The
Rational Argumentator
Will the University Survive?
"When a subject becomes totally
obsolete we make it a required course." — Peter Drucker
For-profit educational services.
Capitalizing off of instructional training. Bankrolling tutelage on a gravy
train. Go ahead and sneer; cringe and shudder — get it out of your system. Oh
the horror, running a profitable business that includes many of the facets of a
traditional higher education.[1]
Perhaps this is one of the reasons
that a disproportionate amount of the Ivory Tower is socialistically inclined;
subconsciously they may fear that the market value of their research, teaching
and professional existence subsists among relatively strange bedfellows, those
whose productivity fluctuates along the poverty line.
A flatter world
Will distance education and online
courses replace the intimacy of round table discussions with high-caliber
teachers? David Gelernter, a professor of computer science at Yale, does not think so.
Based upon my own experiences I would have to agree. However we both believe a
free market in degree granting, one liberated from political regulation and
business myopia, is just around the corner.
The proliferation and enthusiasm of
such degrees is due in part to the fact that they can often times be earned in
a more convenient medium, for a fraction of the cost and in a time-efficient
manner. Say goodbye to commuting, as well as student fees you never took
advantage of. Nor will you have to rearrange your life so you can attend a
class whose instructor instills information that could have just as easily been
gleaned from a $50 textbook.[2]
As the late Peter Drucker succinctly put it, "Universities won't survive.
The future is outside the traditional campus, outside the traditional
classroom. Distance learning is coming on fast."[3]
Out with the old, in with the new,
right? How will the traditional educational model, built for agricultural and
industrialized economies, based on residential living, survive an
ever-expanding mouse-accessible information age? Is the cultivation of
inquisitiveness only available for four interest-bearing payments of $19,999 at
State U.?
Are there drawbacks? Like any other
undertaking there are always opportunity costs; activities you forfeit in order
to pursue alternatives. By enrolling into an online program, Utopia will not
spring forth from earth's bosom nor will you sleep on cloud nine. You will
still get flat tires and computer viruses, maybe even a headache or two.
Is college as an institution of
higher learning going to survive? The top-tier, the Ivies (both public and private), the
flagships, those with enough political and economic pull will all perhaps
survive into the future. Perhaps various departments such as those comprising STEM (e.g. science, technology, engineering, math), Law or
Medical school — perhaps any and all, but as Peter Drucker succinctly put it,
residential life will, sooner rather than later, go the way of the Dodo.
The point of all this is that many
universities and colleges are simply not organized to run like a profit-making
business. Rather than focusing on revenue generating specialties, they
overextend and misallocate resources — ultimately beyond their fiduciary
capacity – and thus find themselves asking for handouts (e.g. donations). This
is not to say that the modern institution as a whole will be done away with,
but rather that such institutions will inevitably be forced to confront the
subsidy bubbles that insulate assorted pursuits. How they deal with the reality
of market forces will ultimately determine whether each institution lasts.[4]
Get-Rich-Quick Schemes
Why go to college in the first
place?
For some individuals, attending
college is viewed simply as a quick and easy way to hit a monetary jack-pot.
Like many other illusions of grandeur, it is reminiscent to the unscrupulous
business plan of South Park's Underpants
Gnomes:
- Attend College
- ???
- Profit!
Feeding this spurious dream are
State-subsidized loans which encourage and create distortions in the labor
market, not to mention the reallocation of productive capital. Arguably it may
be difficult to compare today's Van
Wilder University with the "classical"
schools of Oxford or Cambridge. Nevertheless, for the academic school year 2005-2006,
the average tuition, fees, room and board of attending a four-year public
institution were $12,127. For a four-year private institution, the sum was
$29,026.
One of the justifications for the
price tag is that, in the long run, a college-educated individual would make
more money than someone without said education. And since being wealthier
"benefits society at large,"
efforts promoting this lifestyle should be undertaken. However, as Neal
Zupancic points out, this is a non
sequitur, as the causal
relationship is not directly connected. This fallacious logic, however, did not
prevent State intervention from Senator Claiborne
Pell, who in 1972 pushed legislation
which subsidized student loans – under the inauspicious name, a Pell Grant.
Relatively cheap financing (due to
these subsidies) coupled with lower admission standards
has led a surge in student populations at State universities across the board.
Despite alternate financial sources (such as federal grants and private
donations), per capita spending has significantly decreased over the past five
years.[5] While the demographics may shift,
the attendance trend is not decreasing for the foreseeable future.
Value by fiat
The central underlying element to
Senator Pell's reasoning was skewed: those with college educations earned more
money not because of the framed, stamped, and signed parchments hanging on the
living room wall, but because they had some kind of intellectual training that
gave them a competitive and productive edge over their non-educated brethren.
And for the better part of 30 years, this "go to college and become
rich" mentality has been successfully drummed into the minds of several
generations of not only boobus Americanus,
but much of the developing and industrialized world, too.
Arguments regarding sub-standard educations aside, the fiscal outlook of those involved in following the
accredited institution route has been documented and demonstrated to be a Pyrrhic
victory, as noted by Christopher
Westley. Not that these individuals are
unsuccessful upon graduation, but they become broke, indebted, and even
bankrupt — all in the pursuit of a hyped Potemkin lifestyle.
Old habits die hard
Much like health care
or even voting (e.g., what is the market value for a single vote, close
to zero?), the industry of higher education
has been sheltered from market pressures.
