socialized U.S. medical system. Here too input has been going up sharply relative to output. This tendency can be documented particularly clearly for hospitals, thanks to the availability of high quality data for a long period.

Before 1940, output, as measured by number of patient days per 1,000 population (equal to the number of occupied beds per 1,000 population) and input, as measured by cost per 1,000 population, both rose (input somewhat more than output presumably because of the introduction of more sophisticated and expensive treatments). The number of occupied beds per resident of the United States rose from 1929 to 1940 at the rate of 2.4 percent per year; the cost of hospital care per resident, adjusted for inflation, at 5 percent per year; and the cost per patient day, adjusted for inflation, at 2 percent per year.

The situation changed drastically after the war, as Figure 4 and the top part of Table 1 show. From 1946 to 1996, the number of beds per 1,000 population fell by more than 60 percent; the fraction of beds occupied, by more than 20 percent. In sharp contrast, input skyrocketed. Hospital personnel per occupied bed multiplied nine-fold, and cost per patient day, adjusted for inflation, an astounding 40-fold, from $30 in 1946 to $1,200 in 1996 (at 1992 prices). A major engine of these changes was the enactment of Medicare and Medicaid in 1965. A mild rise in input was turned into a meteoric rise; a mild fall in output, into a rapid decline. The 40-fold increase in the cost per patient day was converted into a 13-fold increase in hospital cost per resident of the United States by the sharp decline in output. Hospital days per person per year were cut by two-thirds, from three days in 1946 to an average of less than a day by 1996.

Taken by itself, the decline in hospital days is evidence of progress in medical science. A healthy population needs less hospitalization, and advances in science and medical technology have reduced the length of hospital stays and increased outpatient surgery. Progress in medical science may well explain most of the decline in output; it does not explain much, if any, of the rise in input per unit of output. True, medical machines have become more complex. However, in other areas where there has been great technical progress – whether it be agriculture or telephones or steel or automobiles or aviation or, most recently, computers and the Internet – progress has led to a reduction, not an increase, in cost per unit of output. Why is medicine an exception? Gammon’s law, not medical miracles, was clearly at work. The provision of medical care as an untaxed fringe benefit by employers, and then the federal government’s assumption of responsibility for hospital and medical care of the elderly and the poor, provided a fresh pool of money. And there was no shortage of takers. Growing costs, in turn, led to more regulation of hospitals and medical care, further increasing administrative costs, and leading to the bureaucratization that is so prominent a feature of medical care today.

Medicine is not the only area where this pattern has prevailed. Aside from defense and medicine, schooling is the only other major area of our society that is largely financed and administered by government, and here too Gammon’s law has clearly operated. Input per unit of output, however measured, has clearly been going up; output, especially if measured in terms of quality, has been going down, and dissatisfaction, as in medicine, is growing. The same may well be true also in defense. However, measuring output independently of input is even more baffling for defense than for medicine.

To return to medicine, hospital cost has risen as a percentage of total medical cost from 24 percent in 1946 to 32 percent half a century later. The cost of physician services is currently the second largest component of total medical cost. It too has risen sharply, though less sharply than hospital costs. In 1946, the cost of physician services exceeded the cost of hospital services. According to the estimates in Table 1, the cost of physician services has multiplied four-fold since 1946, the major rise coming after the adoption of Medicare and Medicaid in 1965.

Figure 5 shows what has happened to the number of physicians and their income. The number almost doubled, and the income per physician almost tripled over the half-century from 1946 to 1996. Both reflect the increase in funds available to finance medical care and the third-party character of payment. The demand for physician services went up, and income had to go up to attract additional physicians. Paradoxically, the attempt by third-party payers – particularly the federal government – to keep costs down has been at least partly self-defeating, because it took the form of imposing onerous rules and regulations on physicians. The resultant bureaucratization of medical practice has made the practice of medicine less attractive as an occupation to most actual and potential physicians, which increased the necessary rise in incomes. It has also reduced their productivity.

VI. Medical-care output

So much for input. What about output? What have we gotten in return for quadrupling the share of the nation’s income spent on medical care?

I have already referred to one component of output – days of hospital care per person per year. That has gone down from three days in 1946 to less than one in 1996. Insofar as the reduction reflects the improvements in medicine, it clearly is a good thing. However, it also reflects the pressure to keep hospital stays short in order to keep down cost. That this is not a good thing is clear from protests by patients, widespread enough to have led Congress to mandate minimum stays for some medical procedures.

The output of the medical-care industry that we are interested in is its contribution to better health. How can we measure better health in a reasonably objective way that is not greatly influenced by other factors? For example, if medical care enables people to live longer and healthier lives, we might expect that the fraction of persons aged 65 to 70 who continue to work would go up. In fact, of course, the fraction has gone down drastically – thanks to higher incomes reinforced by financial incentives from Social Security. With the same “if” we might expect the fraction of the population classified as disabled to go down, but that fraction has gone up, again not for reasons of health but because of government social security programs. And so I have found with one initially plausible measure after another – all of them are too contaminated by other factors to reflect the output of the medical-care industry.

As noted earlier, the least bad measure that I have been able to come up with is length of life, though that too is seriously contaminated by other factors – improvements in diet, housing, clothing, and so on generated by greater affluence, better garbage collection and disposal, the provision of purer water, and other governmental public-health measures. Wars, epidemics, and natural and man-made disasters have played a part. Even more important, the quality of life is as meaningful as the length of life. Perhaps the extensive research on aging currently underway will lead to a better measure than length of life.

Figures 6 and 7 present two different sets of data on expected length of life: Figure 6, expected length of life at birth; Figure 7, remaining length of life at age 65. Both cover the whole century, from 1900 to 1997, the last year for which I was able to get data. For Figure 6 the data are annual; for Figure 7, decennial until recent years. The two tell very different, but equally remarkable, stories.

Expected longevity went from 47 years in 1900 to 68 years in 1950, a truly remarkable rise that proceeded at a fairly steady rate, averaging four-tenths of a year per year. Public-health activities, such as those leading to cleaner water and air and better control of epidemics, played a major role in lengthening life, no doubt; but so too did improvements in medical practice and hospital care, particularly those leading to a sharp reduction in infant and maternal mortality. Whatever its source, the increase in longevity did not have any systematic relation to spending on medical care as a fraction of income. We have reasonably accurate data on spending only from 1929 on; crude data from 1919 on. Except for the deep depression years of 1932 and 1933, national health spending never exceeded 5 percent of national income, and from 1919 to 1948, varied between 3 and 5 percent, primarily as a result of wider swings in national income than in health spending.

The most striking feature of Figure 6 is the sharp slowdown in the increase in longevity after 1950. From 1950 on, longevity grew at less than half the rate that it grew from 1900 to 1950-averaging less than two-tenths of a year per year compared to the earlier four-tenths.6 In the first 50 years of the century, the life span increased by 21 years; in the next 47 years, by eight years. As in the first 50 years, the increase proceeded at a surprisingly steady pace. I have no good explanation for the shift from one trend to the other. I conjecture that it reflects the exhaustion by the end of World War II of the possibility of further major improvements from public-health activity. I leave it to scholars more knowledgeable about medicine than I to give a more satisfactory answer.

The later trend was accompanied, as the earlier one was not, by a major increase in spending as a fraction of national income. However, I attribute that increase in spending to the changes in the economic organization of medical care discussed earlier. I doubt that it is related as either cause or effect to the slowdown in the growth of longevity.

Data are much less readily available for longevity at age 65 than at birth, so I have resorted to the use of decennial estimates except for the most recent year. Figure 7 is almost the mirror image of Figure 6 – that is, the same picture reversed. Instead of first rising rapidly and then slowly, longevity at age 65 at first rose slowly and then rapidly. Until 1940, longevity rose at an average of only .025 years per year. Remaining years of life went from 12 – or to age 77 – in 1900 to 13 – or age 78 – in 1940. Then there was a sharp acceleration, and in the next 57 years, remaining years of life went up by an additional five years to 18 – or age 83, rising at the average rate of .085 years per year. Understandably, both the earlier and the later rates of growth in longevity at age 65 are much smaller than the comparable figures for longevity at birth. The remarkable phenomenon is the shift in trend around 1940, and the steadiness of the trend both before and after 1940.

