Milton Friedman’s School Voucher System

Milton Friedman proposed in his book, Capitalism and Freedom published in 1962, a school voucher system. To summarize: it is desirable for a society to (2) impose a minimum required level of schooling, and (2) finance this schooling by the state. It can be achieved by giving parents vouchers redeemable at any approved schools. The role of the government is limited to ensuring that the schools meet certain minimum requirements. There is no need to combine the administration of schools with their financing.

It may well mean smaller governmental expenditures on schooling, yet higher total expenditures – because parents can spend more on education if they so wish. The equivalent in Hong Kong at the moment is to send our children to direct-subsidy schools which charge a fee.

He also observed that in government-administered schools, salary schedules tend to be uniform and determined for more by seniority, degrees received, and teaching certificates acquired than merit. The alternative would resolve these problems and permit competition to be effective in rewarding merit and attracting ability to teaching.

Despite the obvious advantages, such a system is naturally going to be opposed strongly by the government bureaucracy. Not only will much of the control over education be passed from the government to private citizens, the government machinery will also be greatly reduced in size. Just witness the pseudo-voucher system being proposed for kindergartens in Hong Kong. It is used to strengthen government administration and control of schools, rather than the other way around. In the meant time, more people will have to be hired to administer the system, increasing the size of the bureaucracy.