It's not just hedging risk, but also subsidizing costs. Education is similiar in that you can't create a school for 100 different schools, each of 10 students

It's not just hedging risk, but also subsidizing costs. Education is similiar in that you can't create a school for 100 different schools, each of 10 students across multiple grade levels within a single school district. And furthermore it's very cost ineffective when they share 75% of the infrastructure that other children would use. So you have one school with 1,000 students that has all the finances to have a building, janitorial staff, gym, new textbooks, have music teachers, etc... The schools with 10 students can barely afford lease for a single room office -- much less one general purpose teacher. The healthy subsidize the unhealthy. This is why for healthcare reform insurance is mandatory. I'm not against private schools per se, but I am against the public funding them. The implicit goal of private schools is to oppress those not in them, as much as to educate those in them. It's an anti-public good to fund them. With that said I do think private schools are consistent with the goals of capitalism, part of which is exploit others as best possible.