The Education Myth

Why Schooling Doesn't Explain Britain's Industrial Decline

For more than a century, historians have readily accepted that Britain’s post-1870 growth was slowed by a bad education system. It’s an easy target. Unlike the United States, the story runs, Britain did not provide universal primary schooling until late in the nineteenth century, and what they did offer was of poor quality and low social status. Secondary and higher education was weak and exclusive, it’s said, and geared primarily toward inculcating a gentlemanly elite in the social graces rather than training an industrial workforce. David Landes wrote in The Unbound Prometheus of “the late and stunted growth of technical and scientific education in Britain as against the vigorous, precociously developed German system.... Until the middle of the century, Britain had nothing but the young University of London, the good, bad and indifferent mechanics' institutes, occasional evening lectures or classes, and courses in the rudiments of science in a few enlightened grammar and secondary schools.” Robert Allen puts the point succinctly in his Very Short Introduction to the Industrial Revolution: “[t]he new technologies of the late 19th century required educated labour, and Britain fell behind Germany and the USA, both of which had larger State financed educational systems.”

Economics provides the ideal basis for education-bashing. Many draw on Claudia Goldin (2001), who writes that “post-literacy training could make the ordinary office worker, bookkeeper, stenographer, retail clerk, machinist, mechanic, shop floor worker, and farmer more productive, and that it could make the difference between an economic leader and a laggard.” But the education fundamentalist view of British comparative industrial performance is completely wrong. Goldin was writing about the twentieth-century United States. The gap to US and German achievements in educational attainment and human capital accumulation prior to 1914 has frequently been exaggerated, and placing undue emphasis on it ignores the utility of the specifically British system of development. The belief that widespread school enrollment led directly to higher worker productivity is anachronistic, applying at best to the service economy of the mid-to-late twentieth century—not to the industrial arena in which Britain fell behind. And in any event, Britain was closing the educational gap over exactly the same period as the economic gap was widening.

What sorts of education did the three great industrial nations of the late nineteenth century provide? There are three different categories at which to look, in this case: formal, intermediate vocational, and higher-level technical. I’ll take them each in turn.

The United States, as is commonly acknowledged, was the first nation to institute universal primary schooling, and by 1870 was easily the world leader with 390 per 1,000 children under 20 enrolled. Prussia was not far behind, having reached 365, but the comparable British figure at the time was a miserable 120. But Britain was about to undertake a dramatic serious of reforms that would bridge the divide. In 1870, Forster’s Education Act was passed, providing for the creation of school boards in England and Wales, which could build and run schools in areas where voluntary (i.e. religious) schools were lacking. The 1880 Education Act made attendance compulsory for 5 to 10 year olds, and though enforcement and quality were inevitably imperfect, the results were concrete. Male illiteracy (measured by those unable to sign their names) had tumbled from 30 percent in 1860 to just 1 percent in 1914, while primary education among under-20s had surged to 373 per thousand—still behind the US, it’s true, but ahead of Germany. Secondary and higher education remained exclusive, the province of the existing and would-be upper class, but in 1911 enrollment was at least comparable with (if not ahead of) Germany. The United States led the three, to be sure, but absolute levels were were still vanishingly low (26.8 per thousand in secondary). The high school movement was chiefly a twentieth-century phenomenon. “By 1910,” Goldin writes, “enrollment rates for 5- to 19- year olds were fairly similar among the world’s economic leaders.” Industrial stagnation in Britain, in any event, was accompanied by a closing of the educational gap.

Intermediate-level vocational training encompasses craft, technician, and engineering skills beyond a high school but below a university degree. As we saw above, Landes and Allen were extremely negative about this aspect of the British system. They should not have been. Late nineteenth-century Britain imparted technical skills through a “flourishing” system of five- to seven-year apprenticeships which was well-adapted to existing forms of industry. These arrangements obligated (and incentivized) employers to provide specific on-the-job training. State assistance was forthcoming even in a purportedly laissez-faire economy; after 1859, the Department of Science and Art began to sponsor and fund technical instruction in machine drawing, mathematics, physics, chemistry, and other science subjects. More complex training was offered by the City and Guilds of London Institute from 1879; by the twentieth century, they taught courses across the country in seventy subjects, including “[s]alt manufacture, alkali manufacture, breadmaking, sugar manufacture, iron and steel manufacture, pottery and porcelain, and leather tanning.” Both the DScA and CGLI made capital grants for buildings and equipment and paid teachers at schools run by local boards, and the Technical Instruction Act of 1889 made rate money available for this purpose. British technical schooling complemented apprenticeship and on the job training, with many classes being held in the evening (a fact admired by American observers), and was remarkably successful: total enrollment increased from 10,000 in 1867 to 227,000 in 1896. Far from steadfastly refusing to offer scientific education, the state elastically supplied training in both basic skills and foundational knowledge on top of workplace learning-by-doing.

