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First on the notion of school failure. There are better and poorer performing schools, no doubt. However, at no time in US history has the population had a higher percentage of high school graduates, bachelors, and advanced degrees. The schools on average are not doing as poorly as marketed.
"Should only those who can afford it have the choice to go to the best schools?"
My argument is precisely not that. There should be no failing schools. The neighborhood public school should be successful, regardless of neighborhood.
"The capitalist system of production is an economic democracy in which every penny gives a right to vote. The consumers are the sovereign people. The capitalists, the entrepreneurs, and the farmers are the people's mandatories. If they do not obey, if they fail to produce, at the lowest possible cost, what the consumers are asking for, they lose their office. Their task is service to the consumer. Profit and loss are the instruments by means of which the consumers keep a tight rein on all business activities" - Bureaucracy (1945), Ludwig von Mises"
A very nice classical capitalist economics argument. If only it were true. Classical capitalist economics comes forward from Adam Smith's "The Wealth of Nations". Great stuff, but you need to understand the philosophical framework from which it arises to understand its flaws. Adam Smith practiced and wrote during the "Age of Reason", where the basic assumption was that humans are, when left to their own devices, "reasonable". From this comes the "magic hand" of the market system of thought, in that everyone acting reasonably in a free market system will invariably produce the highest and best result. People have proven over and over again ever since, that the assumption of reasonability is flawed.
In a rational and reasonable market, tech bubbles, Enron, Worldcom, sub-prime mortagages, and the current crash in metals prices, do not exist. But they do exist and always have. The word "Ponzi Scheme" was invented long ago, coined to capture the scam Albert Ponzi pulled off. The "Great Depression" was only "Great" because it was larger than the previous depressions.
Modern economists have studied the phenomena and have sorted one thing out with considerable precision, we humans are not rational. We cannot be expected to behave in a rational manner, because all of history point out that we don't on a regular and repeated basis. To assume to the point of near certainty, as you apparently do, that a free market will produce the best possible result, ignores 200+ years of history that point in another direction. Further, the notion that when people are given that freedom to choose, they will choose in the same manner that you might is intellectual arrogance, plain and simple.
Another place you are shooting blanks is the notion that government is poor at delivering services. Every attempt to privitize government services has cost more and produced less. Governments do not operate at a profit, so that 15 to 20 percent margin is not skimmed off to pay for the CEO's second lakefront home. Secondly the notion that governments can't calculate is cold war era nonsense. The Soviet Socialist system did have a hard time, but "just in time inventory" had not been invented and they were not exactly computing in the cloud, more like paper double entry ledgers and green eyeshades. Wal Mart runs a bigger economy just fine these days, and I have never been to one that was out of toilet paper. This is the current standard for "central planning", and they make toast and dine for breakfast on small "free market" competition.
I am not "superior" to anyone. They make their choices and I make mine. But when you are talking about social engineering on the scale of redesigning the public education system, it is actually good to pay attention to the choices people really make, and not go off on broad based assumptions that they will behave as you expect and desire.
Having worked in child abuse prevention, I can assure you that people are not rational and on more than just occasion, do not put their children's wellbeing at the sort of priority you and I might.
Get your head out of classical economics and join the 21st century.
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