However, I'm surprised that you say "In practice, such scenarios tend to work out... poorly." Do you mean that the free market doesn't do much to improve quality...
That is one big reason behind my statement, yes. Currently, it looks like many, if not most, people -- in the Southern states, at least -- want their schools to engage in cultural indoctrination as opposed to any kind of rationality training. The voucher programs, which were designed specifically to introduce some free market into the education system, are being used to teach things like Creationism and historical revisionism. Which is not to say that public education in states like Louisiana and Texas is any better, seeing as they are implementing the same kinds of curricula by popular vote.
In fact, most private schools are religious in nature. According to this advocacy site (hardly an unbiased source, I know), around 50% are Catholic. On the plus side, student performance tends to be somewhat better (though not drastically so) in private schools, according to CAPE as well as other sources. However, private schools are also quite a bit more expensive than public schools, with tuition levels somewhere around $10K (and often higher). This means that the students who attend them have much wealthier parents, and this fact alone can account for their higher performance.
This leads me to my second point: I believe that Gatto is mistaken when he yearns for earlier, simpler times, where education was unencumbered by any regulation whatsoever, and students were free to learn (or to avoid learning) whatever they wanted. We do not live in such times anymore. Instead, we live in a world that is saturated by technology. Literacy, along with basic numeracy, are no longer marks of high status, but an absolute requirement for daily life. Most well-paying jobs, creative pursuits, as well as even basic social interactions all rely on some form of information technology. Basic education is not a luxury, but an essential service.
Are public schools adequately providing this essential service ? No. However, we simply cannot afford to live in a world where access to it is gated by wealth -- which is what would happen if schools were completely privatized. As far as I know, most if not all efforts to privatize essential services have added in disaster; this includes police, fire departments, and even prisons (in California, at least). Basic health care is a particularly glaring example.
So, in summary, existing private schools are emphasizing for indoctrination rather than critical thinking; and even if they were not, we cannot afford to restrict access to basic education based on personal wealth.
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