Politician – Marsha Familaro Enright

I Run a Private School, and I’m Against School Vouchers

Many, many people across the political spectrum are concerned about the dire state of government schools today. Not only are too many students arriving at college illiterate, innumerate, and ignorant, but many have had to survive a dangerous and destructive time in government schools.

Free society advocates argue that a market solution—thriving competition—is the key to change. In his 1960 Constitution of Liberty, Friedrich Hayek proposed a plan to take the government out of the business of schooling by providing parents with publicly-funded vouchers with which to pay for any school of their choice.

“As has been shown by Professor Milton Friedman (M. Friedman, The role of government in education, 1955), it would now be entirely practicable to defray the costs of general education out of the public purse without maintaining government schools, by giving the parents vouchers covering the cost of education of each child which they could hand over to schools of their choice. It may still be desirable that government directly provide schools in a few isolated communities where the number of children is too small (and the average cost of education therefore too high) for privately run schools. But with respect to the great majority of the population, it would undoubtedly be possible to leave the organization and management of education entirely to private efforts, with the government providing merely the basic finance and ensuring a minimum standard for all schools where the vouchers could be spent.” (F. A. Hayek, 1960, section 24.3)

Many free society advocates have been campaigning for voucher systems the past 2-25years, and some locales (Milwaukee, New Orleans) and states (Florida) have instituted them.

The main opposition to school vouchers is that they threaten to put public education in direct competition with private education, reducing and reallocating public school funding to private schools. Of course, the teachers’ unions and National Education Association are against them.

But I have an entirely different reason to oppose vouchers, and it revolves around the phrase “ensuring a minimum standard for all schools where vouchers could be spent.” Contrary to the opponents who worry that vouchers will undermine the public schools, I’m sure they will undermine—level—the private ones.

That’s because whomever controls the money, controls the curriculum.

I founded and have been running Council Oak Montessori School for children 3 to 15 years old for 25 years. We are a classic Montessori school; we do almost nothing like a traditional school, yet we’ve been cited in Chicago Magazine as one of the best private elementary schools in the city. Our outcomes are remarkable, but not easily standardized. Our students generally do well on standardized tests, but that’s not why we’re good.

Instead, we produce students who maintain their delight in learning, work hard, and know how to behave well with others while remaining their own person. Many do exceptionally well academically, but that depends on the individual. They are good at finding what they love to do and being good at it—and that’s not always an academic path.

We have graduates who struggled mightily with the academic work – and are now designers at Google and illustrators for the movies, gemologists, and auto mechanics. We also have graduates who didn’t want to do much but math—and are engineers and research scientists mad for learning history and reading literature. They just needed to develop their interest in their own time.

Traditionalists just don’t get Montessori. They have objections up the wazoo, despite our 100 years of experience. It’s too different, too child-centered, too individualistic.

I’ve seen what happens to Montessori programs under the thumb of traditionalists—in Chicago public school Montessori magnet schools, and in private Montessori schools run by traditionalists—or caving to parent fear and pressure, and there’s plenty of that to go around.

So, I can imagine what would happen under a voucher program, and here’s what I fear for the private schools: only the richest private schools will be able to continue without taking vouchers. Inevitably, there will be corruption. This will lead to government oversight, and before you know it—boom! We’re back to the government controlling the curricula, teachers, and program. And the differences between private schools will be fundamentally wiped out. What bureaucrat is going to decide the standards? Once government bureaucrats begin regulating, you’re down the same slippery slope that got us into our current educational mess.

It’s happened elsewhere: Belgium is a good example. In 1917 they instituted a voucher program to enable students to go to private and religious schools. Over the years, the schools have come to be more and more regulated by the state, so that now, there’s not a significant difference in them.

But we don’t really need to refer to what’s happened in Europe; we need only see the dire consequences of Federal student loans at the college level today. The Feds have become an octopus, encircling and strangling our colleges and universities with regulations, mandates, and controls. Between them and the New Left manning the professoriat, the market in college education is hugely diminished. Diversity in ideas is down to a few places.

The only completely privately funded college I know of is Hillsdale College, in Michigan. They chose to stay privately funded because of affirmative action: they were started in the 19th century by abolitionists who did not believe in discriminating based on race. In the ‘70’s, they were required by the Feds to employ affirmative action if they wanted to use Pew grants. But they considered affirmative action a form of racial discrimination. Rather than continue with it, their trustees decided the college should become entire funded privately.

And now Hillsdale stands as one of the only ideologically unique higher education institutions in the nation. Too bad more places haven’t had the integrity to follow that path.

