Classical Economists Classical economics refers to the studies done by a group of economists in the eighteenth and nineteenth centuries. They included Adam Smith, David Ricardo, Jeremy Bentham, Thomas Malthus and John Stuart Mill who believed that the pursuit of individual self-interest produced the greatest possible economic benefits for the whole society. Their studies were primarily concerned with the way markets and market economies work. They developed theories about the dynamics of economic growth and began with the publication in 1776 of Adam Smith's monumental work, The Wealth of Nations which identified land, labor and capital as the three factors of production and the major contributors to a nation's wealth. In Smith's view, the ideal economy is a self-regulating market system that automatically satisfies the economic needs of the populace. It stressed economic freedom and promoted ideas such as laissez-faire and free competition. He described the market mechanism as an ‘invisible hand’ that leads all individuals, in pursuit of their own self-interests to produce the greatest benefit for society as a whole.
Public Provision of Education – Advantages According to E. G. West’s Education and the State, the arguments of classical economists in favor of the public provision of education fell into two broad categories – economic and ethical. In the economic category, they believed that education would improve individual productivity. Hence, the public provision of education created a large number of productive workers eventually to increase the economic production for the society. In the ethical category, classical economists argued that mass education could improve the moral standards of the poor, foster values essential to a good society, reduce crime and bring about the social equality. As agreed by classical economists for the economic advantages, education helped to increase the productivity of workers in the same way physical capital increased the productive capacity of a factory or other enterprise. The importance of education in productivity was expressed in Smith’s concept of ‘fixed capital’: 'The acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were, in his person. Those talents, as they make a part of his fortune, so do they likewise of that of the society to which he belongs.' By public provision of education, more workers became skilled labor that contributed to the 1
increase in economic production for the whole society. Furthermore, as mentioned in West’s writings, the classical economists had similar views in one aspect of what was called negative utilitarianism that education could reduce crime and achieve social equality. They analyzed the nature of micro relationship between the education of a person and the benefits he or she received. Based on the psychological theory of equal, innate, intellectual endowment to all persons and the rationalist theory of freedom, they believed that education was the basis of good administration, intelligent and disciplined behavior which formed preconditions for rapid economic growth. So, most of them accepted the advantages from public provision of education for moral betterment, civic order and general happiness. In this way, the government funds spent on education would probably more than offset by the reduction of expenditure on prisons, and therefore the state investment on education was socially profitable.
Public Provision of Education - Disadvantages Regarding the disadvantages of mass education, there were the perverse incentives created by the government involvement in provision of education and government officials did not have private interests that corresponded to those of the public. Their incentives would eventually lead to social inefficiency. Most classical...