More on Education

So, I'd like to apologize to our dozen or so regular visitors and the others- millions, surely- who subscribe to our RSS feed for the lack of an update lately. My work schedule has been hectic and my mother-in-law is in town and so I've not had the time for serious interneting lately.

Just a few days ago I was lamenting the libertarian predilection for cute little parables as opposed to actual, historically grounded arguments, and then Don Boudreaux goes and and posts a good little parable. Analogizing to our largely free-market system of supplying food, Professor Boudreaux challenges those of us who see a government role in the education market to justify our position, given the rousing success of the market in supplying food. So, here goes.

Your kids being educated generates fairly large externalities for me and my kids. Educated people produce more, meaning there's more for me to consume, and their demand for the sorts of goods I like- books, high-brow movies and television and so forth- is higher, meaning I can get the things I want more readily. So I have an interest in ensuring that your kids- and everyone's kids- have at least the opportunity to receive an education. Everyone else shares this interest, incidentally- even if you don't share my predilection for thick tomes on obscure topics, the higher productivity of literate, numerate workers benefits you directly in the form of a higher standard of living.

That's all well and good, you say, but the mere existence of positive externalities does not prove that the market could not supply the good. And that's true, but here's the difference between education and food- you will not willingly starve to death, nor will you starve your children. The number of parents who are less than concerned with educating their children is far, far higher than the number of parents who are less than concerned with feeding them. Witness the drop-out rate in the United States currently, with education costing nothing more than time. Even with free secondary schools, 8% of secondary school students drop out. What would the rate be if education cost money?

I suppose you could make an argument that parents who paid for ten years of education with the goal of securing a high school diploma for their child would object much more strongly to that child abandoning the goal after so much expenditure. And while I am sure some of that would go on, the reverse would too- financially strapped parents deciding that Junior has already mastered his reading, writing and arithmetic and that money could be better spent elsewhere. We also shouldn't ignore the existence of parents who are simply imprudent (to put it nicely) and would rather spend on present consumption than invest in their children's future.

Children cannot choose their parents. Completely eliminating the advantages of being born to weathly parent (and the disadvantages of being born to poor parents) is an unrealistic aim, but we need not compound the disadvantages the children of the poor and/or imprudent already face. A government-subsidized educational system creates sufficient positive externalities to overcome the negative impact of taxation, and these externalities cannot be reliably generated by pure market processes simply because, in the case of primary and secondary education, the buyer is not the consumer.