For a broad coverage of the history of education.
http://en.wikipedia.org/wiki/History_of_education_in_the_United_StatesThis is pretty concise.
http://www.servintfree.net/~aidmn-ejournal/publications/2001-11/PublicEducationInTheUnitedStates.html
The common-school reformers argued for the case on the belief that common schooling could create good citizens, unite society and prevent crime and poverty.
As you can see, public education began long before industrialization did.
What is interesting is that large parts of the US were highly literate prior to compulsory public schooling. IIRC during the Revolutionary War, literacy among non-blacks was around 90 percent for the entire adult population. And almost all of the adults' education was based upon reading the bible, poetry, Latin and Greek works - and translations, circulars, and works and plays in English. Basically, an autodidactical liberal arts education. People did this on their own after a day of manual labor in candlelight.
Most people today could not read "Paradise Lost" and get even 5% of the allusions, yet I bet half of the population back then could get 20-40% of the allusions. Many works like "Paradise Lost" are really works of history and social commentary cloaked as fiction and a thorough understanding of them becomes a framework within which to compare the events in one's life and the events of the greater world.
Are we any better off today with the huge investment in education?