Campuses across the country,
especially those run at large State institutions, are inefficient planned
economies — microcosms of socialism in action.[6]
As Rothbard's law
predicts, the University is not specializing in what it does best. Like an
octopus, its tentacles end up in many unrelated pies in which scarce resources
are diverted to enterprises and endeavors that stray from what its human
capital does best: research and scholarship. The administration[7] involves itself in a smorgasbord of
activities that range from acting as surrogate parents and landlords to
maintaining campus hospitals and transportation services. Monopolizing food
services, dorm-room cleaning (which now apparently involves class-warfare)
and even landscaping – no enterprise is
too small to be left alone nor too big to be undertaken.[8]
For instance, cell phones have
dramatically altered one traditional revenue stream of many universities --
that of long-distance phone calls. As a result, some colleges have raised other student fees
to compensate for the budget shortfalls. Or, as Rothbard's adage literally
rings true, several universities are now offering their own cell phone plans
to counter this trend.
What can stymie the high costs of
operating a college?
Despite the sizable endowments,
grants, and discretionary donations that many research universities have, the
return on investment from licensing internal innovations is next to nil.
This, coupled with increased annuities, wrought by tenure systems has
potentially delivered a crippling blow to an entrenched order.
The tenure
system was originally created to secure
academic freedom for professors — offering flexibility and openness to speak
and research freely without fear of repercussion. (See the Hoppe
debate.) However, from a financial
perspective, Stephen Kerr notes that, "raising an employee's salary
creates an annuity for his or her organizational lifetime. Furthermore, since
future increases are normally calculated as a percentage of salary, erroneously
increasing someone's pay will tend to become geometrically expensive over
time."[9] In other words, a firm should reward
productivity, not tradition or longevity. Therefore, performance-based
contracts can be used in place of a tenure system, an idea now embraced by
numerous college presidents as well.
Many colleges, particularly those
that are State-managed, must change their business models with the times. This
is not some pie-in-the-sky ultimatum; according to a recent survey of college presidents by The Chronicle of Higher Education, many "are
more preoccupied with financial issues than educational ones." One
plausible solution to these monetary quagmires has an irksome kick to it:
"53 percent of the respondents said they believed that tenure for faculty
members should be abolished in favor of long-term contracts, but those who had
been professors with tenure supported it more than those who had not."
Over the past decade, many state
universities have learned that they must locate alternate sources of funding,
as they can no longer solely live off the State dole. In fact, whether they
like it or not[10],
many of the flagship State-funded institutions are marginally becoming privatized. For instance, through a
charter initiative adopted last year,
the University of Virginia (along with Virginia Tech and William & Mary)
now has the freedom to modify tuition rates and operate free of numerous state
regulations, such as those pertaining to procurement, capital outlay, finance,
and personnel. This quasi-privatization is a step in the right direction, as it
should provide better accountability to those who actually finance educations.
And it should be noted that these budget shortfalls are not regionally isolated instances on the East Coast.
Specialization
While some commentators suggest that
specialization is for insects, a large portion of school rank and reputation is weighted
in research, which directly correlates to publishing in peer-reviewed journals
(i.e., impact factor).
For example, numerous departmental performance appraisals require that tenured
or tenure-track professors spend the majority of their time on original
research and publishing -- and the residual is spent teaching (i.e., publish or
perish).[11] In many cases this creates a negatively
dichotomous relationship between meticulous research and supportive
instruction. Unfortunately, many bright researchers lack the personality or
training needed to be effective instructors and vice versa (thus, one of the
main differences between research universities and teaching universities).
Because of this, many universities hire individuals who have longer curricula
vitae rather than vibrant personalities. However, this bittersweet yin-yang has
its own sense of irony, as specialization and the division of labor are the
most promising solutions to an otherwise ruinous situation.
The university is a firm.
To counteract budget hemorrhaging,
the administration could cut extracurricular programs, spin off departments
into independent entities, and deregulate services. For instance, a student
recreation facility could be privatized.
Unfortunately (from a profit-based
business perspective), many recreation centers are not self-sustainable, as
they are subsidized through universal student fees. So regardless as to whether
or not a student utilizes the numerous services offered by these recreation
centers, they stay afloat despite any (in)efficiency. Furthermore, because of
how they are subsidized, their organization is no different than Amtrak, USPS, or Fannie Mae.
In fact, the economically centralized nature of these recreational facilities
makes them, in some ways, no different than a top-down command economy found in
many developing countries or the former Soviet Union.
While these facilities may employ
the use of tools to "rationalize" performance, it is not an
appropriate defense against claims of poor service or relatively high prices
(why charge one price over another?). Economically speaking, separation into an
autonomous entity, which is wholly self-sustaining, is the only long-term
practical solution for determining whether or not these facilities pass the
market test. Otherwise, how can managers effectively set prices? Aside from
pulling numbers out of hats or mimicking the competition, the only valid
measure is by allowing the consumer to vote with his wallet. It should also be
noted that some university services have successfully been subcontracted to
independent firms; such as custodial servies, medical care and stadium
security. It is misleading to claim these large entities are immune to economic
laws such as supply and demand and, hence, can survive (structurally)
indefinitely without any reliable measure of effectiveness.
In the event that these facilities
are privatized, the university could subsidize student membership elsewhere
(e.g. through a bulk purchase of passes) — although this brings up the question
as to why they do not outsource the services to local businesses such as Gold's
Gym or 24
Hour Fitness in the first place.
