The Price of Things to Come: Free

(Guest Post by Matthew Ladner)

I am half way through Chris Andersen’s new book Free: The Future of a Radical Price and I can already recommend the book.

Andersen’s treatment of disruptive technologies and firms is simply fascinating. Craig’s List, for example, has from one perspective “destroyed” far more profits for newspapers than it creates for itself. The entire firm runs on a few dozen employees, but has played a large role in reducing a huge revenue stream for the entire American newspaper industry.

Craig’s List actually hasn’t destroyed profits, but in fact has redistributed them to the general public. Craig’s List provides a superior service to a want ad, and it is almost always free.

Likewise, Britannica and others used to make large profits going door to door selling $1,000 encyclopedia sets. Then Microsoft came out with a $99 dvd encyclopedia, and profits withered. Then Wikipedia came along and Microsoft abandoned their dvd project, and Britannica and company will be required to reinvent themselves if they are to survive.

Technology is driving all of these changes-exponential increases in computing power, storage capacity, are driving changes that are fundamentally disrupting several industries: music, newspapers, and perhaps banking.

The question I have half way through this book: who will become the Google of higher education?

Google has a core business of showing you online ads that is very, very profitable. Most of what they do, however, is throwing out products for free. Google has over 100 free software applications online- maps, Earth, documents, etc. and develops new ones all the time.

Highly successful American universities seem to have a core mission of educating students. This however is questionable at best. Some of these universities have endowments so large that if they simply followed the rules for non-profits and spent 5% of their endowment per year, they could eliminate tuition for their students entirely.

What these universities are really about, of course, is getting research grants and adding to their endowments. What if, however, one or more of them were to go down the road of truly seeking to educate the world by putting up entire degree programs online for free.

A Harvard, Princeton or Notre Dame is likely to always have more applicants than spaces, and in any case, these places could survive without students, not that they will ever need to do so. Why not put up entire rigorous degree programs online, and invite anyone and everyone in the world to complete them for free?

Concerned that it would lessen a regular degree? Pshaw-distinguish it from a regular degree, and require an exit exam, say the GRE, that indicates the student knows quite a bit. Random half-baked idea alert, but if a score on the GRE high enough to admit the student in the upper half of graduate programs were required, we’d know far more about the online student than the traditional ones.

Worried about quality? You should be, but don’t forget the recent U.S. Department of Education study showing that technology based learning is substantially more effective than the old fashioned way.

Imagine if students in Bangladesh could earn a Princeton math degree, or a theology degree from Notre Dame for free, or more accurately for the time, computer and internet cost. The marginal players of the American academy would squeal as they are forced to reinvent themselves from making buggy whips, but this is a small price to pay for bringing opportunity to the world.

The only question in my mind is how long it will be until an elite player has the necessary vision to defect from the comfortable cartel. Several universities have the means to do this, and could receive philanthropic help to do so. Attention Oxford and Cambridge: it wouldn’t require an American university to pull this off. A British university could put out a low-cost version of this, and unlike their American counterparts, they aren’t swimming in resources.

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14 Responses to The Price of Things to Come: Free

  1. Greg Forster says:

    Google gives things away because it has a business model that produces revenue from giving those things away. Sure, the Ivies could give education away – but where’s the business model to produce revenue from that activity and make it sustainable? If you’re asking the Ivies to pay for the expenses associated with generating the online curriculum and making it available, but you can’t point to any revenue it will generate, what reason do we have to think that’s a sustainable model? As you point out yourself, the schools behave in their own financial interest – which is not surprising given that they’re run by human beings rather than by angelic superbeings from another plane of existence. So how do we make this idea sustainable?

  2. Matthewladner says:

    Good question Greg.

    Since tuition is largely irrelevant to these super-universities, a big part of the game is alumni fundraising. A global army of alumni = fundraising opportunity.

    Second, I think that these universities will always have in person students if they want them, and it wouldn’t be that expensive to put a degree program online.

  3. Greg Forster says:

    Philanthropists might help get it started, but would they carry the ball long term? I guess they might if you could point to tangible results (e.g. some kid coming out of a “Tooley School” in the Third World continues his education at Yale online and goes on to do great things for his country’s development).

