• A Liberty Classic Book Review of Education and the State: A Study in Political Economy, by E.G. West.1
As a society, we have become used to government involvement in education. We rarely subject such involvement to economic scrutiny or ask the historical question of whether its appearance was necessary. E.G. West’s book Education and the State1 approaches the topic of state education systems from both economic and historical perspectives. Its economic analysis queries the idea that state education systems are economically necessary. The book’s historical analysis casts equal doubt on the standard historical story that state education systems came about as a noble gift from the state to save the masses from ignorance.

I first came across West’s wide-ranging book when in graduate school working toward a Ph.D. in Education. As a classical liberal in the field of Education, it was always interesting to me that in a world where most goods and services are produced and distributed through markets, education was… different. In most fields, the interesting debates are not over whether goods and services should be provided through markets, but whether the state should regulate markets, subsidize producers or consumers, etc. In education, however, the default assumption is that the state should not only regulate or subsidize, but actually provide, educational services.

To make this all the more confusing, the rationales I often heard for why the state is the most appropriate provider of education left me unconvinced. I often heard that there were positive externalities to education that would make it difficult or impossible to fund privately, or that public education is justified because parents probably lack the necessary intellectual or wherewithal to make good educational choices. Of course, other fields (think grooming products or medicines for contagious illnesses) deal with externalities within markets. And consumer markets exist in fields that are every bit as complex for consumers to navigate as education.

Given the doubts I had (and continue to have) about rationales for state education, it’s easy to imagine how intrigued I was with West’s Education and the State. Here was a book whose wide-ranging chapters do a deep theoretical and empirical dive into the various rationales for state education and find them wanting.

“To use West’s delightful metaphor, state provision of schooling—an area where private enterprise was already working—was akin to the state ‘jump[ing] into the saddle of a horse that was already galloping.'”

West argues that state educational systems likely do not produce the benefits attributed to them (lower crime rates, improved human capital, increased literacy), at least in a way that justifies state provision of education. West’s position is that governments’ proper role in education should have been to help poor consumers afford the private educational options that were already serving the population quite well. To use West’s delightful metaphor, state provision of schooling—an area where private enterprise was already working—was akin to the state “jump[ing] into the saddle of a horse that was already galloping.” (173)

Before describing West’s varied arguments, who was Edwin George West? West was an economist who earned his Ph.D. at the late age of 42. Prior to that, he had been a school teacher and a lecturer in economics at Guildford College. Education and the State was based on West’s dissertation research and was first published by the Institute of Economic Affairs in 1965. The expanded Third Edition was first published by Liberty Fund in 1994.

As I’ve mentioned, West’s argument is wide-ranging, containing theoretical and empirical economic arguments as well as historical scholarship. West analyzes everything from whether state education is necessary for protecting minors and boosting human capital to the legislative history of state schooling in Britain and the United States. Rather than attempt a detailed summary of this wide terrain, I will focus on the areas of West’s case that have been most influential and interesting to me.

Skepticism About the Sufficiency of “Neighbourhood Effect” Arguments

One standard argument used to justify state education is that education produces externalities—what West calls “neighbourhood effects”—that is, benefits to those other than the direct consumer. Since the consumer isn’t the only beneficiary of their education, the argument runs, expecting them to bear the full cost of their education will lead them to underinvest. Education, it is said, boosts the overall economy, makes us better citizens and law-abiding neighbors, and keeps our democracy healthy. Since these are all collective benefits, education should be produced by the collective body of the State.

West subjects these arguments to close analysis. He finds that the argument moves too quickly. The existence of neighborhood effects cannot itself be sufficient to justify state intervention. First, it must be shown that there is a real (rather than imagined or hypothesized) neighborhood effect. Second, it must be shown that the neighborhood effect is significant enough that people will actually underinvest in educational services if expected to bear the full cost of their education. Third, we must show that the resulting government intervention wouldn’t impose equally bad or worse neighborhood effects. Lastly, the argument that neighbourhood effects justify state education also moves too quickly because it assumes that the only or best way to mitigate the problem is for the State to provide, rather than merely to subsidize, education.

