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Solving America’s Public School Crisis
February 20, 2003
Peter Brimelow, John D. Merrifield


David Theroux
President, The Independent Institute

Good evening, ladies and gentlemen. My name is David Theroux, and I’m the President of The Independent Institute. I’m delighted to welcome you to our Independent Policy Forum program this evening.

As many of you know, the Independent Policy Forum is a regular series of lectures, seminars, debates, and other events we hold here in Oakland and elsewhere in the Bay Area. This evening our program is entitled “Solving America’s Public School Crisis.”

As many of you know, the Institute is a public policy research institute. We sponsor many studies and produce many books. This is a copy of our journal, The Independent Review, which I hope everyone here subscribes to. And we hold many conference and media projects based on that, inviting people who produce books elsewhere as well—as with tonight.

For those of you interested in further information on school choice or education issues in general, we also welcome you to visit our Website and go to the archive page on education. I think you’ll find quite a number of informative studies as well as transcripts of events that we’ve held in the past.

In the packet, you’ll find a program that gives information about our speakers. It also mentions our next event, which is not scheduled yet, but will be on perhaps the other big issue these days—the war in Iraq—and we hope that you can all join us at that time. If you’re not already on our mailing list, including our e-mail list, we hope that you will leave that information with us, because we notify people that way and keep you up-to-date on upcoming events as best we can.

Also in your packet you’ll find information about a seminar program we put on each summer, for high school and college students, called the Summer Seminars in Political Economy. And these are one-week seminars, Monday through Friday mornings, which are co-sponsored by Holy Names College here in Oakland. Students also can receive a one-hour college course credit in economics by attending. It’s a very popular program. If there are students that you know who could benefit from a better understanding of the world they live in, we strongly encourage you to consider having them apply.

Another program of ours dealing with education is called the Independent Scholarship Fund. It’s a program that we operate in the East Bay counties of Alameda and Contra Costa, and it’s a privately funded program to provide tuition assistance to children of disadvantaged families. We currently work with about 100 schools. The program was started in 1999. And if you’re interested in projects that help kids now, without waiting for Sacramento or Washington and all the politics and disputes, this is a very efficient way of doing that. So we also welcome your involvement in that.

Tonight’s program, as you know, is on one of the most serious and widespread problems in American society, the increasing failure and problems in the public school system. For decades, of course, reformers have promised to improve public schools, but by and large costs continue to escalate, even though funding has increased simultaneously. For those of you not familiar with the situation in Oakland, this city has the sixth largest public school district in California. The school system is headed for the most expensive bailout in California history, estimated to be between $32 and $70 million. That’s for 48,000 students, meaning that the bailout will be approximately $1,500 per student. This is from a system that produces as many dropouts as graduates. And 75 percent of those who do graduate, read below the national average.

A couple of years ago the state’s fiscal crisis and management assistance team produced a six pound report in which the district received an “F” in every category. In response, the district adopted a number of school reforms, including smaller schools, a 25 percent raise in teacher salaries, and other reforms. And yet the overspending continued in special education, adult education, cafeteria funding, and a whole number of areas, with four separate accounting systems to track it—four separate departments, none of which spoke to each other.

So as former school finance troubleshooter, Pete Yasitis has indicated that on any given day he could request numbers, financial information, and the information would be off by at least millions of dollars—any day. In response, the school superintendent, Dennis Chaconas, received a 33 percent raise in salary from the school board. Meanwhile, when a new accounting system was implemented, it became clear that deficits were skyrocketing. So how could this happen?

Oakland is not unique, as our speakers will attest. The original nature of government schools in the modern era started in Germany, and they were actually adopted as a means to socialize and militarize youth, to be submissive to the national government, especially for wars of conquest. That was the purpose of it. Later it was adopted in other countries, including the U.S. The school system was actually intended to socialize immigrants, especially Catholic immigrants. They were considered to be not loyal to the national government. Interesting enough, during this period of transition into compulsory education, the studies indicate that literacy levels dropped significantly almost across the board.

So, handicapped by a government system of bureaucratic incompetence, public schools today operate in ways that would be unheard of in virtually any other field. Can you imagine Intel or Coca-Cola or your church or synagogue operating this way? It’s inconceivable. And yet, that’s what we have. So as the public schools have become ever more bureaucratized and politicized, what can be done? How do we understand this? How do we communicate this to other people?

We’re very pleased to have two authors and experts in education tonight. I’d like to first introduce a research fellow of ours, John Merrifield. John is Professor of Economics at the University of Texas, San Antonio. His book that just came out—we literally got copies today—is called School Choices: True and False. John received his Ph.D. in economics from the University of Wyoming. He’s been a planning analyst at the Illinois Bureau of the Budget. He’s taught at the University of Illinois and the University of Hawaii. He’s also the author of the book The School Choice Wars, and the author of many articles in both academic and popular publications. John. [Applause]

John Merrifield
Professor of Economics, University of Texas

I have my first cold in several years. I hope it doesn’t show too much or amplify too much. I’m not used to having a microphone in my face when I teach, but if I begin more animated and move around, hopefully, I’ll know instinctively to turn the volume up, because usually I can project to the back of a room this size, but I’ll try to stay parked by the microphone.

Well, a couple of weeks ago, I looked at the calendar, and I looked at some of the work that I was doing, and I was about to cite the Nation at Risk report from 1983, and I said, “1983, that’s 20 years ago. Did we miss the anniversary already? Gosh, I hope not, we should do something to commemorate—that might not be the right word—but to at least remember it.”

No, we haven’t missed it yet, and hopefully for those of you in control of media outlets, do something on April 23rd, 2003, because it will have been—it will be the 20th anniversary of a presidential commission saying we’re a nation at risk, and if a foreign government had done to us—given us our current education system—it would have been seen as an act of war.

And we responded to this, I mean I guess you could call it a response. There has been the equivalent of a full-court press in virtually all 50 states, determined to figure out some way to force teachers in the system to be successful—and literally force, because that’s how politics works. It passes more rules, it creates more restrictions.

And sadly, this full-court press, this reform frenzy that we’ve been in and continue to be in, has—I guess to be optimistic, you’d have to say has produced a mixed bag of results. Most of what’s in the bag, it seems to me, is pretty bad, but there’s enough in there for an occasional politician to claim that they’ve produced some results, and maybe they become President as a result of higher test scores in his former home state.

Frankly, as a college professor and husband of a former teacher, I don’t buy it. Things are ever worse and the rate of decline is accelerating. We seem to do everything backwards. We have a system now where I guess our latest attempt to make the system work is one in which we have high-stakes testing for schools, but not for children. So we have rallies where we try to beg the children to do well on a test they don’t really care about. It doesn’t really affect them, except for a few of the ones that control high school graduation.

We have schools teaching this test because it does mean a lot to them in their ratings, and how they look, and whether people move into their neighborhoods. So they narrow their curriculum to where they do little else but teach what’s on the test and push pretty much everything else off to the side. They no longer teach those things.

Teacher micromanagement is one of the things in this mixed bag that’s suffered severely from this full-court press, 20 years in length, to try to make the system somehow produce acceptable results. My wife, a former teacher, was at the point—and this was a few years ago and I’m sure it’s worse now, at least in Texas—to where she was told exactly what thing to teach on which day of each year. And many teachers, I know, maintain two sets of books, because they knew that this standardized curriculum, this teacher-proof stuff, didn’t work, and so that was what they officially did, and when no one was listening or looking, they went to something that would work a little bit better.

And there have been official reaffirmations of the Nation at Risk declaration. Most recently, in a relatively little-known February 2001 report on national security, another presidential commission declared that our education system was a national security threat. And not much different than what Admiral Hyman Rickover said in 1959 when Sputnik had been up in the air a few years, that our education system was a national security risk then.

As I was flying over here, I decided I would insert something in my speech, because I was talking to one of the other passengers and he reminded me of what’s called the “horse story.” And I’ve seen it bounce around, and I know that I first heard it when it arrived as a slip of paper in my wife’s mailbox at her school, from her principal. And apparently it had been Xeroxed a few million times because it was pretty blurry looking.

But basically it said, when you’re riding a dead horse, what should you do? Get off. We don’t do that in public education. They went through 50 things that they were doing to try to revive the dead horse. And that’s where we’re are at, depending on how you count; 20 years after Nation at Risk or 44 years after Hyman Rickover’s book declaring pretty much the same thing. We’re beating a dead horse. And by that I mean the process by which we make decisions about education. I don’t mean to say that all the schools are bad. I know that almost all of them could be better for the $8,000 per student per year we spend.

