More difficult is coming up with something that could take its place, provide an educated populace, and best allocate people to the educational paths that would serve them bestWell, for starters, we could return exactly to the system of, say, 1890. Most people had enough formal schooling to learn reading, writing and arithmetic. After that, you could learn on the job or through apprenticeship. Professions such as architects or engineers required 0 - 4 years of post-secondary education. High school drop outs designed great structures such as the New York Public Library, the tunnels under London, or the California aqueducts. Now legal credentialing laws mandate architects have 5-8 years of university. Yet the architecture of the late 1800's is far, far, far superior to the architecture of today. Perhaps if we abolished the architecture schools altogether, and the professors had to find new careers in, say, stone masonry, people would build beautiful buildings again...
The trouble with the idea that "the truth is somewhere in the middle" is that the middle changes through time and place. For example, the average voter in 1900 was a hard-core libertarian compared to the average voter today. If you lived in 1900 would you be libertarian? What ideology would you have if you lived in 1965 China? Was the truth somewhere in between Deng and Mao? You accuse the people who say "government should get out of the way" as being simplistic. But to me, the people who automatically believe the truth is always in the middle are even more simplistic.
The only way to find the answers is find it for yourself. I was once far more liberal/progressive. But after numerous life experiences, plus concentrated reading on almost every political subject, I have come to believe that the far right libertarians ( ie, more libertarian than even Milton Friedman) are the closest to being correct.
Imagine you were in a conversation with a 1900 libertarian. What evidence from the world of 2008 would you show him that would prove his libertarianism wrong? Would you show him our bombed out inner cities as evidence of the glories of the welfare state? ( compare a 1900 account of the slums, http://books.google.com/books?hl=en&id=8kEAAAAAYAAJ&... to a modern account like "The Corner" or "Gang Leader for a day" ) Would you show him the public schools? The fine learning going on at our state colleges? Would you show him the wonderful Brutalist buildings that our fully credentialed architects produce? Do you think you could convince him that creating a Federal Reserve made the financial system more stable?
As for the original question about the origins of American public schooling - I don't think Gatto is completely right, but he's much closer to the truth than 99% of Americans would realize. A few years ago I took a course on the history of American education. I was shocked to find the progressives who created American schooling did not care at all about students learning or even job training. The original reasons were about Americanizing and assimilation of immigrants in American values. Later on, the emphasis shifted more towards socialization. Actual learning did not become the primary goal until the much later on. The irony is that public schools were originally created by the upper class progressives to control the lower classes. But by 1980, the elimination of tracking and the restrictions of disciplinary actions made public schools uninhabitable by upper class children, thus forcing them into home schooling or expensive private schools.