Within the parameters of western ideology the concept of democracy is frequently upheld as a corner stone to which our moral, social, political and educational practices are anchored. The term has become a powerful instrument of persuasion in the public forums as the innate goodness of democracy has become more unquestionably ingrained in the historical imaginations of its citizens. As the logic surrounding the value placed on democracy is entwined with the virtues of freedom and self-determination for all, this is hardly surprising. What remains often unexplored in these public forums, however, is whether this logic is in fact justified. To situate the investigation into the current political arena is to acknowledge the dichotomy by which the philosophies of democracy and capitalism are publicly claimed to exist side by side. Such an acknowledgement forcefully yields one to the questions of to what extent our current ideologies of democracy, and the perpetuation of this dogma through our education system, can successfully result in producing an authentic democratic society within capitalist constructs. This thesis has been written in an attempt to expose the contradiction present between our current political claims of democracy and our capitalist directed practices of education through the critical philosophy of Paulo Freire. Freire has firmly established himself as a respected democratic educator, however, my intention has not been to reduce his educational pedagogy by adapting it to attempt to improve the current system of schooling, as I argue is frequently found within educational literature, but rather to differentiate his democratic philosophy of education as the practice of freedom from the capitalist concept of education as a tool of domination and domestication. I argue that the logic of transnational capitalism, which dictates the policies and practices of our education system, is detrimental to the development of the peoples' critical thinking facilities and thus negates their individual and collective empowerment. Such a system of banking education actively denies people the right to participate in history as subjects and inhibits the possibility of an authentic democracy. In this way the capitalist education system is in fact a system of oppression. Through Freire's critical pedagogy I argue that the transference ofknowledge through an authoritarian system does not constitute as education but is instead a training ground for workers set up in the interests of capitalist employers. Social class divisions are maintained and enforced by means of a paternalistic apparatus of hierarchy. In supporting Freire's philosophy, and acknowledging the entirely political nature of education, I argue that an education system that would support an authentic democracy would have to practice authentic democracy. Through the concepts of 'promblematization', dialogue, critical transitivity and praxis I have attempted to refute the fatalistic assumptions that such an education system is unconceivable or unexplainable. Indeed, I argue that if our goal is to live in a democracy then such concepts are unavoidable. The historical case study from the history of the New Zealand education system is included to illustrate the theory in practice. Here I argue that the intentions, practices and policies of the legislators were anti-democratic and anti-educational in that they constructed a compulsory system that is detrimental to the development of critical thought, self determination and dialogical knowing that is necessary to allow each member of society to be part of the governing system. By examining the consequences and legacy of this system it is possible to expose its influences in the larger educational realm in society. It is not my intention to simply present New Zealand education as an isolated case which requires examination but rather as a prominent example of how Freire's philosophy applies to traditional education in the west. This thesis is therefore aimed at re-defining the concepts of democracy and education through critically examining the socio-economic conditions necessary for effective and equal participation in democratic forums. By critiquing the current system via the vehicle of Freire's philosophy, a prominent democratic educator, the divide between democracy as an illusion and as a reality becomes clearer.