Education and Capitalism: an exclusive interview with Joseph L. Bast

Published January 1, 2004

Although there are many major players in the school choice movement–and School Reform News has interviewed many of them over the past seven years–it was Heartland Institute President Joseph L. Bast who last year was singled out for criticism in the Wall Street Journal by Ralph G. Neas, president of People for the American Way (PFAW).

Neas criticized Bast for saying vouchers are the “way to privatize schooling” and that “pilot voucher programs for the urban poor will lead the way to statewide universal voucher plans. Soon, most government schools will be converted to private schools or simply close their doors.” This, wrote Neas in “Voucher Veneer,” was evidence of The Heartland Institute’s “extreme agenda.”

In fact, the stated agenda of The Heartland Institute–the publisher of School Reform News–is “to help build social movements in support of ideas that empower people.” These empowering ideas include parental choice in education, choice and personal responsibility in health care, market-based approaches to environmental protection, privatization of public services, and deregulation as a generally preferred strategy. Nobel economist Milton Friedman calls Heartland a “a highly effective libertarian institute.”

Bast, who was Heartland’s first employee, has overseen the growth of the organization from an annual budget of $20,000 in 1984 to $2.15 million in 2004, with a full-time staff of 12 and a growing network of Heartland Senior Fellows. He has assembled a national advisory board of nearly 100 academics and professional economists; built a donor base of more than 1,400 individuals, corporations, and foundations; and overseen the publication of nearly 500 books, commentaries, studies, and other publications.

Bast is the coauthor of five books on school reform, health care reform, economic development, and environmentalism. His latest book, coauthored with Heartland chairman Herbert J. Walberg, is Education and Capitalism: How Overcoming Our Fear of Markets and Economics Can Improve America’s Schools. He recently spoke with School Reform News Managing Editor George Clowes.

Clowes: What is The Heartland Institute, and how did you become interested in education reform?

Bast: The Heartland Institute is a 20-year-old national nonprofit organization based in Chicago. We address a wide range of topics, not just education. Our principal audience is state and national elected officials. There are about 8,300 of them nationwide.

The first thing I recall reading about the need for school reform was a chapter in Milton Friedman’s Capitalism and Freedom as a freshman at the University of Chicago. That would have been in 1976. The first time I edited or published anything on the subject was in 1983, an article by Joe Maxwell, then a graduate student in economics at U of C, which appeared in Nomos, a quarterly magazine I helped start.

Heartland began in 1984, and we started addressing education virtually from day one, publishing research on independent schools in Chicago, a plan for property tax credits in 1988, a how-to manual for school reformers in 1991 titled Rebuilding America’s Schools, and probably a dozen policy studies and shorter pieces since then. And of course, we launched School Reform News, in January 1997.

Clowes: Is The Heartland Institute’s aim really to “privatize” K-12 schooling in the U.S.? Do you advocate abolishing public education?

Bast: First of all, let’s get the vocabulary right. It’s “government” schools, not “public” schools. In most major cities, private schools are just as open to the public as government schools are, sometimes more so, so let’s not bias the discussion by confusing “government” with “public.”

Do I want to abolish government schools? Honestly, that’s not an easy question to answer. First, you have to separate a straight-forward economic analysis of the issue from the ideology and politics that surround reform proposals, then separate Joe Bast from The Heartland Institute, and finally you need to ask what is politically possible and even desirable.

Clowes: Okay, so what does economics say about government schooling?

Bast: No competent economist in America today would tell you that the best way to organize K-12 education is the way we do it now. That is, to allow the government to tax everyone for the service–regardless of whether they have kids, need to hire educated workers, or even have a high school education themselves–and then provide the service through government-owned and -operated schools. That’s just an obsolete and failed model. To then discourage competition among public schools and ban any tax aid to private schools just makes the model even more absurd.

So speaking as someone familiar with the economics of education, I would say yes, we need to privatize government schools. Anything less than that will leave a failed model in place.

Clowes: So that’s the economic perspective. What is Heartland’s perspective?

Bast: Heartland has more than a dozen spokespersons, 15 board members, nearly 100 academics and professional economists who serve as advisors, 1,400 donors, and nearly 400 state elected officials who serve on an advisory board. Our publications serve as a platform for a score of other school reform groups, which often disagree on the best way to move the ball down the field.

So Heartland doesn’t speak with a single voice on this or any other topic.

Clowes: And finally, what is your personal opinion?

Bast: I think to talk of “abolishing public education” is nonsensical. It can’t be abolished. You would have to revise the constitutions of every state, and pass laws forbidding counties and cities from allocating any tax dollars to schools. Not only would such a quest be impossible to orchestrate and fund, but achieving it would be at odds with my libertarian instincts. I believe in federalism, decentralized government, local autonomy, allowing people to choose which types of government they prefer. I’d be opposed to the kind of laws that would be required to “abolish” public education.

Clowes: Why do you think People for the American Way is singling you out as leading the right-wing conspiracy/campaign to destroy the public–I mean “government”–schools?

