ABSTRACT
This chapter suggests that the LMS/market package for schools rests upon two closely interrelated bases, (1) the neo-liberal economic theories of the market, particularly the work of Friedrich Hayek and his fellow Austrians; (2) recent developments in management theory and business methods which rest on a belief in achieving greater effectiveness through financial delegation; which, it is argued, provides for greater responsiveness to clients. Education markets and other quasi-markets in the social welfare sector have some characteristics that are closer to the service sector of the private economy than to the manufacturing or financial sectors. The theoretical market is thus constituted by three elements; the individual choices of consumers; the reactive and proactive strategies of producers and their constant adjustment of their 'commodity offering' and the order or equilibrium which is thus produced. The market empowers, 'frees', the consumer and provides incentive for the producer.