Apprentice-to-employment ratios in industry were over four times higher in Britain than the United States in 1900 (and about ten times higher across the whole economy), though they both lagged behind Germany. These differences are critical to understanding why Britain’s education system at large diverged from America’s. The answer is not “stupidity” or “elitism,” but the fact that industry itself had unique demands for workforce training in each country. American mass-production substituted raw materials and capital for skilled labor in producing long runs of standardized goods. In Britain and Germany, by contrast, “flexible production”—using skilled shopfloor workers to assemble specialized outputs—predominated. The large US home market and the abundance of natural resources meant that the adoption of mechanized fixed cost technologies that “wasted” raw material inputs was prized over intermediate-level technical skill, which was comparatively expensive. The machines were principally operated by unskilled workers. And if on-the-job skills were of little importance to US employers, of what use was formal education? How could steelworkers, railmen, and garment makers avail themselves of more than basic literacy and numeracy, let alone chemistry and mathematics? Even the wave of American high school graduates that entered industry during the early twentieth century lacked intermediate training, being employed primarily as unskilled hands.

In other words, Britain’s workforce appears to have been adequately skilled for the tasks demanded of it—and over-trained for the jobs paying so well in American industry. British workers learned trade-specific skills from their employers, who had the incentive to make their workers as capable as possible, and received state assistance in more generalized technical education when they wanted it. This division of the private and social costs of human capital accumulation was embraced nowhere else in the West; the German regime took on the full task of training, whereas the United States and France stuck to formal schooling. Floud (1982) asserts strongly that “the British system of technical education, with its concentration on on-the-job training, may have been as effective as more formal education systems based on school or college.” Why shouldn’t it have been? When skills are acquired primarily through learning-by-doing, apprenticeship rather than outside instruction is a highly favorable route. There appears to have been no excess demand for British engineers during the Belle Epoque; the number of engineering firms increased from “a few hundred” at mid-century to 3,700 in 1892. Membership in the Institution of Mechanical Engineers rose from a few dozen in 1851 to nearly 7,000 in 1915. Skilled British workers were competitive on global labor markets, and were pulled overseas in unknown (but large numbers) to install and man machinery.

How did these trends affect worker productivity? American industrial workers were already 50 percent more productive than their British counterparts as early as 1870, per Broadberry (1997), and the gap widened even as Britain’s technical and formal education systems improved. Aggregate productivity in the larger US economy passed Britain sometime in the 1890s, primarily as a result of structural transformation out of agriculture and into industry and services. While per-worker output in German industry had surpassed Britain’s by the First World War, a high agricultural share and low farm and services productivity ensured that Germany never exceeded three-quarters of British levels until after 1945. Increased schooling in Britain, therefore, is correlated with the loss of industrial supremacy. Relative levels of vocational skills were higher in UK industry than in American until after the First World War, long after the productivity slowdown that we need to explain. Trends in levels of broad workforce human capital stocks were largely irrelevant to trajectories of relative and absolute economic performance until well into the twentieth century.

One might still make the case that the last category of education, high-level vocational training, made the difference. Many have. A widely-cited corollary of the American turn toward mass-production using heavy machinery and unskilled labor was an increasing reliance on managerial talent for supervising the workforce. These personnel often had some scientific training and university degrees which could be put to use in developing standardized designs. No data exist, apparently, on the relative levels of management education in Britain, Germany, and America before 1950, but the percentages of industrial operatives with graduate degrees in the former two nations (about a third) in that year were equal to that prevailing in the US circa 1920. Research and development expenditure was also much higher in American than in British and German manufacturing by the interwar period, but again, there was no gap between the two European countries. And anyone familiar with the practices and environs of American business schools, the first of which were founded during the late nineteenth century, should be skeptical that their training provided a better base for management than the vertical promotion that defined British industry. Were suit-wearing, well-manicured outside hires really better at overseeing production lines than longtime workers with both on-the-job experience and formal background education?

In short, the very real gap between British and US-German primary educational enrollment has been fitted to a twentieth-century model. Once the professions came to dominate the once-industrial economies during the World Wars, then of course literacy, numeracy, and general knowledge became assets for white-collar employees. The dramatic expansion of American high school education noted by Goldin and Katz (1996) and the Anglo-German lag almost certainly played a role; so did the aforementioned gap in R&D spending, which interacted with an increasingly science-based industrial establishment to produce differential growth. But in the late nineteenth century, this model is an anachronism—taking the special-interest pleadings of scientific institutions for greater funding as representative of the overall scene. It can’t explain why unskilled American industrial workers were twice as productive as their British counterparts in 1914, and why that advantage had grown so rapidly since 1870.

Let’s throw out the education myth. You didn’t need calculus to make cars or stats to forge steel.