Government-Financed and -Operated Schools
Virtually everyone is in favor of good schools, which means schools communicating important information to students. But few people seem to recognize that communicating information to parents and students about schools and about parents and students to schools is critical to having good schools. This lack of recognition, along with the political influence of the public school lobby, explains why government policy is undermining the education of our children by censoring the communication of information between public schools and their “customers.”
Parents pay for their children’s public school education through taxes rather than by direct payment to the school of their choice. As a result, they do not receive information from the public schools on the costs of educating their children in the form of a price, or tuition payment. Their taxes pay for a host of public services (and disservices), with no breakdown informing them how much they are paying for each. And even if parents did know how much they are paying for the public schools educating their children, they still would not know the social costs, since taxpayers with no children in the public schools are paying much of those costs. Furthermore, parents are limited in their ability to respond to information on the cost of public schools, since in most cases they either have to send their children to the school assigned to them by the public school authorities, or pay for their children to attend a private school while still paying for the public education their children are no longer receiving. So governments prevent parents from communicating their dissatisfaction with their assigned public school by refusing to pay the price charged and taking their business elsewhere.
Thus, parents receive little information on how much public schools cost and have little motivation to acquire information on how well their children’s public schools are performing relative to other schools, since they cannot easily act on that information. And public schools receive little information from parents on how well they are doing, and even less motivation to respond appropriately to the information (typically in the form of complaints) they do receive. By making it extremely costly for parents to pay for education directly or to send their children to the public school of their choice, policymakers prevent, and effectively censor, the communication between parents and public schools of much of the information necessary to provide good education. Not surprisingly, decisions on such important things as class size, curriculum, teaching methods, and the connection between teacher pay and performance will be influenced more by the latest education fashion, what is currently politically correct, onesize-fits-all mandates imposed by remote authorities, and the convenience of teachers and administrators, than by information on the value received and the cost of providing education.
It is true that parents can get a better public education for their children by moving to more affluent neighborhoods where the public schools are typically superior to those in poor neighborhoods. The demand for better education results in higher prices for houses in areas with superior public schools, and these higher prices do communicate some information. But higher house prices reflect a host of desirable features of a particular neighborhood, and thus give schools much less information on how to respond appropriately to the educational preferences in the community than would prices and revenues received directly from parents, and much less motivation to do so.
As long as government finances schools, the best way to improve education is by using the information from parents and schools that is being censored by having schools operated by government. Governments could provide parents with vouchers that they could spend on the schools that they believe do the best job educating their children. Those schools doing the best job, as determined by parents, would receive the most vouchers and expand by competing away resources from those schools doing a poor job. Schools would get direct information in the form of revenue on the educational options parents prefer, and parents would get direct information on the costs of those options. And instead of the tendency toward a one-size-fitsall approach, there would be more educational variety in response to the diversity in educational preferences.
Those children whose parents, or guardians, are least able to move to districts with better schools, or to pay for private schooling, would benefit the most from the educational information that would be communicated through the market for vouchers. It is not surprising that African Americans and Hispanics favor educational vouchers by large majorities Public school officials talk frequently about how they are making every effort to keep their schools supplied with the latest information technology and doing all they can to overcome the so-called “digital divide” so that children in poor neighborhoods benefit just as much from access to information as those in wealthy schools. But they do so while actively opposing educational vouchers that would eliminate the censorship of information that is far more vital to improving the education of all students, particularly those in the poorest neighborhoods, than all of the digital doodads the public schools are obsessing over.
Agricultural Programs
The federal government distorts and destroys information by trying to transfer wealth from consumers to American farmers through a variety of programs, such as guaranteeing farmers higher prices for certain crops, subsidizing water for agricultural use, and limiting the acreage that farmers can legally cultivate. These policies all waste resources by censoring the communication of information.
Consider cotton farming. Because of federal water subsidies and price supports, thousands of acres of land in the deserts of Arizona and California are being used to grow cotton. This clearly would not be happening if farm programs were not censoring the communication of valuable information through market prices. The water subsidies communicate to cotton farmers that the water they are using to grow cotton has little value in alternative uses. This erroneous information would be quickly corrected and cotton farms in the desert would disappear if farmers were allowed to sell their subsidized water to domestic and industrial users, but such sales are either outlawed or severely restricted. Even if the water subsidies were significantly reduced, government price support for cotton would censor communication to consumers that cotton can be grown more cheaply in places like the Mississippi Delta and other parts of the South, than in the desert. Without this censorship cotton production would be shifted out of the desert and to those areas where production costs are lowest.
Because of the distorted information caused by agricultural policies, those policies do far less to transfer wealth to farmers than politicians claim. Because of the artificially high prices farmers receive for their crops, the price of farm land is bid up as farmers make investment decisions in land that would make no sense if accurate information on the value of alternative uses for that land were being communicated. Farmers who buy land after the farm programs are established pay prices that result in them making no more than a normal return on their investments. But even though farm programs do not increase the wealth of these farmers, eliminating the programs would reduce it by causing the price of their land to fall below what they paid for it. And the more these programs have censored and distorted price information, the greater the wealth loss farmers would suffer if the programs were eliminated. Therefore, increasing the accuracy of the information being communicated by agricultural prices and reducing the waste in agricultural production by eliminating farm programs would face strong political opposition.
The greater the improvement in the information communicated and the more waste reduced by eliminating these programs, the more intense the political opposition would be.