Here's The Angry Economist's answer to LibertyBob's Prussian-style education solution (exaggeration intended for humorous effect only):
First, the existance of positive externalities of an action is not evidence that the action needs to be publicly funded. If political priorities were set rationally (which they are not -- for all that behavioral economists claim that people do not make rational decisions, their alternative is not particularly rational either), then something would be publicly funded ONLY if the public gain exceeded the public cost AND if the private cost exceeded the private gain. If individuals gain a benefit from educating themselves, then they'll be willing to pay for it.
Secondly, look at the incentives. If taxpayers fund public education because of externalities, then funding it beyond the value of the externalities is irrational. If you happen to have children in school at the time, then you'll be willing to pay more. These two effects guarantee that public schooling will never have sufficient money.
The guy really knows how to leave you begging for more, but I didn't lift the entire article. RTWT. And the next post too Perfect Competition, Perfect Markets , wherein he says this, "When choosing between two possibilities, you do not compare one against perfection and if it's found lacking, choose the other. You compare the two choices against each other."
That maxim would cure up a lot of anachronistic, ahistorical, moral analysis. You know who I'm talkin' about.
Actually, I'm kidding. I'm sure I'm guilty of it too.
