Literacy and numeracy rates plummet under the state-controlled education monopoly. In the United States, for example, this decline is evidenced by steadily falling scores on standardized tests such as the SAT. Like any other government-created monopoly, state education is largely shielded from competition and therefore cannot provide a high-quality product at market-level prices, even if educators have the best of intentions (cf. pp. 4.11:133-4). But the decline in educational standards is further exacerbated by the diversion of schools to political purposes and social-engineering schemes. More precisely, schools become subservient to an agenda of statism. In the words of the Association of California School Administrators (

): "The purpose of the school system is not to provide students with an education [but] to create a viable social order."

To a large extent, as we have already observed, private schools are displaced from the market by so-called "free" government-run education (p. 4.11:12), and the resources available to the few remaining private institutions are severely limited. Despite this minimal funding, private schools have proven far more successful than their governmental counterparts in providing a quality education, even to children from lower-income backgrounds (who must generally be assisted by scholarships financed from voluntary sources). Because private education is impracticable on a large scale in a mixed economy, however, the majority of citizens fails to receive adequate educational preparation for their lives and careers. This failure is reflected in diminished worker productivity, which contributes to economic decline.

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