West makes these arguments in various chapters analyzing different neighbourhood-effect claims (from claims that education drives overall economic growth to claims that it creates a more morally cohesive society). As one of many possible examples, we can zoom in on Chapter 4 (“Education to Make Democracy Work”), where West analyzes the claim that education produces a more robust democratic citizenry. Is there evidence that absent state education, people were not politically engaged? West reviews several lines of qualitative and quantitative evidence—including surveys conducted by the English government in the nineteenth century—that the majority of people appeared to be literate. West also reviews data showing that, if anything, the early-nineteenth-century English government was concerned that the “lower orders” were too civically engaged, purchasing and discussing incendiary political pamphlets by the likes of Paine and Cobbet. When families were paying the full cost of their children’s education, it appears that a surprising number were functionally literate, and a lack of civic engagement wasn’t a recognized problem.

Even if there were a demonstrable lack of civic engagement before the establishment of state education, West argues that it isn’t obvious that state education solves these problems. He reminds us that since even a large number of poor families were purchasing private educational services, taxing goods and services to pay for state education simply takes money that families could have spent on education and diverts it toward state education. West also points out that justifying state education by pointing to increases in civic-mindedness seems excessive, as state education contains many subject areas that have no obvious connection to civic engagement. In Chapter 6 (“Education and the Quest for ‘Common Values'”), West also notes that state education could also be put to uses antithetical to liberal democratic purposes. Just as it could foster engagement, it could easily foster obedience.

This is the type of thorough (theoretical and empirical) scrutiny West applies to all types of arguments justifying state education on the grounds of neighbourhood effects.

Skepticism About Conventional Historical Narratives About the Rise of State Education

Conventional stories about the rise of state schooling tend to run as follows: Governments have an interest in the well-being of their citizens, and since education is crucial to that well-being, governments create schools so that citizens of all classes can enjoy the intrinsic and extrinsic fruits that education can provide. This is what historian Colin Greer, in a book by the same title, calls “the great school legend.”2

West does not so much shatter this legend as challenge some of its assumptions. The first assumption is that prior to state education, a large number of people went uneducated. The second assumption is that state provision of schooling was necessary to remedy this problem. The four chapters in Part Three (“Theoretical and Empirical Antecedents”) of Education and the State are devoted to West’s historical analysis of the rise of state schooling in Britain and the United States. Here, he finds both of these assumptions to be problematic.

Chapter 10 (“The Rise and Fall of Nineteenth-Century Schools for the Masses”) reviews evidence of the proliferation of private educational options in England and Wales. West discusses several large nineteenth-century surveys of education consumption in the two countries. These surveys generally concluded that while modest state subsidy was justified to help the indigent afford schooling, the need didn’t appear to justify state production of schools. Yet, in 1870 the Elementary Education Act authorized the government to subsidize, oversee, and create their own schools. The Act not only relied on inferior data that exaggerated the need for state education, but allowed the state to unfairly privilege their own schools over existing private schools.

Originally an essay West published in 1967 that appeared only in the 1994 Liberty Fund Edition of Education and the State, Chapter 17 (“The Political Economy of American Public School Legislation”) tells a very similar story about government overreach in the American educational scene. The chapter focuses on the illustrative case of the contentious ascendency of tax-supported schooling in New York State. In the first half of the nineteenth century, state subsidized public schools both existed in competition with private alternatives and also charged a subsidized tuition. West relays considerable evidence that, by this arrangement, the majority of children in the state were receiving formal education of some kind. By 1840, however, legislation was proposed to abolish tuition for public school attendance, and while “the legislation proved to be unworkable, and the Act was met with immediate and widespread hostility” (312), the legislature succeeded in making public schools entirely tax-supported by 1867. This, of course, put state schools at a significant competitive advantage over private schools.

The morals of these two chapters are the same: West is not arguing that the state should have refrained from any intervention in the educational arena, but that the intervention of these governments overreached at every turn. It is worth quoting at some length West’s conclusion about the legislative reaction in New York State.

  • In retrospect, the “best” economic solution of the mid-nineteenth-century problem of financing schools demanded much stricter comparisons of all the costs that were implicit in any proposed change. Those would have included, for instance, a comparison between the cost of operating some improved administration of the existing rate bill [tuition] system on the one hand; and the various costs of switching to and maintaining a free school system on the other. The latter would include not only consideration of the burden of inequity caused by the tax change, but also the costs implied by a reduction of parental choice. (page 314)

In both the British and American examples, West depicts a situation where the government rushed to provide state schooling when data indicated that more modest interventions might be as or more effective. At each turn, the State decided to intervene in a more heavy-handed way, in a way that allowed state schools to compete unfairly and drive out private competition. This leads to what I think is the overriding theme of West’s book: the state’s tendency to jump the educational gun in a way that self-servingly entrenches and promotes its own interest.

