Today’s homily will draw upon three recent entries  from the Gospel of the New York Times “most emailed” list :
- Brother Thomas Friedman on MOOCs
- American Enterprise Institute’s Arthur Brooks on the $10K degree
- Ethan Bronner’s report on the catastrophic decline in law school applications
These, as we shall see, are related. But first, hold on tight, as I’m going to go systems dynamics on you.
Institutions, as we know, are generally stable and change only incrementally. Situations where this is not the case typically require three conditions
- A positive feedback loop where every successful change increases the likelihood of further change (until eventually a new equilibrium is reached)
- A readily available “energy source,”generally money, though personal involvement/commitment will also work
- A cultural meme/analogy/antecedent to free that energy: something simple that causes people to say “oh, that makes sense” rather than “Why would I do that?” 
Let’s take these in reverse order.
MOOCs are solidly in the meme stage: not merely Brother Friedman  but virtually every op-ed writer and his or her dog for the past eight months.
Dr. Brooks is now pointing us to a newly arrived meme, and—again, along with many others—to the energy source: the huge inefficiencies of the existing higher education system and the unsustainable levels of student debt this has generated.
In particular, the $10K meme will shortly be displacing the romantic and highly idealized model of the successful entrepreneur without a college degree. This is the legacy of four of the giants of the microcomputer revolution—Steven Jobs, Michael Dell, Bill Gates and Larry Ellison—who achieved success without the benefit of higher education. Recently [notoriously] instantiated by PayPal co-founder Peter Theil’s program to reward some lucky 24 individuals with $100,000 for not attending college.
Theil’s generous contribution towards diverting 0.000114% of U.S college enrollments from the perilous path of higher education is, however, difficult to generalize due to the
blindingly obvious uncomfortable fact that for every Dell/Job/Gates/Ellison without a degree, there are hundreds of thousands of individuals for whom the absence of a degree is a valid indicator that they are not particularly well suited for highly structured post-industrial careers. These are, in many instances, perfectly fine and happy people leading fulfilling and meaningful lives , but for a large number of well-paying positions, not the person you are going to hire.
The college degree is thus a valid and costly signal, as has been reflected, for decades, in income differentials. But how costly does it need to be? The argument of Brooks and the $10K degree meme: even with the technology available before the MOOCs, a lot less costly than we’ve made it.
Here our second exemplar kicks in: the collapse of law school applications. Is “collapse” too strong a word? No: a 38% decline over three years, to a 30-year low. For this to occur in what only a few years ago would almost universally have been seen as one of the most stable and entrenched institutions in U.S. society is absolutely stunning.
What happened? For reasons I leave others to outline , law schools trapped themselves into an extraordinarily vulnerable position, almost a perfect storm.
The effectiveness of an educational institution in the legal profession—as in many professions—involves two components:
- a zero-sum positional component—only a decidedly finite number of people can go to the top tier law schools;
- a non-zero-sum occupational component: individual competence in tasks such as drawing up contracts and wills, representing clients in court, negotiating divorce settlements and the like.
While the demand for occupational skills is finite, their provision is not: training one competent attorney does not detract from the training of another. This is not true of positional status: were Harvard to double the size of its entering class, or open a branch campus in Wichita, the positional “brand” would unquestionably be diluted. This division of positional and occupational achievement is strongly evident in starting salaries, which, predictably, are bimodal.
The mistake—albeit one sustained for decades—is that law schools outsourced—or were forced to accept outsourcing due to the moral hazard of grade inflation—the determination of occupational competency to the external evaluation of state-level bar exams. This left them in control only of the positional component which, like any positional good (seventeenth century Dutch tulip bulbs, contemporary art and real estate markets, internet stocks) is subject to bubbles and collapse. Typical recommendations involve either cutting programs by a full year—a 33% reduction—or even doing away with law as a graduate degree altogether, requiring—as in Britain and Australia—only undergraduate preparation. Ouch.
The issue of evaluation brings us, at long last—thank you for your patience, and I’m sorry not to be able to offer you coffee and doughnuts in the community room following the service—to that positive feedback loop. The skepticism—or, I would suggest, a manifestation of that age-old aphorism, “Denial is not just a river in Egypt”—of the importance of MOOCs by many in the higher education establishment generally comes down to the question of whether MOOCs can be monetized. Dudes, are you truly oblivious to the [vast] fortunes of Messrs. Gates, Brin, and Zuckerberg, among many, many others? Listen carefully: create a platform with millions of users and zero marginal costs, and it can be monetized.
The path for the MOOCs, of course, is through certification. I suspect this will take two closely related models, both already well established. Where course material is relatively uniform—computer science, accounting, most mathematics courses, introductory economics, and probably introductory political science—the MOOCs will prepare students to take a standardized exam at a facility which certifies that they (and not a ringer) took the exam; fees would be split between the testing center and the provider of the MOOC. This separation of instruction and examination is common—the SAT/ACT/GRE/LSAT/MCAT complex, the International Baccalaureate , and of course bar exams—and has the further advantage of having no incentives for grade inflation.
