John, your argument is that education produces positive externalities that cannot be captured by the person who is educated. Seems reasonable enough, but let me try to pick some holes in it. (All in good humor, eh?)

I think we need to be specific about exactly what kinds of communication skills we’re talking about. Certainly, many such skills can be honed outside of school. Even a child not in school will likely talk to other people every day. However, perhaps the benefit with schools is that they teach a common language and, more broadly, a common culture that people from different subcultures and walks of life within the US can use to communicate. Although I’m not sure how well schools actually do. Many poor minority students, who would benefit themselves and society most from this sort of acculturation, are typically the ones we see in the media who go to the greatest lengths to develop their own idiosyncratic subculture and style of speaking — they actively resist this integration effect that you are touting as a benefit of primary education. Although maybe that’s just the stereotype. There are probably some underlying economic factors.The kinds of day-to-day interactions you talk about don’t seem to me to be much facilitated by education recieved at school. To a large extent, it appears innate. I often feel like I don’t communicate very well verbally, but not for lack of proper education. If you’re talking about everyday interactions outside of the workplace, such as the bank, the grocery store, the movie theater, I think the communication skills needed to play the role of consumer in these circumstances are easily learned just from growing up in this society.

Where I think schooling helps more is in the workplace. And there the benefits of communication are fully monetized and there are no problematic externalities. If you can communicate well, it makes you a more productive employee and you can demand a higher wage. Knowing how to write well, for example, is something you might not pick up outside of school, but most of the benefit from your writing ability accrues to your employer and thus to you.

At the end of the day, I’m at all convinced that there exist substantial positive technological (non-pecuinary) externalities in education services. There might still be a justification for subsidies based on equity concerns, although I can think of no justification for public provision of these services (just like transportation). The case for subsidies seems somewhat weak, in my opinion. Just how many families really can’t afford to send their kids to low-price private schools? And how expensive would private schools be if there was no public system?

A google search on the subject of private school cost yielded somewhat dated information. It’ll just have to do. According to David Salisbury of Cato (who in turn references the Department of Education), private school tuition was $3,267 in the year 2000.

The number is probably higher now, perhaps closer to $4,000. Of course, many of the lower priced schools are parochial and are supported by external funding. Since parents currenly must go to the private sector for parochial education, one would imagine that most of the new schools in the wake of privatization would be secular and therefore not receive so much funding from religious organizations. One the other hand, who knows how much funding the new secular schools would receive from nonreligious organizations and individuals. Plus, all the price-sensitive parents are presumably in the public system now, and would push down the cost of private secular schools if the public system were no longer around. The median income for a family of four with two children was $66,067 in 2005, so it seems reasonable that the vast majority of families would be able to send their kids to school in a private system. Perhaps a voucher system would be desirable for lower-income families.