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:
| Spend it on yourself |
Spend it on someone else |
|
| Spend your own money |
||
| Spend someone else’s money |
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:
| Spend it on yourself |
Spend it on someone else |
|
| Spend your own money |
Lower cost |
Lower cost |
| Spend someone else’s money |
Higher cost |
Higher cost |
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:
| Spend it on yourself |
Spend it on someone else |
|
| Spend your own money |
Higher value | Lower value |
| Spend someone else’s money |
Higher value | Lower value |
Put that all together, and you get Friedman’s table:
| Spend it on yourself |
Spend it on someone else |
|
| Spend your own money |
Lower cost, Higher value |
Lower cost, Lower value |
| Spend someone else’s money |
Higher cost, Higher value |
Higher cost, Lower value |
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:
| Spend it on yourself |
Spend it on someone else |
|
| Spend your own money |
Honda CR-V | Chevy Spark |
| Spend someone else’s money |
Rolls Royce | Used Kia for $75K |
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:
| Spend it on yourself |
Spend it on someone else |
|
| Spend your own money |
Parents paying for their own kids Honda CR-V |
Taxpayers Chevy Spark |
| Spend someone else’s money |
Parents using taxes to pay for their kids Rolls Royce |
Educational establishment Used Kia for $75K |
With incentives like these, it’s almost as if we want the system to fail, isn’t it?
