Vouchers are in the news. One local newspaper led the week by editorially warning President-elect Bush to shun any plan for vouchers in public education. On the same day, the head of a state business group urged our Legislature to seriously consider tuition vouchers as a policy measure.
The whole issue of tuition vouchers for K-12 education has become such an emotionally charged one that it is difficult to carry on a reasonable dialog. But that is exactly what we need.
Sound bites and facile spin make good television news, but they don’t do much to advance public understanding or increase insight. The overall issue—how best to educate our nation’s youth—is an important one.
The issue of vouchers and their possible role in accomplishing public education can only be discussed within a more general framework of what goods and services governments should provide. Why is such government action necessary and what alternative measures can government take to accomplish what it needs to do? Let me start with these issues and deal with the specifics of K-12 education in a subsequent column.
Economists generally agree that there is a set of goods and services that we call “public goods.” Their use of the term is different from everyday use of the same words as in the statement “Abraham Lincoln cared deeply about the public good.” As economists use the term, they mean a set of goods and services that free markets generally will not produce spontaneously.
Economies will produce bread and snow shovels without any government action toward that end, but they will not produce tornado warnings, police protection, national defense or optimal amounts of highways, public health and education.
Economists agree that well-thought-out government action to provide public goods can improve the welfare of society tremendously. Yet many differ on the specific ways governments act most effectively and fairly.
One important principle stands out. The idea that government action is needed to provide some vital goods and services for society does not mean that government necessarily needs to carry out the actual production process itself. This distinction is not terribly subtle, but it gets overlooked in the heat of many debates.
Nevertheless, in many cases, government itself owns “the means of production,” to borrow a term from Marx. That is, it produces the goods with its own facilities, equipment and labor. Defense and safety are examples—stealth bombers, fire trucks and police cruisers are government property, and soldiers and fire fighters are government employees.
In other cases, government decides what goods are needed but then contracts with private firms for actual production. State highway departments design roads, but private firms build them. School districts plan new school buildings; private contractors lay the bricks. Increasingly, school officials also decide on their bus transportation needs and contract with a private company to provide buses and drivers.
Pragmatism rules in many areas. The outcome is a mix of public and private provision. In Europe until recently, governments usually provided telecommunications and electricity. In the U.S., these are regulated, private utilities. Here governments generally provide water, though some cities, such as Des Moines, Iowa, are exceptions.
In France, that paragon of centralized government, water supply has largely been private, giving French water firms a big leg up as many developing countries choose to privatize this essential service.
And returning to transportation, while governments contract with private firms to build roads, city or county employees usually take care of day-to-day maintenance such as plowing snow, filling potholes or mowing parks.
Hospitals and nursing homes are a similar mixed bag. Cities and counties own some, many are private nonprofits and some are private and for profit. Citizens who are eligible for Medicare or public assistance can go to any facility willing to accept such payment; they are not limited to a specific set of government hospitals, as they would be in many other countries. And the Veteran’s Administration or Medicaid pays for nursing home services in facilities run by Catholics, Lutherans, Mormons and Jews as well as in county, state or private for-profit facilities.
The general trend in recent years has been away from direct government production of public goods, and toward more contracting of private firms to accomplish this end. While public employees unions frequently have voiced strong opposition to such moves, the average citizen apparently does not find it terribly important as an issue. Education is the stark exception. We’ll examine why next week.
© 2001 Edward Lotterman
Chanarambie Consulting, Inc.