Debates on education reform are usually based on a number of unstated assumptions. One is that we already “know” what education is and what it could be. Another is that some appointed experts can improve a government-run school system. In my forthcoming book Education unchained: What it takes to restore schools and learning, I argue that both of these premises are false.

Schools are, or at least should be, mere tools to provide children with an education. As such, they can really only be improved in the same way as mobile phones, restaurants, cars or running shoes are improved. We first think about how to go about something. But that is not enough. We must then go through a process of trial and error, which, in a large society, takes place in the market. If we want to improve education we virtually have no choice but to return it to the market.

But returning education to the market must be done properly. There must be no or hardly any government funding of education. Government should not be involved in determining curricula or diplomas. Government should have little or no part in the supervision of schools or of education in general.

Today, these suggestions may sound shocking, but it is actually simply a question of returning to the very mechanisms that once made education great in the first place. Before government took over education in Britain in 1870, close to 90 percent of the working classes could both read and write. Since then, we appear to have been going backwards. In 1995, 20 percent of twenty-one year olds admitted to difficulties with reading and writing. At least 95 percent, possibly 99 percent of children went to school in 1858. Already in 1851 there were about 45,000 schools in Britain, all of which would be qualified as private by today’s standards.

Competition in the market has at least three roles. First of all, competition spurs people on to perform whatever they are doing in a better way. Secondly, competition spurs people on to invent new things, to modify old things, to find new things to do, or to find new ways of doing old things. Innovation in capitalist societies is like mutations in genetics. As Hayek put it, competition is a discovery procedure. It generates new knowledge.

Thirdly, competition weeds out unsuccessful products and services. Who decides who is successful? The market. And who is the market? All of us. Competition is a system of success and failure. Failure is essential. Without failure, the flow of innovation is blocked like a clogged drain. In a free system, failing schools would regularly be swept aside by the competition.

Right up until 1870, parents in Britain hired and fired schools and teachers as they saw fit. The result was much better and much less expensive education. Government took over that education, standardised and homogenised it. But, cut off from trial and error, it soon began to decay.

Free markets versus government planning might seem like a finely balanced problem where one might plausibly argue for both options. To see why this is not the case we should put some numbers into this Hayekian knowledge problem.

– see Education unchained: What it takes to restore schools and learning

In a free system, parents pay the schools and teachers directly. Therefore, if your daughter still can’t read after three months, if your son cannot read, write and speak French after six months, if there is mobbing, you simply shop around and change school in a week or two.

The low expected cost might surprise the reader. But all one really needs to open a school is a teacher, a large room, books, some furniture, and access to a play area outside, such as a schoolyard, a garden, a patch of wood or a public park. At £200 per month, someone teaching 25 children would receive about £5000 per month. This is about a third of what schools commonly cost today. But today, according to figures from the US, often only a third of what school cost actually reaches the classroom.

The result of all this is that school reform would take place tens of thousands of times faster in a free system than in a government one. As should be obvious, at the rate government reforms proceed, once every ten to forty years, there simply isn’t sufficient trial and error to even maintain the quality we once had.