If I
may go off from one of the comments Friedman made in this interview, I am
trying to be open minded about what direction public education can go in order
to better serve a diverse student population. I refuse to use the words �body� or
�client base� to describe (young) children in learning institutions, because
this only plays into the business mind set that has invaded public education.
One of
the best, if not the strongest, arguments in my view for traditional public
schools is their geographic center in the neighborhood where children
live. Young children especially
do not need to become little commuters in Kindergarten, but indeed that is
what we are doing. Their geographic worlds are small and going not too far
away from home for the day with children they recognize from nearby is healthy
and nurturing.
There
are some innovative ideas and existing programs out there that should be
explored and developed more fully before being forced onto national
scale. But especially in K-6 I
think we should be reinforcing not dismantling public schools. Vouchers are being sold as a miracle
cure and the evidence so far refutes any such thing. People care about community. They respond when their neighborhoods
are under threat or when the people they know become involved. Vouchers to promote privatized
education sounds just like another enterprise building scheme, not improving
the educational process.
We
should be reinforcing all systems at the local level that improve local
community sustainability, not as an antidote to globalization, but as a
natural healthy network linked to the whole.
This
is just one area where theorists apply a concept as an overlay over people�s
lives to make it fit into their proposals. It is simply contrary to basic common
sense. If Milton Friedman can
admit to changing his mind about monetary supply and ruminate about the
application of policy by current politicians, then surely we can wonder why
all of a sudden the NeoCons are pushing so hard to privatize education. Ask. Challenge. Resist. Let�s take the best of the old
traditions and modify it with the best of what we discern from the new ideas.
Economic theory, education policy, government reform.
KWC
Some FWers will
be interested in the following interview with Milton Friedman in this FT
Weekend Magazine:
<<<<
FT LUNCH WITH MILTON FRIEDMAN
Simon London
Hold on to your hats and prepare to be amazed: Milton
Friedman has changed his mind.
"The use of quantity of money as a
target has not been a success," concedes the grand old man of conservative
economics. "I'm not sure I would as of today push it as hard as I once did."
Granted, this is hardly a conversion of Damascene significance. But, heck,
it's a start. It also shows that, at the age of 91, Friedman still has his
critical faculties intact. The man once described as "the most consequential
public intellectual of the post-war era" is still engaged -- and
engaging.
We are at the North Beach Restaurant in San Francisco. While
he will be forever linked with the "Chicago school" of economics, Friedman and
Rose, his wife and sometime co-author, moved to the area in the late 1970s
when he retired from teaching.
The restaurant is only a couple of
blocks from Friedman's home and, it transpires, is a regular haunt. He
receives a voluble welcome.
Those under the age of 40 are probably
unaware how consequential Milton Friedman has been. His mild recantation on
monetary targeting would have caused a sensation - and perhaps saved a lot of
grief -- had it been uttered 20 years ago. In the early 1980s, both the US and
the UK set interest rates according to Friedman-style targets for money-supply
growth. The common aim was to bring down inflation without the pain of
recession.
The common outcome, however, was partial success. Inflation
fell, but at enormous cost in terms of unemployment.
The fact that
central banks the world over have given up trying to "fine-tune" economies to
an imaginary perfect pitch is a measure of his wider influence. Money-supply
targets may have been replaced by inflation targets - but the Friedman
influence remains strong.
If this was not enough for one lifetime,
Milton Friedman the polemicist has been at least as influential as Milton
Friedman the economist. His championing of small government, low taxes and
market forces helped set the terms of public policy debate through the 1980s
and beyond.
It comes as no surprise to find he has strong views about
the menu, too. On Friedman's recommendation, I order sand dabs, a flatfish
said to be something of a house speciality. The professor opts for eggplant
and we agree on two green salads to start, with iced water all
round.
Free To Choose, the "personal statement" published with Rose in
1979, closed with the observation that the intellectual climate was shifting
away from collectivism in favour of free market ideology. What has happened in
the 20 years since, I wonder? "The fall of the Berlin Wall, which occurred 10
years after Free to Choose was completed, means that support for socialist,
collectivist forms of social organisation has all but
disappeared...