Returning to our fundamental problem: what about the kids! What about the millions that are getting a terrible education in public schools. Aren’t we concerned with all those individuals? Should we advocate that they languish just because of what might happen 50 years down the road? Maybe we should just bite the bullet and use vouchers and charter schools (don’t get me started on those crony capitalist institutions!)?

I think there’s a much better way to transition to a free market in education.
I would have to investigate the full legal ramifications, but tax credits seem a better road, although not without pitfalls. Tax credits are via individual tax returns, not controlled and handed out by some government bureaucracy.

A person could get a tax credit for any amount donated towards a student’s tuition and fees, whether related or not. I can envision that private charities like The Donors Trust, would arise to administer the scholarships. Of course, there’s still the specter of the government regulating the use of the tax credits, a serious concern. But the fact that they are more arms-length from government regulators is a big plus.

If you’d like an idea of what a real free market in education would be like, see Common Ground Against Common Core. I’ve penned the final chapter, “Liberating Education in which I outline the rich market in schools that would ensue if we had no government education program, but a completely private market – and how everyone could be educated in it, no matter their wealth or penchants or problems. The evidence is there.

M. Friedman, The role of government in education, 1955 Hayek, Friedrich. 1960. The Constitution of Liberty. Chicago: University of Chicago Press, section 24.3

Referenced:

http://www.tax4world.com/tax-return/2016-tax-return-with-education-credits 2/

http://paper.li/SmlPplBigIdeas/1415280440?edition_id=2437ca10-f0cf-11e4 82e4-0cc47a0d164b

https://www.thesavvystreet.com/i-run-a-private-school-and-im-against school-vouchers/

A lesson in profit by Gen LaGreca and Marsha Familaro Enright

Addressing a joint session of Congress on health care, President Barack Obama reiterated his often-expressed aversion to the profit motive:

“[B]y avoiding some of the overhead that gets eaten up at private [health insurance] companies by profits and excessive costs and executive salaries, [the public insurance option] could provide a good deal for consumers, and would also keep pressure on private insurers to keep their policies affordable and treat their customers better . . .”

Is this true? Is profit wasteful, as Obama implies? Does it lead to higher prices and lower value to consumers? Can the government, unburdened by profit, do the same job as a private company, only cheaper and better?

To answer, let’s consider one business, one product, and one profit-seeking man who lived at a time when the market operated largely free of government subsidies, bailouts, regulations, taxation, and other “progressive” intrusions.

Henry Ford, at age 13, saw a steam-driven land vehicle, a “road locomotive,” which filled his imagination with the vision of a horseless carriage and fueled a passion to create one. As a young man, he worked day jobs, while trying to build a car in his free time. Realizing a viable car could not run on steam, he sought to develop a new kind of engine.

On Christmas Eve 1893, the 30-year-old inventor clamped his first gasoline engine to his wife Clara’s kitchen sink. With the home’s electricity providing ignition, the motor roared into action, sending the sink vibrating and exhaust flames flying while Clara prepared the holiday dinner.

In pursuit of his dream, Ford and Clara moved eight times in their first nine years of marriage. He quit a secure job at the Edison Illuminating Company, banking everything on his vision. He co-founded the Detroit Automobile Company—a venture that failed. Jobless, Ford moved his wife and child into his father’s home. But he kept working on his car. “It is always too soon to quit,” he said.

Ten years passed from the roar of the little engine on Clara’s sink to the launch of the Ford Motor Company. It took five more years to produce his big success, the Model T, and additional years to master its mass production.

Why did Ford persist through years of hardship and uncertainty? How much would his love for the work have sustained him without the hope of eventual profit? Imagine if he had lived in a system where politicians could, at the stroke of a pen, seize his profits or decide how much he could keep. Would he have risked so much or worked so ferociously to bring a world-changing invention to market?

Would an Amtrak employee devote a decade of free time inventing a new train, only to rise a notch on a civil-servant’s pay scale? Dream big, work hard, create something earth shaking, but be paid small is the antithesis of the American dream.

The pursuit of profit not only motivated Ford, but also his bold investors who had the foresight to realize the horse was doomed.

In 1903, a school teacher invested $100—half her life savings—in the Ford Motor Company. Sixteen years later, she sold her stock for a total gain of $355,000. Why would she and others place their money on a highly experimental venture, were it not for the hope of tremendous gain should the enterprise succeed? What kind of person would deny her the reward for recognizing Ford’s vision and risking her own money?

The pursuit of profit also impacted every aspect of Ford’s business operations.

