The magic of the marketplace

Posted: Jul 10, 2002 12:00 AM
Writes Milton Friedman in The New York Times: "School vouchers can push elementary and secondary education out of the 19th century and into the 21st by introducing market competition on a broad scale, just as competition has made progress possible in every other area of economic and civic life." Fires back letter writer Dennis C. Buss: "Free marketeers like Mr. Friedman may delight in the prospect of competition working 'its magic.' But the Supreme Court's benighted decision on vouchers actually poses a threat to the shared civic values and democratic social cohesiveness that American public schools advance." A classic argument is restarting itself on fronts hither and yon. It is about markets and how much elbowroom they deserve in a land of liberty. A lot? A little? Who decides? And who measures the results? The voucher question is one front. Another is the question of fraud and cover-ups on Wall Street; still another, free trade. It seems we, as a people, want freedom; we just can't figure out how much is good for us. We thought for a time in the late '80s and '90s we had a pretty good line on it. Well, here we go again. The "magic of the marketplace," in Ronald Reagan's phrase, is the wizardry Milton Friedman delights in and Dennis Buss recoils from. The central attribute of this magic is its uncontrollability. Once you set the marketplace to work, it will discard, create, reinvent, reshape. Friedmanites can't wait to see how it all comes out. Bussians are sure they know already. What's more, they don't like what they know. They like things pretty much as they are. They would probably, if pressed, agree with old Lord Falkland: "When it is not necessary to change, it is necessary not to change." When they walk, you can hear the high-buttoned shoes squeak. The marketplace is famously disruptive, and plenty of people, not unreasonably, resist disruption. With some, in politics, it is more than a case of dislike; it is a case of desire to control and channel and guide. This instinct flourishes in Washington just now. Many liberals (clearly not of the classical laissez-faire variety) want to regulate the health-care industry and tell the pharmaceutical industry what it can charge. They want to "protect" American industry with tariffs. They want government to oversee the way companies keep their books. On one hand, they acknowledge the failures and problems of many public schools; on the other hand, they like the notion that government ought to make the policy for schools that supposedly bind us together cozily. Vouchers, so this argument goes, would cause such ties to loosen and "social cohesiveness" to slack off. The magic of the marketplace is, for the likes of these critics, a kind of black art that requires close watching, with garlic wreath and crucifix in hand. Marketplace critics want to control outcomes -- which in human terms is understandable. Less understandable is where they get all that confidence in the outcomes they set out to engineer. It is not as though the public schools, especially those in the inner cities, were going great guns. As Justice David Souter observed, dissenting from the 5-4 decision upholding Cleveland's voucher program, "The record indicates that the schools are failing to serve their objective ... If there were an excuse for giving short shrift to the Establishment Clause, it would probably apply here." Thanks to Souter's minority status on the question, we can expect to see vouchers prove or disprove themselves. We might recall meanwhile our recent celebration of that incalculable dice toss, the Declaration of Independence. Control outcomes? Americans couldn't even control food and ammunition supplies for their troops in the field. Still, it worked. The marketplace -- and those battlefields where notions of cohesiveness flew into the air like sparks -- won the day for freedom and competition. It just might happen again.