Four Ways to Spend Money on Education

As we consider just what we’ll be getting from our schools this fall, and what we’ll be paying for that, we should remind ourselves now of just why we’re all going to feel so disappointed later. 

Milton Friedman once made a handy chart to describe the four ways that someone can spend money, and to predict the kinds of results we should expect to see in each case.  Briefly, you can spend your money, or someone else’s money; and you can spend the money on yourself, or on someone else:

You can probably guess how to fill in the boxes.  If you’re spending your own money, you’d like to keep costs down.  Spending someone else’s money, you don’t care so much what anything costs:

If you’re spending money on yourself, you’d like to get as much value as you can.  If you’re spending it on someone else, you’re not so concerned about that:

Put that all together, and you get Friedman’s table:

This is somewhat abstract, so let’s illustrate it with some examples.  If we’re talking about buying cars, the table might look like this:

So far, so good?  Now, where school funding in particular is concerned, let’s take a look at where each of the interested parties — parents, taxpayers, and members of the educational establishment — falls in the table:

With incentives like these, it’s almost as if we want the system to fail, isn’t it?