Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
9.US Prepares for Currency War with China - Richard_Mills
Last 7 days
Biotech Stocks With Near Term Catalysts - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Gold Price Selloff Risk High - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Platinum Price vs Gold Price - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19

Market Oracle FREE Newsletter


Abolish Publish Schools, a $600+ Billion Spending Cut

Politics / US Politics Jun 12, 2010 - 06:41 PM GMT

By: Gary_North


Best Financial Markets Analysis ArticleThis will not be done. It will not be done because Americans do not really want major spending cuts.

To demonstrate my point, let us consider America's sacred cow, tax-funded education.

According to the Central Intelligence Agency's Factbook, the United States spends about 5.3% of gross domestic product each year on education. If that estimate is accurate, this means about $750 billion a year.

The United Nations estimate places the figure of 5.7% of GDP.

That would mean expenditures in the range of $800 billion a year. If we assume that about 80% of these expenditures are funded by governments at various levels, we are talking something in the range of $600–$650 billion a year.

There is no economic reason why 100% of the expenditures on education should not be paid for by the parents of students or by the students themselves, when they reach college or graduate school level. There is also nothing that says that a government has the moral authority to coerce parents who hold to one view of education, or one view of how the world works, to subsidize the educations of other families, whose children attend schools that teach a view of the world closer to that approved by the subsidized parents.

To say this is to announce one of the most hated heresies of the modern world. I mean "heresy" in the good old-fashioned way that it was meant in the Middle Ages and in virtually any society prior to the Enlightenment. This heresy involves calling into question the legitimacy of a priesthood, self-appointed and self-policed, which gains its money from the civil government.

The establishment of churches funded by tax money has been common in most societies throughout history. I contend that it is basic to the modern world, too. The modern priesthood is the educational establishment in each nation. Tax funding goes to those institutions that have been certified as reputable by the priesthood.

An educational institution that claims to be legitimate in the modern world is pressured strongly to become accredited by institutions that are run by the priests whose standards are enforced by the state. An institution that sets up a college that is not approved by one of these accrediting associations cannot issue certain kinds of degrees without breaking the law. This system of accreditation extends all the way down to infant care.

The state regulates educational establishments, even including home schools, in order to preserve control over the content and methodology of education. In earlier centuries, a similar oligopoly was run in conjunction with state funding and also state coercion. Churches policed the society, including the morals of society, by means of a monopoly granted to them by the civil government.

The state in seventeenth-century New England could legally compel church attendance by every member of the society. What is not understood is that this law was rarely enforced in Boston. In his book, Winthrop's Boston (1965), Darrett Rutman concluded that the churches of Boston three centuries earlier could contain only about 25% of the residents of Boston at one time.

The modern educational system is far more compulsory than churches were in New England in 1665. The school bus system is indicative of just how compulsory it is. On this point, read my story of the two buses.

Local governments, state governments, and even the Federal government use tax money and the threat of violence against any parent who does not agree that the state has the right to shape the content of his children's education. This has been going on for so long that most Americans accept this regime as somehow established by natural law. The irony here is that the schools teach Darwinism, and Darwinism has no concept of natural law. Darwinism destroyed the concept of natural law. If the universe is evolving in autonomous, unpredictable ways, in terms of such random phenomena as genetic mutation, there can be no such thing as natural law. No social order is permanent; no legal order is permanent. The laws change as society changes.

In the modern world, anyone who suggests that all tax money should be withdrawn from the funding of educational programs is regarded as a crackpot. I am such a crackpot. I believe that the state does not have a moral right to compel parents to support other people's educations.

If it were my decision, I would shut off the funding by the state for every school in the United States, including the military academies. This would add something in the range of $600 billion to the private sector. Governments would not be able to persuade parents and others to hand over their money at the point of a gun from one person in order to subsidize the education of another person.

One of the oddities about life is that a statement regarding a widely believed moral imperative in one area is regarded as morally unsustainable when virtually the same statement is applied to another area. What virtually everybody accepts as self-evident truth in one area is regarded as self-evident error in another area.

In order to discuss tax-funded education, I want to change the topic from tax support of educational institutions to tax support of churches. The logic that I am about present applies equally well to both forms of institutional arrangements. But the public is unwilling to accept the logic of the disestablishment of churches when it is applied to disestablishment of education.


