Educational Economies in the 1800s

Prior to the advent of government-funded public schools, the primary mode of education for those of the lower classes was the charity school, pioneered during the 1800s by Protestant organizations and adapted for use by the Roman Catholic Church and governmental bodies. Because these schools operated on very small budgets and attempted to serve as many needy children as possible, economic factors were prominent in their design.

The basic program was to develop "grammar" schools. These taught only grammar and bookkeeping. This program permits people to start businesses to make money, and gives them the skills to continue their education inexpensively from books. "Grammar" was the first third of the then-prevalent system of Classical education.

The ultimate development of the grammar school was by Joseph Lancaster, who started as an impoverished Quaker in early 19th century London. Lancaster used slightly more-advanced students to teach less-advanced students, achieving student-teacher ratios as small as 2, while educating more than a thousand students per adult. Lancaster promoted his system in a piece called Improvements in Education that spread widely throughout the English-speaking world.

Discipline and labor in a Lancaster school were provided by an economic system. Scrip, a form of money meaningless outside the school, was created at a fixed exchange rate from a student's tuition. Every job of the school was bid-for by students in scrip. The highest bid won. The jobs permitted students to collect scrip from other students for services rendered. However, any student tutor could auction positions in his or her classes. Besides tutoring, students could use scrip to buy food, school supplies, books, and childish luxuries in a school store. The adult supervisors were paid from the bids on jobs.

With fully-developed internal economies, Lancaster schools provided a grammar-school education for a cost per student near $40 per year in 1999 U.S. dollars. The students were very clever at reducing their costs, and once invented, improvements were widely adopted in a school. For example, Lancaster students, motivated to save scrip, ultimately rented individual pages of textbooks from the school library, and read them in groups around music stands to reduce textbook costs. Exchanges of tutoring, and using receipts from "down tutoring" to pay for "up tutoring" were commonplace.

Established educational elites found Lancaster schools so threatening that most English-speaking countries developed mandatory publicly-paid education explicitly to keep public education in "responsible" hands. These elites said that Lancaster schools might become dishonest, provide poor education and were not accountable to established authorities. Lancaster's supporters responded that any schoolchild could avoid cheats, given the opportunity, and that the government was not paying for the educations, and thus deserved no say in their composition.

Lancaster, though motivated by charity, claimed in his pamphlets to be surprised to find that he lived well on the income of his school, even while the low costs made it available to the poorest street-children. Ironically, Lancaster lived on the charity of friends in his later life.

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