Labour's championing of market forces as a way to improve public services may have had an unexpected side-effect: the entrenchment of privilege at Oxbridge. Amanda Root explains

In 1997, the hope was that it would become easier for the talented, hard working and aspirational child to succeed by, say, getting to a top university, under Tony Blair's Government. "Education, education, education" was the rallying cry, and the hope was for level playing fields and equal opportunities for all; claims that are no-brainers. Yet still the equalities were not delivered. About half of all Oxbridge students still come from public (ie private, fee-charging) schools, yet such schools educate only about 7 per cent of the school-age population. How can it be the case that 50 per cent of the most academically gifted are mysteriously concentrated in fewer than 7 per cent of the population?

A faux-naive defence is usually wheeled out. "But we are an elite university - we need to pick the best," assert my (often extremely clever, hard-working, kind and socially skilled) colleagues at Oxford University, blithely ignoring the social conditions that lie behind what they define as "the best". (Is it stating the obvious to suggest that people who have succeeded in Oxbridge have a vested interest in playing the meritocratic card?)

Sadly, such attitudes are still widespread. Talking to the director of development of a Cambridge college recently, I asked about students' financial hardship. Without missing a beat, he replied that since parents had been paying private school fees, university tuition fees of ?3,000 a year were not much by comparison. Perhaps this was a wind-up, but I fear it was not. The issue is one of people liking people like themselves - for example, oligopolies of public schools that supply key gatekeepers in Oxbridge. Gates are often shut against those without the "right" backgrounds - it is only recently that Oxford appointed its first college principal (Andrew Dilnot at St Hugh's) who attended a comprehensive school, for example.

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The mechanisms that reproduce these inequalities are complex, but some elements are usually overlooked. In encouraging citizens to use markets to exercise choice, in education, as elsewhere in the public sector, the current Government has unleashed corporate skill in creating social capital (self confidence, self-belief and savoir-faire that involves experience, etiquette and certain sorts of learning). Corporations, in educational markets as in social care or health, will inevitably work towards the company's enlightened self-interest, not out of pure altruism. While many cling to idealistic dreams of bright children moving onwards and upwards unhampered by social prejudice or disadvantage, the private sector cleans up. If corporations such as private schools can maximise income by monopolising desirable outcomes, they will.

So what is really going on? Besides the usual strategies that we half-know and half-suspect (tiny classes, extra "help" from teachers, applying for less popular courses, "donations", old-boy networks and the rest), private schools also invest huge amounts of time and effort in producing students with social capital. Sometimes the investment is obvious. In Oxford, for example, the Duke of Edinburgh's Award is known as the "posh kids" qualification - public schools can resource it more easily than state schools.

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The social capital of exclusivity is also one of their key selling points. It appeals to the snobbery of those who want their children to speak with nice accents, mix with the sons and daughters of old money and use pristine sport facilities. (Apparently the "wow!" factor of lavish sports provision has a big pull on fee-paying parents, just as the presence of the nouveau riche is a no no).

As part of the creation of social capital, private schools try to ensure that like socialises with like. The Oxford High School for Girls runs social events for the girls to meet boys from equivalent boys' public schools. The meetings are sequenced, and sooner or later the girls can meet boys from "top" public schools. Imagine the social cachet of having your child date someone from Eton. Matchmaking starts young, it seems.

Many private schools give coaching on how to approach interviews in preparation for university selection. They seek to prevent their pupils being so nervous and intimidated that they do not know how to "sell" themselves appropriately at the interview.

Feedback from an Oxbridge college that takes 65 per cent of its intake from private schools suggested that an important criticism of state-school candidates was that they stuck to their arguments. This is a judgment about social capital, not the content of the candidate's arguments or the soundness of their ideas. It is no surprise that two thirds of those who succeed in this particular test have the backing of confidence-building private education behind them. State schools do their best, but compared with private schools, they lack resources to teach pupils how to handle this sort of encounter.

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Of course, most of us use markets to buy food, clothes, hair-cuts, electricity and so on, but an important though largely unnoticed legacy of the Blair years is the imperative for citizens to use market mechanisms to improve public services.

The idea is that social justice, value for money and rising standards throughout the public sector will be driven up by market competition, which in turn is created by citizen choice. It is no good relying on local authorities or elected representatives in local or central government to provide or even regulate services - we, the ordinary people, need to be actively choosing and shaping and, via our actions, the market-driven survival of the fittest will improve conditions for all.

Market mechanisms are now part of mainstream service provision. The imperative to choose the best from the marketplace applies - controversially - to schooling. Parents are encouraged to choose what is "best" for their child in the educational marketplace, even if the unintended outcomes of such choices are that state schools in some areas often lose as much as a quarter of aspirational students to the private sector.

Markets can, of course, allow a variety of economic forms to co-exist: co operatives can trade alongside hedge funds, one-person businesses can compete with multinationals. However, monopolies, cartels and oligopolies often succeed better than more pluralistic forms, especially when markets are relatively unregulated. This is what is happening to selection for Oxbridge - citizens can try to opt in, but powerful suppliers, such as the private schools, largely delineate the rules that determine who succeeds. This is economic Darwinism fathering a new form of meritocracy: but because of the aura of moral and engaged choices, few seem worried by the progeny.

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Gordon Brown is one of the few prime ministers of the past 100 years who went to a university that was not Oxford or Cambridge. Will he change the traditions in more ways than this and hold to the egalitarian convictions that led him to criticise Oxford for not granting straight-As state-school pupil Laura Spence an interview in 1999 because she "did not show potential"? Watch this space.

Amanda Root is senior research associate at Oxford University's Centre for the Environment. Her new book, Market Citizenship: Experiments in Democracy and Globalization is published by Sage, ?60.00.

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