Classical Libertarian Compromises on State Education

Paine, Smith, and Mill Failed to Foresee the Consequences of Government Schools


Filed Under : Education, Taxation, Competition

Dr. West is emeritus professor of economics at Carleton University in Ottawa, Canada, and author of Education and the State (Liberty Press).

There seems to be a consensus that the typical intellectual today is more comfortable than most with the government supply of education. But what of the intellectuals who were also advocates of laissez faire in the eighteenth and nineteenth centuries? They would surely not approve of today’s extensive intervention. I shall argue, nevertheless, that their tendency to compromise seriously weakened the defenses against an all-encompassing state.

From among the early intellectual libertarians I shall concentrate on the political economists. I shall then focus on Adam Smith, John Stuart Mill, and a writer whose characterization as a political economist may be challenged by some: Tom Paine.

The Preliminary Promise

Before proceeding to the inconsistencies in these writers I shall, in fairness, start with the strongest parts of their arguments. Of their main recommendations that distinguish them from current practice in education, the most striking is their insistence that school fees should not be abolished and should always cover a significant part of the cost of education. The main reason for this requirement has either been subsequently forgotten or carefully avoided. Fee-paying is the one instrument with which parents can keep desirable competition alive between teachers and schools. Adam Smith was the most insistent on this point. Most of the later economists in turn upheld Smith’s principle. Thus Thomas Malthus argued that if each child had to pay a fixed sum, the school master would then have a stronger interest to increase the number of his pupils. . . .[1]

Similarly, James McCulloch thought that the maintenance of the fee system would secure the constant attendance of a person who shall be able to instruct the young, and who shall have the strongest interest to perfect himself in his business, and to attract the greatest number of scholars to his school.[2] Otherwise, if the schoolmaster derived much of his income from his fixed salary, he would not have the same interest to exert himself, . . . and like all other functionaries, placed in similar situations, he would learn to neglect his business, and to consider it as a drudgery only to be avoided.[3]

While James Mill also strongly shared this view, the most hesitant of the classical economists to insist on positive fees for schooling was his son, J.S. Mill. But after much deliberation he wrote to Henry Fawcett: I, like you, have a rather strong opinion in favour of making parents pay something for their children’s education when they are able. . . .[4]

To the twentieth-century liberal such reasoning is profoundly wrong because it makes the degree of schooling of a child a simple function of the size of his or her parent’s pocket or purse. Yet the taxes that pay for free public education derive from revenues collected out of the same pocket. The poor were substantial taxpayers in the eighteenth and nineteenth centuries, the period that preceded the progressive income tax. Indeed in the first half of nineteenth-century Britain, taxes on food and tobacco counted for about 60 percent of all central revenue.

But even today the poor pay taxes—with every cigarette, every can of beer, and every gallon of gasoline they purchase. In other words, if schooling is made compulsory and free, people with low incomes will almost always contribute to its cost from their tax contributions, however modest. But suppose this same sum was collected not, as now, but at the door of their chosen school in the form of a tuition fee. The consequence would be considerable family protection against inferior service. This was the main point urged by the early political economists. Its cogency meanwhile is measured by the anxiety of the current school monopoly to attack it immediately wherever it appears.

The Subsequent Retreats

Having made the first move in favor of family liberty, however, all the classical writers mentioned could not resist making what to them were minor exceptions to the rule.

Tom Paine

In his famous book The Rights of Man, first published in 1791/92, Paine agreed that the quantity of education was insufficient but the shortfall was due not to the unwillingness of parents to educate their children adequately, but to the simple fact of poverty. But poverty, in turn, Paine emphasized, was due almost entirely to excessive taxes on the poor. General taxation, and especially the excise, had been increasing substantially in the late eighteenth century. The land tax, paid by the aristocrats, in contrast had been falling. Just over one half of the total revenue went for servicing the huge national debt. The remainder went for current government expenses that Paine believed to be extravagant. And he insisted that money taken in taxation from average families was much more than enough to finance a basic education for their children. (Much of this revenue, incidentally, came from the poor rates.)

