As in other liberal democratic nations around the world, the population of Australia is undergoing significant diversification. This raises new challenges for education. In liberal democratic societies like Australia and the United States of America, mass schooling has always had multifaceted social and individual goals to achieve. With the contemporary diversification of the population, these goals and the means to their attainment require new attention. A first step towards living peacefully and having a productive and flourishing life in multicultural communities is to educate children to respect and benefit from the diversity within which they live. According to the educational philosopher John Dewey, sustainable growth in society can be attained in diversity (Dewey, 1922,1983a). If a given community elects to reward only a small number of functions produced by a selected segment of the population, that society is to be condemned (Garrison & Neiman, 2002). In other words, Dewey believed that the key to survival is diversity, not homogeneity. While he acknowledged individual differences and inequality in the physical and cognitive performances of various tasks, he also argued that a democratic community is primarily concerned with moral equality. From this perspective, the initial aim of education is to aid all to achieve their unique potential and to make their unique contribution to society (Lapsely & Narvaez, 2006). Dewey goes to on declare that through creative inquiry the world can be transformed. According to Dewey, diversity provides alternatives, whereas isolationism reduces freedom because it reduces the capacity to think of alternative possible choices and actions. In this interpretation of freedom, creativity, dialogue and pluralistic democracy are optimal ways for sustaining growth in society (Lapsely & Narvaez, 2006). But how can these democratic possibilities be achieved in the increasingly multicultural liberal democratic societies of the west? How might ethical education contribute to the development of these societies? In general terms, the research reported in this thesis is concerned with these issues.