And by the way, I think that’s the way you should pose it when you talk to your friends. Don’t tell them how bad their school is, even if it is. Say, “Look what you can buy in the private sector for $8,000 for a child per year.” That’s what we’re spending nationally. I’m sure it’s higher in California, but national average is about $8,000.

This horse story has found its way into another acronym: MLTS-H. More of the same, harder. One of the things that we’ve achieved in the last 20 years is that we’ve documented, across 50 states at least, that we’ve tried everything, everything in the way of reviving this dead horse to get this system, this way of deciding how to spend school taxes and decide what goes into text books or curriculum.

The system is dead, and the things that we’ve been doing for the last 20 or so years—more of the same, harder—have recycled acts of proven failure. And of course, as David’s comments pointed out, this couldn’t happen anywhere else except in a system where people are forced to pay no matter what the performance is. To quote another eminent scholar, who unfortunately has passed away already, Quentin Quade, it’s a “public finance monopoly.”

It’s not a monopoly in the sense that there’s only one agent that controls all the schools, but it’s a public finance monopoly in the sense that the school in your area has about a $6,000 price advantage over anybody that might want to compete. You’re perfectly free to compete with a public school for its student; it’s just that you’ve got to charge to pay your bills and they don’t. And you’ve got to compete in the teacher labor market with your tuition dollars, and they’ve got $6,000 to $8,000 a student or more, in some places, to compete in that market and others.

So anyway, if you’re riding a dead horse, you should get off. A book by Myron Lieberman that got me interested in the subject, and got me to write these two books that I’ve written—Public Education: An Autopsy, a wonderful 1993 book from Harvard University Press—pretty much documents that the horse is dead and it’s getting stiffer and smellier, which is what dead things do. And I can smell it in my classroom when I try to get students to go study and they won’t unless I give them the questions in advance, and say, “well, I won’t change them much by the time you ask them.” They’re used to being taught a test. But, anyway, read Public Education: An Autopsy. Again, it’s about the process.

Now there are many schools that are succeeding in spite of the system, and they’ll be even better if we institute school choice, which is what we need to do. That’s the answer. The horse is dead; we need to get off. We need to walk, at first, and hopefully find another horse—but one that walks a little differently than the dead one we’re trying to revive.

Hope triumphs over experience with a little help from inertia. We have a system that’s truly mind-boggling in what it assumes versus what we know to be fact.

Government control of education is something that used to scare most of us, the idea that the government was going to decide what our kids learned. But now—and this is the most discouraging thing to me—you go to a cocktail party and talk to somebody that’s relatively educated, and they can’t imagine anything other than the government deciding what your children should learn. Again, that used to scare a lot of us, and probably most of you in this room, but not most people. It’s what they insist on.

The system that we have now assumes that political control of curriculum can yield something other than some mish-mash—something that a political majority can somehow coalesce along, because it’s the only thing they can agree to, and it’s just kind of a dumbed-down version of curriculum. But yet, we assume that working together we will create this wonderful curriculum that we’ll all agree with. It’s not going to happen. We’re too different, which is another reason we need school choice. We can’t all be educated to learn exactly the same things in exactly the same way. We should give up trying.

Our current system assumes that monopolies can work well. As I said, it’s a public finance monopoly. There’s no competition. The public school has a $6,000 or so per student per year price advantage over any potential competitor, including most other public schools.

The system assumes that incentives don’t matter, that people work just as hard, and innovate just as hard, and do all the same things whether they get rewarded for success or punished for failure or not. The system assumes that children, because they’re put in schools based on attendance areas, can and should be taught the same things in the same way. Utterly ridiculous, a denial of all the diversity that all of us see around us all the time.

Even some of you, if you don’t have a large family, you know somebody that has a large family, you know that even within a family, the children are different enough that you shouldn’t educate all of them in the same way. What about in the neighborhood? You shouldn’t have attendance areas. You need to have specialization. And you can’t assign people to specialized schools, so you have to have school choice. And then when you have that, then you have competition, which is something else that we desperately need.

And last, but not least, our system assumes that specialization doesn’t matter in terms of productivity or attention span in terms of the students, but it does. We know that it does. We know that specialization is the cornerstone of productivity, but we’ve created a system that makes that impossible.

Again, you can’t assign children to a specialized school. You just can’t do it because the mismatches would be huge. Now, what we have are children assigned to schools that are sort of, kind of, reasonably OK—if they’re managed well—for everyone, but they are not very good for anyone. What we need is a system in which there is diverse schooling—specialized schools, in which at least one of them is an outstanding choice for every child, rather than to try to create a system or have the current system that we have wherein supposedly every school can educate every child. That’s not going to happen. Children are too different.

And last but not least in this list of things that we assume about our system that aren’t true—that politics works better than markets in motivating and creating. Because the proponents of the current system insist on political control—“democratic control,” you hear that all the time—and they vilify profiteering and markets. We know that profit and loss and competition is the best way to bring out the best in people. We can see that all over the world. And it’s not profiteering, it’s people taking a chance that there might be something left over after all the other bills are paid. And if they’re lucky, and they do really well, there’s a lot left over. But there might not be anything left over at all.

But, unfortunately, even many choice advocates are pretending that the horse is not dead. They propose systems like Milwaukee and Cleveland and Florida—which are OK, I’m not against having them—but they propose these as the answer to our problem, which is a nation at risk, a dysfunctional school system that needs to be transformed. But those programs are too small and too restricted to achieve the desired results. Those programs are OK for what they’re doing, but they shouldn’t be hyped as the solution. They only involve five to ten percent of the children in those school systems, and the private schools are still at a huge disadvantage in competing with the public schools. They’re not the answer to where we need to go.

But, again, some of my fellow choice advocates are pretending the horse isn’t dead, and they’re appeasing an unrelenting enemy with proposals that assure the system will prevail. And if we’ve learned anything from the various battles, most of which we’ve lost on school choice, so far, it’s that it doesn’t matter how much choice or how little choice we propose. The resistance and what they’re willing to say, most of which isn’t true, and spend money to put it on the TV, doesn’t vary with whether you’re just advocating something as relatively limited as charter schools, or something like a Cleveland-style voucher program, which offers a little less than $3,000 to somebody to leave a school system that spends over $10,000 per child. That resistance is the same. I mean, they took that all the way to the Supreme Court to try to strike that down.

So, in conclusion, but this conclusion takes a long time—so in conclusion—see, the conclusion is over half of what I have to say—but in conclusion, to end the practice of recycling proven failure and achieve genuine reform, we have to put the children before the system and achieve the minimum requirements of a competitive market as a starting point. As a starting point.

So in other words, that’s the minimum starting point. From there we can take things incrementally. But we’re not going to achieve the minimum requirements of a market system, choice, specialization, free entry and exit—I’m starting to sound like an economics professor, I apologize—we’re not going to achieve that incrementally.

To get the ball rolling, we have to have competitive forces as a starting point, and then from thereon, there are a lot of turns on the road we can take. Get the government completely out of the system—I know a lot of people favor that, and depending on what day it is, and what side of the bed I get up on, I’m one of them. But these minimum key elements of competitive market are on the road to anything that’s worth doing in the way of school reform.

A Level Playing Field

OK, so what do we mean by these minimum requirements? A level playing field for all school operators. If I have a couple of seconds to tell somebody what I have in mind for reforming schools, what I tell them is to end the discrimination against private school users. Treat them the same. They paid into the system just like anybody else. Their children are entitled to a share of the money, just like anybody else did. Ending discrimination against private school users—private schools being those defined by our compulsory education laws as being a school—ending that discrimination would achieve what Milton Friedman said would happen, namely competition. And once we institute it somewhere, it would spread like wildfire over the rest of the country.

So anyway, that’s what a level playing field for all school operators means. The government can’t favor its own schools. I suppose you could debate that, but I would prefer to stand on principle and not give that up. Under Proposition 38 the children in the system would get twice as much money as those who leave it. Prop 38 wasn’t too bad, but that was a serious flaw because that says that the system is more important than the children. No, it’s not—the children are. That’s why we tax ourselves—to help the children, not to keep alive a process. I keep reminding ourselves that our school system, and I’m talking about the whole thing not just the public part, the whole thing is just a process, a way of deciding how money gets spent and how decisions get made. And there’s nothing sacred about that. Our children come before keeping it. So the government can’t favor its own schools, and that means ending discrimination against private school users.

Market-Determined Tuition

Another critical element that we have to have as a starting point, and one of my biggest disappointments when I look at voucher programs, one of the easiest things my fellow school choice advocates feel that they can jettison is market-determined tuition. And Cleveland allows you—in some cases requires you to—pay 10 percent on top of the voucher to get your kid into the school, but since it’s capped at 10 percent, it doesn’t really allow the market to set tuition there. In Milwaukee, the purveyors of the private schools have to accept the voucher as full payment. That’s a price control. Price controls are a disaster. Price controls are a poison pill.

