urlMIT Strategy professor Michael Cusumano published a lengthy opinion piece where he argued that free online courses may have much higher costs and consequences than the socially minded people promoting them intended.

I worry, however, based on the history of free products and services available on the Internet and their impact on the software products business as well as on the music, video, book publishing, and newspaper and magazine businesses. We have learned that there can also be “negative” network effects. In education, this would occur if increasing numbers of universities and colleges joined the free online education movement and set a new threshold price for the industry—zero—which becomes commonly accepted and difficult to undo. Of course, it is impossible to foresee the future. But we can think about different scenarios, and not all of them are good.

The piece is a bit frustrating with some internal inconsistencies that would take too long to go through. But, by way of example, as I’ll get to in a moment, Cusumano’s concern is that free online courses by elite institutions may wipe out the non-elite ones but at the same time suggests that a free price sends a signal that those courses are of low value. So, on the one hand, their free price combined with high value will wipe out the non-elite courses while their free price sends a signal of low value compared to non-free courses offered by non-elite institutions. You can’t have it both ways.

Now I don’t believe in the dire scenario of doom caused by free. I am also far from convinced that ‘free’ sets an equilibrium that can’t be changed. I see this as an experiment and it is often the case that giving away something for free while you settle on new educational and other methods is a great idea. There may be some delusion as to what these might achieve but I think it is a laudable role of elite institutions to experiment. But Cusumano is precisely upset that the costs of running experiments are too high.

So let me evaluate that normative notion: that if free actually works to displace old ways of delivering higher education and, moreover, when combined with the ‘massive’ and ‘open’ leads to incredible scale, will it be bad for society or for the missions of MIT, Harvard etc?

To disentangle this, I need to consider two alternative assumptions. The first is that having a “one course delivered to all” model is actually the right way to deliver education. The second is that it is not but that there will be a ‘trickle up’ effect of destruction and unravelling as we find that out.

One course for all: the notion here is that, say, Econ 101, can be taught online by, say, Greg Mankiw, and no other Econ 101 teachers are required anywhere. In this situation, you can learn economics from Mankiw and don’t need to attend another University. Assuming you can be accredited here, it is true that there will be a decrease in demand for education from non-Harvard institutions.

Cusumano seems to indicate that that will somehow be a bad thing for society. But in this world, what was a bad thing for society was locking all of that talent teaching thousands of Econ 101 classes when one person could do it all. To be sure, in the short-run, Econ 101 lectures will be displaced and not too happy about it. But consumers — in this case, students — by exercising their choice to take the free Harvard course than pay for a course in another institution are overwhelmingly better off. Cusumano seems to argue that the displacement of “lesser institutions” will be a bad thing. It is bad for them but it is hard to believe it is bad for society.

Trickle up and unravelling: that said, someone has to pay Harvard. Online courses will have costs and so these costs will have to be covered. If Harvard has a free course, destroys all competition and then cannot find a revenue source to pay for that course in the long-run, then it too will be doomed. So the Cusumano-style argument appears to be that “elite institutions have, in their folly with free courses, destroyed their own market.” Now apparently, the example here is Wikipedia or Web Browsers. And Cusumano says that in each case the situation is not too rosy. But if Harvard shuts down because of free online courses itself and other elites are providing, then the market will be left unserved. Someone else will come in.

Perhaps, however, there could be period of disruption as we move from A back to A. Cusumano doesn’t really address this except to say that free is ultimately unsustainable. To me, it seems that other adventures in digital adoption have caused disruption but in no case have they really left us with permanent damage wondering what it was all about. To be sure, some people have lost lots of money. But it is far from clear that these have happened without some lasting legacy of change and moving on.

In the end, concerns like this with free experiments seem to place far greater weight on the notion that “once you go free you can never go back.” But if it is the case that free can’t be supported by other revenues to cover the costs of provision, the market does work it out and back we go. This is just another way of innovating and leveraging potential scale as well as learning about what the market might bear. I, personally, am happy elite institutions have been willing to consider offering up their capital for this.

18 Responses to Will free MOOCs destroy Higher Education?

  1. jagielo says:

    What is the difference between having an Econ course online and reading the Econ textbook at home? Most college courses, especially the entry freshman and sophomore classes, are a big waste of time for both the teacher and the student. Classes of hundreds are common where everyone listens to some lecture and then take a multiple choice test at the end of the semester.

    Seriously, we could eliminate the whole cost of these two years right now. Everyone would benefit. Education is so stuck in the ancient world.