Data for later years of life suggests that the steadiness of the trend in longevity at age 65 is not likely to continue. At these later ages, there has been a distinct slowing of increases in longevity since about 1980. At age 85, remaining years of life for females has not changed in the 17 years from 1980 to 1997. It was 6.4 years in both 1980 and 1997.7

What caused the change in the trend at age 65, and why was that change in the opposite direction from the change in the trend at birth, and why did it occur about 10 years earlier? Could it have been the emergence of penicillin and sulfa at around 1940 that explains the dating of the shift? No doubt many other advances in medicine, from the handling of blood pressure to the perfecting of open-heart surgery, the improved treatment of cancer, and the better understanding of diet were of special importance for preventing death at later ages. I am incompetent to judge these matters and their relative importance. But I have no doubt that one economic change also played an important role. That was the sharp improvement in the economic status of the elderly brought about by government transfer programs, notably Social Security. From being among the poorest groups in society, the elderly have become among the most affluent in the post-World War II period.

However interesting these speculations may be, they are a long way from providing an answer to the question with which we started this section, namely, “What have we gotten in return for quadrupling the share of the nation’s income spent on medical care?” The slowdown in the increase of longevity at birth started before tax exemption and Medicare had any effect on spending. Similarly, the acceleration in the increase in longevity at age 65 started 25 years before Medicare was enacted and showed no speedup thereafter. Perhaps better measures of the health of the population and various subgroups will show a relation to total spending. But on the evidence to date, it is hard to see that we have gotten much for that spending other than bureaucratization and widespread dissatisfaction with the economic organization of medical care.

Promo by Google

Are you looking for a way to save money on auto insurance? We’ve taken the mystery out of this confusing subject by outlining 10 simple steps to saving money while getting the best coverage for yourself and your car. Welcome:
Auto Insurance reviews

VII. The United States vs. other countries

Our steady movement toward reliance on third-party payment no doubt explains the extraordinary rise in spending on medical care in the United States. However, other advanced countries also rely on third-party payment, many or most of them to an even greater extent than we do. What explains our higher level of spending?

I must confess that despite much thought and scouring of the literature, I have no satisfactory answer. One clue is my estimate that if the pre-World War II system had continued – that is, if tax exemption and Medicare and Medicaid had never been enacted – expenditures on medical care would have amounted to less than half its current level, which would have put us near the bottom of the OECD list rather than at the top.

In terms of holding down cost, one-payer directly administered government systems, such as exist in Canada and Great Britain, have a real advantage over our mixed system. As the direct purchaser of all or nearly all medical services, they are in a monopoly position in hiring physicians and can hold down their remuneration, so that physicians earn much less in those countries than in the United States. In addition, they can ration care more directly – at the cost of long waiting lists and much dissatisfaction.8

In addition, once the whole population is covered, there is little political incentive to increase spending on medical care. In an insightful analysis of political entrepreneurship, W. Allen Wallis noted that

one of the ways politicians compete for votes is by offering to have the government provide new services. For an offer of a new service to have substantial electoral impact, the service ordinarily must be one that a large number of voters is familiar with, and in fact already use. The most effective innovations for a political entrepreneur to offer, therefore, are those whose effect is to transfer from individuals to the government the costs of services which are already in existence, not to alter appreciably the amount of the service reaching the people.9

Medicare, Medicaid, the political stress on the “uninsured,” and the current political pressure for government financing of prescriptions all exemplify this phenomenon. Once the bulk of costs have been taken over by government, as they have in most of the other OECD countries, the political entrepreneur has no additional groups to attract, and attention turns to holding down costs.

An additional factor is the tax treatment of private expenditures on medical care. In most countries, any private expenditure comes out of after-tax income. It does in the United States also, unless the medical care is provided by the employer. For this reason, the bulk of medical care is provided through employers, and private expenditures on medical care are decidedly higher than they would be if medical care, like food, clothing, and other consumer goods, had to be financed out of post-tax income. It is consistent with this view that Germany, the country second to the United States in the fraction of income spent on medical care, has a system in which the employer plays a central role in the provision of medical care and in which, so far as I have been able to determine, half of the cost comes out of pre-tax income, half out of post-tax income.

Our mixed system has many advantages in accessibility and quality of medical care, but it has produced a higher level of cost than would result from either wholly individual choice or wholly collective choice.

VIII. Medical savings accounts and beyond

The high cost and inequitable character of our medical-care system is the direct result of our steady movement toward reliance on third-party payment. A cure requires reversing course, reprivatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes.

The ideal way to do that would be to reverse past actions: repeal the tax exemption of employer-provided medical care; terminate Medicare and Medicaid; deregulate most insurance; and restrict the role of the government, preferably state and local rather than federal, to financing care for the hard cases. However, the vested interests that have grown up around the existing system, and the tyranny of the status quo, clearly make that solution not feasible politically. Yet it is worth stating the ideal as a guide to judging whether proposed incremental changes are in the right direction.

Most changes made in the final decade of the twentieth century have been in the wrong direction. Despite rejection of the sweeping socialization of medicine proposed by Hillary Clinton, subsequent incremental changes have expanded the role of government, increased regulation of medical practice, and further constrained the terms of medical insurance, thereby raising its cost and increasing the fraction of individuals who choose or are forced to go without insurance.

There is one exception, which, though minor in current scope, is pregnant of future possibilities. The Kassebaum-Kennedy bill, passed in 1996 after lengthy and acrimonious debate, included a narrowly limited four-year pilot program authorizing medical savings accounts. A medical savings account enables individuals to deposit tax-free funds in an account usable only for medical expense, provided they have a high-deductible insurance policy that limits the maximum out-of-pocket expense. As noted earlier, it eliminates third-party payment except for major medical expenses and is thus a movement very much in the right direction. By extending tax exemption to all medical expenses whether paid by the employer or not, it eliminates the present bias in favor of employer-provided medical care. That too is a move in the right direction. However, the extension of tax exemption increases the bias in favor of medical care compared to other household expenditures. This effect would tend to increase the implicit government subsidy for medical care, which would be a step in the wrong direction.10 But, on balance, given how large a fraction of current medical expenditures are exempt, it seems likely that the net effect of widely available and flexible medical savings accounts would be very much in the right direction.

However, the current pilot program is neither widely available nor flexible. The act limits the number of medical savings accounts to no more than 750,000 policies, available only to the self-employed who are uninsured and employees at firms with 50 or fewer employees. Moreover, the act specifies the precise terms of the medical savings account and the associated insurance. Finally, at the end of four years (the year 2000) Congress will have to vote to continue or change the program. (Those who signed up in the first four years would be entitled to continue their accounts even if Congress terminates the program.) A number of representatives and senators have indicated their intention to introduce bills to extend and widen the availability of medical savings accounts.

Prior to this pilot project, a number of large companies (e.g., Quaker Oats, Forbes, Golden Rule Insurance Co.) had offered their employees the choice of a medical savings account instead of the usual low-deductible employer-provided insurance policy. In each case, the employer purchased a high-deductible major medical insurance policy for the employee and deposited a stated sum, generally about half of the deductible, in a medical savings account for the employee. That sum could be used by the employee for medical care. Any part not used during the year was the property of the employee and had to be included in taxable income. Despite this loss of tax exemption, this alternative has generally been very popular with both employers and employees. It has reduced costs for the employer and empowered the employee, eliminating much third-party payment.