To be fair, some recreation centers
do in fact have several revenue-generating entities – for instance: guest membership passes, renting
towels and lockers, selling racquetballs, personal training sessions,
extracurricular classes such as Yoga and Self-Defense, outdoor events such as
weekend kayaking or caving and intramural sign-ups. However, even though this
may be the case, these goods and services generally cannot finance their annual
budget.
Whether it is through complete
independent privatization or corporate buyout, recreation facilities could create
a formal policy to wean their internal finances from the university. The end
result will allow the management to implement an effective incentive program,
allowing the university to adapt to their dynamic business environment.
Contemporaneously (e.g., in the Real
World), due in large part to the competitive forces rendered by Google et al.,
Microsoft is now undergoing structural changes. How are institutions such as universities immune to the
laws of economics any more than other business entities? If nothing else, a
paradigm shift of some magnitude needs to occur for individuals, families, and
firms that invest in college educations to demand a different kind of system, a
different kind of business model.
A brief history in time
While pedagogy (the formal discipline of teaching) has been around for
several hundred years, humankind has spent the better part of its existence
training and otherwise instilling values, beliefs, and information into its brethren
and progeny. Throughout its storied evolution and development, theoretical
frameworks ranging from blank
slates to statistical models have been
constructed to explain and prescribe the best way to school and educate one
another.
Although the Catholic Church and
Jesuit Order are historically credited for organizing the first universities to
train their priests, Prussia,
architect of the modern Welfare state, unsurprisingly had its hand in the
creation of the modern education system, including that of Higher Education. John
Taylor Gatto, among others, has
noted that it was Prussia that first
enacted compulsory attendance
at the primary school level, in a concerted effort to erect a martially
disciplined and compliant populace. Rigid hierarchies of authority (teacher vs.
student) were established in an effort to bridge obedience to both military
commanders and technocratic civil servants. Some of these positivist methods
and theories[12] trickled into higher education[13] and are extensively chronicled by
proponents of the deschooling movement
and Montessori
approach.[14]
And while some professors lament the
latest bugaboo known as the Internet, to be historically consistent they should
throw sticks and stones at descendants of Johannes
Gutenberg, for inventing a more efficient and
systematic process of printing texts — thus eliminating a traditional role of
scholastic scribes (though arguably creating in return a plethora of
professions, industries and markets in the process — i.e. creative
destruction). Perhaps these same instructors
could venture into the terra incognita and partner with startups such as
Digital Universe,
or hawk their expert knowledge to the highest bidder.[15]
Necessity is the mother of invention
Numerous universities and colleges
now offer lectures through podcasts covering
a host of topics. Podcasting is simply a neologism for automated webcasting — a
process combining traditional audio and video feeds with easy-to-use RSS syndication technology. Berkeley, Stanford, Harvard, Princeton,
Purdue, and the Mises
Institute itself are just a few notable
entrants in this burgeoning market. [16]
In fact, Podcasts have become so popular that both Yahoo and Apple (among
others) have added the functionality to
listen, transfer, and search for podcasts natively. It is also worth noting
that companies like IBM,
in an effort to streamline and make communication more convenient and
efficient, have successfully incorporated podcasting into their own corporate
culture.
In 2001 MIT began an initiative,
dubbed OpenCourseWare, to "virtualize" all of their graduate and
undergraduate programs, for free public consumption. This includes tests,
lecture notes, reading lists, slides – the whole kit and caboodle. With courses
ranging from biology and nuclear engineering
to management
and literature,
the OCW service will assist the insatiable Curious George within all of us.[17] And like podcasts, other institutions
have created projects similar to OCW, including notables such as Carnegie Mellon, Johns Hopkins,
Tufts, Rice, and Utah State.
Wikipedia, the open encyclopedia,
has, for better and for worse, become a mainstay among digerati across the
globe. Despite sophomoric pranks,
the "free" source is,s in many cases, just as authoritative as its leather-bound counterpart.
And while this is certainly a great resource to get pointed in the right
direction, it does not replace definitively published research, which the next
contestant makes locating easier.
In late 2004 Google opened the doors
to a new service called Google Scholar.
While it is still relatively new (thus having a relatively limited index), for
anyone that has used EBSCO, Web of Science, JSTOR, or a legion of other
information databases, Scholar is a godsend. Not only do you get to use the
familiarly quick and clean Google interface to retrieve information, but it
also features advanced search capabilities to narrow queries based upon authors, publications, subject
matter, and dates. Mining quotes and information from peer-reviewed journals
has never been easier. Now you can not only see the various academic papers
published by notables such as Mises or Rothbard, but you
can also view other works that cite them
(again, not a novel invention, but it is fast, accurate, and free).
Do these online resources replace a
traditional 4-year education? Arguably, the social stigma from not attending a
brand-name university for the most part still outweighs the costs of attending
one. If nothing else, these online resources can at least complement the
traditional venues; web-based education can be leveraged to the benefit
of everyone involved (win-win).
Digital libraries
How much longer will you physically
need to visit a library? Did you know that there are several well-funded
ventures to digitally scan the contents of every book ever written?[18] Yahoo, Microsoft, and the University of
California are funding an umbrella organization called the Open Content Alliance,
which includes other collegiate libraries and book publishers. There is a catch,
however. No matter how vast their index may become, these fastidiously scanned
contents[19] indexed on their free and open OCA
website are works solely in the public domain (i.e., works that are no longer
copyrighted) — accounting for less than 15% of books ever published.