Courses without standard content—most of the humanities, some of the social sciences—will streamline their existing distance learning environments  with the cost-saving mechanisms of MOOCs such as collaborative discussion , and provide course-specific exams, probably utilizing the same testing centers. These will be more expensive than the open MOOCs, but still much cheaper than bricks-and-mortar instruction, and the combination of competition, economies of scale in the production of course material, and the societal meme of the $10K degree will drive down the costs from the current levels.
At which point we hit the feedback loop: the courses that are most susceptible to conversion to a MOOC format are the large, anonymous undergraduate lectures currently conducted by a dot on the stage scrolling through PowerPoint slides, the only human contact in the course being with inexperienced GRAs of widely varying skills and motivation, and evaluation through multiple choice tests. Yet generating a disproportionate share of the credit-hour revenue: in many subdisciplines, the introductory course enrollments generate as much tuition revenue as all of the junior-senior and graduate courses combined.
This—not the MOOCs—is the revenue model that collapses. Taking with it not just the instructional positions of the introductory courses, but those of the subsidized upper-level courses, and the superfluous graduate programs  that were justified and supported solely by GRA revenues. Instruction focuses now at the upper division coursework—the MOOCs have taken out the introductory level, the grad programs are gone—and in all likelihood focuses largely on [imagine!] teaching, not generating research that no one reads. Drying up the life support for the proprietary journals [sob...]. And finally, the $10K education doesn’t provide much of a niche for the $250 textbook, does it? 
It’s going to be a wild ride.
1. These are merely recent exemplars: I could be writing this almost any time in the past eight months and have roughly the same information available, particularly on MOOCs
2. An important corollary to Schrodt’s [frequently violated] First Law: “Any proposed universal theory of human behavior must first be shown to apply in at least one case.”
The mature Steve Jobs was a master of this principle. Having successfully associated himself with the revolutionary Macintosh, he then proceeded to over-reach with products the public was not ready for: the pre-Macintosh Lisa, the Newton, the NeXT computer. On return from exile, he became [brilliantly] cautious: the iMac was simply a very cool-looking unitized PC, OS-X a user-friendly Unix, iTunes a legal alternative to Napster, the iPod a solid-state Walkman, the iPhone a small PC occasionally used as a phone, the iPad a large iPhone—from a programmer’s perspective, this is exactly what it is—and the Apple retail store is, well, a retail store. And doing all of this while cannily marketing himself as a “visionary.” Jobs and his famous reality distortion field: we miss him.
3. Why do I keep typing “Friedamn”?
4. A quarter century later Mark Zuckerberg would also follow this well-trodden path, but these guys were the pioneers.
5. In this instance, I mean this seriously, not ironically. It happens.
6. Don’t you
love hate it when writers say that?
7. Assuring future employers that one learned something in those years of secondary education beyond the worship of athletics, self-esteem, and creationism.
8. The legacy students at the positional universities cringe in terror…nah, they just reach for another beer.
9. No, no, no, Phil!: my dean has promised they will resist this and protect our existing business model! Yeah, right, and with the same internet-era success of brick-and-mortar bookstores, record stores, newspapers, classified ads, travel agencies and news magazines.
10. Remember, this generation of students prefers that mode of discourse, to the point of using it as a medium for finding tragically vulnerable nonexistent life partners.
11. Here I disagree—not for the first time —with Gary King (see this currently unpaywalled article) who sees the for-profits such as the University of Phoenix as a major threat. While the for-profits may integrate into the system, particularly with their vast established system of staffed testing locations, they are at least as vulnerable to the MOOCs as the introductory courses at the not-for-profits. They have the further disadvantage of being a negative positional good, incurring (for good reason) the wrath of Congress, and being deeply dependent on Federal funding at a time of shrinking discretionary budgets.
12. Definition: any program that cannot place graduates at peer institutions. Or at all. Which is to say, probably about 80% of the existing Ph.D. programs in the social sciences and humanities. Most of these programs could be quickly eliminated through market selection were the following information—accuracy insured by random audits—readily available:
- proportion of students with funding
- time to degree
- position held one year after degree
- position held five years after degree
Despite numerous proposals over the years to require the posting of variations on this, it isn’t available, and will not be as long as the programs have control over the release of the information. It is possible that some external agency would require it, but this hasn’t happened yet.
13. Visit our marsupial friends at OPOSSEM for the alternative.
14. Yes, this happens a lot…in fact I usually find myself in disagreement with Gary. Though Gary tends to be wrong about important things, which is arguably more useful than being right about trivial things.