Susan Pendergrass speaks with Robert C. Enlow, president and CEO of EdChoice, about whether Milton Friedman’s ideas still hold up seventy years after Capitalism and Freedom. They discuss why capitalism is losing favor with younger Americans, how regulatory capture rather than free markets is driving the backlash, what declining public school enrollment signals about the future of education, and more.
Episode Transcript
Susan Pendergrass (00:03): Thanks so much for joining us on the Show Me Institute podcast, Rob Enlow of EdChoice. You’ve been executive director, CEO there for how long?
Robert Enlow (00:13): Since two thousand nine.
Susan Pendergrass (00:15): That’s a long time.
Robert Enlow (00:16): Well, not as long as when I started in 1996, so thirty years this year.
Susan Pendergrass (00:21): 30 years. Yeah. Wow. Well, I don’t know how time is flying, but I wanted to have you on to talk about a couple things that are going on recently, and one thing in particular, which is, there’s poll after poll, there’s election after election, it seems to be the case that capitalism is losing favor with the American public, socialism is gaining steam with the American public. And recently I saw an editorial about the fact that JD Vance has said that Milton Friedman is essentially no longer relevant. That Milton Friedman’s ideas made sense in the 80s, but it’s no longer relevant for today. We need more of a Hamiltonian economic plan than what Milton Friedman put forth. And of course, Milton Friedman’s seminal work, Capitalism and Freedom, is now 70 years old. And well, I just realized 20 years ago you edited a volume on his work, Liberty and Learning, and certainly you worked side by side with him. You ran his foundation before he died, and you know him. I’m just curious your thoughts on whether or not Milton Friedman is still relevant.
Robert Enlow (01:40): I think we need more Milton, not less, right now. And I think we need far less Hamiltonian central banking, centralized scrutinizers, to quote the great Frank Zappa, I need no more central scrutinizers in our life, regardless of whether they come from the right or the left. There is a distrust in systems across the board, whether you’re right or left. And some people respond to that by saying we need to have a socialist system. And some people respond to that by saying we need to have a Hamiltonian sort of centralized control system. Milton Friedman’s correct solution is that we need a bottom-up system of individual liberty and enlightened self-interest. And we need far more of that than we need less.
Susan Pendergrass (02:25): So why is it out of favor now? What do you think is going on, that the idea of the government taking care of housing, healthcare, education, the basic foundations of each individual’s life, that the government should be managing that? Is it just too far in the rear-view mirror, the idea of individual liberty and individual responsibility, and folks haven’t seen it recently enough? Or maybe it’s neither of these, or is it that the particular form of capitalism folks are seeing right now, where some people are making a ton of money and a lot of people are not making much money at all, is that what’s causing this backlash against capitalism?
Robert Enlow (03:12): So what people are seeing is absolutely causing a backlash. Let’s just say that. I have a 28-year-old son, and he and I argue about this constantly, right? And I love him for that. Everyone seems to see that both government is a major problem, but also there’s a massive inequity in how our systems of competition are working. What people forget is what Milton would say about that. He would say, we do not have a free market, we do not have individual liberty, and we don’t. What’s happening in America and what’s happening around the world is Milton’s greatest fear, and it’s also beginning to happen in education reform, even among some of our allies. The idea of regulatory capture. People forget that what ends up happening, and it was chapter six in Milton’s Free to Choose, is Milton’s book story on what’s wrong with our schools. People often forget chapter seven, which is who protects the consumer. In that chapter, he talks a lot about what used to happen with the old ICC, the Interstate Commerce Commission, and the Railroad Commission, and how at one point everyone, all these people got together from right and left to create a change to a massive problem. That problem got changed, everyone was happy, and all the advocates went home, and the bureaucrats were left to put it in place. The bureaucrats did what? They put it in place in a self-interested way, and now all of a sudden you have to come and reform the reform. This is what’s happening, I think, both writ large in America and certainly with education. I think there’s this real challenge with regulatory capture. This is true among private schools, charter schools. The minute schools get into a choice program, sometimes they’re like, well, we don’t want any other schools in these programs. And so this regulatory capture is not a free market. Milton would be railing against that as much as he would be about anything else, in my opinion.