In 1818, the state of Connecticut ceased funding the Congregational churches of the state. In 1833, Massachusetts followed Connecticut's lead. Massachusetts at that time was the last remaining state in the United States that used tax money to support churches.

Critics of the tax funding of churches had a number of arguments. I present here a brief summary of some of the more famous of these arguments, as a way of explaining the justification for the disestablishing of education. As you read these arguments, substitute the word "schools" for "churches."

THE MORAL ARGUMENT. The issues of life that are dealt with in churches are of fundamental importance. These issues are life-and-death issues. Some churches believe that there are eternal life and death issues.

There was a time when virtually all Western churches believed this. To compel someone to spread the message of a rival religion is an intolerable form of state coercion.

THE PRACTICAL ARGUMENT. Politicians rarely give much thought to the fundamental issues of life. They are too busy getting elected and reelected. They cannot devote the time necessary to sort out fundamental truths from fundamental errors. To imagine that they can select the churches that are deserving of financial support at the expense of others that do not share the same views, is to impute a degree of wisdom not possessed by government officials. Politicians can barely be trusted to run the government, let alone run the churches.

THE POLITICAL ARGUMENT. To allow this year's majority in the state legislature to set standards for what should be taught in the churches is to grant them too much power to shape the thinking of the voters. The politicians will use this power as a way to subsidize those churches and those ministers who preach a message that is congenial to the majority in the legislature.

When a majority of votes in the legislature can determine the content of what is going to be taught in the churches, a society has transferred enormous authority to politicians to shape the thinking of the next generation. This is a way for politicians to preserve their majority, despite the fact that, had they not funded those churches that are favorable to their viewpoint, they would have been voted out of office at some future election.

The politicians will use the power of civil government to extend the public's acceptance of those political views and political conclusions that are favored by the present majority in the legislature. This will turn politics into a battle zone between rival churches.

THE INTELLECTUAL ARGUMENT. Competition is basic to progress in every area of life. Churches should therefore compete apart from tax money that favors one procedure or one set of principles over another.

If tax money is used to fund churches, the quality of the preaching will decline. If preachers know that they are going to receive guaranteed income from the state, they have less incentive to preach according to the beliefs of the members of their congregations. If their income can be maintained apart from the donations from their members, then incentive to slack off increases.

There is an incentive to trim the content of the preaching in order to meet the standards of the latest political majority. Preachers who don't hold to such views have a harder time starting rival congregations, because the older congregations are the recipients of tax money.

This subsidizes the status quo. The public is kept from hearing new ideas, better ideas, and more effectively preached ideas precisely because congregations are not in control of the purse strings. A minister who has been granted certification by the hierarchy in a tax-supported denomination is granted immunity for poor performance in the pulpit when counseling. There will be a dumbing down of preaching precisely because more effective preaching does not receive its economic reward.

THE CHARITY ARGUMENT. Throughout Western history, churches have been a major source of charitable giving. Members of local congregations contribute money to the churches, and the churches pass some of that money back into the community by supporting the poor. Christianity has repeatedly preached that the support of the poor is morally obligatory, and furthermore, the success of the church will always be related to its success in charitable giving.

When the state provides the funding for the churches, the charitable impulse is weakened. Members assume that the money coming in from other taxpayers will go to the support of the poor. They more readily accept the concept of the welfare state, but they accept it as flowing through their local congregations. The impulse to sacrificially give to the poor is cut short, because the state provides the funds to support the poor.

The church then becomes a paid agency of the state, operating in terms of the latest rulebook governing state welfare expenditures. The church becomes an agency of the modern welfare state, while individuals within the churches feel less pressure to fund private programs of charity. The ability of charitable giving to become more effective is cut short, because the state's money will continue to fund the churches charitable ministries, just so long as the church conforms to the rulebook governing the distribution of tax funded welfare.

When compassionate conservatism funds church-run welfare programs, conservatism will become less compassionate. So will church members. "See this badge? See this gun? You're going to be compassionate, or else." This was not what Jesus had in mind.

THE LOWEST COMMON DENOMINATOR ARGUMENT. Whenever state funds are used to subsidize any program, the outlook of lowest common political denominator takes over the funding. The reason for this is that voters can exercise authority over politicians by putting them into offices or tossing them out of office. The politicians want to be elected or reelected. They cater to the opinions of those groups of voters that have the greatest clout at the polls.