Medical savings accounts offer one way to resolve the growing financial and administrative problems of Medicare and Medicaid. Each current participant could be given the alternative of continuing with present arrangements or receiving a high-deductible major medical insurance policy and a specified deposit in a medical savings account. New entrants would be required to accept the alternative. Many details would have to be worked out: the size of the deductible and the deposit in the medical savings account, the size of any co-payment, and whether additional medical spending would be tax-exempt. Yet it seems clear from private experience that a program along these lines would be less expensive and bureaucratic than the current system, and more satisfactory to the participants. In effect, it would be a way to voucherize Medicare and Medicaid. It would enable participants to spend their own money on themselves for routine medical care and medical problems, rather than having to go through HMOs and insurance companies, while at the same time providing protection against medical catastrophes.

An interesting and instructive experiment with medical savings accounts has recently taken place in South Africa, as explained by Shaun Matisonn of the National Center for Policy Analysis:

For most of the last decade [the nineties] – under the leadership of Nelson Mandela – South Africa enjoyed what was probably the freest market for health insurance anywhere in the world…. South Africa’s insurance regulations were and are sufficiently flexible to allow the type of innovation and experimentation that American law stifles…. The result has been remarkable…. In just five years, MSA plans captured half the market, proving that they are popular and meet consumer needs as well as or better than rival products. South Africa’s experience with MSAs shows that MSA holders save money, spending less on discretionary items in a way that does not increase the cost of inpatient care. Contrary to allegations by some critics, the South African experience also shows that MSAs attract individuals of all different ages and different degrees of health.

A more radical reform would, first, end both Medicare and Medicaid, at least for new entrants, and replace them by providing every family in the United States with catastrophic insurance – i.e., a major medical policy with a high deductible. Second, it would end tax exemption of employer-provided medical care. And third, it would remove the restrictive regulations that are now imposed on medical insurance – hard to justify with universal catastrophic insurance.

This reform would solve the problem of the currently medically uninsured, eliminate most of the bureaucratic structure, free medical practitioners from an increasingly heavy burden of paperwork and regulation, and lead many employers and employees to convert employer-provided medical care into a higher cash wage. The taxpayer would save money because total government costs would plummet. The family would be relieved of one of its major concerns – the possibility of being impoverished by a major medical catastrophe – and most could readily finance the remaining medical costs. Families would once again have an incentive to monitor the providers of medical care and to establish the kind of personal relations with them that were once customary. The demonstrated efficiency of private enterprise would have a chance to improve the quality and lower the cost of medical care. The first question asked of a patient entering a hospital might once again become “What’s wrong?” and not “What’s your insurance?”

While so radical a reform is almost surely not politically feasible at the moment, it may become so as dissatisfaction with the current arrangements continue to grow. And again, it gives a standard – if less than an ideal one – against which to judge incremental changes.


a

a

a

a

a

a

a

a

Notes

1 Females only are included to remove one source of irrelevant difference among countries. In general, females tend to have a longer expected length of life than males, and countries differ in the ratio of males to females. The correlation of expected length of life with per capita spending on medical care in dollars is almost the same as with percent of GDP spent on medical care.

2 The correlation is partly spurious because percent spent tends to be positively correlated with real GDP, and real GDP is positively correlated with length of life for given percent spent. However, the partial correlation of percent spent with length of life is statistically significant and higher than the partial correlation of real GDP with length of life.

3 In an extensive study, the Rand Corporation compared the effect of different health-insurance plans, varying from one with no deductible and no co-payment – that is, free medical care – to one with 95 percent co-payment, very close to complete private responsibility. In his summary of the results, Joseph Newhouse concluded that, “had there been no MDE [maximum deductible expense], demand on the 95 percent coinsurance plan would have been a little over half as large as on the free care plan,” and an accompanying table gives 55 percent as the actual fraction.

The 1997 value of the extrapolated trend from 1919-1940 is 48 percent of on a completely independent set of data. See Joseph P. Newhouse, Free for All? Lessons from Rand Health Insurance Experiment (Harvard University Press, 1993), p. 458.

4 Had this been the total expenditure in 1996, the United States would have ranked twenty-first, rather than first, among the 29 OECD countries in fraction of income spent on medical care.

5 The figure of 14 percent referred to earlier was from OECD data; it referred to 1996 rather than 1997 and to percent of gross domestic product, not national income.

6 I have used data for the population as a whole, although data are also available by sex and race. There are minor differences between the sexes and between the races, but the broad picture is essentially the same for all, so I have not thought it worthwhile to present more detailed data, as I did in Input and Output in Medical Care (Stanford: Hoover Institution Press, 1992).

7 I am indebted to James Fries, a leading expert on aging, for calling this phenomenon to my attention. The data cited are from Metropolitan Life Insurance Statistical Bulletin, Oct.-Dec., 1998.

8 See Cynthia Ramsay and Michael Walker, Critical Issues Bulletin: Waiting Your Turn, 7th edition (Vancouver, B.C., Canada: Fraser Institute, 1997).

9 W. Allen Wallis, An Overgoverned Society (Free Press, 1976), p. 256.

10 Whether medical savings accounts increase or decrease the government subsidy to medical care, including the hidden tax subsidy of tax exemption, depends on whether they raise or lower total medical expenditures exempted from tax. First-party payment works toward reducing such expenditures by giving consumers an incentive to economize and by reducing administrative costs. The availability of tax exemption to a wider class of medical expenses has the opposite effect. Such experience as we have with medical savings accounts or their equivalent suggests that the first effect is highly significant and is likely to overwhelm the second. However, this issue deserves more systematic investigation.

Milton Friedman is a senior research fellow at the Hoover Institution and author (with Rose D. Friedman) of Two Lucky People (University of Chicago Press, 1998). He received the Nobel Prize for Economic Science in 1976.

Milton Friedman – Health Care Reform (1992) pt 3/4

Milton Friedman – Health Care Reform (1992) pt 4/4

_____________________

Related posts:

Dan Mitchell on Obamacare Supreme Court Decision: “I’m disgusted that the Supreme Court once again has decided to put politics above the Constitution!” (Includes lots of videos and cartoons)

__________ Enzi statement on the Supreme Court’s King Vs. Burwell decision 5 Takeaways From Today’s Supreme Court Ruling on Obamacare Wicker Comments on King v Burwell Supreme Court Decision Senator Lankford Discusses the King v. Burwell Supreme Court Decision Congressman Steve King Response to SCOTUS King v. Burwell Ruling Obamacare and the Odious Anti-Constitutionalism of […]

Open letter to President Obama (Part 718) Cartoonists Go to War against Obamacare

Open letter to President Obama (Part 718) (Emailed to White House on 6-25-13.) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get […]

The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992

______ Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992 In his new book, Money Mischief, economist Milton Friedman compares inflation to alcoholism; blames the rise of Chinese communism, in large part, on an […]

NEW RIVER MEDIA INTERVIEW WITH: MILTON FRIEDMAN Professor Emeritus of Economics, University of Chicago Senior Fellow, Hoover Institution

______ Milton Friedman – A Conversation On Minimum Wage Milton Friedman Interview Milton Friedman is Professor Emeritus of Economics at the University of Chicago and Senior Fellow at the Hoover Institution.Dr. Friedman received the 1976 Nobel Memorial Prize for Economic Science. Member of the research staff of the National Bureau of Economic Research from 1937 […]

Walter E. Williams: “Milton Friedman was an economist’s economist” Wednesday, Dec. 6 2006 1

________ Milton Friedman on Donahue – 1979 Uploaded on Aug 26, 2009 Dr. Milton Friedman, Nobel Laureate, promoting “Free to Choose” on the show Donahue. Walter E. Williams: Milton Friedman was an economist’s economist Print Font [+] [-] Leave a comment » By Walter E. Williams Published: Wednesday, Dec. 6 2006 12:00 a.m. MST Walter […]

FRIEDMAN FRIDAY 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow against Communism When Needed Most José Niño April 22, 2015

_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

FRIEDMAN FRIDAY Milton Friedman came up with the NEGATIVE INCOME TAX

____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

FRIEDMAN FRIDAY Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor

________________ Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate.  Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an […]

5 myths that conceal reality by Milton Friedman

A great speech below: Here are the myths:Robber Baron Myth, The Cause of Great Depression Myth, The Demand for Government Service Myth, The Free Lunch Smith, and The Robin Hood Myth. 1) the Robber Baron Myth, 2) the Great Depression Myth, 3) the Demand for Government Service Myth, 4) the Free Lunch Myth, and 5) […]

FRIEDMAN FRIDAY SEPTEMBER 4, 2006 An Interview with Milton Friedman

_______________ FEATURED ARTICLE | SEPTEMBER 4, 2006 An Interview with Milton Friedman Milton Friedman* I recently sat down with Milton Friedman, a few days before his 94th birthday, to discuss the impact of two of his most important contributions to economics and liberty: A Monetary History of the United States, 1870-1960 [co-written] with Anna Schwartz, […]

FRIEDMAN FRIDAY The Social Responsibility of Business is to Increase its Profits by Milton Friedman The New York Times Magazine, September 13, 1970.

Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

FRIEDMAN FRIDAY Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

FRIEDMAN FRIDAY The Fed should pay attention to Milton Friedman’s wisdom.

Too Much Money Portends High Inflation

The Fed should pay attention to Milton Friedman’s wisdom.

June’s inflation index jumped 5.4% from a year ago, the highest reading since August 2008. The experts were surprised. Clearly, Federal Reserve watchers never bothered to consult Milton Friedman. Lost is a core Friedman dictum: “Inflation is always and everywhere a monetary phenomenon.”

In his Feb. 23 testimony to Congress, Fed Chairman Jerome Powell said that the growth in the money supply, specifically M2, “doesn’t really have important implications.” The experts, the press and the bond vigilantes were as quick to unlearn monetarism, if they ever had learned it, as Mr. Powell. Reporting about U.S. inflation rarely contains the words “money supply.” We are repeatedly told that the most recent upticks in inflation are anomalous and “transitory.”

Wrong. The inflation upticks aren’t temporary and were predictable, driven by an extraordinary explosion in the money supply. Since March 2020, the M2 has been growing at an average annualized rate of 23.9%—the fastest since World War II. There is so much money out there that banks don’t know what to do with it. Via reverse repurchase agreements, banks and money-market funds are lending money to the Fed to the tune of $860 billion. That’s unprecedented.

According to monetarism, asset-price inflation should have occurred with a lag of one to nine months. Then, with a lag of six to 18 months, economic activity should have started to pick up. Lastly, after a lag of 12 to 24 months, generalized inflation should have set in. That’s the standard monetarist sequence, and it’s been followed to a T.

To get a handle on what the recent money supply explosion implies for inflation, consider a monetarist model for determining national income. That famous model was displayed on Milton Friedman’s California license plates. It’s compact: MV=Py, where M is the money supply, V is the velocity of money (the speed at which it circulates), P is the price level, and y is real gross domestic product.

Plug numbers into the model and solve for M, and money supply (M2) should be growing at around 6% a year for the Fed to hit its inflation target of 2%. With M2 growing at nearly four times the “ideal” rate since March 2020, inflation is baked into the cake, and it’s likely to persist. By the end of the year, the year-over-year inflation rate will be at least 6% and possibly as high as 9%.

Some who like to throw cold water on monetarism argue that the velocity of money has collapsed and will mitigate the inflationary impact of the rapid growth of the money supply. While velocity did collapse with the onset of Covid, it’s on track to pick up until the end of 2024. Consequently, velocity will grease the monetary wheels. That’s why inflation might hit the high end of our forecast range.

Mr. Powell and his colleagues should start paying attention to the money supply. Money matters. Indeed, it dominates.

Mr. Greenwood is chief economist at Invesco in London. Mr. Hanke is a professor of applied economics at Johns Hopkins University.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.“If we could just stop the printing presses, we would stop inflation,” Milton Friedman says in “How to Cure Inflation” from the Free To Choose series. Now as then, there is only one cause of inflation, and that is when governments print too much money. Milton explains why it is that politicians like inflation, and why wage and price controls are not solutions to the problem.

In this episode Friedman notes, “Inflation is just like alcoholism. In both cases when you start drinking or when you start printing too much money, the good effects come first. The bad effects only come later.

That’s why in both cases there is a strong temptation to overdo it. To drink too much and to print too much money. When it comes to the cure, it’s the other way around. When you stop drinking or when you stop printing money, the bad effects come first and the good effects only come later.”
Pt 3
Germany, 1945, a devastated country. A nation defeated in war. The new governing body was the Allied Control Commission, representing the United States, Britain, France and the Soviet Union. They imposed strict controls on practically every aspect of life including wages and prices. Along with the effects of war, the results were tragic. The basic economic order of the country began to collapse. Money lost its value. People reverted to primitive barter where they used cameras, fountain pens, cigarettes, whiskey as money. That was less than 40 years ago.
This is Germany as we know it today. Transformed into a place a lot of people would like to live in. How did they achieve their miraculous recovery? What did they know that we don’t know?
Early one Sunday morning, it was June 20, 1948, the German Minister of Economics, Ludwig Earhardt, a professional economist, simultaneously introduced a new currency, today’s Deutsche Mark, and in one fell swoop, abolished almost all controls on prices and wages. Why did he do it on a Sunday morning? It wasn’t as you might suppose because the Stock Markets were closed on that day, it was, as he loved to confess, because the offices of the American, the British, and the French occupation authorities were closed that day. He was sure that if he had done it when they open they would have countermanded the order. It worked like a charm. Within days, the shops were full of goods. Within months, the German economy was humming along at full steam. Economists weren’t surprised at the results, after all, that’s what a price system is for. But to the rest of the world it seemed an economic miracle that a defeated and devastated country could in little more than a decade become the strongest economy on the continent of Europe.
In a sense this city, West Berlin, is something of a unique economic test tube. Set as it is deep in Communist East Germany. Two fundamentally different economic systems collide here in Europe. Ours and theirs, separated by political philosophies, definitions of freedom and a steel and concrete wall.
To digress from inflation, economic freedom does not stand alone. It is part of a wider order. I wanted to show you how much difference it makes by letting you see how the people live on the other side of that Berlin Wall. But the East German authorities wouldn’t let us. The people over there speak the same language as the people over here. They have the same culture. They have the same for bearers. They are the same people. Yet you don’t need me to tell you how differently they live. There is one simple explanation. The political system over there cannot tolerate economic freedom. The political system over here could not exist without it.
But political freedom cannot be preserved unless inflation is kept in bounds. That’s the responsibility of government which has a monopoly over places like this. The reason we have inflation in the United States or for that matter anywhere in the world is because these pieces of paper and the accompanying book entry or their counterparts in other nations are growing more rapidly than the quantity of goods and services produced. The truth is inflation is made in one place and in one place only. Here in Washington. This is the only place were there are presses like this that turn out these pieces of paper we call money. This is the place where the power resides to determine how rapidly the amount of money shall increase.
What happened to all that noise? That’s what would happen to inflation if we stop letting the amount of money grow so rapidly. This is not a new idea. It’s not a new cure. It’s not a new problem. It’s happened over and over again in history. Sometimes inflation has been cured this way on purpose. Sometimes it’s happened by accident. During the Civil War the North, late in the Civil War, overran the place in the South where the printing presses were sitting up, where the pieces of paper were being turned out. Prior to that point, the South had a very rapid inflation. If my memory serves me right, something like 4% a month. It took the Confederacy something over two weeks to find a new place where they could set up their printing presses and start them going again. During that two week period, inflation came to a halt. After the two week period, when the presses started running again, inflation started up again. It’s that clear, that straightforward. More recently, there’s another dramatic example of the only effective way to deal with rampant inflation.
In 1973, Japanese housewives going to market were faced with an unpleasant fact. The cash in their purses seemed to be losing its value. Prices were starting to sore as the awful story of inflation began to unfold once again. The Japanese government knew what to do. What’s more, they were prepared to do it. When it was all over, economists were able to record precisely what had happened. In 1971 the quantity of money started to grow more rapidly. As always happens, inflation wasn’t affected for a time. But by late 1972 it started to respond. In early 73 the government reacted. It started to cut monetary growth. But inflation continued to soar for a time. The delayed reaction made 1973 a very tough year of recession. Inflation tumbled only when the government demonstrated its determination to keep monetary growth in check. It took five years to squeeze inflation out of the system. Japan attained relative stability. Unfortunately, there’s no way to avoid the difficult road the Japanese had to follow before they could have both low inflation and a healthy economy. First they had to live through a recession until slow monetary growth had its delayed effect on inflation.
Inflation is just like alcoholism. In both cases when you start drinking or when you start printing too much money, the good effects come first. The bad effects only come later.
That’s why in both cases there is a strong temptation to overdo it. To drink too much and to print too much money. When it comes to the cure, it’s the other way around. When you stop drinking or when you stop printing money, the bad effects come first and the good effects only come later. That’s why it’s so hard to persist with the cure. In the United States, four times in the 20 years after 1957, we undertook the cure. But each time we lacked the will to continue. As a result, we had all the bad effects and none of the good effects. Japan on the other hand, by sticking to a policy of slowing down the printing presses for five years, was by 1978 able to reap all the benefits, low inflation and a recovering economy. But there is nothing special about Japan. Every country that has had the courage to persist in a policy of slow monetary growth has been able to cure inflation and at the same time achieve a healthy economy.