Not to be left out of the fun,
über-publisher Macmillan is also trying
to scan and sell the contents of its massive publication library (you probably
had one of its books each year throughout school). And Amazon.com is now
allowing users to digitally view books
online (provided the publisher has opted into their scanning program). You can
even buy the specific pages
you want printed off and shipped to your domicile.
Despite legal threats,
one firm is trudging ahead in an effort to scan every book ever written,
including those still under copyright: Google Book Search.
While legal ramifications have yet to be
sorted out in the courts and despite Eric
Schmidt's conservative 300-year estimate, anyone can take advantage of the ability to search for and
locate a book they never even knew existed (including those
in Europe).[20]
Certainly it helps everyone save unnecessary trips to libraries and book
stores. Plus it now enables independent researchers, educators of roughly 2
million home-schooled kids and people from every walk of life, to find
information that would otherwise be left to obscurity: it is empowering.
Teaching an old dog new tricks
While it is not an entirely new
phenomenon[21], the open
access movement is worth discussing as an example
of modifying business models to take advantage of new technological
innovations.[22]
In the past, the vast majority of
scholarly journals have used a subscription-based model that was relatively
expensive for individuals to afford, a tab that institutions, firms, and
libraries were expected to pick up or subsidize.[23]
To bypass this cost-prohibitive nature of accessing journals, organizations
such as the acclaimed Public Library of Science
charge the author alone for publication costs rather than other users.[24]
The prospective research still
undergoes the scrutiny of the scientific peer-review process; however, a twist
is that upon publication, it also becomes immediately and freely viewable to
the public at large under an open
content license.
Conditions permitting, this
experimental development may fizzle out. However, by certain
statistical/empirical measures, this effort could be deemed a budding success
if compared to its competition.[25]
Originally launched in October 2003, after only 3 months of existence, PLoS
Biology was assigned a high impact
factor of 13.9 — "placing it above such
established journals as EMBO Journal, Current Biology, and the Proceedings
of the National Academy of Sciences. In fact, in ISI's category of general
biology journals, PLoS Biology is ranked number 1. In 2004, PLoS
Biology articles were downloaded
more than 1 million times."
In addition to projects like the PLoS,
other notable alternatives include an open-review process in which referees are publicly known and held accountable
for their recommendations and for what they approve. While it is arguable as to
whether or not this would have prevented the recent South Korean cloning fiasco, Jerry Kirkpatrick notes that "open-source" reviewing – a process similar
to Wikipedia in which anyone can review and critique a publication – has gained
a foothold in some circles, including the distinguished British Medical Journal,
which no longer uses a closed review system.
While the jury is still out, both
open access along with open review have the potential to drive down the costs
and eliminate altogether another barrier to scholastic participation for
professional and amateur alike.
What is a college ranking?
What makes these remotely valid? How
can you rank heterogeneous, dissimilar institutions? A 3.8 GPA at one school is
not at all comparable to a 3.8 at another. Each instructor has his or her own subjective
evaluation of a student, course work is different in each department at each
institution, resources available to students are different, the student-body
diversity/dynamic is different, so how can these be aggregated, let alone
objectively quantified?
In a vain attempt to show
transparency and impartial legitimacy, both letter and number scores are used
to quantify student assessment. Can the 93 you received on your term paper for
English 101 from Professor Smith in 1991 at a small rural liberal arts academy
be legitimately weighted the same against pupils in other sections with
different instructors at a substantially larger urban school years later? The
scale methodology is flawed, if nothing else, for the fact that you cannot use
a subjectively assessed interval aggregation system to compile a nice round
number.
Modern-day credentialing is
reminiscent to judging at the Olympics,
shrouded in sophistry and obfuscated behind a veil of superficially objective
criteria. It literally is the same problem encountered when economists endeavor
to calculate
numbers like GDP or BCS
rankings.
Part of the ranking methodology used
by US News & World Report involves the tabulation and aggregation of
ratings by administrators and professors at peer institutions. For instance,
the typical Likert scale
uses a 1-5 rating system (1 for worst, 5 for best). Each pollster has his or
her own attitudinal preferences, which are subjective and relative to his or
her own internal ranking system. It is therefore foolhardy and misleading to
attempt to aggregate all the pollsters’ subjective views on what flavor of ice
cream is the best flavor. Is it Crimson Tide Cookies 'n Cream? What about Hokie
Orange Sherbert? Can one forget Knute Rockne Fudge Delight?
Several years ago, The Washington
Monthly published a study,
originally commissioned by US News & World Report, which criticized
the nebulous methodology used to create the ranking hierarchy. It found similar
problems in trying to rank disparate undergraduate programs due to their
ever-varying goals, encompassing "liberal arts education; vocational
preparation; pre-professional and scholarly preparation; middle-class
socialization; and service and leadership development."[26]
Pedigree, the golden seal of
approval
A few months ago The New Yorker
published an article
which detailed "the social logic of Ivy League admissions." The
author provides evidence[27]
for this brand-equity hypothesis (which directly correlates with status): it is
the admissions process that is at the core of the elite college value
proposition. That institutions such as Harvard operate using a Balanced
Scorecard method to maximize their endowment[28], social rolodex (e.g., select
students who have a high probability of being financially successful and will
contribute to brand equity), brand perception (e.g., invest in faculty
and staff that contribute to brand equity over instruction) and comparative
advantage (e.g., the actual instruction which is differentiated primarily
on branding, admissions and fund raising).