Those voters who are most easily swayed by emotional arguments rather than by scientific or factual arguments become the swing voters who will determine the outcome of close elections. Under such circumstances, the opinions of the broad mass of voters will prevail in every area of government. To the extent that the broad mass of voters are not well informed on theological matters, to this extent will the funding of churches by the state debase the quality of the preaching as well as the intellectual content of the preaching. Churches will look to the state as their source of funding, which places them at the mercy of the lowest common denominator voter. The opinions shared by these people will determine which denominations win or lose in the arena of public opinion. This arena is not the arena of competitive preaching; it is the arena of political vote-getting.


If these arguments make sense to you when applied to churches, you should consider their validity when applied to all forms of education. As far as I can see, the same problems of tax funding that are involved in the establishment of churches also apply to the establishment of educational institutions. The same conflicts, the same temptation to the misuse of power, the same lowest common denominator principle, the same tyranny apply to the tax funding of education as applies to the tax funding of churches.

As surely as Congregationalists in Massachusetts could not understand the logic of these arguments in 1825, or 1725, so the members of the established church of political salvation do not understand the logic of privately funded education. It took decades of criticism from Baptists and Quakers to persuade the members of tax-funded churches to give up their claim of other people's money.

It is worth noting that within five years of the decision of the Massachusetts government to cease funding the Congregational churches of the state, the government began funding local schools. A Unitarian lawyer, Horace Mann, became the first major official in the new state educational system. He made tax-funded education respectable throughout New England. That heritage now is widely accepted throughout the country.

One of the best books on how tax-funded churches took advantage of their power to box out independently-funded churches is The Churching of America, by Finke and Stark. Tax funding weakened the established churches so much that they could no longer compete when the subsidies ended.

Back in the 1950s, theologian and historian R. J. Rushdoony identified the underlying commitment of tax-funded education. He wrote a book on the background of the public school systems, with extensive citation from primary sources regarding the faith of the original educational bureaucrats in the ability of state education to make mankind better. Rushdoony called his book The Messianic Character of American Education (1963). He called the public school system America's only established church. He called the employees of this church "priests."

The interesting thing is that a liberal theologian and historian, Sydney E. Mead, wrote a book in the same year that also identified the public schools as priestly. Rushdoony opposed the educational priesthood. Mead favored it. He called his book The Lively Experiment. That experiment has been deadly for competitive education, just as it was for New England's Calvinist churches.

The transfer of tax money from the churches to the schools replaced the older system of established religion. The underlying principles of tax funding have not changed. The underlying presuppositions of the benefits of this funding have not changed. The difference is this: there were a lot of Baptists in the early 1800s, and there were a lot more of them by 1890. They had the votes. They opposed tax-funded churches. They had been on the receiving end of that tyranny for too long. Unfortunately, they adopted the religion of public education with the same fervor that other denominations did in the nineteenth century.


I am of the opinion that we will continue to see $600 billion or more per year of tax money pour into America's only established churches. It would be nice, as citizens, to get that money sent back to us in the form of tax rebates, and then to see the tax codes revised in future years, so that the money would never be sent to the politicians in the first place.

I wonder if most tea party members would agree with me. I wonder how many of them would agree with me. Probably about as many as would agree that Social Security and Medicare should be abolished.

The deficits will rise. The defaults will come. Home schools will flourish.



© 2010 Copyright Gary North / LewRockwell.com - All Rights Reserved



Robin Nandi
13 Jun 10, 19:19
"I am such a crackpot"

"I am such a crackpot" - I couldn't have put it better myself. ;)

Your analogy is false and none of your arguments stand up to scrutiny.

The priests were picked to advance the political aims of the church. They kept local businessmen sweet, they provided support to locals and harnessed the military to fight for the church when required. They always obeyed the church. They taught the doctrine of the church. For the state to support churches through taxpayer funding was a political decision. The teaching of doctrine is about maintaining support and control among the population and very little to do with education, spirituality or morality. Religious teaching cannot be proven (in many cases it can be proven to be untrue). By contrast, education is (or should be) about teaching evidence-based truth and empowering people to think independently. Teachers are picked to educate students. To "brainwash" them with the "doctrine" of mathematics and teach them the "mantra" of independent thought. Your analogy is hollow.

MORAL ARGUMENT - It is unacceptable state coercion to force teachers to teach against their beliefs.