Related posts:

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman The Power of the Market 1-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

________________

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 3 of 7)

Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside is the largest horde of gold in the world. Because the world was on a gold standard in 1929, these vaults, where the U.S. gold was stored, […]

“Friedman Friday” (Part 16) (“Free to Choose” episode 3 – Anatomy of a Crisis. part 2 of 7)

  George Eccles: Well, then we called all our employees together. And we told them to be at the bank at their place at 8:00 a.m. and just act as if nothing was happening, just have a smile on their face, if they could, and me too. And we have four savings windows and we […]

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 1of 7)

Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 FREE TO CHOOSE: Anatomy of Crisis Friedman Delancy Street in New York’s lower east side, hardly one of the city’s best known sites, yet what happened in this street nearly 50 years ago continues to effect all of us today. […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

____________________________

_____________


________________________________________________

_____________________________________________

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video) Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 3 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: If it […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 2 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 2 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Groups of concerned parents and teachers decided to do something about it. They used private funds to take over empty stores and they […]

By Everette Hatcher III | Also posted in Vouchers | Edit | Comments (1)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 1 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 1 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Friedman: These youngsters are beginning another day at one of America’s public schools, Hyde Park High School in Boston. What happens when […]

By Everette Hatcher III | Also posted in Vouchers | Tagged , , , , | Edit | Comments (0)

Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video)

Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video)

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 1 of transcript and video)

 Milton Friedman and Ronald Reagan Liberals like President Obama (and John Brummett) want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. […]

Milton Friedman Friday: (“Free to Choose” episode 4 – From Cradle to Grave, Part 3 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 3 OF 7 Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside […]

By Everette Hatcher III | Edit | Comments (0)

Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 2 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. For the past 7 years Maureen Ramsey has had to buy food and clothes for her family out of a government handout. For the whole of that time, her husband, Steve, hasn’t […]

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7)

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7) Volume 4 – From Cradle to Grave Abstract: Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act […]

By Everette Hatcher III | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 3 of 7)

  _________________________   Pt3  Nowadays there’s a considerable amount of traffic at this border. People cross a little more freely than they use to. Many people from Hong Kong trade in China and the market has helped bring the two countries closer together, but the barriers between them are still very real. On this side […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 2 of 7)

  Aside from its harbor, the only other important resource of Hong Kong is people __ over 4_ million of them. Like America a century ago, Hong Kong in the past few decades has been a haven for people who sought the freedom to make the most of their own abilities. Many of them are […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 1of 7)

“FREE TO CHOOSE” 1: The Power of the Market (Milton Friedman) Free to Choose ^ | 1980 | Milton Friedman Posted on Monday, July 17, 2006 4:20:46 PM by Choose Ye This Day FREE TO CHOOSE: The Power of the Market Friedman: Once all of this was a swamp, covered with forest. The Canarce Indians […]

By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

By Everette Hatcher III | Posted in Milton FriedmanPresident Obama | Edit | Comments (1)

Dan Mitchell: Trump’s Tax Returns and the Flat Tax

Trump’s Tax Returns and the Flat Tax

I applauded when Joe Biden used clever tax strategies to reduce his (apparently unpatriotic) tax bill to the IRS. I also applauded when Bill and Hillary Clinton engaged in clever tax avoidance, as well as John Kerry and Gov. Pritzker of Illinois.

In the spirit of bipartisanship, I also applaud when Donald Trump does the same thing, and that part of what we’re going to discuss today.

First, some background: The ongoing battle over Donald Trump’s personal tax information has finally ended. If you’re curious, the New York Times has a detailed report on what Trump earned (or lost) in recent years.

And the NYT also tells us how much tax he paid during those years.

When I look at these numbers, my first thought is that Trump is not a very good businessman since he has a negative income most years.

My second thought is that I’m glad he paid a low tax rate of about 3 percent in 2018 and approximately 4 percent in 2019, the two years when his income was positive.

Why am I glad? Because money in private hands is far more likely to be utilized wisely than money that gets diverted to the IRS and then spent by the politicians in Washington.

That’s the first part of today’s column.

The second part of today’s column is to use Trump’s tax return to show why the tax system would be much better if we junked the internal revenue code and replaced it with a simple and fair flat tax.

The flat is based on the principle of equality.

  • All income tax taxed at the same low rate.
  • No income is exempt from tax, other than a family-based allowance.
  • No income is subject to double taxation.

A tax system based on equality also means radical simplicity. The hundreds of different tax forms in today’s tax code would get dumped in the garbage.

All that would be left is a simple tax form for households.

And a simple tax form for businesses.

What would this mean for Trump’s tax returns? I’m sure the implications would be enormous, but I want to focus on just two issues.

First, under the flat tax, business losses can not be used to lower taxes on household income (wages, salaries, and pensions). So that would probably mean a higher tax burden for Trump.

Second, the tax treatment of business changes in ways that would both help Trump and hurt Trump. The most important thing to realize is that the convoluted corporate income tax (as well as parts of the personal income tax such as Schedule C) are replaced by a very simple cash-flow system.

Here’s how Professors Robert Hall and Alvin Rabushka describe the business portion of the flat tax.

The business tax is a giant, comprehensive withholding tax on all types of income other than wages, salaries, and pensions. It is carefully designed to tax every bit of income outside of wages, but to tax it only once. The business tax does not have deductions for interest payments, dividends, or any other type of payment to the owners of the business. As a result, all income that people receive from business activity has already been taxed. …The resulting simplification and improvement in the tax system is enormous. …Eliminating the deduction for interest paid by businesses is a central part of our general plan to tax business income at the source.

One very important implication of this approach is there there no longer would be a bias for debt. This would not be good news for people like Trump who usually rely on debt to finance their businesses.

On the other hand, the net result would be a tax code more favorable to investment and entrepreneurship. So if Trump is a good businessman, he will benefit.

I’m agnostic on Trump’s entrepreneurial ability, but I’m an unabashed fan of having a better tax system for America. Replacing the internal revenue codewith a sensible tax system would mean a more prosperous country and a less corrupt Washington.

P.S. Under a flat tax, a business would be allowed to “carry forward” losses from previous years, just as is usually the case for the current system.

P.P.S. A flat tax also would replace depreciation with expensing, which is another policy favorable to smart entrepreneurs.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

In this episode “How to Stay Free” Friedman makes the statement “What we need is widespread public recognition that the central government should be limited to its basic functions: defending the nation against foreign enemies, preserving order at home, and mediating our disputes. We must come to recognize that voluntary cooperation through the market and in other ways is a far better way to solve our problems than turning them over to the government.”