An Economic Theory of State Education

Despite the varied nature of the chapters in Education and the State, E.G. West tells the tale of consistent state overreach into the field of education. West makes the point neatly n a thought experiment in chapter 1 (“State Protection of Minors in Theory”).

  • Protection of a child against starvation or malnutrition is presumably just as important as protection against ignorance. It is difficult to envisage, however, that any government, in its anxiety to see that children have minimum standards of food and clothing, would pass laws for compulsory and universal eating, or that it should entertain measures which lead to increased taxes and rates in order to provide children’s food ‘free’ at local authority kitchens or shops (page 11).

Yet, this seems precisely the tendency when it comes to education. Even if we can argue that schools are good because they protect children from ignorance, that seems only to justify the state to enact measures guarding against parental neglect of education, not the further step of providing state education to all children. That some families can’t afford education and some children are illiterate may justify measures to help those families and children, but not more, especially if evidence suggests that those are minority cases.

For more on these topics, see “Educating Like a State,” by Arnold Kling, Library of Economics and Liberty, January 6, 2014; and “Educational Freedom,” by Arnold Kling, Library of Economics and Liberty, April 1, 2013. See also the EconTalk podcast episode Erik Hanushek on Educational Quality and Economic Growth, August 6, 2007, and On Education, Can Capitalism Survive? Part VIII, Chapter I, by Benjamin A. Rogge, Library of Economics and Liberty.

Why might the state be prone to such overreaches? In Chapter 7 (“Education and Economic Growth”), West suggests that much of the answer may be due to what he calls “educational inbreeding.” He notes that “when a government requires advice on education, it resorts first and foremost to those ‘in education'” (112). While this might make sense on first blush, we can see the problem with it if we imagine, say, a government commission on how to provide transportation to citizens staffed only by representatives of a single car company. Just as that car company will be prone to make recommendations that happen to favor its interests over competitors, we can justly suspect that people “in education” will favor the interests of their own organization over others.

When writing Education and the State, West was not yet familiar with (or did not invoke) the then-emerging economic field of public choice economics. The inclusion of the essay on the political economy of American public school legislation into Liberty Fund’s edition of the book remedies that. In that essay, West makes use of what he calls “the economic theory of democracy” to help make sense of what happened in New York. Noting that “the campaign for free schools appears to have originated in the teachers’ institutes” (307) and have been supported by public school reformers, West postulates that while these reformers surely had intent to do good, like most of us, they also wish to promote or protect their own profession and well-being. In saying this, West does not theorize “that educators are prompted by motives of self-interest to any greater degree than anybody else. But on any realistic assessment, the typical member of a profession can reasonably be regarded as having more than one motive in life” (316). In other words, these government overreaches could be explained by the fact that those within the public sphere may wish to promote the growth of that sphere for idealistic and self-interested reasons, even if more modest steps might be more justified.

As mentioned, when I read West’s book, I was a graduate student in the field of Education who was already skeptical of prevailing arguments for the necessity of state education. Reading West’s economic and historical case was exciting. (West’s book, by the way, was one of the first in a number of “revisionist histories” of education, many of which were written using a more Marxist class analysis, taking on a more conspiratorial—and to me, less realistic—tone.) Education and the State provided me then and provides me now with an interesting, yet likely not exhaustive, framework for understanding why the inertia of state education can be so strong while the arguments “justifying” it are so questionable.


[1] E. G. West. Education and the State: A Study in Political Economy. Foreword by Arthur Seldon. Introduction by Myron Lieberman. Liberty Fund, Inc. 1994.

[2] Colin Greer, The Great School Legend. Basic Books, 1972.

*Kevin Currie-Knight is Teaching Associate Professor in East Carolina University’s College of Education (Department of Special Education, Foundations, and Research.) He teaches classes in the Foundations of Education, and is the author of the book Education in the Marketplace: An Intellectual History of Pro-Market Libertarian Visions for Education in Twentieth Century America. (Springer, 2019).

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