To help people decide how to vote in this week's Fun Online Poll, here's another example - the State education system and why the MW policy is as it is.
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I have to trot out a few basic assumptions/observations first, but you can skip to the end of this section to get to the point. These are:
a) Education is A Good Thing - not only to enable each individual achieve more, but also from the point of view of society as a whole - you're better off as an also-ran in a well-educated society than in a poorly-educated one,
b) Competing providers will always be better than a State-run monopoly, however they are funded,
c) The full cost of an average State school place (including the quangocracy and teachers' pensions) is about £8,000 per pupil, not much less than private school fees at the better value private schools in most parts of the country,
d) Taxes on turnover, employment and incomes* are A Bad Thing because of the "deadweight costs" - not only is each individual taxpayer worse off, but the economy as a whole suffers.
e) What we have is a situation where the State spends about £80 billion of taxpayers' money on educating about ten million schoolchildren not very well (John B will no doubt differ on this point).
f) The poor standards and the higher tax burden make it doubly difficult for the ninety three per cent of people who come out of a State school to get on in life and become wealthy.
g) About seven per cent of parents can scrape the money together to have their children educated privately. On the whole these children get a better education, but the parents are paying twice over - once for the State school places they do not use (via taxes) and again directly to the school. That's bitter, but at least it enables the wealthy to stay (relatively) wealthy, and rather bizarrely, relative wealth is as important to people as absolute wealth.
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So much to the assumptions.
If we rule out the option proposed most eloquently by e.g. Brian Micklethwait, to scrap all State involvement in education - both the funding side and the provision side - and rule out staying with the status quo, the way forward has to be education vouchers.
As a moderate in all things, I wouldn't even initially propose scrapping all State schools and giving everybody a voucher - I'd let parents choose to waive their children's free State school places and take vouchers worth £4,000 a year (half the cost of a State school place) to be used against the cost of private school fees. Even if only a fifth of pupils took them up, there'd be no overall cost to the taxpayer (workings here), but if half of pupils took them up, that'd save £12 billion. Not a huge amount, but enough to raise the personal allowance by £1,500 each or so for a start.
And for every £1 of income tax cut, there would be a few more parents who can afford to put their children into a private school, thus further savings to the taxpayer, thus more tax cuts and so on in a virtual circle until some sort of optimum is reached, where the "deadweight costs" of the taxes are rather less than the overall benefit to society from having a better-educated population than would otherwise be the case.
What would the results of all this be?
1. Lower taxes, so it's slightly easier to become wealthy (benefitting each individual as well as the whole economy).
2. Higher educational standards (ditto)
3. There would no longer be a privileged and/or dedicated elite who send their children to private schools, who then earn more, send their children to private schools etc; the lines would be far more blurred, so there would be more 'social mobility' in both directions (but hopefully more upwards than downwards).
* Of course, if we replaced Council Tax etc with Land Value Tax, there would be a real incentive for councils to either improve their own schools; allow more competing providers to take them over; or even to top-up the vouchers with local money. As we well know, house prices and rents are much higher in the catchment area of good schools, ergo LVT receipts would be higher, so up to a certain natural level, improvement in schools would be self-financing. But that's a slightly different topic.
Wednesday, 18 March 2009
This week's Fun Online Poll - more examples
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6 comments:
We, your loyal fans, forgive the two "f)"s.
I'm not sure I understand how your half-cost voucher scheme could work. Vouchers are of no use unless they can buy an education. Which parent will take a voucher worth £4,000 instead of a school place worth £8,000? Where will they be able to spend their £4,000 voucher? Which schools will provide an education for half the amount it costs?
If a school takes voucher pupils paying £4,000 a head while those pupils who have not opted for vouchers result in the school receiving £8,000 per spotty teenager, would it feel obliged to provide extra services for the non-voucher brigade? If not, why not?
TFB, on Day One, the only parents who would benefit are those who already send their kids private.
But as it would reduce the cost of sending your child to one of the cheaper private schools to a couple of thousand pounds a year, hopefully the number of kids going to private schools would increase enormously.
And don't confuse 'cost' and 'value'. A private school place is worth more than it costs (the difference being a modest profit for the school). Most State school places are worth less than they cost the taxpayer (it's called waste).
I'd just loan all parents the whole amount of the cost of educating THEIR children.
AC1, loans are fine for higher education as that's just for the top few who are supposed to be able to do break even calculations as to whether going to uni is worth the investment, but not for school age kids.
I'm not sure about this, education is (I believe) one of the public goods that the state should provide, just like basic healthcare service and a genuine "Beveridge" style income insurance scheme.
I have nothing against private education, healthcare or income insurance, but the point is if people can no longer afford these they still have access to the public provided services, and that's why they should contribute, because they do have access to them even if they choose to go elsewhere.
This benefits the whole of society.
Now, that the government is shit at delivering these public goods, and wastes lots of time and money pissing about with things that aren't public goods is a different and very real problem. Similarly, I have no expectation that the government has to deliver the public goods, just facilitate their provision.
If state funded schooling or the NHS was made up of private sector companies I'd have no problem with that, providing they can deliver to the required service level.
I think your plan doesn't really does much for kids who have lazy, scummy parents (it's not the kids' fault) who don't give a shit about their education, these tend to be the poorest kids. It helps those who care most about their kids' education but these tend to be more affluent parents who either send their kids to private schools already, or send their kids to the good state schools (and they do exist).
MJW, fair points, but...
1. 'Public goods' are only those things which a free market would not provide and/or have to be funded out of taxes because of the free rider problem; so the State has to provide them, or at least collect the taxes to pay for private provision. Edcuation is not a public good in the narrow sense.
2. Seeing as we agree the State is fairly shit at providing education but education is certainly a 'merit good' or one that has wider public benefits, what's wrong with a mix of free State schools for The Underclass and taxpayer-subsidised/privately provided schools for everybody else?
3. There's not much you can do for The Underclass, they can continue sending their kids to a 'free' State school.
4. Sure, even with £4,000 vouchers, the lower paid-but-decent people (the second and third income quintiles) might not be able to afford to pay much in the way of top-up fees, but competition and selection will still drive up overall standards for these people.
What's not to like?
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