We already see a little teeny bit of evidence in Florida of how much difference this makes. They have two kinds of vouchers in Florida. There’s the regular vouchers, which are price controlled again, and the school operators and the private schools have to accept the voucher worth half what they spend on the public schools as full payment. But the vouchers for the special ed kids, that’s the other program they have in Florida—you can supplement that with private funds.

Permission to do that creates the market, sets the market in motion in setting prices, and lo and behold, when they ease that restriction—I have an e-mail to this effect just recently—I think they tripled the number of schools, almost overnight, that were willing to participate. If only they could charge what they wanted to and didn’t have to set it right at the level of the voucher, sometimes just a little more than the voucher, then they were willing to play ball. That attracted some entrepreneurs. So it’s still a tiny voucher program, but it gives us a little hint of how important market-determined pricing, tuition, is.

Freedom to Diversify and Specialize

And last, but not least on our list, an abbreviated list for the purposes of this evening, is the freedom to diversify. Schools have to be free to configure their programs and charge whatever they want. And we need that because, well, specialization is the cornerstone of productivity. Different kids like things differently than others. Different kids learn in different ways than others. And so we need a system with diverse schools. And that means light regulation, school choice, and, again, market-determined tuition so that the school operators can offer something that costs a little bit more than the voucher or tuition tax credit amount.

A phase-in is perfectly fine for doing this. That’s perfectly fine. Incrementalism, passing legislation in steps to achieve these—no, that’s not good because that’s not going to happen. Government programs are very difficult to change. You’ll get cast in stone on your first and second step. But passing it in the first legislation, and saying, OK, it’s going to take ten years to take effect, or five years, well, that’s all right. As long as the entrepreneurs know where the endpoint is, and what the school system’s going to look like, that will give us some time to get going. That’s fine.

But to create a Milwaukee-like program one year, and to think that that’s going to morph itself into another program, and we’re going to pass some more legislation, and then we’re going to pass another piece of legislation to ease those restrictions—that’s not going to happen. We can already see that in Milwaukee. It’s ten years later, and they’ve eased one restriction, namely, the number of kids that could participate, from one to fifteen percent but that’s it. The other main restrictions, they still have.

And I don’t see anybody talking about getting rid of those, other than me. I’m not a taxpayer in Wisconsin or a voter. And they’re pretty much stuck—in fact, in Milwaukee they aren’t even using all the vouchers. I need to study this some more, but apparently the private sector is up to as far as they want to go at whatever the voucher amount is now—$5,000 something, which is about half what the Milwaukee public schools do.

So we can accept a phase-in, but we have to achieve all of the key elements in the initial legislation. And it just may not take effect right away, that’s all right. So again, problems, defeats, this is too radical, the public isn’t ready, all the things that I’ve heard—it doesn’t change that basic fact we have to achieve as a starting point.

It may take us a while to get there, but we can’t keep spending big bucks on propositions in California or elsewhere that aren’t going to get it done. We may have more work to do before the public is ready. And part of that is to eliminate some debilitating fallacies.

Before I get into that, let me just make one other point about the Milton Friedman-like voucher or tax credit thing that we need to implement these key elements. I try not to be a political pundit too often, but I firmly believe that a universal choice program, where there isn’t favoritism for the government school over the private ones, would have fared better. I don’t know whether it would have passed or not. But one of the reasons that it would have fared better—it would have solved the school equity problem. If you allocate as a starting point the same amount of dollars to each child, that takes care of that. Whereas the other kind of voucher programs, that hasn’t been addressed. Second of all, a Milton Friedman-style program would be cheaper. You’re not funding two separate systems. It’s just one system. This choice system funds all the schools.

And last, but not least, in this little list of why limited choice probably doesn’t fare as well politically as broader universal choice—it’s a drag to have to apologize for the impact on the system. That’s what school choice advocates are often doing. Saying, well, our vouchers won’t hurt public schools. Well, let it hurt public schools. I’m sorry, it’s just a process. There’s so much capacity in the public schools that there’s no way for any program, even if you didn’t phase it in, to do anything other than—even in the worse case scenario from the other side, where they keep talking about public school abandonment, even if they’re right, they cannot be abandoned very fast. That’s where all the teachers are, or the vast majority, and that’s where almost all the classroom space is.

Even if people want to stampede for the gates like at a nightclub, there’s no place to go for very many of them. It may gradually cause abandonment of the public school system, but it’s not going to happen very fast. It will be a gradual transition. And again, frankly, I don’t care. I really don’t care whether people love their public schools or not. If they think that they’re fine, and they stay there, and if they have the option to leave, and they don’t, that’s fine. Again, a child-first system—the system is the one that the people pick when they have a choice at a level playing field.

Fallacies of the Status Quo

Well, what about these fallacies that we have to attack?

One of the fallacies that people suffer from is they say, “Well, I’m in a really good school”—which means better than the other ones that are really bad. [Laughter] But better doesn’t mean good. Again, pose to them, what do you think you could get for $8,000 per child from the private sector? Because that’s what you’re paying through your taxes to the public sector.

“Only low-income kids need help.” No, the whole system is broken. They’re only getting shafted worse than the others. I’m sorry—I’m speeding up, so I’m abbreviating there a little bit some of the nicer language I might have used.

And a really annoying fallacy, and not, probably not as bad really as the other one, but particularly annoying when I hear people talk about this, is that the existing menu contains all the possible choices. People act like a voucher program would only slightly enlarge the private sector, and it would still be 80 percent run by churches and 98 percent non-profit, and it would perform exactly as it does now, only it would be a little bigger. No.

In fact there’s every reason to believe that the churches probably wouldn’t increase the number of students very much. Many people are in church-run schools now. That’s the only game in town other than their public school. And if they had—if there were school choice, they would leave for a secular private school. And then the churches would gain some children that currently aren’t in church-run schools that want to be there, but they can’t. So they would probably break even. The big growth would be in the ones that aren’t—that are profit-based and that aren’t run by non-profit churches, or other non-profits for that matter.

So we need to attack the enemy also where it’s weakest, which means probably not try again in California or Michigan, at least not for a while, because that’s about where the teacher unions are strongest, not weakest. So we need to do some work—Peter shook his head—so maybe they’re not, maybe they’re stronger even yet somewhere else, he’ll tell us.

Peter Brimelow

They don’t pay for it. It costs people so much to defeat this thing—to do it every year. [Laughter]

John Merrifield

Yeah, cost us something, too. And the longer cost for us is the defeatism that results in these little programs that result from that. Anyway, so you didn’t think we were going to have a debate today, did you? [Laughter] I thought preaching to the choir—we still may do that.

Anyway, these modest escape hatch programs are not the things that we, as choice advocates, should be pursuing. They’ll happen naturally from politicians compromising, and we can’t agree on doing what we need to do, and what we should always pursue is something that will transform the system—and if we have to settle for something less, fine, but don’t propose something less. Don’t propose losing the battle—or losing the war just to win a little battle along the way, and have some headlines that say, yeah, we won something, because we may not have won anything worth winning long-term.

Well, anyway, that was three-fourths of what I had to say, and I’m sure my two minutes are up, so I’m sure the rest will come up in questions. Thank you. [Applause]

David Theroux

Thank you very much, John. My next speaker is someone who has been a friend of mine for many years. Peter Brimelow is currently a columnist for CBS Marketwatch. He’s a former senior editor at Forbes. His new book is this one right here, called The Worm in the Apple, which I highly recommend to anyone here and beyond.

Peter was born in England. He was educated at Sussex. He received his MBA in the Bay Area here from Stanford University. He’s also been a media fellow with the Hoover Institution. He was a recipient of a Fulbright Award and also a Stanford scholarship.

He’s received numerous awards, including the Royal Bank/Toronto Press Club Award. He’s also had quite an extensive career in the media. He was a staff writer for the Financial Post in Toronto, business editor at McLean’s, economic counsel for Senator Orrin Hatch, associate editor at Fortune. He’s a senior editor at National Review, contributing editor at Barron’s, and so forth.

He’s the author of many other books, and his articles have appeared in many top newspapers and magazines. I’m very pleased to introduce Peter Brimelow. [Applause]

Peter Brimelow
Columnist, CBS Marketwatch

Thank you, David. Thank you, John. When do you want me to stop?

David Theroux

Half an hour from now.

Peter Brimelow

Half an hour. [Laughter] These people want to go to bed. OK.

David Theroux

Central time. Oh, you’re on Eastern time.