Susan Pendergrass (05:06): And I always go back to this very simple explanation of the four ways to spend money, right? And clearly the least careful way is when you spend other people’s money on other people. And the idea that folks want to expand that exponentially right now concerns me, because we’re just going to be burning more money for worse results.
Robert Enlow (05:29): This is why ideas like ESAs are so important, and directing direct funding to families where they have to pay something and have the actual act of paying, I think that puts skin in the game. For your listeners, maybe they don’t remember the four ways Milton said you spend money, but I think it’s important. Well, you know it, but I always use this with you. If I spend my money on you, I am super careful about how much I spend, I don’t care what I buy. If I spend your money on me, I’m super careful about what I get, but I don’t care how much I spend. And if you spend someone else’s money on someone else, you don’t care how much you spend or how much you buy. And I think that is our problem right now. And you mix that with companies, associations, unions that all make it harder for others to enter the marketplace. This is the real challenge of barriers to entry, right? We’re seeing this in K-12 education now, where a bad story creates a desire to have a regulatory impulse. This is not the right way to go. We should be going toward more freedom. And I think this is what young people are reacting to, Susan. In my opinion, people like my son and others are reacting to the basic, obvious problem that government is not capable of doing it, but the current structure of entering a marketplace is impossible and only advantages some.
Susan Pendergrass (06:54): Yeah. Right. Clearly the idea of parents choosing where their kids go to school is an extremely popular idea. You guys poll it every month. I think as long as those polls have existed, it’s been 70% plus, parents want to do this. And yet that’s one that’s being strongly resisted by the same folks who are leaning towards socialism. They want to really lock the doors on letting kids out of the worst schools.
Robert Enlow (07:26): So, you know me and my background. For those of you who don’t know, I actually did liberation theology work back in the day before I got to Milton Friedman’s organization. And then I got to meet Milton Friedman, which, by the way, in about 12 seconds I felt like a minuscule intellect, because he’s so incredibly smart. But I call my transition from liberation to liberty, and part of that is because I think Dr. Friedman, and I think the radical left, the socialist left, identify the problem. The problem is ineffective government and systems that do not work for people. So whether it’s an oppressive government or a fascist government or a dictatorial government, it is not working for people. Now the socialists and those who will argue, well, then the best solution is my view of government because I’m better, so, in a very sort of old George H. W. Bush way, it’s a kinder, gentler kind of socialism, my way, better than others. Milton’s argument was, no, the solution to this government problem is to give individuals more ability and autonomy. This is common sense that I don’t think a lot of our younger folks understand anymore. But the interesting thing is, it’s a difference, I think, between their public and private life. Publicly, they say this is a problem, we’ve got to solve this problem. Privately, they use choice and competition and individualization and customization more than any generation ever before. This is their entire life, and it’s called a cell phone. And every app leads them to individual customization.
Susan Pendergrass (09:04): Thank God that’s not my problem.
Robert Enlow (09:06): You mean scrolling, doom scrolling?
Susan Pendergrass (09:09): Yeah. Thank God I never scroll. But I just feel like there is a disconnect. You’re exactly right, of course they want more choice in everything. And I don’t want to say “they,” but I think this is also sort of crossing generational lines, this idea that capitalism is evil and bad and is creating, I think we see a lot of crony capitalism right now. We see our elected officials making billions of dollars and buying up parts of companies. We see this weird form of capitalism. And then we have the vice president himself saying it’s not relevant anymore. It’s for the 80s and it’s not relevant anymore. And maybe people are just buying that. Maybe there’s like, okay, I guess capitalism is on the way out, what’s the next thing? And socialism is being sold in a pretty neat package.
