Milton Friedman: The Problem of Bureaucracy

...but in the case of schooling, that isn’t the situation. The consumer is the parent and the child; the producer is the teacher and the school administrator. And unfortunately, from the point of view of quality and efficiency, centralization in this area reduces the impact of the consumer on the producer. If you are dealing with a small local area, even in a school system in which there is no direct payment for schooling, in which it is financed by the government through taxes, there is a good deal of interconnection between the local parents and the local teachers; parents can have a good deal of input. The more you broaden the area of control, the more difficult it is for the parent to have much of an input. So the effect of centralization has been to put the producer in charge and in the saddle and to reduce the feedback from the consumer. What you do is take the control out of the hands of the parents and put control in the hands of the professional educators. In New York City, as you all realize, what you do is take control out of the hands of the parents and put it in the hands of Albert Shanker. Mr. Shanker may be an excellent person. I don’t know him, I’ve never met him. I have no quarrel with him as an individual, but his objectives are not the same as the objectives of the parents. He is serving a different clientele. He isn’t getting his income and his power by satisfying the parents; he is getting his income and his power and his clientele by satisfying a very different group with very different objectives. This phenomenon is not at all special to schooling. Wherever government bureaucracy takes over, costs go up and quality goes down. That’s no less true of the post office than it is of the schooling system. It’s no less true of garbage collection than it is of the schooling system. You know there have been a number of studies made of this kind of phenomenon. Many cities around the United States have private garbage collection, that is to say, people pay privately to private firms to collect their garbage. A number of studies have been made comparing the costs of that private garbage collection with the costs of garbage collection when it is done by a municipality. The answer always turns out to be the same: it costs roughly twice as much to do it by a municipality as it does to do it by private means. Again, if you look at the post office, it’s hard to find any area in our society in which the quality of the product has shown less improvement over the last hundred years than in the post office. In fact, I think there are many people who would say the quality of the product has gone down not up, and the cost has certainly gone up. There are very few items that the consumer buys whose price has risen as much as the price of mailing a first-class letter. Costs have gone up, quality has gone down. Again, there is a small town in Arizona which has a private fire department; it’s a private-enterprise fire department. The costs of fire protection in that town--Scottsdale, Arizona--are roughly half the costs of municipal fire protection in those towns that have municipal fire protection. A study was made sometime ago of the efficiency of clerks in handling pieces of paper in the Social Security office in Washington and in a private insurance office. And lo and behold, the clerks in the private insurance office did twice as much work in the same amount of time as the clerks in the government office. This isn’t because government employees are bad people; they’re not. They’re human beings like you and me. It isn’t because the private people are better people; they’re not. It’s because in the case of the private arrangements the customer has something to say; in the case of the governmental arrangements the customer has very little to say and the producer is in the saddle.

Channel: Free To Choose Network

Views: 56,602

Keywords: Milton Friedman (Academic), Education, Free To Choose (Book), School of Choice, Government, Bureaucracy (Quotation Subject), Consumer, Parent, Teacher, Children, New York City (City/Town/Village), Family, Lesson, Teachers, Lessons, Students

Id: ViAT1TxhBk4

Length: 4min 23sec (263 seconds)

Published: Wed Feb 15 2012