Peter Brimelow

You know, at the time of Nation at Risk, as John mentioned, in 1983, I was at Fortune magazine. And they came to me. Fortune’s kind of a top-down operation, and they came to me and said, “We have to do something about the public school crisis, and you have write the story.” And so I said this was a very poor idea because I hadn’t gone to an American school, obviously. And at that time, we didn’t have children, so I had no first-hand experience. And finally, it was summer and the schools were shut. They replied, “This will make you objective.” [Laughter]

And guess what? They were right. I approached the school system as a financial journalist would approach any industry—the baked bean industry, it doesn’t make any difference. It’s a question of input versus output, which is, what’s the best output to what the input is?

Now this is completely and totally antithetical to the way the education industry looks at itself, and for that matter, the way most education writers that write about it. Their attitude is: education is good, more education is better. Education spending is good, more education spending is better. They have no sense of margin utility. Is that the term, John? Thank you. [Laughter]

So in the 20 years since Nation at Risk came out—you can argue about results, which are basically flat. The test scores, as far as we can tell, there’s been no dramatic improvement since the Nation at Risk. But one thing you can’t argue about is that the system is now fantastically more expensive than it was 20 years ago. Costs have gone up, in real terms, per pupil sort of spending, has risen, adjusted for inflation, by something like 40 percent. There are various ways of measuring productivity, it’s an interesting concept. The productivity is down 35 to 40 percent in this system in just 20 years.

Now, this is unique in the American economy. There’s no other area where you see this continuous productivity decline. There are never any productivity increases in education, in spite of typewriters, television, computers, and videos, which your children spend more time watching in public schools than you may think. There’s never any kind of productivity increases.

And I finally saw an extremely arresting case. John’s making the point that the experiments—and they are experiments that are being conducted in vouchers—at the moment don’t have clear results on the qualitative side as far as the quality of the testing, the output goes. Except maybe for African-Americans. There’s some evidence it’s helped them.

But there’s a secondary issue here, which is one of the principle points I’m making in my book, These experiments are cheaper. The kids are being turned out at lower cost, and that’s an end in itself to me, as a financial journalist, if you can get the cost down.

The Public School System as a Socialist Industry

But the problem—as soon as you look at the education system in this context—what you realize immediately, of course, is that we’re looking at a socialist industry. I used to compare it to the Soviet farm system, which as you know, turned Russia from being a grain exporter to being a grain importer, and they experienced 70 years of bad weather at harvest time. [Laughter] Then the Soviet farm system went away, so we’re left with American school system, which is still very much here. And there are certain symptoms which you can always find.

One, there is the politicized allocation of resources—decisions about what’s going to be spent on are made through a political process, not through any kind of a market process. And that’s a big problem in terms of efficiency. For example, generally speaking, for political reasons we now mainstream handicapped children. That’s fantastically expensive. It’s responsible, all by itself, for about a third of the cost increase. And it’s not clear that’s the best use of resources, or that that environment is best for the children.

The second symptom of socialism is proliferating bureaucratic overhead. I’ve got a lot of numbers about this in The Worm in the Apple. Fifty years ago, there were three teachers in the school system for every adult who wasn’t a teacher. In other words, administrators, guidance counselors, whatever they are, who weren’t in the classroom, there were three teachers. Now the ratio is almost one-to-one. There’s almost one non-teaching adult in the system for every teacher. There are about half a dozen states in the country where I find there are more adults out of the schools in the education system. They’re in the central headquarters and so on. They never see a kid from one day’s end to another because they’re entirely in the headquarters.

Another symptom of socialism, the third symptom, is the chronic mismatching of supply and demand. And in Russia, this used to take the form of the left boot factory producing more than the right boot factory did. [Laughter] In the teaching system it’s gluts in various things, followed by shortages. We’ve had a teacher shortage, and there’s some evidence now we’re going to have a teacher glut in California. It’s an endless cycle of chronic mismatching of supply and demand.

A fourth symptom of socialism, which you are all familiar with, is the constant quest for top-down panaceas. There are no solutions coming up from the bottom, so solutions have to be imposed from the top. In the Soviet system it took the form of plowing the virgin lands or using more fertilizer, preferably financed with Western bank loans, all this sort of thing. All these panaceas usually involve more input.

In the American school system, the government school system, it takes the form of various fads that go through the system, such as whole language, or open classrooms—or closed classrooms, or just ajar classrooms, or any kind of classroom. [Laughter] There’s an endless series of fads like this. And this is inevitable in the system, because that’s the only way you can get any change.

I have to say I think the President’s plan of No Child Left Behind is in itself a type of a fad. It’s equivalent to sort of going out and shooting a few peasants to make them work harder. And it will produce results in the short run, but in the long run, I don’t think it is going to produce results.

And a final symptom of socialism is qualitative and quantitative collapse, and that’s what we see in the system, particularly on the quantitative side, on the cost side. This is my contribution to the school debate, we should be worrying more about costs. Forget about the output. Let’s assume the output is constant, let’s just get the cost down. And if you are a California taxpayer, you’re going to be thinking this a lot in the next little while, because basically over half of local spending is the schools. And about 70 percent of that spending is teacher salaries. That’s what’s driving the budget crisis across the country.

The Teachers Unions

Now, having taught about the apple, the education system, I’m going to turn to the worm, the teachers’ union—the teacher unions. You know, about 100 years ago, a number of muckraking journalists, on whom I model myself, made the discovery that there were these national corporations starting to come into existence, and they were essentially acting like monopolies. And they were monopolies. Standard Oil and so on. And this was a bad thing. And they called them trusts. In those days they used to call monopolies trusts. Now what we have here is a teacher trust. The way the union works is it attempts to monopolize and restrict the supply of labor in order to get the prices up. The teacher trust.

Now, it was said back in the 19th century that the tariff is the mother of trusts. Very important point. What it means is if you could get imports, cheap imports coming in, they would undermine a domestic monopoly. So the tariff is a public policy that makes it possible for the trust to come into existence. Similarly, I think the government school system is itself the mother of the teacher trust. It’s a political system, and it responds to political action. And that’s what the teacher union is good at.

The National Education Association has been around since the Civil War, 150 years or something. But it was literally a National Education Association most of its existence. It only became a union in the 1960s. It was actually illegal for public employees generally to unionize until the 1960s. And that the reason it was illegal is that even labor advocates like FDR and George Meany at the AFL/CIO thought that it would simply create a situation of impossible power, that you would have a monopoly on top of a monopoly. You’d have a monopoly supply of labor to a monopoly service.

In the case of education, there’s actually a third level of the monopoly, which is the compulsory attendance laws. The consumers are forced to consume. So for that reason, they felt that public employee unions, and particularly teachers, were a bad idea. And they were right. It turns out that 30 years later, this has been a disaster. It’s created a monster.

But you know this often happens in the economy. When you have a very dynamic and fluid but also structured system like the U.S. economy, it happens from time to time that there’s kind of an institutional glitch and some group gets itself in a position where it can extort rents. How would you define rents, John? Basically, it’s money. They can extort money from the rest of the system.

John Merrifield

Excess profit.

Peter Brimelow

Is there such a thing as an excess profit? Let’s not get into that. [Laughter] Anyway, I mean, I’m old enough to remember when this was the case with stockbrokers. Are there any stockbrokers in the room? There was a time when you couldn’t negotiate sales commission rates as a buyer of stock. So these big institutions, like the insurance companies, were buying these huge blocks of stock and paying retail commissions on them, so it made a lot of institutional salesmen very rich for a while, until they were forced to start negotiating commissions.

I would say another example—before deregulation, airline deregulation. Another example, I would say, is the plaintiff lawyers right now. The interaction of contingency fees, on the one hand, and the tort crisis on the other, the liability crisis on the other, has made a lot of trial lawyers very rich. But the interesting thing about all these glitches—eventually people figure out what’s happened, they do something about it, and they go away. And that’s what’s going to happen with the teachers union, the teacher trust.

There was actually nothing inevitable about this development, that teachers would go to a sort of industrial union model of organizing. At the very moment that they did it, it turned out that the union movement was entering an historic decline. Fewer and fewer Americans are involved in unions in the private sector. It really is the public sector that’s keeping the union movement going.