Robert Enlow (09:58): Right. Yeah, but you know who’s not buying it anymore? This is, I think, the hope for the future. Communities of color. Communities of color are seeing the importance of unleashing rampant individual capitalism and rampant opportunity. You see this with micro schools and homeschooling. The fastest growth of homeschooling is in the Black community. The same thing is often true in the micro school community. It is communities who are most challenged, often and sometimes most oppressed,
Susan Pendergrass (10:04): Yeah.
Robert Enlow (10:25): that understand the benefits of opportunity in free markets in a way that you might argue “bougie” suburbanites who go to Columbia don’t get. And that is, of course, I think a problem of privilege more than anything. And so I think that’s a challenge for our society. But I’m watching communities of color embrace competition and individual liberty in a way I’ve never seen before in education. And I think we’ll get there again, but I think right now there’s a real disillusionment. And I think part of it has to do with our current government and with our previous government. We’ve not had a really good go of it the last two times.
Susan Pendergrass (11:06): Yeah, and I’ve met many parents from communities of color, like Black parents, Black moms, who will do anything to make sure their kids get the same opportunities, particularly if they’re economically disadvantaged, to make sure their kids get the same educational opportunities. And they are the ones who are pressing. In Missouri, there are groups of parents pressing for open enrollment, pressing to expand our ESA program, going to Jefferson City, learning how to be politically active, and they’re putting pressure on these folks also to get their kids out of unsafe schools and to stop being told, yeah, I’m sorry, I know only three percent of the kids are proficient in math in your school, but we can’t let you out of it. They’ve had it with that argument, and they’re the ones who are really pressing it. I don’t know if it’s landing, because we’ve made some progress, but we haven’t really
Robert Enlow (12:01): Where it’s landing, Susan, here’s where you’ve got to remember it’s landing. What is the enrollment in our traditional schools looking like right now? Down dramatically, right? What is the enrollment and effort in what I would call, what Vela, my dear friends at Vela, call “indie education”? It’s dramatically increasing. And this is the proof of the positive. Milton used to say the readiness for a true free market can be seen
Susan Pendergrass (12:08): Down.
Robert Enlow (12:28): in the prior years by an underground marketplace. And in many ways we have an underground marketplace of education happening, which is fantastic. It’s leading to so many opportunities. You’ve done the research in Arizona and other places. The massive growth of new vendors, the massive growth of opportunity, is really amazing.
Susan Pendergrass (12:47): Yeah, it’s only limited by what parents can think up. And they just keep thinking up new stuff.
Robert Enlow (12:52): Yeah, it’s shocking. Milton’s quote is always true: there’s not been another way heretofore discovered to raise the masses out of poverty than what happens when you unleash the free market and capitalism. And I think the challenges we’re seeing with capitalism and with liberty and with the view of liberty now are problems related to government and cronyism and regulatory capture. I don’t think people realize, when a legislator says, how do I know if someone’s learning? Well, you know what doesn’t tell them if someone’s learning? A test they have to take once a year after a certain period of time. That does not really tell you. All that gives you is a mark in the day in the life of a kid. And by the way, those aren’t doing very well, right? Not anywhere. So I don’t want to rely on that system to tell me how kids are doing. And I think people see
Susan Pendergrass (13:38): Not in Missouri.
Robert Enlow (13:47): this huge disconnect between what they’re told and what they’re seeing in real life. And they want to do it themselves. Young kids want to do it themselves.
Susan Pendergrass (13:54): That’s right. And parents know when their kids can’t read. And they know when their kids are watching too many movies at school and don’t want to get on the bus. Parents know all of that. And if they don’t have any options,
Robert Enlow (14:07): And what’s exciting?
Susan Pendergrass (14:09): certainly work to expand options for parents. I know we’re up to a million and a half, maybe, in private school choice programs, maybe closer to two.
