Abstract
This paper critically examines the crisis of welfare liberalism with specific reference to New Zealand education in order to speculatively reappraise the central principles upon which a revived welfare state could be constructed and in terms of which publicly provided education can be justified. Specifically it will seek to achieve these goals through a number of interrelated tasks. Firstly, it will examine the claims of neo‐liberal theory and argue that contradictions within this theory make its demise likely. To do this it will focus on themes relating to the efficiency of markets, rationality and consumer choice, the state and central planning as well as the issue of liberty. Secondly, in a more positive analysis, it will examine prospects for a return to the welfare state in the near future. This will involve an examination of some important criticisms of the traditional welfare state and an assessment of possible models in terms of which a revived, non‐bureaucratic welfare state could be constructed.

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