That’s a big problem for the unions right now, by the way. They’re having trouble keeping their membership growing. And one of the reasons for it is that the Generation Xers simply can’t relate to the idea of solidarity forever and all this stuff. Some of the things that the union is supposed to be protecting them against they just don’t believe would ever happen. There was a time, for example, way back in the ’40s and earlier , when teachers used to have get permission to marry, and things like that. Now no Generation Xer can even believe this could exist. They think that’s out of the Stone Age. So the union can’t very well pretend they’re going to protect them against that. That’s the least of the things that—well, best I don’t get into that. [Laughter]

The final point I’d like to make about the teacher union, the teacher trust, is it’s absolutely critically dependent on legal privileges. It doesn’t come into existence in a vacuum. Those legal privileges—I mean, the most important was to be allowed to unionize at all in the public sector. But basically you could divide them into collective bargaining laws, on the one hand, and agency fee laws. Collective bargaining means that if you’re in a collective bargaining state, if you get enough teachers together, you can compel the school board to negotiate with you as the exclusive representative of all teachers. That’s what collective bargaining is. You’ve got it in California.

There’s also agency fee. That means that once the teacher union has got itself recognized as the monopoly bargainer, it can then turn around and demand fees from even teachers who don’t want to join the union. It can’t compel them to join, but it can compel them to pay the fees, except for some of the political contributions. That’s called agency fee. You’ve got that in California, too. In fact, it’s mandatory in California. It’s not even negotiable here, that the CTA has got itself into a position of extraordinary power. But was done recently. When I came here in 1970, it wasn’t the case. Jerry Brown was responsible for passing collective bargaining in the public school sector.

And the result of all this is that the inmates are running the asylum. [Laughter] I have somewhere a quote from the Hoover Institution’s Terry Moe about rules. Oh, here’s the one I used this morning. The California legislative analyst discussing the California situation. He said, “Districts that enter into collective bargaining share power with the unions over a wide range of decisions that affect district education policies and the distribution of district resources.” In other words, they just get control of every aspect of life.

Let me draw back a minute and raise another question about the education system. Apart from the cost numbers, which I think are really fascinating, there’s another interesting number about the way in which the government school system works, which tells us a lot about what’s going on, and that’s the dropout rate, or rather the inverse of the dropout rate, the graduation rate.

Way back in 1900, about 6 percent of all 17 year-olds graduated from high school. It was very unusual to graduate from high school in those days. Most people dropped out, went to work. After that it starts to go up, looking from left to right, an exponential curve. By the Second World War, about half of kids in that group, 17 year-olds, were graduating from high school. But still, the fact is that Hitler was defeated by a nation of high school dropouts. The graduation rate continued to soar until 1968 or ’69. It reached 77 percent, and at that point it stalled. And it’s never gotten higher than that. Twenty-five years later, it’s actually significantly lower now. It’s declined to below 70 percent—68 or 67 percent.

Now this is a fascinating datum, I think, and it can only be explained in two ways. One is that there’s something absolutely chronically wrong with the system because it can’t do what it’s trying to do, namely, graduate all the kids from high school. Or the second possibility is that, in fact, the kids can’t be graduated from high school. There’s a limit to the number of people you can actually expect to graduate from high school.

I have data in The Worm in the Apple which suggests that in the early 1990s, of white kids with IQs below 75, nearly half of them are graduating from high school. Now these kids are on the verge of being technically retarded, but they graduated from high school. What does this say about the high school degree? That’s a really fascinating question to me.

I mean, what it means is that there’s never been a golden age in American education where everybody graduated from high school. The attempt to keep people in these big comprehensive high schools until they’re 18, and get them out at 18, has never, never worked. It’s responsible for a lot of curious things. Occasionally you’ll see people say that the quality of high schools was much better back in the 1900s and so on. That’s probably true, because the kids who were getting out of high school were an academic elite. There weren’t attempts to keep all these other kids in the system, and generally having them stink up the halls and have fights and all this sort of thing.

But there’s another side of this as well, by the way. A teacher once said to me that compared to when he and I went through school—150 years ago—the big difference today, he said, with his kids, was that kids are constantly falling asleep in class. And the reason they’re falling asleep in class is they’re working in the malls. The labor force participation of 16 to 19 year-olds for Americans is staggering. It’s like 60 percent. It’s three or four times what it is in France or Germany.

Now it seems to me that’s something that should be encouraged. They should be sent out there to work if they want to work, and maybe drop in and out of education later. Maybe we should focus on getting the kids out of school earlier and allow them to come back and to top up their schooling later as they see fit. Now that’s exactly the kind of thinking that the teacher union will not allow, because they want more victims in the system. They would like you all to be in high school right now. [Laughter]

And there’s another aspect of this, which is the great expansion in home-schooling. There’s somewhere between half a million and a million-and-a-half kids being home-schooled at the moment. It’s very hard to get exact numbers, but it’s clearly vastly larger than it was 30 years ago.

Now that’s come about because laws have been changed, which goes to the critical importance of the legal framework in education system. Parents had to be given the right to educate those kids at home, and yet conform with the compulsory education laws that exist in every state.

Now, I have small children, and it’s impossible for me to imagine educating these two children at home without murdering them. [Laughter] Or, in the case of teenagers, being murdered by them. [Laughter] But the answer is in home-schooling they’re often not actually taught for very long. Home-schools make it work because they teach the kids for a couple of hours a day. In other words, the moral of the story is, the substantive content of education can be delivered much more efficiently, both in terms of the hours of the day, and probably the years in the school kid’s curriculum than it is right now.

Now, I’ll quickly say something about what’s to be done. I see two aspects to this problem. That’s your book, isn’t it? I’m sorry. One of them is, we’ve got to clean the apple. The answer is, clean the apple with market forces. There are lots of proposals. John’s discussed a few. They’re both an end and also a means, because they undermine the power of the teacher’s union, the worm. If it can’t keep you from marching in lock-step, and it doesn’t like organizing lots of small units, its power is going to be weakened.

But the second aspect of what’s to be done is the worm itself has to be extracted and exterminated. That means the teacher trust has got to be busted. You’ve got to go to the legal framework that governs that, in which the teacher trust is rooted. In the end, in the last chapter of Worm, I have about 25 proposals where this can be done, ranging from very grand ideas to small ones. For example, I don’t see why you couldn’t apply antitrust theory to the teacher union, break it up into separate states so it can’t mobilize across state lines. Curiously enough, one of the things that the NEA actually did when it became a union was to unify its dues to compel teachers everywhere who joined any branch of the NEA to join the national union. And it was very, very unpopular. In fact, the Missouri teacher’s union actually seceded from the NEA over it.

But there’s a lot of other things that can be done, too. In the end, it goes down to the collective bargaining laws. The collective bargaining laws have got to be removed, weakened, so that teachers don’t have to accept the leadership of the union. At least so there’s competition among representatives. In Texas, there’s actually a profit-making organization that bargains on behalf of teachers.

It happens that in there are still two states in the union—North Carolina and Virginia—where school boards are prohibited from bargaining collectively. They’re not allowed to bargain with teacher unions. Of course, you still have a socialist system, and the union still exists, and it confers, and it lobbies, and so on and so forth, and people in Virginia think it’s very strong, but it’s nowhere near as strong as it is here. And that’s something which ought to be thought about.

Someone was saying to me earlier, is there any hope for the system? It seems to me there’s a lot of hope. I mean this is not a stable system. It’s something that’s happened by accident. It can be swept away. And if you have any doubts about it—well, let me just tell you a story. In the town in Connecticut where I live, recently they had a lot of trouble getting the peasants to vote for a tax increase, and so it kept getting voted down. And at one point, the teachers actually picketed the commuting drivers, and they had big notices, holding it up, saying it’s about the children. Now of course, it’s not about the children, it’s about the teachers. Specifically, many teachers that don’t realize they belong to a union, by the way, polls show. And the grander reason, I would adduce, for being hopeful, is the Soviet Union collapsed. Thanks very much. [Laughter] [Applause]

David Theroux

Thank you, Peter. We have time for questions. And Carl will bring the microphone by. How about the lady right here?

Audience Member #1

I wish the panel had been a little bit more balanced. I found it very much on the Right, and I just want to mention that there are words you said nothing about—

David Theroux

By the way, one question—was Bismarck right wing or left wing?

Audience Member #1

I’m just commenting about contemporary politics. There are languages other than the market for assessing policy questions, for assessing what is to be done. I’m not saying the Oakland schools are in great shape, but I work there all the time as a researcher, and so does my colleague here, and I don’t think the two of you have spent very much time on the ground where the battles are being fought.

David Theroux

Do you have a question?

Audience Member #1

Yes, here’s my question. What about democracy and the history of the ideal, at least, of the common school which—in which children from varied backgrounds, not just immigrants, but social class has not been mentioned here, would come together and learn democratic discourses in citizenship? What about the ideal of a sense of the public and of children as a collective responsibility and resource? What about questions of inequality? We have wider income gaps now than ever before in U.S. history.

