Economist Douglass North in passing posits a theory of demand for government funding of education in his book The Economic Growth of the United States, 1790-1860. Investment in knowledge represents a deliberate decision by a society to divert resources from more immediately productive pursuits. Implicitly or explicitly, a society makes assumptions about the returns on such investment which affect the level of expenditure of tax monies. The amount of capital diverted into investment in knowledge will depend upon the structure of political power and the attitudes of that group in society which is in a position to enact legislation regarding taxes…
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