NCPA - National Center for Policy Analysis

More Money Equals Worse Education

December 20, 2000

Almost everyone seems to agree that the answer to better education is more money. Congress just voted an 18 percent increase in education funds, and 78 percent of voters polled last month by CNN said "more funds" were the answer to improving schools. However, critics say, money isn't the answer.

  • For three decades, taxpayers have given the education establishment more money to lower student-teacher ratios -- and the ratio has come down, from 25.8 students per teacher in 1960 to 17.3 in 1995.
  • Per pupil expenditure has gone from around $2,000 to around $7,000 in the same period.
  • Yet reading scores have remained virtually flat.

What's up? Critics say there are several reasons why more money hasn't helped. A major reason is that public schools are effectively a monopoly.

  • The public school system is a taxpayer-funded monopoly with about 90 percent of the market (students).
  • A monopoly serves the monopolist first, not its customers, who have little choice but to get their services from the monopoly.
  • Consequently, the prices are higher than they might be under competition, and the quality of goods or services are of minor consideration.
  • As long as the government continues to direct money and students to schools, the current situation will obtain and more money will just make it worse, since many public schools will continue to offer inferior education for higher and higher prices.

The only possible remedy, critics believe, is to break the monopoly by introducing competition into the school marketplace by offering parents a choice among schools.

Source: Editorial, "More Money?" Wall Street Journal, December 20, 2000.

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