  2. Lin Tse-hsu says:

    The problem with the general discussion about MOOCs is that it is focused on the wrong things. We have had the capacity to deliver free information to a “massive open” audience for nearly 90 years. In 1924 it was radio that was touted as the great new way of delivering educational content. The problem was not information delivery it was interactivity and the inability of the educators to assess student learning. MOOCs have not addressed this problem because the creators and celebrators of this “experiment” are still enamored with the most trivial aspect of their creation.

    • Jerry Fields says:

      Lin Tse-hsu is right on target here. Man is a social animal, and learning is among the most social of activities. The thing missing in every on-line approach is the community of scholars (teachers and learners). The reading of books is useful and even essential. But, there is no substitute for an informal one-on-one with an effective professor, and even more important, there is no way to duplicate interactions between students in any but a face-to-face environment. A couple of nights a week drinking beer and seriously discussing a subject with dedicated classmates is the best way to understand the disciplines and joys of trying to understand the world.

      • drshortt says:

        @jerry “there is no way to duplicate interactions between students in any but a face-to-face environment” – I agree but students paying huge fees to attend universities aren’t getting that now but something called self – directed learning – diy education but you pay the fees for the certificate / degree

    • kaleberg says:

      It’s actually older than that. We’ve had cheap books around since wood pulp cut the cost of paper in the mid-19th century. You could argue it was even older, since there were cheap lending libraries in the 18th century. In Massachusetts, you could still join the bar if you had access to a law library and could to the required reading. Of course, most Massachusetts lawyers went to law school and learned the old fashioned way.

  3. [...] on 2013-03-27 by wbaker Will free MOOCs destroy Higher Education?Will free MOOCs destroy Higher Education? MIT Strategy professor Michael Cusumano published a lengthy opinion piece where he argued that free [...]

  4. Cusumano is totally clueless. Colleges right now are doing a lousy job educating students. As documented in Arum and Roksa’s “Academically Adrift”, fully 35% of students fail to improve on a standardized test of college-level learning after four years. 35 % !!

    And around 40% of grades given are As, compared to about 15% in the 1960s, when students studied about 25 hours per week. Now they study about 15 hours per week. Maybe they are playing beer pong the other ten hours.

    And they are charging simply exorbitant amounts of money for this “service”, which is subsidized by taxpayers more than $100 billion annually. And still half of all entering students fail to graduate within six years !

    Can colleges do a worse job than they do now ??

    • Lin Tse-hsu says:

      Most of what you are describing is a decline in student behavior. I agree that colleges should be holding students to a higher standard that would compel them to adopt more rigorous habits. The problem is that colleges exist in a market driven system that increasingly focuses on “service” and models that depict students as “customers” and colleges as “service providers.”

      Education is not a market. A student cannot buy 5 pounds of education. Nor is education like putting goods into a cart and then checking out, though that is exactly the depiction many institutions use as students register for classes with their virtual checkout carts.

      The education system provides opportunities that are only consummated when the students put in the work.

      Rigorous professors are pushed out of the “market” by less rigorous ones when students rate their performance as poor and then complain that “they didn’t learn anything.”

      If MOOCs are going to fix anything, they must compel students to perform rigorous work that can be evaluated. Otherwise they will make matters worse.

  5. [...] MOOCsの成り行きが心配という記事もあったし、想像するに課題は多々ありそうだ。 [...]

  6. greg byshenk says:

    “Cusumano’s concern is that free online courses by elite institutions may wipe out the non-elite ones but at the same time suggests that a free price sends a signal that those courses are of low value. So, on the one hand, their free price combined with high value will wipe out the non-elite courses while their free price sends a signal of low value compared to non-free courses offered by non-elite institutions. You can’t have it both ways.”

    I think that this interpretation is incorrect.

    If I understand Cusumano’s argument correctly, he is suggesting that the “free price” signals a low value for basic education. That is, it is not that “free price combined with high value will wipe out the non-elite courses”, but that, if “non-elite courses” — in general, including both MOOCs, and other free courses as well as traditional non-elite institutions — are seen as low value, then non-elite traditional institutions will be unable to compete with “free”. If two “products” are equally valued, but one is provided at no cost while the other must be paid for, then the free option will tend to displace the paid option.

    The same is not true of elite institutions, because they are already seen as higher value than non-elite institutions. Thus their “product” is not in direct competition with the “free” product, and the effect on elite institutions will not be the same as that on non-elite institutions.

    There is, I think, a further error being made.

    “One course for all: the notion here is that, say, Econ 101, can be taught online by, say, Greg Mankiw, and no other Econ 101 teachers are required anywhere. In this situation, you can learn economics from Mankiw and don’t need to attend another University. [...] what was a bad thing for society was locking all of that talent teaching thousands of Econ 101 classes when one person could do it all.”

