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Giving School Choice the Milton Friedman Test

August 12, 2013 in Economics

By Andrew J. Coulson

Andrew J. Coulson

Last month marked the 101st anniversary of Milton Friedman’s birth. The date was celebrated across the nation, particularly — and rightly — by school-choice advocates. Although Friedman launched the modern school-choice movement and lived to see it rise to national prominence, there is still more that those of us who support educational freedom can learn from his example.

Friedman was famous for his advocacy of individual liberty and limited government, particularly in education, but often said that this was an avocation, not his vocation. Professionally, he studied the role of government spending and the money supply on consumers and unemployment. His work in this field was so compelling that it caused many economists to abandon their erstwhile Keynesian views, and it earned him the 1976 Nobel Prize in economics.

What distinguished that work was its rigorous empiricism and focus on long-term outcomes. For example, a reigning belief among mid-20th century economists was that if government handed out money during hard times, people would spend it, stimulating economic growth. Friedman theorized that this was wrong and proposed that consumers mostly base their spending decisions on their “permanent,” long-term income prospects — so they tend to save rather than spend temporary additional income. Then he put both theories to the test.

“The ultimate test of the validity of a theory,” Friedman wrote, is “the ability to deduce facts that have not yet been observed, that are capable of being contradicted by observation, and that subsequent observation does not contradict.” He collected data that could potentially demolish either Keynesian stimulus spending or his own “permanent income” theory — or both. When the numbers had been crunched, only Friedman’s theory was still standing.

To this day, Friedman’s conclusion remains the accepted view among economists. If education reformers wish posterity to be kind to their labors, we would do well do emulate Friedman’s rigorous empirical methods. That means testing our policy recommendations against reality and not allowing short-term benefits to cloud our assessment of long-term outcomes.

At present, there is little research comparing alternative school-choice policies such as vouchers, education tax credits and charter schools. Separately, each has been compared with the conventional public school system, but their relative merits have hardly been explored. As a result, decisions as to which of these policies should be advocated seldom have an empirical basis. Yet, what little evidence is available suggests that there may be real …read more

Source: OP-EDS

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