In this episode Milton Friedman makes the point, “There was no widespread public demand for Social Security programs… it had to be sold to the American people primarily by the group of reformers, intellectuals, new dealers, the people associated with FDR. The Social Security is one of the most misleading programs. It has been sold as an insurance program. It’s not an insurance program. It’s a program which combines a bad tax, a flat tax on wages up to a maximum with a very inequitable and uneven system of giving benefits under which some people get much, some people get little.”
Pt 5
Lawrence E. Spivak: I know, I believe, I say I know, I think I know, but I’ll say I believe that you felt, you blame the government for the Great Depression of 1929 through 1933 and of course, you had to blame FDR for all he did, but most people feel that he saved this free economy of ours.
Friedman: Given the catastrophe of the Great Depression, there is no doubt in my mind that emergency government measures were necessary. The government had made a mess. Not FDR’s government, it was the government that preceded him. Although it was mainly the Federal Reserve System which really wasn’t subject to election. But once FDR came in he did two very different kinds of things.
Lawrence E. Spivak: Well, had the government made a mess by what it did or but by what it didn’t do.
Friedman: By what it did. By it’s monetary policies which forced and produced a sharp decline in the total quantity of money. It was a mismanagement of the monetary apparatus. If there had been no federal reserve system, in my opinion, there would not have been a Great Depression at that time. But given that the depression had occurred, and it was a catastrophe of almost unimaginable kind, I do not fault at all, indeed on the contrary I commend Roosevelt for some of emergency measures he took. They obviously weren’t of the best, but they were emergency measures and you had an emergency you had to deal with. And the emergency measure such as relief programs, even the WPA which was a make work program, these served a very important function. He also served a very important function by giving people confidence in themselves. His great speech about the only thing we have to fear is fear itself was certainly a very important element in restoring confidence to the public at large. But he went much beyond that, he also started to change, under public pressure, the kind of government system we had. If you go beyond the emergency measures to the, what he regarded as reform measures, things like NRA and AAA, which were declared unconstitutional, but then from there on to the Social Security system, to the …
Lawrence E. Spivak: Take the Social Security System for a minute. The people wanted that, they wanted that protection. They were frightened, they wanted welfare.
Friedman: Not at all.
Lawrence E. Spivak: When you said pressure, who, pressure from whom?
Friedman: Pressure from people who were expressing what they thought the public ought to have. There was no widespread public demand for Social Security programs. The demands…….
Lawrence E. Spivak: No demand for welfare with 13 million people …….
Friedman: There was a demand for welfare and assistance I was separating out the emergency measures from the permanent measures. Social Security in the first 10 years of its existence, helped almost no one. It only took in money. Very few people qualified for benefits. It wasn’t an emergency measure. It was a long term measure. And it had to be sold to the American people primarily by the group of reformers, intellectuals, new dealers, the people associated with FDR. The Social Security is one of the most misleading programs. It has been sold as an insurance program. It’s not an insurance program. It’s a program which combines a bad tax, a flat tax on wages up to a maximum with a very inequitable and uneven system of giving benefits under which some people get much, some people get little. So that Social Security….
Lawrence E. Spivak: Would you now abolish Social Security?
Friedman: I would not go back on any of the commitments that the government has made. But I would certainly reform Social Security in a way that would end in its ultimate elimination.
Lawrence E. Spivak: If you’re not afraid then of the free market under any circumstances, where cooperation which you find necessary which you believe all to come, fails to come, where competition becomes so fierce and becomes very frequently corrupt and where, all where it becomes stupid. Take for example what’s happening in today’s market, the conglomerates. Which have been seizing up all sorts of, we happen to live in a hotel that’s run by a conglomerate. Why should ITT, for example, run a hotel and how are you going to stop that.
Friedman: Well in the first place, once again,
Lawrence E. Spivak: Without government, without…..
Friedman: Once again, it’s government measures that have promoted the conglomerates. The only major reason we have conglomerates is because they are a very effective way to get around a whole batch of tax legislation. Let me ask a different question. Who is more effected by government regulations, by government controls?
Lawrence E Spivak: I thought I was supposed to ask the questions. But I was warned that you might turn these on me.
Friedman: Well tell me, whose more effected the big fellow who can deal with it or that have a separated department to handle the red tape, or the poor fellow?
Lawrence E. Spivak: The big fellow can always take care of himself under any system.
Friedman: Right, and therefore he’ll want a system which gives the big fellow the least advantage. And the system under which he can get government to help him out, gives him the most advantage, not the least. You say am I afraid of greed, of lack of cooperation. Of course. But we always have to compare the real with the real. What are the real alternatives? And if we look at the record of history, if we go back to the 19th century which everybody always points to as the era of the robber baron who strode around the land and ground the poor under his heel, what do we find? The greatest outpouring of voluntary charitable activity in the history of the world. This University, this University of Chicago is an example. It was founded by contributions by John D. Rockefeller and other people. The colleges and universities throughout the Midwest. If you go back and ask when was the Red Cross founded, when was the Salvation Army founded, when were the Boy Scouts founded, you’ll discover all of that came during the 19th century in the era of unregulated rapacious capitalism.
Lawrence E. Spivak: I’d like to go back for a minute to the question of conglomerates. Granted that what you say that the government policies concentration on central government if you will, or whatever you want to call it, are responsible for the growth of conglomerates. What would we, what should we do about them now? Government try to undue them? Or should anybody try to undue them?
Friedman: No.
Lawrence E. Spivak: Or should you just let them fail?
Friedman: You should let them fail, of course. I am strongly opposed to government bailing any of them out. You should let them fail. The best things you can do in my opinion, are first to have complete free trade so you can have conglomerates in other countries compete with conglomerates in this country. We may have only two or three automobile companies, but there’s Toyota, there’s Volkswagen, competition from abroad is effective. But in the second place…
Lawrence E. Spivak: When do you say complete free trade you mean all over the world?
Friedman: No sir. I mean the U.S. all by itself unilaterally should eliminate all trade barriers. We would be better off if all the countries did the same.
Lawrence E. Spivak: What do you think would happen if we just did it though?
Friedman: I think we’d be very much better off and a lot others would then follow our example. That’s what happened in the 19th Century when Great Britain in 1846 completed removed, unilaterally, all trade barriers so that…..
Lawrence E. Spivak: You don’t think this country would be flooded with goods of all kinds from all over the world, maybe cheaper in that we wouldn’t have great unemployment in this country?
Friedman: What would the people who sold us goods do with their money? They’d get dollars, what would they do with the dollars? Eat them. If they want to send us goods and take dollars in return, we’re delighted to have them. No. That’s not a problem as long as you have a free exchange rate. Because we cannot export without importing, we cannot import without exporting. You would not have a reduction in employment, what you’d have would be a different pattern of employment. You’d have more employment in export industries and less employment in those industries that compete with import. But go back to conglomerates, Larry for a moment. I just want to ask a very different kind of a question. Conglomerates are not very attractive, I would much rather have a lot of small enterprises. But there’s all the difference in the world between a private conglomerate and a government conglomerate. In general, the government conglomerate can get money from you without your agreeing to give it to him. You and I pay for Amtrak and for the postal deficit whether we use the services of Amtrak or the postal deficit or not. I don’t pay your conglomerate unless I rent one of their apartments. I get something for my money. So bad as private conglomerates are, they’re less bad than one of the alternatives.