What is a degree worth? Whether you
want to believe it or not, there is a market for brand-name institutions, just
as there are markets for brand-name shoes, cars, and clothing. State
accreditation acts as the modern golden seal of approval. Each institution is
essentially a brand name, whose inner workings and coursework could be
identical, while seemingly proprietary to those on the outside.[29] However, this Midas touch can be
misleading and, in some cases, may
not be worth a Continental.
Where's the beef?
Surely the financial gains of
attending outweigh the aforementioned financial costs, right? Whether you are
paying attention or not, your brain does not learn through some kind of osmosis; hands-on experience is arguably irreplaceable in a
classroom. For example, let's look at business schools.[30]
The tie in to contemporary schooling
comes from a controversial paper regarding the value of obtaining an MBA.
Pfeffer and Fong found after analyzing
40 years worth of research, that MBA graduates earned little, if any, more income
compared to non-MBAs.[31]
In fact, they found several instances of just the opposite. To that end, Gary
North suggests that higher education — and MBA
School in particular – has become nothing more than a bureaucratized Mandarin Civil Service
of yesteryear, which adds little to no value of those who matriculate to the
institutions.
Pfeffer and Fong also found that not
only do many business schools use the same textbooks and instruction methods
(e.g., case studies), but "that graduates from the most competitive, elite
programs achieved the greatest earnings is scarcely surprising, as these
people"[32] essentially matched the customer
perspective pillar ensconced by the Balance Score Card approach, they
"were selected by their programs on the basis of their much higher than
average capabilities and credentials."[33]
An example of erroneous use of the
case-study method is the following. A group of researchers conducted a study[34] of business school students in their
senior year that had a mean age of 21. Upon being split up into three random
groups, these students individually played a computer simulation of sorts,
wherein they became CEO of a cell phone company for 13 years. The first eight
years were predetermined to correspond to historic regional coverage, and then
the remaining five years expanded to nationwide via industry deregulation
— all of which was warned of to the participants by way of computer messages.
Performance was measured based upon market share, and each student was given
course credit for completing the experiment.
This is set entirely outside the
real world. Telecom CEOs do not sit at a computer terminal all day, receiving
standardized messages from an omniscient entity about industry changes that
will occur in the future. Furthermore, none of the students had to live with
any of the consequences their actions caused. They did not have to worry about
accounts payable, research and development, advertising[35],
managing information systems, State regulations, and a cornucopia of issues —
ranging from the most trivial and mundane (e.g., notary headers) to
substantially larger ones, such as solvency. Nor did they have to go home at
the end of the day and explain to their friends and families as to how their
decisions may have bankrupted a company and adversely affected the lives of
thousands of employees.
While this was a research project
that can in fact be replicated over and over, the conclusions gleaned from the
study cannot realistically be transferred to generalizing telecom CEO behavior
to the real world. If you want to know how a CEO would have reacted with
factors XYZ, observe how a CEO handles factors XYZ. Studying twenty-one
year-old college students who have little to lose is not an accurate
measurement of CEO activity.
Pfeffer and Fong leveled similar
criticism at this case-study approach, "[s]tudents learn to talk about
business, but it is not clear they learn business."[36]
They are not the only academics to believe this either, as Mintzberg and
Lampell note, "[u]nfortunately you cannot replicate true managing in the
classroom. The case study is a case in point: Students with little or no
management experience are presented with 20 pages on a company they do not know
and told to pronounce on its strategy the next day."[37]
In fact, oft-quoted management guru Peter Drucker[38]
and Mises[39] revealed similar qualms with business
education as a whole and entrepreneurial training in particular.
Online degrees and distance
education
The poster child for this movement
is the University of Phoenix. This accredited institution is the bane of
existence for some establishment players – namely, tenured professors who
believe the profit motive dilutes pure research and unfairly treats education
as a commodity. However, prior to founding the University, John Sperling[40]
was himself a professor at San Jose State University. After leaving academia
and founding the University, in an interview with Fortune several years ago, he was told what one of his former
colleagues at SJSU thought, "John Sperling represents something horrible
in American education" and "I have an extreme loathing for him, and
in a just world, he would be in jail."
Contrast this with a relatively balanced review
from Gary Berg, dean of extended education at California State University
Channel Islands — who actually took a class from start to finish to see what it
was like. He found that it did indeed have several weaknesses, namely "its
poor academic reputation, faculty, general education, and maintaining quality
while growing at a fast rate." Yet despite these misgivings[41], he does not threaten John Sperling with
jail time nor curse him for eternity.
The University of Phoenix is not
alone in its quest to meet the needs of customers worldwide. The Teaching Company, Thinkwell,
ALEKS, EPGY from
Stanford, CTY from Johns Hopkins – the list of available services for
children and teenagers continually grows, due in part to a public school system
which has its head stuck in the 19th century.
In fact, there is no shortage of
programs from accredited institutions of higher education as well. Stanford, USC, Pepperdine,
UCLA, New Jersey Institute of Technology, University of Hawaii,
Florida
State, University
of Illinois, Rochester Institute of Technology, even the prestigious Open
University in the UK — they all have online
degree and distance education programs. [42]
And due to the market pressures, perhaps these same institutions will be forced
to become "for profit," prompting the question: what's the difference
between profit and non-profit in this instance? Therefore if the arguments from
the academy were initially against non-residential education (i.e., distance
and online), or charging prices for a course, or customized/tailored degree
plans, or access to journals, what is left to besmirch?
Think different, give it the old college
try.
