THE ECONOMICS OF EDUCATION1

Published date01 February 1959
DOIhttp://doi.org/10.1111/j.1467-9485.1959.tb00099.x
Date01 February 1959
AuthorJ. Wiseman
THE
ECONOMICS OF EDUCATION’
I. INTRODUCTION
IN
recent years the great growth in the importance of social expendi-
tures in Britain has stimulated interest in the economic implications
and consequences of these activities. The study is a dif6cult one,
primarily because the criteria to which the economist is accustomed
to refer in other contexts, when attempting to form judgments as to
the wisdom or otherwise of utilising resources in a particular fashion,
cannot easily be used in the examination
of
social services. There are
two reasons for this. For a commodity bought and sold in the market
place, the consumer can decide, by his willingness to purchase, how
much shall be produced and hence what communal resources
shall be used in the process of production. This provides a
guide, though one that needs careful handling,
to
the efficiency with
which productive factors are being employed. Most social services,
however, are provided free or at prices that do not reflect the costs
of providing them. Consequently, the demand for these services does
not reflect their value to the community in any direct way, since
those who consume are not themselves called upon to make the
sacrifice (of using resources in other ways) that makes that consump-
tion possible. Secondly, the gain from the provision of social services
is often not confined to those who consume them, but is disseminated
also among other members of the community; there are
social
benefits
additional to the benefits obtained by the individual consumer
of such services. An obvious example is the treatment and prevention
of contagious disease.
In
the field of education, the gain for the
community life from the promotion of general literacy also illustrates
the point. This second proposition means that the value
of
such
services
to
individuals, even
if
they were required to pay the market
price for them, would not reflect their full value to the community.
Consequently, to leave such services simply to provision by the market
would result in too little of them being provided.
These arguments are well known, They have, however, encouraged
economists to fall back upon discussion of social service expenditures
in relation to what seem to
be
statistically ‘objective’ measures of
other kinds. Thus, we can discover that education expenditure
on
A paper read to the British Association for the Advancement of Science
at its meeting in Glasgow on August
28,
1958.
48

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