Related posts:

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman The Power of the Market 1-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

________________

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 3 of 7)

Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside is the largest horde of gold in the world. Because the world was on a gold standard in 1929, these vaults, where the U.S. gold was stored, […]

“Friedman Friday” (Part 16) (“Free to Choose” episode 3 – Anatomy of a Crisis. part 2 of 7)

  George Eccles: Well, then we called all our employees together. And we told them to be at the bank at their place at 8:00 a.m. and just act as if nothing was happening, just have a smile on their face, if they could, and me too. And we have four savings windows and we […]

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 1of 7)

Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 FREE TO CHOOSE: Anatomy of Crisis Friedman Delancy Street in New York’s lower east side, hardly one of the city’s best known sites, yet what happened in this street nearly 50 years ago continues to effect all of us today. […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

____________________________

_____________


________________________________________________

_____________________________________________

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video) Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 3 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: If it […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 2 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 2 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Groups of concerned parents and teachers decided to do something about it. They used private funds to take over empty stores and they […]

By Everette Hatcher III | Also posted in Vouchers | Edit | Comments (1)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 1 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 1 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Friedman: These youngsters are beginning another day at one of America’s public schools, Hyde Park High School in Boston. What happens when […]

By Everette Hatcher III | Also posted in Vouchers | Tagged , , , , | Edit | Comments (0)

Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video)

Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video)

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 1 of transcript and video)

 Milton Friedman and Ronald Reagan Liberals like President Obama (and John Brummett) want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. […]

Milton Friedman Friday: (“Free to Choose” episode 4 – From Cradle to Grave, Part 3 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 3 OF 7 Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside […]

By Everette Hatcher III | Edit | Comments (0)

Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 2 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. For the past 7 years Maureen Ramsey has had to buy food and clothes for her family out of a government handout. For the whole of that time, her husband, Steve, hasn’t […]

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7)

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7) Volume 4 – From Cradle to Grave Abstract: Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act […]

By Everette Hatcher III | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 3 of 7)

  _________________________   Pt3  Nowadays there’s a considerable amount of traffic at this border. People cross a little more freely than they use to. Many people from Hong Kong trade in China and the market has helped bring the two countries closer together, but the barriers between them are still very real. On this side […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 2 of 7)

  Aside from its harbor, the only other important resource of Hong Kong is people __ over 4_ million of them. Like America a century ago, Hong Kong in the past few decades has been a haven for people who sought the freedom to make the most of their own abilities. Many of them are […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 1of 7)

“FREE TO CHOOSE” 1: The Power of the Market (Milton Friedman) Free to Choose ^ | 1980 | Milton Friedman Posted on Monday, July 17, 2006 4:20:46 PM by Choose Ye This Day FREE TO CHOOSE: The Power of the Market Friedman: Once all of this was a swamp, covered with forest. The Canarce Indians […]

By Everette Hatcher III | Posted in Current Events, Milton Friedman | Edit | Comments (0)

“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

By Everette Hatcher III | Posted in Milton FriedmanPresident Obama | Edit | Comments (1)

Incoming House Oversight Chairman: ‘Imperative’ to Stop Omnibus Spending Bill

Rob Bluey  @RobertBluey / December 21, 2022

James Comer in a grey suit in front of an American flag

Rep. James Comer, R-Ky., the incoming chairman of the House Oversight and Reform Committee, is urging his Senate counterparts to reject the $1.85 trillion omnibus spending bill in order to strengthen GOP’s oversight authority for the next Congress.

Comer will ascend to chairman of the powerful House committee Jan. 3 with a range of investigations planned. Before he’s even able to get started, however, Senate Republicans who support the omnibus spending bill could strip Comer of important leverage—the power of the purse.

With 20 Republican senators already votingTuesday on a procedural motion to advance the bill, Senate Majority Leader Chuck Schumer, D-N.Y., appears to have enough GOP support to get the bill done this week.

That hasn’t stopped Comer and other House Republicans from warning about the consequences.

“It’s imperative that we stop the massive omnibusso that Republicans can use our majority power next Congress to conduct oversight of the federal government, hold the Biden Administration accountable, and enact good government reforms,” Comer told The Daily Signal in a statement.

Withholding money from the Biden administration is one tool House Republicans can use to exercise effective oversight—particularly if federal agencies and government officials are uncooperative or not forthcoming with information in the new year.

“The primary method that Congress can use to hold federal agencies accountable is via appropriations,” said Paul Winfree, former budget policy director for President Donald Trump and a distinguished fellow at The Heritage Foundation. “They should not be appropriating until they’ve figured out just how to use their oversight powers.” (The Daily Signal is the multimedia news organization of The Heritage Foundation.)

Passage of the omnibus spending bill would insulate the Biden administration from a spending fight for the next year. The bill making its way through the Senate funds the president’s agenda from through Sept. 30, 2023.

>>> No Surprise: Republicans Won’t Hold Biden Accountable

Comer was first elected to Congress in 2016 and served as ranking member on the House Oversight and Reform Committee while Democrats had the majority. He’ll ascend to the top spot once the 118th Congress starts in less than two weeks.

He’s among a vocal group of House Republicans who are warning about implications of passing the massive spending bill during the current lame-duck Congress rather than waiting until next year when Republicans have control of the House.

“It’s no surprise that Democrats are racing to use their waning days of power to force through trillions of dollars in new spending and a host of bad policies that will weaken our country,” Comer told The Daily Signal. “Democrats’ unhinged, inflation-inducing spending binge over the last two years caused 40-year high inflation that’s harming the pocketbooks of Americans and has allowed rampant government waste.”

In addition to Comer, 13 House Republicans are promising to oppose and stymie the legislative priorities of any Republican senator who votes in favor of the omnibus spending bill this week. They have the support of likely incoming House Speaker Kevin McCarthy, R-Calif., as well.

>>> Warning Shot: House Conservatives Threaten Revenge If GOP Senators Vote for Pelosi-Schumer Spending Bill

Schumer already has the support of Senate Minority Leader Mitch McConnell, R-Ky., and Sens. Richard Shelby, R-Ala., vice chairman of the Senate Appropriations Committee. They were among the 20 Senate Republicans who voted to move forward on the bill Tuesday.

Earlier this year, House Republicans outlined an ambitious oversight agenda. It includes an investigation of Homeland Security Alejandro Mayorkas’ failures leading to the border crisis, the government’s collusion with Big Tech to censor speech, the origins of COVID-19, Hunter Biden’s corrupt business dealings, the disastrous withdrawal from Afghanistan, politicization of the FBI, the administration’s promotion of critical race theory, and many other topics.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Remember to include the url or headline of the article plus your name and town and/or state.

A.F. Branco for Oct 21, 2021

 

Incoming House Oversight Chairman: ‘Imperative’ to Stop Omnibus Spending Bill

James Comer in a grey suit in front of an American flag

“It’s imperative that we stop the massive omnibus so that Republicans can use our majority power next Congress to conduct oversight of the federal government, hold the Biden Administration accountable, and enact good government reforms,” Rep. James Comer, incoming chairman of the House Oversight and Reform Committee, said in a statement. (Photo by Anna Moneymaker/Getty Images)

Rep. James Comer, R-Ky., the incoming chairman of the House Oversight and Reform Committee, is urging his Senate counterparts to reject the $1.85 trillion omnibus spending bill in order to strengthen GOP’s oversight authority for the next Congress.

Comer will ascend to chairman of the powerful House committee Jan. 3 with a range of investigations planned. Before he’s even able to get started, however, Senate Republicans who support the omnibus spending bill could strip Comer of important leverage—the power of the purse.

With 20 Republican senators already votingTuesday on a procedural motion to advance the bill, Senate Majority Leader Chuck Schumer, D-N.Y., appears to have enough GOP support to get the bill done this week.

That hasn’t stopped Comer and other House Republicans from warning about the consequences.

 

“It’s imperative that we stop the massive omnibusso that Republicans can use our majority power next Congress to conduct oversight of the federal government, hold the Biden Administration accountable, and enact good government reforms,” Comer told The Daily Signal in a statement.

Withholding money from the Biden administration is one tool House Republicans can use to exercise effective oversight—particularly if federal agencies and government officials are uncooperative or not forthcoming with information in the new year.

“The primary method that Congress can use to hold federal agencies accountable is via appropriations,” said Paul Winfree, former budget policy director for President Donald Trump and a distinguished fellow at The Heritage Foundation. “They should not be appropriating until they’ve figured out just how to use their oversight powers.” (The Daily Signal is the multimedia news organization of The Heritage Foundation.)

Passage of the omnibus spending bill would insulate the Biden administration from a spending fight for the next year. The bill making its way through the Senate funds the president’s agenda from through Sept. 30, 2023.