After producing an agenda for radical reduction of government expenditure, Paine set about discussing how to dispose of what he called the surplus. Instead of proposing simple reduction of taxes on the poor, to which the logic of his argument pointed, he advocated instead a conditional remission of taxes. The condition was that parents should send their children to school to learn reading, writing, and arithmetic. And who should monitor such a voucher system? Paine had no qualms in proposing that it be done by the minister of the church parish: The ministers of every parish . . . to certify jointly to an office, for that purpose, that this [educational] duty be performed.[5]

After speaking up for the average man, therefore, Paine proceeded to indicate that ultimately he mistrusted him. The implication was that if simple tax reduction was resorted to, the people could not be depended on to spend enough of their increased disposable incomes on education. Yet Paine’s initial argument was that it was heavy taxation that was the main obstacle to private purchase of education. He had no evidence that the reluctance was due to basic family preferences. And even if it was, there remained the issue of liberty. Did Paine’s rights of man not extend to freedom to decide the type and amount of education for their children? Unfortunately, however, he failed to address this question.

Paine’s voucher scheme demanded schooling; yet this was not the only vehicle for education. Why then did he superimpose his own choice? And why should ministers of religion have the sole right to monitor the voucher program? Would they not increasingly modify the definition of education to become more and more in conformity with their particular religious creed? What constraints were there on the size of the special office that Paine wanted the ministers to report to? He appears to have paid no heed at all to the counsel of William Godwin. Godwin had warned about the potential growth of bloated bureaucracies that would be encouraged by late eighteenth-century proposals for national education.

Adam Smith

Smith’s famous book The Wealth of Nations (1776) argues that economic growth will best occur when natural liberty is respected and leads to specialization or participation in the division of labor. But when the division of labor reaches its fullest development, Smith tells us in his Book V, the worker becomes as stupid and ignorant as is possible for a human creature to become.

Smith’s forecast of the degeneration of labor is based on one condition: that government fails to take some pains to prevent it. The main task of government, he argued, was to secure the education of the common people. But since Smith explains that government in his own country had for a long time actually taken the necessary pains, the implication is that the road to cultural destruction, in Scotland, at least, was firmly closed and the potential nightmare scenario avoided.[6] So, just like Tom Paine, Adam Smith reveals his mistrust of ordinary people when it comes to their duties to educate their children.

In his Glasgow Lectures of the 1760s, Smith is even more explicit. Once his market economy fully establishes the division of labor, The minds of men are contracted and rendered incapable of elevation. Education is despised, or at least neglected. . . . Having observed that, in contrast, people of some rank and fortune have money to afford education, Smith also declares: It is otherwise with the common people. They have little time to spare for education. Their parents can scarce afford to maintain them even in infancy.[7] Here Smith falls into the same trap as Tom Paine. To maintain that poverty is the formidable obstacle tells us nothing about the real tastes of people for education. The only true test is to see what happens when poverty is removed. But in any case even if people would buy less education than Smith would like, his willingness to bring in government would appear to conflict with his famous principle of natural liberty.

Smith is inconsistent in yet another sense. His statement that parents are too poor appears to conflict with his parallel economic argument that wages per capita had been rising for two centuries, and further progress to higher stages of the division of labor via the invisible hand was expected to bring still higher rewards to all ranks of society. But if Smith expected real incomes to continue to rise, so would leisure, and so would the ability to afford and to enjoy more education.

It will now be helpful, momentarily, to step outside of the context of internal logic, and look at Smith’s different forecasts of workers’ fortunes in the light of evidence relating to the half century following his demise. First, his prediction of rising real incomes was clearly borne out. The general conclusion of economic historians is that in Britain in 1850 real wages were about double what they had been in the period 1801-4, which was just over a decade after Smith’s death in 1790.[8] Also implicit in Smith’s predictions of rises in real incomes, to reiterate, are expected increases in leisure. Subsequent evidence, in fact, unambiguously reveals the steady decline in weekly hours of work since Smith wrote.[9]

Did the income and leisure improvements of the common people lead them to increase their purchases of education in Britain after Smith’s demise and without substantial prompting by government? The major educational intervention in England and Wales did not come until 1870 when the Forster Act introduced government schools for the first time. Yet by 1869 most people in England and Wales were literate, most children were receiving a schooling and most parents, working-class included, were paying fees for it. And all this was well before schooling was government-provided, compulsory, and free.[10]

The Scottish Act of 1696, which impressed Smith, laid down that a school should be erected in every parish and that teachers’ salaries be met by a tax on local heritors and tenants. This schooling, however, was not made compulsory by law; and neither was it made free. The parental fees made up a big part of the teachers’ salaries and were paid by every social class. Indeed, the Scots did not have free and compulsory schooling until about the same time the English did in the 1880s. The more Smith championed the Scots parochial school system, therefore, the more the implicit credit he was paying to working parents. Their action in voluntarily paying fees to purchase education at the parish schools was obviously a tribute to them in Smith’s own time despite his contrary statement in the Lectures that education would be despised after the division of labor was established.