    It is not actually true that “one person could do it all”. Certainly Mankiw could lecture online to every econ 101 class, but just giving a lecture is not actually -teaching- econ 101, and more than a course using his “Principles of Economics” textbook or someone just reading that textbook is him teaching the course. Actually teaching the course requires someone to evaluate student understanding of the material, correcting it when it is incorrect, and answering questions and otherwise guiding the student to understanding. Such is already extremely difficult in a large traditional lecture, but it simply impossible when dealing with tens of thousands of students in a massive course.

  7. alex says:

    I have to agree with a few people up on the thread – what’s the difference between an online course and just teaching yourself from the book? Textbooks have existed for a long time and we still manage to have a university system.

    The big difference between a textbook and a real class is accreditation (and, yes, help from a prof and a learning environment, blah blah blah if you could get accreditation for teaching yourself out of a textbook then few people would pay $50k/year for college). MOOCs don’t offer accreditation. That’s not a trifle – it defeats the entire point of taking a class for 99% of students (of course learning has intrinsic value. I’m sure future employers will appreciate all the intrinsic value I’ve built up over the years).

    Until someone comes up with an accreditation solution for MOOCs (and no one will – Harvard isn’t going to start handing out Harvard degrees to people who took online classes), they’re just glorified textbooks.

    • Lin Tse-hsu says:

      Efforts to hybridize MOOCs in ways that *will* allow accreditation are being proposed in California right now. What the Golden State does others will imitate. The difference between textbooks and what is being proposed by the supporters of a MOOC revolution is that a textbook has a centuries long record of successful integration *into the classroom*.

  8. The problem with your “informal one-on-one with an effective professor” example is that it doesn’t exist in many institutes of higher education.

    Let me give an two senarios that I recently experienced.

    I registered for a US History class that many freshman are required to take as part of their liberal arts education. I sat in a classroom taught by a second rate Master’s degree educated instructor for a few hours before realizing it was a waste of my time.

    I replaced the class above with a series of lectures taught by a Yale professor covering the same subject matter. Every day I looked forward to watching the lectures. The professor was obviously an expert in her field. I followed up the lectures with reading in the textbook left from my dropped community college course. At the conclusion of the lectures and textbook study, I took the US History CLEP covering the material and scored in the 72 out of 80 on the test.

    There are classes that will always need to be taught in a formal academic setting, but many of lower level classes forced on undergraduates could be taught online.

    It is hard for me to comprehind how sitting in a lecture hall with 200 students is quality professor time.

    • greg byshenk says:

      I don’t think that anyone would argue that “sitting in a lecture hall with 200 students is quality professor time”, including the professors at the front of such lecture halls. The important part is what happens outside the lecture hall, in those cases where the student fails to understand or misunderstand the material.

      As your example points out, online lectures are basically a different form of self-study. There is nothing inherently wrong with self-study, for those having the right talents and skills. But not every student has those talents and skills, and having them in one area doesn’t necessarily entail having them in another.

      When a student is having difficulty, it may be necessary to explain the material in a different way; just repeating the same thing (or rewinding the video) is not helpful. If a student misunderstands, if my be necessary to work with the student, tracking things back to the root of the misunderstanding. These are the things that self-study (whether that is reading a book or watching a lecture) won’t provide.

  9. robpatrob says:

    I suspect that MOOCS will destroy universities as we know them as the web adverts destroyed the economic model of most newspapers. So I see them as a set up process for the real change. Is the idea of academia as the best start in life for most young valid as a way of preparing our young for life as it will be lived in the next 60 years?

    I don’t think so. It is a great start for a few – as it was 150 years ago. But even then the process was different. Not 300 in the class with a text book and TA’s. But 3 in a class and a conversation.

    Now I see university as an industrial process using products to pump out a mass market of BA’s into a world of work that does not exist anymore. The world of the job is dying is it not? It was only a blip in the history of work as well.

    20 people at Craigslist pulled the footings from the newspaper business whose fixed high costs now could not be supported. MOOCs will surely do the same. And the smart kids will learn how to make a living in a networked world, while the less thoughtful will worry about how to get an academic credential

    • greg byshenk says:

      I think the concern is that MOOCs will destroy the “lower” tiers of universities, leaving only the “elite” as survivors. One likely result is that “the smart kids” will continue to have access to elite education (along with “the rich kids”), leaving the rest to make their way as best they can.

  10. [...] the unsustainability of offering free education from upper universities be dealt with? Getting students on a curriculum can be good for the skills [...]

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