Ford didn’t need a politician’s scolding to lower prices—only the desire to make huge profits by reaching mass markets. Because early cars were expensive, people viewed them as mere playthings of the rich. But Ford sought to “build a motor car for the multitude.” This led him to develop his moving assembly line, significantly reducing manufacturing costs and, consequently, prices. The original $825 price of the Model T finally bottomed at $260. That price-lowering strategy brought him the millions of customers that made him rich.

Similarly, Ford’s pursuit of profit didn’t result in bare-subsistence wages for employees, but in phenomenal pay increases. He shocked the world by introducing the $5 workday, more than doubling the era’s prevailing wage. Why? To attract the best workers, whose talents increased product quality and company efficiency. High pay also decreased employee turnover and training costs, again increasing Ford’s profits.

Ford typifies the successful capitalist, whose profit-driven innovations lower prices, while raising wages and living standards for all.

Even today’s Ford Motor Company, a much-fettered child of our mixed economy, demonstrates the superiority of private- over government-run companies. Ford refused TARP bailout money, choosing to operate without government strings. The result? Ford’s profits are up 43 percent, while bailed-out GM and Chrysler lag behind.

In Henry Ford—a thin man who was the fattest of fat cats—we see an embodied refutation of President Obama’s worldview. Ford developed a new form of transportation vastly cheaper, faster, more convenient, and superior to the old mode. He continually lowered prices so that everyone, rich and poor, would have access to his product. He created thousands of jobs. He raised employee wages. He did all this good without government grants, bailouts, stimuli, subsidies, or coercion, but simply as a result of the honest pursuit of personal gain.

This achievement was possible only because a private individual had the freedom to pursue his own self-interest, in cooperation with others who supported his vision and shared in the rewards, unencumbered by government.

By eliminating profit, Obama implies that everything else about an enterprise would remain the same, only the product would be cheaper and better. Actually, by removing profit, nothing at all would remain the same.

Contrary to Obama’s notions, profit is not an overhead cost, but a vital gain sought over and above costs in order to reward a company’s risk-takers. According to economist Ludwig von Mises, “Profit is the pay-off of successful action.” And “The elimination of profit . . . would create poverty for all.”

Eliminate the hope of profit, and you extinguish that spark which ignites the human engine and powers it to explore uncharted roads: the creative mind. Profit is the proud product of the creative mind, and the creative mind is an attribute of the individual. Obama’s attack on profit is an attack on human creativity and innovation, which is an attack on the individual.

Obama’s antipathy for the self-interested individual is explicit. “In America, we have this strong bias toward individual action,” he said in an interview in the Chicago Reader. “But individual actions, individual dreams, are not sufficient. We must unite in collective action, build collective institutions and organizations.”

It was Henry Ford’s individual actions and individual dreams that brought motorized, personal transportation within reach of everyone in the world.

America is rooted in the “pursuit of happiness”—which means the right of each of us to create, to produce, to rise, to succeed, and to profit from the fruits of our labor. Contrast this worldview with that of a president who disparages the individual and seeks to limit or expropriate his profits on behalf of a faceless “collective.” Obama’s war on profit is a war against the individualist heart and soul of America.

Profits are a badge of honor earned by someone who offers others something they value enough to buy. The first buyer of the first car of the Ford Motor Company was a doctor. He was tired of hitching up his horse and buggy for nighttime emergencies. Ford’s product enhanced his life, as it later enhanced the lives of millions. Profit is the medal Ford received from his customers for a job well done.

If our nation is to cultivate productive geniuses like Henry Ford, it must proclaim that the quest for profit is moral and noble.

POSTSCRIPT: Transportation Secretary Ray LaHood recently announced “the end of favoring motorized transportation at the expense of non-motorized.” This means that the federal government, with its vast powers to fund highway projects, “liveability” initiatives, and other aid programs, as well as to tax gasoline, now intends, in LaHood’s stunningly brazen words, “to coerce people out of their cars,” in favor of walking or cycling. A century ago, Henry Ford, through capitalism and the profit motive, brought motorized transportation to the world. Now, an alarmingly anti-capitalist government is reversing that historic achievement and pulling us back to the pre-industrial age.

Gen LaGreca is author of “Noble Vision,” an award-winning novel about the struggle for liberty in health care today. Marsha Familaro Enright is president of the Reason, Individualism, Freedom Institute, the Foundation for the College of the United States. Incidents from the book “Young Henry Ford,” by Sidney Olson appear in this article.

Permanent Link: http://marsha-familaro-enright.com/a-lesson-in-profit/

Originally published at: http://dailycaller.com/2010/03/31/a-lesson-in-profit/