Maybe not today, maybe not tomorrow,
but one day you may end up demanding that a course at State U. provides 100%
Satisfaction Guaranteed, service with a smile. Where is the customer service
department located in traditional institutions? Adjacent
to the bursar's office? Where
can you formally lodge complaints or leave suggestions and recommendations,
knowing that your status as a customer is truly valued? While there is
certainly no shortage of snake oil diploma
mills, the onus of distance education or
non-traditional avenues such as online programs (or even not attending), can be
judiciously scoffed at.
No matter what newfangled
technology may be incorporated into our lives
or what medium for instruction is used, perhaps the boldest statement of
embracing change comes again from Peter Drucker: "Education can no longer
be the sole property of the state." And it won't.
Tim Swanson is a graduate of Texas A&M University and currently lives in China. Send him mail.
This essay was originally published in 2006 on Mises.org.
NOTES
[1]
Philosophically speaking, there is no objective "thin line" or
"grey area" between what kind of education one should or should not
make an economic profit on. Educational training and pedagogy instruction are
not immune to laws of economic scarcity. Knowledge and information can be
commodities as well.
[2] While
this is not to say that social studies departments are entirely comprised of
unproductive existential self-loathing and Cubistic meanderings… just as NASA
can be welfare for engineers and the NEA can be welfare for artists, tenure can
be welfare for academics. See also "Free market business reform " at Catallarchy.
[3]
"Universities won't survive. The future is outside the traditional campus,
outside the traditional classroom. Distance learning is coming on fast."
Peter Drucker, I got my degree through E-mail Forbes, June 16, 1997.
[4]
"Thirty years from now the big university campuses will be relics.
Universities won't survive. It's as large a change as when we first got the
printed book. Do you realize that the cost of higher education has risen as
fast as the cost of health care? And for the middle-class family, college
education for their children is as much of a necessity as is medical care —
without it the kids have no future. Such totally uncontrollable expenditures,
without any visible improvement in either the content or the quality of
education, means that the system is rapidly becoming untenable. Higher
education is in deep crisis." Peter Drucker, Seeing things as they really are Forbes, March 10, 1997.
[5] "At Public Universities, Warnings of Privatization" Sam Dillon, October 16, 2005, New York Times.
[6] Stating
the glaringly obvious sans refined tact, The Onion may not be a highly
cited journal of impact among tenured literati, however to quote Mark Twain,
"Truth is stranger than fiction, but it is because Fiction is obliged to
stick to possibilities; Truth isn't." More than any other reference in
this article, none is more prescient than: University
Implicated In Checks-For-Degrees Scheme.
[7] The
organizational design of many universities and colleges is sometimes
emasculated by political and economic power struggles between administrators
(e.g. President, Treasurer), the faculty, students, the board of regents, and
so on. To assuage fears of a 'tragedy of the commons' (e.g. who owns certain
property), a responsive hierarchy accountable or responsible for certain
actions (i.e. who can be fired), must be implemented. Even non-profit organizations
like the Mises Institute must have articulated goals for donors and
stakeholders to judge issues of accountability — or else the organization is
fundamentally aimless. Bureaucracy by Mises covers this issue (large "vertical"
corporations can also suffer this ailment). See also Peter
Principle.
[8] In a
curious instance of the pot calling the kettle black, some colleges and
universities have an odd mantra purportedly against not accumulating wealth or
profiting off investments: do as we say, not as we do. For instance, did
you know that Columbia and NYU are the largest landowners in Manhattan (behind
the City itself and the Catholic Church)? And they each also have billion-dollar
endowments. So why can't "for-profit" firms also own swaths of
property and acquire wealth? For more on endowment sizes, read the annually
published study from the National Association of College and University of
Business Officers; as of this writing the latest is from 2003-2004. Regarding the relatively high costs
of attending (i.e., 'going broke by degree') see also "Huge college loans eating up salaries" from the Seattle Post-Intelligencer.
[9] Kerr, S.
(1999). Organizational rewards: Practical, cost-neutral alternatives that you
may know, but don't practice. Organizational Dynamics, 28(1),
61-70. See also Clayton Christensen's theory of Disruptive Technology, originally
published in the Harvard Business Review.
[10] Some
socialists have detailed
this turn of events; you will never guess what side of the issue they come down
on… It also raises an interesting point as to the definitive line by which an
institution is public or private, although the answer could be seen in terms of
political, not economic autarky.
[11]
A number of interesting anecdotes regarding Peer-reviewed Journals Gone
Wild: the Sokal Affair,
the Bogdanov Affair,
and this troublesome report
from New Scientist. Another recent quagmire involves the journal The Lancet, a fraud which has spurred an investigation into
the peer-review system as a whole.
[12]
"They fail to see that education cannot convey to pupils more than the
knowledge of their teachers. Education rears disciples, imitators, and
routinists, not pioneers of new ideas and creative geniuses. The schools are
not nurseries of progress and improvement but conservatories of tradition and
unvarying modes of thought. The mark of the creative mind is that it defies a part
of what it has learned or, at least, adds something new to it. One utterly
misconstrues the feats of the pioneer in reducing them to the instruction he
got from his teachers. No matter how efficient school training may be, it would
only produce stagnation, orthodoxy, and rigid pedantry if there were no
uncommon men pushing forward beyond the wisdom of their tutors." Ludwig
von Mises, Theory and History,
Auburn: The Mises Institute, 1985, p. 263.
[13] To the
dismay of curmudgeons everywhere, unpopular instruction methods (such as
long-winded impersonal lectures) are more a symptom of time constraint or lack
of creativity and not some nefarious conspiracy to deprive humanity of esoteric
knowledge.