What is taught in schools is largely apolitical. If there are teachers that don't believe in geometry then it is better that they don't teach. In those aspects that are political teachers should be able to give their honest opinion. You have got to trust teachers. I see no contradiction between this and a state-approved curriculum. Children understand that different people have different opinions about things. If they do not get exposed to different opinions then their education would certainly be deficient.

THE PRACTICAL ARGUMENT - Politicians are concerned with getting elected. Given their short term aims, they cannot be trusted to run the education system.

I'd be willing to bet that over half of the US senators don't know when the Chinese Civil war was and can't do calculus. They don't decide what gets taught in schools and universities. To them the education system is a $600bn payment and a chance to talk about the vague notion of "doing the best for your child" to woo voters. They don't run the education system; they just provide the funding. So this is an argument against interference in the education system by politicians, not against tax funding of education.

THE POLITICAL ARGUMENT - It politicizes the curriculum.

Look at the situation with the education system now that it is tax funded. Is the curriculum political? How much of the presidential campaign did the candidates spend talking about which events of world history should be taught in schools or whether high school students should be taught calculus?

Don't mix funding with decisions about what gets taught. It was appropriate for the church, but not for education. Our politicians want to stay out of it as much as possible and pass the decisions on to "experts". In fact it is a shame education is not a little more politicized. It shows how little our politicians value education.

THE INTELLECTUAL ARGUMENT - Competition would improve performance. The status quo stifles innovation.

Competition would not improve standards. It might give a few more opportunities to wealthy students, but this is not the main problem with the current system. Children of wealthy parents who value education tend to perform well anyway. Standards for low income students would drop considerably. No-one would want to educate them. There is no profit to be gained from teaching students with no money. Those that do will be trying to provide an education on the cheap or the students will fall open to exploitation by a school funded by some religion or pressure group.

Imagination and enthusiasm among teachers keeps innovation in teaching methods alive. This won't change. Competition simply provides innovation in the business model e.g. cost-cutting opportunities.


I don't see how this applies to education.


Politicians are after votes. They will pander to the views of the voters with the most clout. In the case of education this is the "middle-class" voters with the "large elbows" and some knowledge or influence. The fact that the curriculum is largely apolitical is because this group of voters by-and-large want the same thing for their children's education. This is a good thing and a reason in favor of a state-approved curriculum. To not require schools to teach to a state-approved curriculum would open the doors to religious organizations and pressure groups to teach any rubbish (e.g. creationism) and pass it off as truth to further their political aims. And this is one of your arguments in favor of private education!

There has to be some guarantor of standards and respected educators funded by the state seem best placed to deliver this.


The consequences of your proposal are:

o The government would save $600bn in education spending and gain some tax income.

o Standards for poor students would fall.

o Lots of lawyers, middle-managers and PR experts would be employed to defend the company, manage it's image and keep the customers re-assured.

o Advertisers would be employed to print glossy leaflets encouraging parents to buy a horrendously over-priced education by blackmailing them to "do the best for their child".

o Parents would pay more for their children's education.

o Schools would be able to teach whatever they like. There would be no guarantor of standards.

o Standards dependent on income would widen the already large inequality in US society.

We should value education more and invest in our children and our future. Education has lead us to monumental discoveries (e.g. the structure of DNA) and new technologies (e.g. the Internet). The "sacred cow" ought to be a hell of a lot more sacred. We should cut health and defense before education.


18 Jun 10, 17:24
Robin Nandi


Your arguements are sound only to those who enjoy continuing to be the parasites of our current "educational" system. In my state, the union has negotiated a 4 and a half day school week, soon to be a 4 day school week.

Teachers (unions) keep asking for more money while they continue to do much less for that money. We are graduating semi-literate students who don't even know what geometry is or how to use it.

At the very least, individuals who do not have children in school or those who seek private education should be expempt from being taxed for those who choose the failing public school system. And it is failing and every fact will back that up. "Imagination and innovation among teachers keep teaching alive" is THE most asinine statement I have ever read. I witness first hand how teacher's once established curriculum (first two or three years of teaching) becomes a wash, rinse and repeat cycle whether it works or not. Any child could spend two hours in a library with a guiding parent and easily outperform what a public teacher "teaches" in a month.

So while Mr. North may be having a pipe dream here, I would much rather his dream then your all to familiar continuing nightmare.

Post Comment


6 Critical Money Making Rules