    My larger point is just that you keep saying these schools are able to survive without charging tuition. Well, sure, but as long as they can, why would you expect them to stop? Contrary to the famous bumper sticker, schools don’t hold bake sales because they need the revenue or they’ll close up shop; they hold bake sales because bake sales increase revenue. No matter how much money you pour into the system, the schools will still hold bake sales as long as the cost of holding a bake sale is lower than the revenue it produces.

  4. Alsadius says:

    Two objections spring to mind.

    1) The old adage about how you learn more outside the classroom than inside. I always assumed it was talking about “life lessons”, but it’s literally true. I switched majors halfway through my university career, and learned essentially nothing in class after that point, because I spent the time I was failing my first major learning my second on the side. Similarly, a huge part of what I learned on my first major I learned by hanging out with people who did it for fun, not in some dreadfully boring classroom. I’m atypical in this regard, I think, but a big part of the value of a university is the fact that it collects a whole bunch of intellectuals into a small area and lets them hang out together. When you put a whole bunch of smart people who like learning in a room together, you don’t need to teach them much of anything, because they’ll go figure it out for themselves. For that matter, this is pretty much the fundamental idea of a university. And while technology can do many wonderful things, it’s still not the same as face-to-face socialization.

    2) Alumni donations, of the sort that build those gargantuan endowment funds, happen because the alumni feel a connection to the university, and a big enough one to will their net worth to their school instead of their kids or their favourite charity. Do you really think an internet degree you did for free will inspire that kind of loyalty?

  5. matthewladner says:

    Greg-

    Certainly most will want to charge, and I have no problem with that. It’s just interesting to think that some could literally put it up for free and go for a global reach.

    Alsadius-

    Spammers make vast fortunes with a one in a hundred thousand or less response rate…

  6. Patrick says:

    I’d pay for a free degree from Princeton or Harvard.

  7. Patrick says:

    Innovation is already underway: http://www.teach12.com/teach12.aspx?ai=16281

    The Teaching Company hires great college professors and assembles a single college course work on a DVD or CD collection. You won’t earn a college degree, but you will get an education (sometimes college degrees don’t come with an education).

    Dvd and CD sets make up entire courses.

    At Penn State I took a History of Empires course from Doctor Fagan. It cost me about $1,500. The History of Ancient Rome on the CD set cost about $350 and included some 24 hours of audio instruction. (A single semester of college would have only about 45 hours worth of classroom time, not all of that would be instruction, however).

    http://www.teach12.com/ttcx/coursedesclong2.aspx?cid=340 (I got this for a Christmas present, but I did notice my parents got it on sale for cheaper than that).

    http://www.teach12.com/teach12.aspx?ai=16281

  8. Greg Forster says:

    Yeah, but it would make a huge difference if it came with an Ivy or Oxbridge brand name on it.

  9. Brian says:

    A college degree is a signal to employers that you can commit to something for multiple years. You can wake up on time and meet deadlines. You can navigate a bureacracy. There are plenty of free ways to learn about the content of coursework. Even before the internet anyone could go to the library and learn as much as they would in college about subject matter. But knowledge is only part of what is needed to be successful in the world.

    Don’t get me wrong, Matt, I understand you were advocating a more structured and monitored giveaway of content, and perhaps this would capture both the content AND commitment aspects that a college degree represents. I am all for it.

    BTW, MIT is already doing it. They currently have 1900 free web courses.

    http://ocw.mit.edu/OcwWeb/web/home/home/index.htm

    • allen says:

      A degree is also a signal to human resources department that they’re off the hook to determine whether a candidate for a job has the requisite skills.

      Notice that the degree’s no guarantee that the advertised skills have been learned but that the human resources department can blame the university if it turns out the kid didn’t learn what he’s supposed to have learned.

  10. I have a brilliant business idea with those 1900 free web classes from MIT. The only thing you lack if you take those free online courses is the proof that you actually did them and learned the material. My fantasy business would certify that people took those online MIT courses and mastered the material. But my fantasy business would charge a fraction of what MIT charges. That would prove content knowledge as well as the self-discipline that Brian wants. How does that sound?

    • allen says:

      If it’s a business idea somewhere there’s going to be an exchange of money. Wanna crack loose with when that’s supposed to occur and for what?

  11. matthewladner says:

    Sounds Good!!!!!!!!!!!

  12. Patrick says:

    Being a dyslexic, ADHD (so I’m told) autodidact (wannabe) makes reading at the library a task…which is why I love the learning company videos. I’m going to have to check out that MIT free online course work. I’m excited.

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