This paper starts from the premiss that there are three possible systems of schooling: the market based model, the traditional top-down or bureaucratically administered non market model, and the partly devolved participatory non market model. Most real life education systems mix all three, but one form tends to dominate. In Australian schooling there is a tendency towards market forms of production and distribution. This tendency is not inevitable, and is undesirable. Markets, however important they may be in social life, are relatively inaccessible to political organisation and democratic control. Thus markets are unlikely to place a high value on such policy aims as self determination through education, cultural diversity (Marginson 1992c), the democratisation of knowledge, the free flow of information, and equal access to educational credentials by social group. This paper puts forward some ideas for a theory of markets in schooling. These markets have broad roots in the interaction between the education institutions , the labour markets, the professions, and the social groups using education. But the nature (and the relative importance within schooling) of the education markets is by no means fixed, and is particularly sensitive to public policies and to the ideological climate in which schooling takes place. The tendency to markets is associated with certain forms of political/intellectual knowledge, such as public choice theory, and the free market blueprints of Friedman and others. The paper identifies some of the arguments, and policies, that are used to support a transition to markets. It tentatively suggests some counter arguments and strategies (in terms of both intellectual work and public policies) that might contribute to a reversal of this tendency towards markets. It is assumed here that schooling should steer towards the participatory non market model, wherein parents enjoy significantly more choice than with the traditional public sector approach, but a choice expressed through political systems rather than market exchange. In taking this path it is necessary to 'rescue' the concept of choice from the free market liberals. Choice can be expressed through political self determination as well as market consumption, and arguably, is capable of taking a richer form in its political than its economic incarnation. For education institutions and for educators, the purpose of education should not be to compete successfully against other institutions and other educators (what does that prove? what does that gain?) while producing market commodities as cheaply as possible, i.e. with the lowest level of real educational content that the market will bear. Rather, the purpose should be to maximise the social value of any and every educational 'product'.