Those who defend our current, single supplier, K-12 public educational system against school choice and private schooling often do so on the grounds that public money should only go to public schools. Recently, Rep. Richard Gephart, D-Missouri, in a televised C-Span speech made at the J.F.K. School of Government, argued this point.

There are many obvious ways of countering this position, including the observation that city after city in the U.S. is engaged in privatizing many of its public services (which involves public money going to private firms). Here, however, I want to present an explanation of public education that breaks all links between public money and public ownership and control of schools.

The notion that public educational dollars should only go to public schools misunderstands where the public component in education lies by confusing public education with publicly supplied schooling. Supporters of the educational status quo believe that public education equates to 100% government financed, government owned, and government operated schools. In fact, the public element in education is simply the benefits from education that accrue to us all when an individual becomes educated. When a child engages in learning, two categories of benefits are produced: private and public. Private benefits are things that the individual directly involved in the act of learning receives. In the case of K-12 education, this is normally perceived to be an increased capacity to earn income over a lifetime. Public benefits from learning are things that go to the wider society. For example, the more education a child obtains the more likely they will grow-up to be better informed citizens. This makes us all better-off. This second type of gain from education is its "publicness" and gives public education its name.

This flow of educational benefits to society poses a special problem for those who want to privatize schooling. Let me explain this by comparing the purchase of education with the purchase of something that doesn’t generate a public benefit. When I go shopping for clothing the amount of individual items I buy is determined by me weighing the private benefits I expect to receive from any individual item against their private costs. At the time I consume what I bought I’m better-off. But what about my neighbors? When I put on a new shirt does the surrounding community experience any boost in well-being? Probably not. If anything they might feel envy—which make them worse-off. In this situation, no public benefit exists. That’s why we don’t link the word "public" with "wearing a new shirt."

Let’s turn to the instance of parents buying education for their children. In a private educational system parents buy schooling in the market with out-of-pocket money. Like me when I go clothing shopping, they buy a quantity of schooling for their children that weighs private benefits against private costs. What’s inefficient about this behavior is that it ignores the public’s benefit from education. Because parents only care about their children and themselves, the amount of education they demand understates the true benefit from schooling. This causes too little of society’s resources to be allocated towards education. The way our nation has responded to this quandary is to support a 100% government financed, owned, and operated school system. But is this our only alternative?

Let’s involve that mythical American family, the Joneses, in a little story telling. Imagine a system of schooling where parents buy education for their children from private individuals in the same way they now buy their children’s clothing, food, medical care, etc. Let’s say that the Jones’ family decide to spend $10,000 dollars a year on their children’s education. Furthermore, assume that the public benefit generated by the Jones’ children going to school is $5,000 a year. This means that $15,000 should be spent on education. Under a completely private system of schooling only $10,000 will be spent, however. What’s to be done? Is there a way out of this without erecting a publicly owned, operated, and controlled school system? Fortunately, the answer is yes. Let’s say that the public gives to the Joneses an educational voucher equal in value to $5,000. If the Jones’ family adds this to their $10,000 expected outlay then our problem is solved. The Jones’ children will consume in total $15,000 worth of schooling. We have captured the public dimension of education without suffocating the system in mounds of public bureaucracy.

What may we conclude from this? A public educational system has nothing to do with 100% government subsidized education or government owned schools or government run schools. In order for a public educational system to exist the only thing that the government has to do is pay parents of school age children the dollar value of the benefits the public receives from their children’s schooling. Once this truth is understood, the reform of American education can proceed on more rational grounds.

Mark A. Nadler is an Adjunct Fellow at the Ashbrook Center for Public Affairs at Ashland University.