But what about the schools in poorer areas whose academic success will be extremely limited if all their funding comes from students? Would you not allow any government intervention to support them?
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As i've said before, this wouldn't be a 'pull the rug from underneath' move - it'd take many years. But as for the government sometimes stepping in, yes maybe initially, but as the society prospered and became wealthier i'd want charities/business to start stepping in just as they did before the creation of the welfare state - with both hospitals and schools.
The problem is, once you start allowing the government to subsidise certain schools - it leads to the prices all being pushed up as the schools can then spend as much as they want and not have to worry about going into the red, as the state will always back them up.