The Alabama Legislature failed to enact universal Education Savings Accounts (ESAs) this session, causing Alabama to fall further behind more innovative red states on school choice. Today I offer a measure to make Alabama the education reform leader: end government schools entirely.
Economists distinguish levels of government intervention in markets, beginning with regulation of private activity. Government funding constitutes more extensive involvement, and the most extensive is public or government production of the good or service itself. Public schools, for example, constitute public production, while Medicare is public provision of healthcare services. Adopting universal ESAs would move us toward public provision, but I suggest we end government schools entirely.
No economic arguments for public education require public production. Consider parents who cannot afford school. Public provision, say an ESA sufficient to cover the cost of some private schools, addresses this problem.
Another fear often raised is that parents who do not value formal learning will fail to enroll their children in school. Personally, I think very few people are such extremely poor parents, still, compulsory attendance with private schools addresses this issue.
A third argument notes education’s value to others besides the child being educated, or what economists call “positive externalities.” Several types of external benefits may exist, including reducing the likelihood of citizens voting for a demagogue, staying off public assistance, and devising inventions benefiting millions. The textbook response to a positive externality is a subsidy for consumers, or again, public provision.
Economist E. G. West, however, documented how the above arguments do not explain the rise of public schools in Great Britain or America. Indeed, America founded public schools to push Protestant education on Catholic children.
Managing the curriculum requires control. Parents want the basics taught and teachers can often deviate from an assigned curriculum. Thus, controlling instruction requires the ability to hire and fire teachers, or government schools.
Children would be the biggest winners with a market in education, but good teachers would also benefit, as teachers recognized for their great ability to help students learn and yield satisfied parents would be in great demand. A market for education should also involve much less oversight of teachers, as schools will provide the instruction that parents demand.
Universal ESAs would largely establish a market for education, but public schools could lead to potential for new controls. Would bureaucrats and lawmakers sit idly by if public school enrollment cratered? Or would they impose rules to protect the public schools? The potential for new controls could chill investment in private schools.
So let’s privatize public schools by giving the buildings to the teachers and administrators. Teachers could use the buildings to start their own schools or sell them to others wanting to start schools. Taxpayers would then pay off any outstanding debt for the schools.
This would be an enormous windfall to current teachers. Economics provides a reason for this: teachers and administrators (not staff or school board members) have made specific investments in the government school system. Specific investments have value in their designed use, but few alternative uses. Teachers’ specific investments might be worthless in an education market.
How exactly? Suppose that public school teachers today only know critical race theory and how to teach to a test and would be unemployable in an education market. (I exaggerate to illustrate my economic point; my son has had awesome teachers at Troy Elementary School.) Yet they have invested in their teaching degrees and licenses and DEI training in good faith. Giving them these school buildings keeps school choice from ruining them financially.
Economics highlights the difficulties plaguing reform. Those who have invested in the status quo will lose from reform, and consequently will oppose it. We need paths out of such policy quagmires – possibilities such as gifting school buildings to current teachers.
However, we absolutely should not give away school buildings and reinstate subsidies for schools a few years later. Privatization should amend Alabama’s constitution to prohibit state or local appropriations or assistance to schools. (ESAs assist students, not schools.)
Education reform is crucial to renewing America. Government schools are expensive, fail to educate many students, and are fonts of progressive indoctrination. Good teachers will benefit from school choice, but privatization offers a way for all teachers to benefit from reform.
Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.
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