[14] For more
on Deschooling/Unschooling be sure to read Ivan
Illich and John
Taylor Gatto. Note also the slippery
slope involved in trying to empirically
define success in terms of what educational system is best -- it would simply
be a battle of artificially defined goals; draw your own conclusions from
"Literacy of College Graduates Is on Decline," Lois Romano, Washington Post, December 25,
2005. Another related story comes from an Associated Press
article "Study: Most College Students Lack Skills" which notes that among other findings, that despite
graduating, many students still have a difficult time comparing credit card
offers and analyzing newspaper editorials.
[15] In
addition to contracting knowledge-based and information-driven work out to
domestic/foreign firms, one market that is being capitalized off of is
multidisciplinary online tutoring from
India. See also John Hagel's "Unbundling the Corporation"
from The McKinsey Quarterly.
[16] Here is a list
of courses offered through this convenient medium also dubbed,
"learncasting." Slate recently published, "The
Year of the Podcast," detailing where the medium
currently stands in the scheme of things and where it is heading. See
also Apple's new "iTunes U" endeavor and a Forbes discussion
on podcasts from Stanford.
[17]
OpenCourseWare even publishes several courses in economics, all of which more or less fail the Ludwig von Mises
School of Hard Knocks litmus test. But still the same, it's the thought
that counts - after all, not everyone is a praxeologist.
[18]
Practicing good netiquette, here is the obligatory mention of the original
digital library, Project Gutenberg.
[19] To see
the Kirtas book-scanning machine in action, click 'video demo.'
[20] In April
of 2005, several nationalists such as Jacques Chirac suggested that Google's
actions will invariably bias the scope of material found online to the Anglo-Saxon variety, "Google's plans have
rattled the cultural establishment in Paris, raising fears that the French
language and ideas could be just sidelined on the worldwide web, which is
already dominated by English." As of September 2005, Google is now scanning
books in Europe as well.
[21] ArXiv.org has been around for roughly 15 years. It stores electronic
preprints for physics, math, computer science, and biology.
[22] T. J.
Walker, professor emeritus at the University of Florida, has put together an
extensive list of journalistic discussions on the
ramifications of academic e-prints and e-publications.
[23] While
Doug Bandow of Cato has recently been in the news
for ethical improprieties regarding whether or not financial contributions
biased his research, he questions
"where the line of legitimate writing turns to something worse. When does
financial support turn into ideological control?” He wonders "Is it
'journalism' if the research is helped along by a foundation whose board
members have some interest in the subject?" The same could be asked of some
medical research, which is under similar fire.
[24] This is
not to say that the current PLoS business structure is the best or most
efficient way to operate; it is merely an illustration for how academia could
adopt technological innovations to conform around adverse intellectual property
regimes (see Kinsella on IP).
Several journals, such as Nature, reacted by allowing authors to
self-archive their publication online. And regarding open-source peer review,
economist Tyler Cowen recently discussed this effort and raised some interesting arguments against its practice.
[25] For
comparison, the reputable journal of Science, largely considered one of
the world’s most premiere journals, is estimated to have roughly the same
number of total readership (about
one million). Likewise, Nature,
another prominent journal which has been in print since 1869, has an impact
factor of 32.182 in 2004.
[26]
"Quality ratings of institutions are commonly performed in light of
institutional goals. Compared with hospitals and graduate programs,
undergraduate colleges are more heterogeneous in their goals. Goals may
include: liberal arts education; vocational preparation; preprofessional and
scholarly preparation; middle-class socialization; and service and leadership
development. There are also varying mixes of goals across institutions. In
large institutions there is considerable variance within the institutions, for
example, among different subunits ("colleges"). The great variance
both across and within institutions makes it very difficult to get consensus on
quality criteria or on measures for undergraduate programs in general, or even
for groups of colleges or universities that might appear similar. Compared with
hospitals there is also a paucity of publicly available comparable data on
postsecondary institutions that are up-to-date, this necessitating more
reliance on data collected directly from the schools." The Washington
Monthly, "The NORC Report on U.S News and World Report."
[27]
"Social scientists distinguish between what are known as treatment effects
and selection effects. The Marine Corps, for instance, is largely a
treatment-effect institution. It doesn't have an enormous admissions office
grading applicants along four separate dimensions of toughness and
intelligence. It's confident that the experience of undergoing Marine Corps
basic training will turn you into a formidable soldier. A modeling agency, by
contrast, is a selection-effect institution. You don't become beautiful by
signing up with an agency. You get signed up by an agency because you're
beautiful." Malcolm Gladwell, "Getting in, the social logic of Ivy League admissions." October 10, 2005, The New Yorker.
[28] Is
donating money to an alma mater irrational? Arguably, by giving back you
can in fact help increase your own brand quality and recognition through
financing portions of the university model which are "ranked" (e.g.,
purchase more books for library, endow a chair to attract "star"
researchers). Patri Friedman has a germane discussion on this issue; be sure to read through the comments as well.
[29] Be sure
to read the latter portion of Arnold Kling's essay at TechCentralStation: 'Economic
Man' vs. 'Status Man' which also discusses school ranking
and branding.
[30] To the
chagrin of business school administrators everywhere, simply having a
certificate of completion does not qualify you in any form or fashion to manage
or direct the operations within a firm: bona fide experience does. Experience
that cannot be replaced with a textbook of definitions, PowerPoint slides, or
computer simulations.