>>> No Surprise: Republicans Won’t Hold Biden Accountable

Comer was first elected to Congress in 2016 and served as ranking member on the House Oversight and Reform Committee while Democrats had the majority. He’ll ascend to the top spot once the 118th Congress starts in less than two weeks.

He’s among a vocal group of House Republicans who are warning about implications of passing the massive spending bill during the current lame-duck Congress rather than waiting until next year when Republicans have control of the House.

“It’s no surprise that Democrats are racing to use their waning days of power to force through trillions of dollars in new spending and a host of bad policies that will weaken our country,” Comer told The Daily Signal. “Democrats’ unhinged, inflation-inducing spending binge over the last two years caused 40-year high inflation that’s harming the pocketbooks of Americans and has allowed rampant government waste.”

In addition to Comer, 13 House Republicans are promising to oppose and stymie the legislative priorities of any Republican senator who votes in favor of the omnibus spending bill this week. They have the support of likely incoming House Speaker Kevin McCarthy, R-Calif., as well.

>>> Warning Shot: House Conservatives Threaten Revenge If GOP Senators Vote for Pelosi-Schumer Spending Bill

Schumer already has the support of Senate Minority Leader Mitch McConnell, R-Ky., and Sens. Richard Shelby, R-Ala., vice chairman of the Senate Appropriations Committee. They were among the 20 Senate Republicans who voted to move forward on the bill Tuesday.

Earlier this year, House Republicans outlined an ambitious oversight agenda. It includes an investigation of Homeland Security Alejandro Mayorkas’ failures leading to the border crisis, the government’s collusion with Big Tech to censor speech, the origins of COVID-19, Hunter Biden’s corrupt business dealings, the disastrous withdrawal from Afghanistan, politicization of the FBI, the administration’s promotion of critical race theory, and many other topics.

By voting for the $1.7 trillion spending bill, Senate Republicans would strip their House counterparts of the leverage they need on all those investigations and more by giving Biden and Democrats exactly what they want—money to continue on, unaffected, for another year.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Remember to include the url or headline of the article plus your name and town and/or state.


March 31, 2021

President Biden  c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Please explain to me if you ever do plan to balance the budget while you are President? I have written these things below about you and I really do think that you don’t want to cut spending in order to balance the budget. It seems you ever are daring the Congress to stop you from spending more.

President Barack Obama speaks about the debt limit in the East Room of the White House in Washington. | AP Photo

 

“The credit of the United States ‘is not a bargaining chip,’ Obama said on 1-14-13. However, President Obama keeps getting our country’s credit rating downgraded as he raises the debt ceiling higher and higher!!!!

Washington Could Learn a Lot from a Drug Addict

Just spend more, don’t know how to cut!!! Really!!! That is not living in the real world is it?

Making more dependent on government is not the way to go!!

Why is our government in over 16 trillion dollars in debt? There are many reasons for this but the biggest reason is people say “Let’s spend someone else’s money to solve our problems.” Liberals like Max Brantley have talked this way for years. Brantley will say that conservatives are being harsh when they don’t want the government out encouraging people to be dependent on the government. The Obama adminstration has even promoted a plan for young people to follow like Julia the Moocher.  

David Ramsey demonstrates in his Arkansas Times Blog post of 1-14-13 that very point:

Arkansas Politics / Health Care Arkansas’s share of Medicaid expansion and the national debt

Posted by on Mon, Jan 14, 2013 at 1:02 PM

Baby carrot Arkansas Medicaid expansion image

 

Imagine standing a baby carrot up next to the 25-story Stephens building in Little Rock. That gives you a picture of the impact on the national debt that federal spending in Arkansas on Medicaid expansion would have, while here at home expansion would give coverage to more than 200,000 of our neediest citizens, create jobs, and save money for the state.

Here’s the thing: while more than a billion dollars a year in federal spending would represent a big-time stimulus for Arkansas, it’s not even a drop in the bucket when it comes to the national debt.

Currently, the national debt is around $16.4 trillion. In fiscal year 2015, the federal government would spend somewhere in the neighborhood of $1.2 billion to fund Medicaid expansion in Arkansas if we say yes. That’s about 1/13,700th of the debt.

It’s hard to get a handle on numbers that big, so to put that in perspective, let’s get back to the baby carrot. Imagine that the height of the Stephens building (365 feet) is the $16 trillion national debt. That $1.2 billion would be the length of a ladybug. Of course, we’re not just talking about one year if we expand. Between now and 2021, the federal government projects to contribute around $10 billion. The federal debt is projected to be around $25 trillion by then, so we’re talking about 1/2,500th of the debt. Compared to the Stephens building? That’s a baby carrot.

______________

Here is how it will all end if everyone feels they should be allowed to have their “baby carrot.”

How sad it is that liberals just don’t get this reality.

Here is what the Founding Fathers had to say about welfare. David Weinberger noted:

While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813) was a Scottish lawyer, writer, and professor. Tytler was also a historian, and he noted, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Thomas Jefferson to Joseph Milligan

April 6, 1816

[Jefferson affirms that the main purpose of society is to enable human beings to keep the fruits of their labor. — TGW]

To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.” If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree; and the better, as this enforces a law of nature, while extra taxation violates it.

[From Writings of Thomas Jefferson, ed. Albert E. Bergh (Washington: Thomas Jefferson Memorial Association, 1904), 14:466.]

_______

Jefferson pointed out that to take from the rich and give to the poor through government is just wrong. Franklin knew the poor would have a better path upward without government welfare coming their way. Milton Friedman’s negative income tax is the best method for doing that and by taking away all welfare programs and letting them go to the churches for charity.

_____________

_________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Related posts:

Welfare Spending Shattering All-Time Highs

  We got to act fast and get off this path of socialism. Morning Bell: Welfare Spending Shattering All-Time Highs Robert Rector and Amy Payne October 18, 2012 at 9:03 am It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever. The Obama Administration turned a giant spotlight […]

We need more brave souls that will vote against Washington welfare programs

We need to cut Food Stamp program and not extend it. However, it seems that people tell the taxpayers back home they are going to Washington and cut government spending but once they get up there they just fall in line with  everyone else that keeps spending our money. I am glad that at least […]

Welfare programs are not the answer for the poor

Government Must Cut Spending Uploaded by HeritageFoundation on Dec 2, 2010 The government can cut roughly $343 billion from the federal budget and they can do so immediately. __________ Liberals argue that the poor need more welfare programs, but I have always argued that these programs enslave the poor to the government. Food Stamps Growth […]

Private charities are best solution and not government welfare

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

The book “After the Welfare State”

Dan Mitchell Commenting on Obama’s Failure to Propose a Fiscal Plan Published on Aug 16, 2012 by danmitchellcato No description available. ___________ After the Welfare State Posted by David Boaz Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Welfare reform part 3

Thomas Sowell – Welfare Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. The Continuing Good News About Welfare Reform By Robert Rector and Patrick Fagan, Ph.D. February 6, 2003 Six years ago, President Bill Clinton signed legislation overhauling part of the nation’s welfare system. […]

Welfare reform part 2

Uploaded by ForaTv on May 29, 2009 Complete video at: http://fora.tv/2009/05/18/James_Bartholomew_The_Welfare_State_Were_In Author James Bartholomew argues that welfare benefits actually increase government handouts by ‘ruining’ ambition. He compares welfare to a humane mousetrap. —– Welfare reform was working so good. Why did we have to abandon it? Look at this article from 2003. In the controversial […]

Why did Obama stop the Welfare Reform that Clinton put in?

Thomas Sowell If the welfare reform law was successful then why change it? Wasn’t Bill Clinton the president that signed into law? Obama Guts Welfare Reform Robert Rector and Kiki Bradley July 12, 2012 at 4:10 pm Today, the Obama Department of Health and Human Services (HHS) released an official policy directive rewriting the welfare […]

“Feedback Friday” Letter to White House generated form letter response July 10,2012 on welfare, etc (part 14)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on July 10, 2012. I don’t know which letter of mine generated this response so I have […]