Robert Enlow (14:18): Yeah, I think it’s more important to look at what’s happening in some states. So it’s a million and a half across the country. That’s tripled in seven years, which is amazing in terms of publicly funded private school choice. You’ve got to look at what’s happened in places like Florida and Arizona and Arkansas. Florida has gone, since two thousand and one to today, from eighty-nine percent of kids in their assigned public schools to barely fifty percent. You’re seeing diversity of choice. And the future of education, and I think therefore the growth of liberty in educational marketplaces, is in the following three things: there are fewer kids, there are dramatically more options, and there’s no money. So that will lead to, in my opinion, a free market system of education far faster than any kind of top-down socialist idea.
Susan Pendergrass (15:08): And then they’re all going to come back and blame you, right? The idea that school choice is the reason, I mean Missouri enrollment is down, it’s projected to go down more. I looked at kindergarten cohorts, it’s absolutely going down. They continue to hire teachers. And when they have to start laying off teachers and closing school buildings, they’re going to say it’s because of school choice. And of course it isn’t because of school choice. But when parents can have school choice, they take it.
Robert Enlow (15:32): It’s the only system where I’ve seen you blame the customer for a failure of your product. I’ve just never seen anything like it in the country. We literally blame education failures on parents who don’t want to go to educational failures. It’s crazy.
Susan Pendergrass (15:53): And then in Missouri they lock the door on them. It’s like, well, too bad, you can’t leave. So maybe it’s just a matter of not needing to refer to any of this as capitalism, because when it comes down to it, parents don’t really care what it’s called, as long as they can pick their kids’ school. They don’t really care.
Robert Enlow (16:08): Look, the reality is parents don’t know if it’s a charter school, private school, or public school most of the time. And that’s okay with me. But the reality is, do they have power and control over how the money is spent and where their kids go? And the best thing we know about it, in my opinion, from the data we’ve seen, and we continue to see this, is families who make choices make better choices over time. This is one of the most amazing things. You start and say, hey, I want a good school for my kid, I think this is better. And then they get in there, and three years later they’re like, what’s the test scores, and how’s it working, and what’s your pedagogy? Because, shockingly, the more options you have, the better customer you become, because you care more. I use this story all the time. When I was a kid, I asked my mother for a ten-speed. I got it for Christmas and proceeded to leave it outside. By the fall it was all rusted and nasty. And I said, hey Mom, I need another ten-speed. And she said, no, but if you earn half of it, I’ll buy the other half. Well, I earned half of it and she bought it for me. Guess how well taken care of that ten-speed was.
Susan Pendergrass (17:14): Leave it outside.
Robert Enlow (17:16): Right, what happens? So when you put some skin in the game and allow free markets to work, this is what families benefit from.
Susan Pendergrass (17:24): So Milton Friedman’s still relevant?
Robert Enlow (17:27): I think Milton Friedman will become
Susan Pendergrass (17:29): Me too, even hearing it said, but yes, go.
Robert Enlow (17:31): Well, no, so actually I think what’s really interesting, I think Milton Friedman, if you read Michael Kanudi’s Wall Street Journal piece, which is amazing, the other day about Milton and this whole conversation, I think Milton is the countercultural revolution that’s coming. I think Milton is both, I mean, one of the things about knowing him and getting to know him over the last decade of his life was he was an equal opportunity challenger.
Susan Pendergrass (17:46): Okay.
Robert Enlow (18:00): If he was a right-leaning guy who didn’t like free markets, he would immediately call out a right-leaning guy who didn’t like free markets. If it was a left-leaning guy, he would do the same thing. Milton was about true individual liberty. I think we’re going to get back to that kind of countercultural revolution. Just like it was seen in Eastern Europe and Latin America. I think that’s the next thing, in America you’ll see communities who are poor reading Milton Friedman in the basement.
Susan Pendergrass (18:27): Love it. Well, you heard it here first. Maybe you can come back and talk to us more about it.
Robert Enlow (18:32): I’m happy. Thanks so much for having me.
Susan Pendergrass (18:34): Appreciate it.
Produced by Show-Me Opportunity