Bast: Actually, George, I think it’s your fault! School Reform News reaches more policymakers and grassroots activists, more often, than any other publication that supports school choice and vouchers. Three-quarters of state elected officials say they read it, and nearly half say it has changed their mind or led to a change in public policy.

Thanks to School Reform News, Heartland probably poses a bigger threat to the public school monopoly than any other organization in the U.S. today. That’s a big claim to make, but I believe it is true. We don’t lobby, and we don’t run television or radio ads. We don’t appear in the Washington Post or New York Times very often. But for seven years we’ve been influencing more elected officials on this subject than any other organization.

Getting back to the actual charges made by People for the American Way, it should be clear that we are neither leading nor being manipulated by some “right-wing conspiracy.” There are plenty of differences of opinion among school choice proponents about how to introduce competition and choice into K-12 education. We don’t tell other people what to think, we don’t tell donors who to fund, and we don’t try to “pick winners” or get involved with political campaigns.

The real “conspiracy” in education today is the one between the teacher unions and liberal advocacy groups such as People for the American Way. They are in complete lockstep in their opposition to school choice and vouchers. Is that a coincidence? I doubt it.

Clowes: What do you think is the motivation behind privatization? Is it to help children get a better education, or to make money for capitalists? Is there a tradeoff here?

Bast: Whose motivation are we talking about? My motive is to help kids get a better education, period. A day doesn’t pass that I don’t think about how many kids are having their lives ruined by not being taught to read and write, being pushed along by an unaccountable government bureaucracy that freezes out parents and all the other stakeholders. It’s a tragedy. It’s the biggest tragedy in America today.

I believe the same concern motivates other policy analysts and think tank executives and their donors who support school choice. We’re all in it for the kids. If we didn’t think this would work, we’d be focusing on other issues. There are plenty of other ones out there we could be working on.

There are entrepreneurs and corporations that may be motivated by profit to see greater privatization of schooling. That’s exactly as it should be. We want them motivated by self interest, rather than altruism, because as Adam Smith said, relying on people pursuing their own interests is a much more reliable way to achieve the public good than relying on altruists.

Clowes: Although full privatization may be your preference, what do you hope or expect to see happen in the coming years?

Bast: I think charter schools, tax credits, and school vouchers will continue to expand and spread as more parents demand choice and elected officials discover that kow-towing to teacher unions is a losing reelection strategy. It is getting more and more difficult for state legislators to say school choice is too risky, or too expensive, or should only be a last resort. The genie is out of the bottle. School choice has become a social movement, and legislators need to lead or get out of the way.

Ten years from now, I think most parents will be able to take their share of education funding and use it to send their children to the public, private, or charter school of their choice. Surveys suggest about two out of three parents would choose a private school if tuition were not a barrier, and that’s with today’s very limited range of choices. So in 15 or 20 years, I believe fewer than one child in three, maybe one child in four or five, will still be attending government schools. And those government schools, by the way, will be much better than the government schools of today.

Clowes: Heartland also was formed just a year after the publication of A Nation at Risk, so you have seen 20 years of effort to improve the public schools. Why do you think these reforms have produced so little in terms of improved student achievement?

Bast: That’s easy. With the exception of a few pilot programs in Milwaukee, Cleveland, and Florida, no policymakers have embraced market-based reforms such as school vouchers. They are just rearranging chairs on the deck of the Titanic. Until they change the way schools are financed–until the money follows the student, and schools have to compete for those students–nothing else will make much difference.

Clowes: Your new book makes that case, doesn’t it?

Bast: Yes. Dr. Herb Walberg and I wrote Education and Capitalism: How Overcoming Our Fear of Markets and Economics Can Improve America’s Schools. It was just published by the Hoover Institution.

I believe Education and Capitalism is the first time since Milton Friedman wrote Capitalism and Freedom that the case for capitalism has appeared side-by-side with the case for school choice and vouchers. Our thesis is that you can’t persuade someone to rely on private companies to educate their children if they don’t know how markets and capitalism work. Most people today simply don’t understand capitalism, and people often fear what they don’t understand.

Clowes: What one message would you most like to communicate to policymakers about capitalism and education?

Bast: “Capitalism” sounds scary and like an ideology, but it’s simply an economy that relies on freedom instead of force to produce and distribute goods and services. We rely on capitalism to provide food, clothing, shelter, transportation, health care–just about everything except K-12 schooling. That’s weird, and it gets more weird with every passing year as more goods and services get privatized here in the U.S. and in other countries.

Relying on capitalism to educate children worked well in the U.S. for two centuries–from the founding of the first colonies in the 1600s until the mid-1800s. That successful system, composed largely of private schools that competed for students, was abandoned for ideological and political reasons that people today would be ashamed to express. We can and should bring that successful system back, because with all the advances in technology and institutions that have taken place since the 1840s, there’s no telling how much more efficient and effective a market-driven school system would be today.

Every month and every year that we delay the adoption of school vouchers and other market-based reforms means thousands or millions of kids are denied the education they need to achieve their potential, be good citizens and productive members of society. We’re out of time. The answer is right in front of us. All we need are more state legislators with the courage to do the right thing.