The debate of education financing in the classical perspective

It can be seen from this brief excursion into the early literature that the classical economists provided, between them, a most comprehensive treatment of the economics of education. To various extents, they were preoccupied by the fact that investment in education might be socially inefficient, that is, too low to maintain the conditions for economic progress. This could happen both for objective reasons, the social positive externalities of education, and for subjective ones, the bounded rationality and short-sightedness of economic agents. State intervention was therefore necessary to correct the limits of market mechanisms. Smith’s initial proposal that education should be financed with contributions by families was not taken up: indeed, from McCulloch to Marshall there were more and more reasons to support the public financing, and also the public management, of education – at least elementary. McCulloch, Mill and Senior denied the relevance of the principle of choice in the field of compulsory education.