"On the other hand, anti-collectivism has not meant
anti-big government. In terms of the attitude towards big government, it is
very hard to say that there has been any improvement. There may have been
backsliding." I point out that government spending fell as a proportion of
national income during the 1990s, reversing a long upward trend. Surely this
was a sign of big government in retreat? More a sign of political gridlock in
Washington, he responds, with President Clinton's Democrat White House pitched
against a Republican-controlled Congress.
He adds, with an air of
disappointment, that spending under George W Bush is back on an upward trend.
"The second President Bush appears to have inherited the free-spending
tendencies of the first," he says dismissively. What, then, of the tax cuts
that the president recently signed into law? "His insistence on tax cuts is
good," he concedes. "That is the only real way of bringing pressure on
Congress to hold down spending. In my view, the size of government is
determined much more by how much they can raise in taxes than by any
ideological theory." The entrees arrive very, very hot.
"To go back to your
original question, the tide of public opinion has continued to go against
government. People are as suspicious as ever of government - big or small.
Unfortunately, the slowness with which public opinion affects policy has not
changed."
His favourite example of the mismatch between public opinion
and public policy is school vouchers. Such a scheme, he says, would unleash
market forces in the education sector by giving parents the right to choose
which school their child attends. Funding would be granted in the first
instance to the child, not the school. Schools would then have to compete for
business by raising standards or pleasing parents in other ways.
"There
is no doubt about public opinion," he says, tucking in to his eggplant.
"Everyone knows that the public school system is lousy. The solutions proposed
are all ineffective with one exception: a greater degree of parental choice -
more competition. The majority of the American public is in favour of
child-centred financing. But the teachers unions exercise such strong
political control that it is very, very difficult to make any
progress."
Listening to him it is easy to understand why his formula
appealed to political leaders -- think Margaret Thatcher and Ronald Reagan --
who craved black-and-white answers to complex questions. As well as turning
out academic papers and polemics, Friedman in his prime was also a prolific
producer of newspaper articles. One of his most influential appeared in The
New York Times Magazine circa 1970, arguing that business should keep its nose
out of social affairs and concentrate on maximising returns to
shareholders.
"The only responsibility of companies is to make a
profit," he wrote -- providing thousands of future MBA students with an easy
starting point for essays on the topic of corporate purpose.
This is
one area, I suggest, in which the tide of opinion has surely turned against
him. Recent scandals involving Enron, WorldCom and others have added to the
interest in "business ethics" started in the late 1990s amid growing concern
about environmental degradation and globalisation.
Nonetheless,
Friedman's passion for shareholder primacy remains undiminished. The
fashionable idea that companies should balance the needs of shareholders,
employees, customers, communities and other "stakeholders" strikes him as
wrong-headed.
"The stakeholder notion is a very dangerous notion. It is
a socialist notion. It says that employees are major stakeholders. It is
really a movement towards employee-run enterprises." But what about the claim
that human capital is as important to businesses as financial capital? Surely
employees -- the providers of human capital - should have some say in the way
businesses are run?
His answer is twofold. First, human capital is not
new. The share of wages and earnings in national income has been remarkably
stable through the decades. Second, the best system of corporate governance is
one that provides the best incentives to use capital efficiently. The
self-interest of employees in retaining their jobs will often conflict with
this overriding objective. Besides, shareholders enjoy none of the contractual
protection enjoyed by employees. Thus, they bear the residual risk when a
company fails.
"You want control... in the hands of those who are the
residual recipients because they are the ones with the direct interest in
using the capital of the firm efficiently. How do you like the sand dabs?"
Sand dabs, it turns outs, are a favourite in the Friedman household. Rose's
sand dabs are unmatched even by the North Beach Restaurant.
I ask
whether he has changed his famously sceptical views about European monetary
union. After all, the euro has been around for a couple of years and is, as we
speak, kicking sand in the face of a weak dollar. Surely this suggests that
the European single currency could be a long-term success.
"I've been
wrong so far, so I don't have too much confidence in my view. But I think
within the next 10 to 15 years the eurozone will split apart. The British
government, on balance, should stay out of it." I remark that Friedman the
economist seems less sure of himself these days than his polemicist alter
ego.
After a long pause, he agrees: "You form a philosophy at a certain
stage and for the rest of your life it dominates. On the big issues of policy
I don't think there is anything I've changed my mind
about."
>>>>
Financial Times 6/7 June,
2003
