The Price of Things to Come: Free

September 24, 2009

(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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