So my question is the following: Since the Reagan era, public provisioning for families for caregiving and for public services have deteriorated radically, funding for parks and rec as well as schools, for example, and market dynamics have expanded. There are some areas of the world—and issues of care and education are some of them—where markets don’t work as well as they may, for example, in manufacturing. And my question is, what about these wide inequalities? And if you were to have a total market mechanism, as you are proposing, what would happen to the 25 percent of children in Oakland who live below the poverty line? Thirty-five percent in LA County? The rich always get richer. They’re doing fine.

John Merrifield

They’d go to functional schools.

Audience Member #1

I don’t think that would be the case. I’d like you to address inequality and justice and democracy issues.

John Merrifield

Well, I mean I don’t really know what her question is, but there’s nothing worse for poor children than the system that we have now. [Applause]

Audience Member #2

Here, here.

Peter Brimelow

I think the question is a fine illustration of what I said about the way in which educators think. I mean essentially they don’t view education as a business or an industry, they view it as a religion. Somebody noted here that the fact is that public schools are a relatively recent invention in the U.S. They’re not more than just over 100 years old. For most of the first 100 years of the Republic, there weren’t public schools, there were private schools. And they seemed to be pretty good about being democratic. So I’m inclined to think that these things can be delivered.

But we’re not talking here about a pure market system. We’re talking about a system in which there’s a very substantial government subsidy to pupils, to students, amounting, as John says, to somewhere up to $8,000 a year. That subsidy exists, the question is what is the most efficient way to deliver it.

David Theroux

By the way, one book you might want to consult is a book by Joel Spring called Education in a Corporate State, which is basically about how the state system is designed to turn out cogs in the corporate-state wheel for military adventurist purposes, which is not exactly in a right wing position. Other questions?

John Merrifield

Just one other thing about the battle she’s fighting. The whole idea of this is to not have those battles. Most school things can be decided individually between parent and school proprietor. We don’t all—we can’t, and we don’t all have to agree on what should be taught and how it should be taught.

Peter Brimelow

Well, yes, I just did address an issue on that. I said there’s a substantial subsidy to every student who is in the public schools. The problem is most of that subsidy right now goes to salaries. Maybe it should be spent some other way.

John Merrifield

You have administrators.

David Theroux

There’s also, I think, a certain question about whether collectivism and equality can go hand-in-hand, or whether it’s basically a system of an elite ruling the masses and forcing them to participate whether they have any choice or not.

Audience Member #3

I may be unique here. I have attended private and public school. I have home-schooled. I have children who went to private school and children who went to public school, so I did it all. And I must say that I’m very impressed with both of you two gentlemen and all that you had to say.

I also serve on the school board in my district. And I deal with collective bargaining in a very real state, and it’s horrible. I did not realize how difficult it was to deal with the teachers union until I arrived with a majority of teachers union supporters on my board.

My question is you said that Texas was able to get rid of collective bargaining, and that they have gotten rid of compulsory fees or that they have a profit-making institution that fights on behalf of the teachers. Did I understand that correctly? And how can we in California get rid of collective bargaining? Right now, it’s almost impossible with a Democratic-controlled legislature and governor who’s passing almost every bill they can. We dealt with about 500 education bills, last year, at least that they passed for us to deal with in education. So it’s an overwhelming task for us. But I want to hear how we, in this room, and including board members, what can we do—because there’s another person that’s on the school board with me that came. How can we get rid of collective bargaining?

John Merrifield

Now, before Peter answers that, let me just point out the contrast between these two. She’s talking about battles, and she just named them. How can we survive in a system where we pass 500 new pieces of legislation? Of course those are battles, and that’s exactly what’s destroying our school system. The whole idea is to avoid that. I’m sorry. Peter, go ahead.

Peter Brimelow

Texas is a state where there are no collective bargaining laws, and there are no agency fee laws—and you can’t strike as a teacher. So the union is very weak in terms of its legal power. And there’s a very large Texas independent educators association, which is not a union. What I think you were thinking of was North Carolina and Virginia where laws have been passed that actually prohibit collective bargaining. North Carolina prohibits the school boards from engaging in collective bargaining with a union. As to what can be done here, it’s really just a mirror image of what happened in the 1980s when they put collective bargaining through. I mean, most people don’t even know what collective bargaining is. It has to be identified as the enemy. It has to be made into a political issue. That means that whoever does it, for example, the Republican Party, is going to have to show some backbone, which is a problem. [Laughter]

But on the other hand, I grew up as a kid in England, where all the major industries were nationalized. And they’re now denationalized. And none of us expected that to happen. It was just done because there was a strong political leader, and because the economy was cratering. And the education system was cratering, so we just need some political leadership. And I recommend that you provide it. [Laughter]

Audience Member #4

This teacher, I have to thank her for bringing up a term, democratization. I have a real issue with that term in education because I’ve done all private school, public school, home-school, and my goal as a parent is to nurse my children’s mind and intellects, and I’m really more concerned about civilizing my children instead of socializing them, which goes along with democratization, because socializing is to put them under the control of a government.

But when I go out and I talk about school choice, having written the school choice initiative with Milton Friedman, I find that there are so many people that don’t even have a concept of what education is. There is no definition. And isn’t that one of the first problems we have to attack? What is education, and by whose standard are we going to go along? Isn’t it in the end going to have to be the parents who decide what the standard is for their children?

John Merrifield

Right, but that’s why we don’t want to politically decide that question. We want to leave that up to individuals and families.

John Merrifield

We can’t politically decide, it’s not going to happen.

David Theroux

People, by and large, who are interested in the concept of democracy in education or any field, want basically to have a system that’s responsive, that’s accountable, that they have a say in, that is functional, and is one that will reinforce the bonds of cooperation and community and so on and so forth. Does this system do that? That’s the question. How about the gentleman right here?

Audience Member #5

Please don’t throw hard objects, but I am a union steward, and I have the distinction of going to one of the worst school districts in probably the country, the Richmond Unified School District, and one of the best in Benecia, California. So I’ve seen both sides of the coin. And I have a three-part question. I think you both gave a pretty cogent explanation of the problem, but your solutions were pretty far off.

First, as far as the union, one possibility you didn’t consider, what do you think of union empowerment? Because I think it’s kind of a tired old fallacy that you’ve trotted out, that the unions are these all powerful organizations who are controlling the weather and everything else. They’re actually not very powerful, especially on the local level.

My wife is a teacher and she has no control over what goes on in the classroom. Things are fiated to her by the school district, not by the union. The problem with our school system is the peer culture in the school, and it’s not the teachers. Your teachers have gone to school for an average of five years. How would you deal with the peer culture? That’s one question. And would you advocate empowering teachers to kick out the one or two students in every classroom, even in the good districts, that take up all the teacher’s time?

The second part of my question is, could you please, especially Mr. Brimelow, explain to me—how does spreading yet more taxpayer money to the private sector, instead of just the public sector, how does that increase the sort of capitalist laissez-faire system that you seem to be promoting?

And my third part is—well, I guess, I said it—the union. How would the further empowerment of the union and the union being given a chance hurt these reforms? You might not actually have the enemy you think have.

Peter Brimelow

I’m not sure what you mean exactly by union empowerment. As I said earlier, I do think that is a big problem for the system—that it’s trying to keep too many kids in school too long who should perhaps be out somewhere else. And that goes to the compulsory attendance laws, and the length of time they require kids stay in school. I think that we should definitely be looking at that.

I don’t know that this is what the union wants, though. It seems to me they want people to stay in school because they want more clients. I’ve never seen a union representative advocate that school attendance be actually reduced.

Now your other question, I mean it’s just a question of economics here. What we have here is subsidy that’s delivered by the state to students. At the moment, it is delivered in the form of government-owned buildings, and curriculum, and so on. This is the direct equivalent of instead of giving food stamps to the poor, having free government-owned supermarkets. And it would not be efficient. It’s more efficient to give out food stamps and let the supermarkets compete for them. That’s the essential argument for vouchers. There is the subsidy given by the state, and the question is, what is the most efficient way to deliver it?

John Merrifield

Interesting contrast. You pointed out they’re not so powerful. They’re powerful enough to keep the politicians making the choices and the policies, but it’s true, the politicians keep making bad choices and policies, which you described. That’s the problem.

Peter Brimelow

Can I just add, I agree completely with that. You see, the unions are not the whole problem in education. It’s got lots of other problems. The problem is the system is not short of problems. [Laughter] Virginia is a government-run school system, and the ethos of the government school system pervades Virginia even though the school boards there have a lot more power than they do elsewhere. The national right to work people will say that. They’ve talked to employers about unionization.

