The following article is taken from Wikipedia.
Penny University is a term originating from the eighteenth century coffeehouses in London, England. Instead of paying for drinks, people were charged a penny to enter a coffee house. Once inside, the patron had access to coffee, the company of others, various discussions, pamphlets, bulletins, newspapers, and the latest news and gossip. Reporters called "runners" went around to the coffee houses announcing the latest news, to hear about the newest developments and business ideas.
This environment attracted an eclectic group of people that met and mingled with each other at these coffee houses. In a society that placed such a high importance on class and economic status, the coffee houses were unique because the patrons were people from all levels of society. Anyone who had a penny could come inside. Students from the universities also frequented the coffee houses, sometimes even spending more time at the shops than at school.
It is easy to imagine the wide range of ideas that were produced as a result of this intermingling of people. The term “Penny University” is often used in reference to the eighteenth century coffee houses because of this reason. Coffee houses encouraged open thought and gathering of community. This environment, which was so conducive to intellectual discovery, could almost be called a school of social learning. To some people this was probably more of a school than rigid classrooms where people could not step out of a particular social role.
The original sense, of a coffee house, probably grew out of a common experience: that you came out of a coffeehouse feeling ten times as smart as you were when you went in. As, indeed, wide-ranging conversations ensued therein, from the commercial (leading to the founding of, in London, Lloyd's of London, and in New York, the New York Stock Exchange) to the political, and the purely intellectual; the idea that one could acquire an education for the price of a cup of coffee, that is, a penny, took hold of the poetic imagination.
Since that time, various coffee shops all over the world have used the name "Penny University".
Today, many coffee house visitors come alone to read or with a small group of friends for intellectual conversation. They walk up to a counter, pay for their beverage and find a nice quiet corner to settle into. The ambiance in a modern coffee house is created with perhaps a fireplace, the sweet smell of flavoured syrups, and mellow ballads flowing out of strategically placed speakers. The stimulating effects of caffeine give rise to the lovely humming of inspired conversation and the sound of frantic scribbles of a pencil upon paper. Should a person from eighteenth century London walk into this scene, they may not even recognize this evolved form of what they used to call a coffee house. Wikipedia.
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