More interesting still, it was the fee-paying private schools that were bearing the main burden of Scottish education in terms of the number of scholars. For every one Scottish parochial school pupil in 1818 there were two non-parochial school pupils. And the latter outnumbered the former by much more than two to one in the growing industrial areas such as Greenock, Paisley, and Glasgow—the very areas where Smith argued there was greater need for schooling.[11]

John Stuart Mill

Like Tom Paine and Adam Smith, J.S. Mill also has the reputation of a serious advocate of freedom for the individual. In his celebrated essay On Liberty (1859), Mill asserted that the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.[12]

With regard to education, Mill scores many points with modern libertarians with his famous remark in his essay that A general state education is a mere contrivance for moulding people to be exactly like one another . . . in proportion as it is efficient and successful, it establishes a despotism over the mind, leading by natural tendency to one over the body.[13]

It is usually forgotten, however, that Mill was equally critical of the alternative scenario: the free market in education. His reason was that the uncultivated cannot be competent judges of cultivation.[14] In other words, market failure occurs in this case because persons requiring improvement, having an imperfect or altogether erroneous conception of what they want, the supply called forth by the demand will be anything but what is essentially required.[15]

As to the empirical evidence of what the real world education market was like, Mill seems to have been as misinformed as Adam Smith. Mill protested that . . . even in quantity it is [in 1848] and is likely to remain, altogether insufficient, while in quality, though with some slight tendency to improvement, it is never good except by some rare accident, and generally so bad as to be little more than nominal.[16]

Mill could not have read any national reports on education because the first full census of schooling did not appear until 1851, three years after he had written the words in the previous quotation. It is reasonable, meanwhile, to conjecture that he relied upon his circle of radicals and Utilitarians for his evidence, and especially on his colleague James Kay who had recently founded the Manchester Statistical Society (MSS). I have previously subjected the findings of the MSS on education to close analysis and have concluded that its measure of numerical deficiency in schooling in 1838 was seriously flawed.[17] As for its findings on school quality, the primary criterion seems to have been moral instruction which, of course, involves considerable subjective and serious individual value judgment. Mill referred hardly at all to one of the major outputs of education, namely literacy. From the copious research on this issue that has accumulated since Mill’s time, R.K. Webb, a leading historian expert on this subject, has concluded that by the late 1830s (i.e., about a decade before Mill wrote his Principles), between two-thirds and three-quarters of the working classes were already literate.

Despite Mill’s dislike of general government provision of education (i.e., in government schools) he, like Paine and Smith, was willing to compromise. The first part of the compromise was his reconciliation to some government schooling. Though a government, therefore, may, and in many cases ought to, establish schools and colleges, it must neither compel nor bribe any person to come to them. A state school should exist: if it exist at all, as one among many competing experiments, carried on for the purpose of example and stimulus, to keep the others up to a certain standard of excellence.[18]

It is interesting that without any evidence, Mill presumed that the state schools would always be the superior pacesetters. And to openly forbid government to bribe people to come to its schools is to hide the fact that they are financed by taxation. Some indeed would equate this arrangement with hidden bribery of taxpayers.

The second part of Mill’s compromise was his insistence that education should be made compulsory. Notice that he demanded compulsory education and not compulsory schooling. Furthermore, he proposed to support it with a system of enforcement of public examinations to which children from an early age were to be submitted: Once in every year the examination should be renewed, with a gradually extending range of subjects, so as to make the universal acquisition and what is more, retention, of a certain minimum general knowledge virtually compulsory.

Mill advocated Bentham’s system of examinations as the price to be paid for the right to vote. Strictly speaking this solution did not remove the power of the state over education, it only restricted it to the power of those officials who were to be appointed on behalf of the state to set the examinations. Mill thought that this would not matter so long as the examinations were confined to the instrumental parts of knowledge and to the examination of objective facts only.