[31] Pfeffer,
J., & Fong, C.T. 2002. The end of business schools: Less success than meets the
eye. Academy of Management
Learning & Education, 1(1):78-95.
[32] "A
straightforward interpretation of these results is that it is not education in
business but selectivity that is being assessed. As Dugan et al., noted, the
fact that graduates from the most competitive, elite programs achieved the
greatest earnings is scarcely surprising as these people "were selected by
their programs on the basis of their much higher than average capabilities and
credentials" (1999: 23). This interpretation, that what matters are the
personal attributes of the attendees not what they learn while in attendance,
is consistent with the fact that the course of study, and even the textbooks
used, are remarkably similar across schools of different degrees of
selectivity, so it is hard to argue that there are important differences in the
knowledge being provided in the different schools. Studies conducted by the
Educational Testing Services in 1982, as well as Porter and McKibbin's (1988)
investigations of curriculum across business schools, have emphasized that the
curriculum is quite similar across schools." Ibid.
[33] Dugan, M.
K., Grady, W. R., Payne, B., & Johnson, T. R. 1999. The benefits of an MBA:
A comparison of graduates and nongraduates. Selections, 1: 18-24.
[34] Seijts,
G.H.; Latham, G.P.; Tasa, K.; Latham, B.W. (2004). Goal setting and goal
orientation: an integration of two different yet related literatures, Academy
of Management Journal, 47(2), 227-240.
[35]
For-profit firms are not the only entities trying to promote their wares. In
"Those
weird College ads" Mike DeBonis of Slate
details numerous ad campaigns used by 2005-2006 Bowl-bound universities and
colleges to attract potential students to their campuses. This also
raises another issue regarding the role of athletics at the University
and the hotly contested matter of "amateur" student-athletes.
For more on these issues, see the Knight Commission Report as
well as professor Donald Siegel's paper, "The Union of Athletics With Educational Institutions."
[36] Pfeffer,
J., & Fong, C.T. 2002. The end of business schools: Less success than meets the
eye. Academy of Management
Learning & Education, 1(1):78-95.
[37] As quoted
in Pfeffer & Fong -- Mintzberg, H., & Lampel, J. 2001. Matter of
degrees: Do MBAs make better CEOs? Fortune, February 19, 2001: 244.
[38] "On
the whole it looks very much as if the 'integrated' business education tends to
make a man unfit to be an entrepreneur by paralysing his intellectual muscles,
just as the training in mere technical skills of the business school of
yesterday tended to unfit a man by destroying his vision. The more emphasis
there is on 'administration', 'organisation', 'policy', 'analysis', etc., the
more there is emphasis on the known 'right' way of doing things and on routines
rather than on the new – in short on the accepted, the safe, the bureaucratic
way rather than on the way of the risk-taker and the innovator." Footnote
from Ludwig Lachmann on Peter Drucker, "The Science of Human Action:
Review of Mises", Economica, New Series, Vol. 18, No. 72. (Nov.,
1951), pp. 412-427.
[39]
"Education, whatever benefits it may confer, is transmission of
traditional doctrines and valuations; it is by necessity conservative. It
produces imitation and routine, not improvement and progress. Innovators and
creative geniuses cannot be reared in schools. They are precisely the men who
defy what the school has taught them. In order to succeed in business a man
does not need a degree from a school of business administration. These schools
train the subalterns for routine jobs. They certainly do not train
entrepreneurs. An entrepreneur cannot be trained. A man becomes an entrepreneur
in seizing an opportunity and filling the gap. No special education is required
for such a display of keen judgment, foresight, and energy." Ludwig von
Mises, Human Action,
Fourth edition by Bettina B. Greaves (Irvington: Foundation for Economic
Education, 1996), p. 314.
[40] John
Sperling, showing his entrepreneurial colors, is also a venture capitalist as
detailed superbly in Wired magazine, "John Sperling Wants You to Live Forever."
[41] Like the
University of Phoenix, NYU has reportedly received relatively lower marks from
competing institutions due in part to the fact that it hires numerous part-time
and contract-based faculty. Yet ironically, this same adjunct faculty used the
threat of Unionization in the spring of 2004 to gain many of the advantages
conferred to full-time/tenured professors, see "Letter
to the NYU Community Updating the Status of the Negotiations Between the UAW
and the University."
[42] The
Associated Press recently ran a story, "Online
classes popular on campus as well as off"
in which they detailed a growing trend in which many traditional college
students - despite living on or near campus - are enrolling in distance
education courses to fulfill some of their degree requirements. Among the
reasons noted, include the ability to schedule around potential time conflicts
(e.g., jobs) as well as simply not wanting to take a class at 7 in the
morning. The AP article also cites The
Sloan Consortium which is an amalgam of
"institutions and organizations committed to quality online education."
Among other numbers of interest, according
to Sloan, "over 1.9 million students
were studying online in the fall of 2003," and that number increased to
2.6 million in 2004. Forbes recently ran a piece, "Colleges
on the cutting edge of technology,"
detailing the advances in computer technology - specifically wireless - which
have been deployed across campuses and now enable students to stream
lectures, download podcasts, and take interactive courses online.
Furthermore, in "More undergrads playing hooky when the classes go online," the Chicago Tribune recently noted that the
advent of technologies such as podcasting has actually decreased attendance of
many classes. This unsurprisingly has caused consternation among some
faculty members, who have started pulling the material offline in order to
restore regular attendance.
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