And in heavily unionized states—well, for example, in Britain where I come from—you’ve got the phenomenon of employees who kind have become like pit ponies. They never see the light of day. They don’t know what it is to be free. And they’ll say things like, if we didn’t have unions how would we set wages? So the government school system itself is a pervasive problem, and would be a problem regardless of the existence of the union. There are other problems. The weakening of the union is not a panacea, but it is a prerequisite.

David Theroux

There are a number of writers like Ivan Illich and others who’ve raised the question of whether compulsory education laws are actually state-sponsored child labor. This lady right here?

John Merrifield

The unions aren’t the problem. They’re blocking change, that’s the problem. Politicians and the political process is the problem.

Audience Member #5

Well, every stakeholder in a big bureaucracy is going to block change, it’s just a bureaucracy.

Peter Brimelow

That’s the point.

Audience Member #5

What I have seen is that there has been a lot of power structure not so much with the teachers’ union, they have a lot of power, but also the Superintendents’ Association, the School Board Associations. These folks have a lot of power, because when you talk to the rank and file teachers, oftentimes they don’t agree with what’s going on at the upper end of the teachers’ unions. And a lot of the money that’s in the educational system, which is over 55 percent of the state budget right now, does not get into the classroom. So I think our biggest thing that we can attack the public government schools with is that so much of the dollar goes to the bureaucracy, the overhead, and not the one-to-one teaching ratio. I think that’s where we have to attack this. So the teachers’ union, the rank and file, is not that powerful. It’s the superintendents.

I have a friend that works for the California State Teachers’ Retirement System. People are retiring with millions of dollars from teaching—from being a bean counter in the district office—and that’s got to change. And I think if those facts get out there, that will influence a lot of people. Thank you.

David Theroux

Could I sort of just slightly change one of the points that she was making and raise a question for both panelists? If you didn’t have compulsory funding of schools, what would happen to the collective bargaining nature of the union’s power? Any thought about that? In other words, if people were not compelled to fund public schools, what would happen to the nature of the union participation?

John Merrifield

Well, anything that interjected freedom into the system, where the teachers aren’t all treated the same, the union would be destroyed.

David Theroux

This gentleman right there.

Audience Member #7

Making the assumption that you people have your finger on the pulse of this thing, at least more than I do, can you gaze into your crystal ball and tell me what the legal climate of home-schooling might be? I mean they’re under assault from the teacher trust, or the whole institutional thing, but at the same time they seem to serve as a safety valve also for kids that just can’t fit in the one-size-fits-all education system. But will they survive? And what is the future of home-schooling from a legal perspective?

Peter Brimelow

Well, my impression is that home-schooling—there’s been battles for it in almost every state on this question, and essentially the home-schools have won. They have been able to compel the authorities to recognize that there are home-schools and it’s legitimate. And they’re doing it for a bunch of reasons. The best reason is that they’re organized. They’re highly organized and use the Internet a lot. They’re a very well organized minority. And the evidence is that more and more people are going into it.

Audience Member #8

The one thing you haven’t talked about is parent involvement. And I’m a perfect example of that, having lived in San Francisco and moved out because I thought the public schools were so terrible, and I couldn’t afford private schools. I went to Orinda, where the public schools are excellent and the children have done well. That’s because we’re very, very involved. So what do you think about the parent involvement forcing the changes that you want?

John Merrifield

Well, parent involvement is discouraged by our current system. I agree with you that parent involvement is an important ingredient, and if we involve parents in choosing schools and matching children to programs, that can’t help but create additional involvement. We definitely need that.

Audience Member #9

I’ve worked as a teacher, and I’ve worked in a juvenile hall system for a while, and I come across some 16 year-old kids who commit crimes and go to juvenile hall. We find out that they have disruptive, dysfunctional families, etc. They need counseling and all these other things. And yet I’ve also met 16 year-old kids who are bored and troublesome in high school, and they want to drop out, and they’d like to join the military where they might be able to come under the government wing and get all these services also. But our present system does not allow that. So what’s wrong with this picture and how can we fix it?

John Merrifield

Well, I think we described that, it’s to give them some choice in doing some of these things. I don’t think there’s any reason to force one size—I mean one size doesn’t fit all. You can’t expect to put children from across the spectrum in one school, much less one classroom.

For instance, these discipline problem children, they should have special services in a school specialized to handle that problem. They shouldn’t poison classrooms across the system by being in there, and disrupting, and occupying all of the teacher’s time. No one teacher is talented enough to be just that right person across this spectrum of children’s interests and needs——although a few miracle workers are out there.

Audience Member #10

Thank you. Have either of you taken on work at the ratio of dollars spent for special education versus the rest of the education population, and how that affects the outcome?

John Merrifield

I haven’t looked at that per se, but I know that the choiceless system, like we have, greatly magnifies the perception that there are special education problems. A system of diverse schools that are specialized, where parents would choose, would drastically reduce the number of children labeled by their parents in some way—or labeled by schools that thought to have to get some more money from them.

Peter Brimelow

I have some data on that in Worm, and it’s expensive, and it’s a major factor in the increase of costs—the decline of productivity of the system.

David Theroux

I mentioned the Oakland schools, originally. That’s a major problem.

Audience Member #10

What I really need to know is if it’s having an effect upon the outcome of the education of the rest of the children in the school?

John Merrifield

Mainstreaming is a disaster.

Audience Member #10

Because the ratio has gotten so far out of kilter.

Peter Brimelow

Well, we know that the results the rest of the children are producing are not great. So something’s doing it. So that’s not a bad candidate.

Audience Member #11

Some of the work that I do with a group of people is working with these special students. And the parents choose in our system to come to our services through the public schools. So my question is, are you familiar with, or do you know of any agencies out there, that are currently working with the public schools. Are there any other organizations out there that you’re familiar with, with special needs kids, that parents have financial ability to choose in a public school?

John Merrifield

Peter, I’m striking out on this one.

Peter Brimelow

I think there’s some provision in No Child Left behind for that, isn’t there?

Audience Member #11

Yes. There’s a supplemental service provider list that, but none of them are pretty much in the public schools. The service providers on that list have gone through, in the State of California, a series of exam questions, and then you’re allowed to come into the system and you’re given a certain amount of money. It runs between $400 and $1,200 per student, if the school allows you in. Most schools—Sylvan, Kaplan, other institutions, individuals who run counseling centers—these are some of them that are on the supplemental service provider list for California.

David Theroux

And that’s growing.

Audience Member #11

Oh, it’s huge. It’s growing.

John Merrifield

I remember an article a few years ago by Janet Beales, and she’s in an organization around here—I can’t remember which one it is.

David Theroux

She was with Reason for a while. She’s independent now.

John Merrifield

She wrote an article about all of the children sent by choice by the public school officials to private schools that specialized in particular special needs.

Audience Member #11

And the school system paid for it?

John Merrifield

The school system paid for it.

Audience Member #11

Where was this?

John Merrifield

It was a couple of years ago, in a newspaper, Wall Street Journal.

Audience Member #11

No pervasive programs that are currently taking some foothold for parent choice?

John Merrifield

Not that I know of. Try to get a hold of her though. She sounds like she really knows that area.

Audience Member #11

Well, I run a private school myself, and we have a teacher at our school who is French, and so I have a question for Peter in particular, namely, that the French Left is very different from the American Left, in the sense that they want higher standards. They say that they don’t want poor people to be exploited by the rich because the poor people are ignorant. Why do we see so much demand for lower standards on the part of the American Left? And is there any chance of reversing that so they’re going for higher standards for the poorest so that the poor don’t get exploited? And that competition might be a part of that?

Peter Brimelow

How long do we have? [Laughter]

John Merrifield

The short answer to that is we need to get the standards-setting out of the political process. That shouldn’t be a political issue.

Peter Brimelow

Well, the question you’re raising about American Left is an extremely interesting one, but it’s not easy to answer. It depends what you think their motives are. And the American Left is not rooted in the working class. It’s an elite left. Whereas I would say the French, and to some extent, the British Left traditionally came out of the labor movement, and so on, and actually had the interests of the working class at heart and cared about the working class. It’s not clear that that’s the case in the American Left. It’s an elite left.

That’s equally true in Britain, by the way, though. The education reforms that the socialist put through during the war in the coalition government were highly competitive, and highly examination-driven, and IQ-driven, and they developed a highly efficient system of socialism. But it was based on selectivity and around competition.

David Theroux

Yeah, also the position of the public school system on what was a common school system—it was a combination of common schools and other schools in the U.S.—was imposed by wealthier people on poor immigrants and so forth. Dick, did you have a question?

Audience Member #12

Yes, sir, thank you very much. How would you modify the current taxation system and the distribution of the taxation to the different schools, private as well as religious and public?