The fact that Mill did not enter into further details as to what was to constitute a certain minimum of general knowledge, enabled him to escape many of the serious difficulties which lay beneath the surface of his plan. For instance, who was to determine the subjects to be taught? How would one choose between, say, elementary political economy and geography? Could powers of censorship be easily exercised? Suppose that certain individuals had aversions to certain subjects, who would be the arbiter? J.S. Mill himself, for instance, had a particularly strong objection to the teaching of theology and was insistent that national education should be purely secular. We have here, it seems, not so much the libertarian as the intellectual paternalist with noble intentions. Certainly his treatment of other people’s opinions on this subject seemed to contradict the spirit of Mill’s On Liberty as it is popularly conceived.

Finally, in his anxiety to judge ordinary people, John Stuart Mill made exactly the same logical error as his fellow libertarians Tom Paine and Adam Smith. The two latter stated that people were too poor to afford education and at the same time were culpable for not wanting it. Mill’s version of this non-sequitur went as follows: In England . . . elementary instruction cannot be paid for, at its full cost, from the common wages of unskilled labor, and would not if it could.[19] How did he know?


Where education is concerned, Tom Paine, Adam Smith, and J.S. Mill were not full-blown libertarians. Rather they were liberators. Ultimately, they wanted to liberate the masses into a world of culture (their conception of culture) and into a realm of reason (their reason). In so doing they were all willing to make significant compromises that, for them, legitimized the intervention of government. And while their support of the free market led them to favor maintaining tuition fees at all times, they failed to foresee that the government bureaucracy they were willing to set afoot would swiftly abolish tuition, or rather substitute tax prices for conventional prices.

At this distance in time, another libertarian, and one who was a contemporary of Paine and Smith, seems to have been much more insightful and skilled in the art of prediction. William Godwin, who was a philosopher, not a political economist, wrote the following cautionary words in 1796: “Before we put so powerful a machine [education] under the direction of so unambiguous an agent, it behooves us to consider well what it is that we do. Government will not fail to employ it to strengthen its hands and perpetuate its institutions.”[20]

1.   Malthus, Letter to Whitbread, 1807.

2.   J.R. McCulloch edition of The Wealth of Nations, 1828, note XXI.

3.   Ibid.

4.   Letter to H. Fawcett, 24 October 1869.

5.   Tom Paine, The Rights of Man (London: Everyman Edition, 1961 [1791]), p. 248.

6.   Smith also recommended government regulation such that proof of some basic level of education was to be the price of entry into skilled trades and professions. But he appears to have been content that the Scottish parochial system had already made most people literate. Smith also advised the inclusion of simple geometry and mechanics in the curriculum. There is no evidence, however, that this was widespread practice in the parochial schools.

7.   Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, reprinted in two volumes, R.H. Campbell, A.S. Skinner, and W.B. Todd, eds. (London: Clarendon Press, 1976), p. 784.

8.   R.S. Neale, “The Standard of Living, 1780-1844: A Regional and Class Study,” in Arthur J. Taylor, The Standard of Living in Britain in the Industrial Revolution (London: Methuen, 1975), p. 173.

9.   Joseph S. Zeisel, “The Workweek in American Industry 1850-1956,” Monthly Labor Review, 1958, pp. 81, 58.

10.   Edwin G. West, Education and the State (London: I.E.A., 2nd ed., 1970), p. xvii.

11.   Select Committee on the Education of the Poor, Parl. Papers, 1818, III. See also an account of this document in Edinburgh Review XCI, 1827, pp. 107-32.

12.   On Liberty (1962) Fontana edition, p. 135.

13.   Ibid., p. 239.

14.   J.S. Mill, Principles of Political Economy (New York: Augustus Kelley, 1969), p. 953.

15.   Ibid.

16.   Ibid., p. 956.

17.   Edwin G. West, “The Benthamites as Educational Engineers,” History of Political Economy, 1992, 24:3.

18.   Mill, On Liberty, p. 240.

19.   Ibid., p. 959, my emphasis.

20.   William Godwin, Enquiry Concerning Political Justice and its Influence on Morals and Happiness (London: 1796), p. 297.


October 1996

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