John Merrifield

Well, I haven’t thought about that as much. Currently what we need to do is voucherize the existing funding or tax-creditize it if you wish. But at some point, it would help to unify the funding and not have it be some mixture of federal, state, and local. Frankly, I think we need to get away from income taxes. So it probably ought to be some kind of a sales tax. And property taxes as well, get away from those.

Audience Member #12

I just want to comment on the special eds. This Saturday, Hayward Unified is having a board meeting, and they’re going to vote potentially to abandon class size reduction. And they have some 340 K-3 classes. That would increase class size from 20 to 32 in a difficult district, with a lot of multiethnic problems in terms of teaching reading and what have you.

And in this district there’s an encroachment over $2 million of the special ed into the regular fund. Other districts I’m told in Berkeley had nine million. In Oakland it’s even larger. But it seems to be almost an entitlement, writing IEPs, learning disabilities. We have lots of autistics, and they’re very expensive, and Hayward’s doing a good job attracting more autistics—I don’t know where they’re coming from—but there’s no limit to this. The district seems to be afraid of the lawsuits. And so, imagine giving up class size reduction in 144 classes for little first-graders, kindergartners, because of this thing is out of control that the district is not willing to take on. So it’s a real crisis with regard to special ed.

David Theroux

The lady right there.

Audience Member #13

Yeah, a couple of questions. And just in terms of historical perspective, it seems to me that the compulsory attendance laws were put in place because of demands of the labor market. So because the children were working in factories, and so to open the jobs for adult males, that was one of the things—and it seems to me that looking outside the box in a way, that if you were to change that for the demands of our economy today—that would be one question I would have for you.

And the other question is in terms of your political constituencies, it seems that you get interested in education when you have children, and you’re interested until they’re done, and then you’re not interested anymore. And so you have a fluctuating base, and yet, the institution remains and the teachers remain, and the bureaucrats remain. So they’re able to have a much more stable sort of lobbying effort.

And then the other question is that my mother taught in Louisiana for 38 years, and they didn’t have unions. And when she was in school, you couldn’t even chew gum, and they would tell you who to marry, because teachers had to uphold this certain calling—it was not just a job. But it seems to me that somehow, if you don’t have collective bargaining, what do the teachers do in their own economic interests, which would seem to be in line with this Institute’s mandate? I have cousins who teach in private schools. They have no retirement, they get lower wages. What do you put in place of that, because that’s their economic self-interest is at stake. They’re not going to go for that. And if you do want to enact this kind of change, you have to offer something else. So those are my three areas.

John Merrifield

Well, teachers would certainly see improved working conditions. Whether they would see improved salaries would depend on how many former teachers would come back into the system after teaching became a profession again, as opposed to more of a blue collar union occupation that it is now. So I don’t see any problem in setting wages for true professionals that work with clients that choose them, and that specialize in areas according to wage differentials, and sell themselves as productive team player teachers that somebody would want to hire.

And I know that principals want to be involved in hiring teachers, and that’s the way it needs to happen, not school cartels called districts hiring teachers. The teachers need to be in a labor market where they can choose the school that they work in, not the district that they work in, and where they can shop themselves directly among competing schools, public or private.

Peter Brimelow

I agree that it’s true that most people get into education when they have children, but one of the points I make in my book is that you have to look at the cost dimension. In other words, people should be interested in education because they’re taxpayers. That’s what’s really impacting most people. I mean education is not a trivial cost in this country, and it really does drive state and local spending, and anybody who’s concerned about taxes should look to that.

Your point about the interest of teachers—of course, wages do get set in the private sector through a variety of ways. And for teachers, they should have these options, too. As I say, in Texas, there is one organization, which is a profit-making entity, that bargains on behalf of teachers. It’s basically like having an agent, a literary agent or something. And another suggestion that I examine in this book is that we could move to a European model where you have competing unions, where you don’t have exclusive camps. You have several different unions.

More generally, though, I think the point you’re making about the interest of the teachers in the current system is a very good one. One of the lessons of the privatization movement in Britain, when they did substantially privatize the nationalized sect, which was very, very large, is that however much it may distress you, you basically have to bribe the people in the system to give up their current position. And they did it in the case of privatization of the Water Board, and the electricity, and so on, by giving the workers shares. And that worked very well. It brought the workers over the objection to it. And we have to find some similar equivalent to buy out the entrenched interests in the education system.

John Merrifield

We don’t want to judge a choice-based system on the basis of the private sector, the depravity of the private sector that we have now, because the private schools are now in a situation where it’s a miracle that there are any private schools. By the way, I appreciate you in the back that you’ve been able to perform this miracle. But try to think of another part of our economy where somebody can sell something for thousands of dollars that someone else is giving away. Pretty tough.

David Theroux

On the issue, by the way, of historical background of compulsory education, if you go back and look at the writings of the people who are proponents of it, you’ll find that it was very xenophobic, very racist, very ethnocentric. And you combine that with the fact that a lot of wanted to essentially reduce the labor market. They want to eliminate young people being in the labor market, which is part of what continued in other ways, too. That’s also how Apartheid started, too. How about this gentleman right here.

Audience Member #14

Thanks. I was a teacher for 20 years, and the prevailing outlook of my colleagues was, all we ask is less work to do and higher pay when we don’t get it done. It was a disgusting period of time. I was in the classroom for 20 years. In the district where I live, the teacher union orchestrated the school board election in 1990, and won an award from CTA for doing so. CTA gives the Joyce Fadem (award for excellence in manipulation of school board elections. [Laughter]

As far as democratization in the Oakland City schools is concerned, ebonics is the model of democratization in the Oakland City schools. Now I know I need to ask a question. [Laughter]

John Merrifield

Thank you for that comment. We appreciate that.

Audience Member #14

There are some who say that dumbing-down of American education is rather deliberate. That there are forces from Lou Gerstner of IBM, to Mark Tucker of the Carnegie Foundation, to Hilary Clinton, who have in view an American workforce that is pliant, that is a blank slate that can be pretty much manipulated into whatever position is needed. Have you had any experience, any dealings with that movement? Can you talk about that for a moment?

Peter Brimelow

This sounds like the kind of thing that would interest David. [Laughter] Well, I haven’t, but I know that it’s certainly easier to sustain a system like the one we have when there isn’t any understanding of economics, and certainly we’ve achieved that.

David Theroux

If the purpose of education is that every individual matures and is able to think for him or herself, and understand the world and function successfully, the model that you’re mentioning, which is the mainstream model, is the opposite. It’s to dumb-down the quality. It’s to make people think alike. It’s to make people subservient and basically submissive to the system. I’m not sure if you know about the story of the “Pledge of Allegiance,” but one of the major advocates of compulsory education was a guy named Francis Bellamy, who wrote the “Pledge of Allegiance.” And he was a Christian Socialist, and he believed very strongly that you had to mold the citizenry, the young people, into being essentially loyal subjects of a national government. And there’s a whole story about the practice of reciting the “Pledge of Allegiance,” actually raising your arm up, and there’s a whole thing he wrote about this, which he got adopted throughout the country. And it’s part of this model that education is to essentially create sort of robot-type figures that will be subservient rather than create individual, independent, self-acting people.

Audience Member #15

This is kind of a general question, maybe some of the audience could answer it. In the Alameda County school system, my grandson has seen the movie Malcolm X three times, and he’s getting kind of bored with it. [Laughter] Does anyone have any idea of what the film budget is in Alameda County among the various school districts?

Audience Member #16

Our researcher has left.

John Merrifield

Well, it sounds like they’re pretty efficient to have one film and they just keep showing it. [Laughter] I guess they’re not spending a lot of money on films and they could show three versions that are like Malcolm X, but different, so they’d have to buy three films.

David Theroux

One more question.

Audience Member #17

Regarding the need of unions to protect the teachers’ paychecks and so forth—I live out in Lafayette in what is reputed to be a pretty good school district, and it probably is. And some of the best teachers have gotten together and formed a private academy after school, during which time they go back and repeat the day’s lessons. And we send our kids there at roughly $25 per student per hour to get the lesson they didn’t get in school.

Now why they didn’t get it in school, I don’t know, but in order for them to be able to graduate at the top of their class, pass their SATs, and get into college, we add this on top of whatever the hell we’re paying in Lafayette for property taxes, which I don’t even want to talk about. So, yes, the unions do defend some of the teachers, the ones we probably would be better off without.

David Theroux

I want to thank our speakers, Peter Brimelow and John Merrifield. [Applause] I want to thank you for joining with us. For those of you who have not picked up copies of their books [School Choices: True and False and The Worm in the Apple] I hope you will do so. They’re available upstairs. They’d be happy to autograph copies. And we hope to see you at our next Independent Policy Forum. Thank you. Good night.


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