Arena Banner
Pie Chart
Voting Results
40 % 60 %

Thank you for voting!

Thank you for voting! Please share this debate with your friends and encourage them to vote for your side!

Tech Will Fundamentally Transform Higher Ed

By Michael Gibson

Two guys in a garage. In early 1998, back when Microsoft appeared to be a juggernaut and the Justice Department was sniffing around for an antitrust case, that’s who Bill Gates said he feared. Journalist Ken Auletta recalls visiting Gates in Richmond, Washington, that year. What competitive challenge, Auletta asked, did Gates most fear? “Gates did not recite the usual litany of prominent foes—Netscape, Sun Microsystems, Oracle, Apple. Instead, he said, ‘I fear someone in a garage who is devising something completely new.’”

Later that year, in Susan Wojcicki’s Menlo Park garage, Larry Page and Sergey Brin founded Google.

One canonical measurement for technological change is Moore’s Law, which forecasts that the performance of microprocessors will continue to improve on a logarithmic scale while costs plummet. In an ideal competitive market with low barriers to entry—as is the case for fabricating microprocessors—quality ought to increase and costs ought to decrease. This is why smartphones and tablets get better and cheaper every year. It is why Bill Gates feared two guys in a garage in 1998.

For higher education over the last three decades, nearly the opposite has been true. In real terms, the cost of a college degree has risen more than fourfold, a faster clip than both housing (even counting the run-up to the 2007 financial crisis) and healthcare. Total outstanding student loan debt has surpassed $1 trillion. According to a study by economist Richard Vedder, about 17 million Americans with college degrees work in jobs that the Bureau of Labor Statistics says they are overqualified for. More than 40 percent of students fail to graduate from four-year colleges within six years. No new, credible, tier-one universities have been founded in over half a century.

If we define innovation and technological progress as doing more with less, then it is undeniable that higher education has been stagnating for over 30 years. Indeed, we seem to be accomplishing less for ever-larger, more staggering sums—an anti-Moore’s Law of sorts. Who do current colleges fear in the competitive landscape? It is quite telling that if you were to ask this of Drew Faust, the president of Harvard, or of L. Rafael Reif, the president of MIT, they would not say some brilliant starving technologist toiling on something new in a garage.

But they should.

The future of higher education—whatever else it may be—will involve reversing the woeful, stagnant trends of the last 30 years.  Happily, it will be a future shaped by gales of Schumpeterian creative destruction set in motion by entrepreneurs, a force that universities have held at bay thanks to government protections and the limits of old technology. To help get a sense of where things are going, Alex Tabarrok recently drew an insightful analogy in a Marginal Revolution post. He posted a TV Guide schedule from 1963, when viewers only had one shot to watch their favorite shows: the one time it aired on a weeknight.

We now think of this situation as laughably archaic. Yet higher education has been like this until very recently—students have had to attend a lecture by a professor at a particular time, or else miss it forever. Now, with the advent of Khan Academy, Coursera, Udacity, and other massively open online courses, we are seeing the beginning of the end to the Howdy Doody era of education.

But college, some traditionalists say, is more than just learning. It is above all . . . an experience . . . that must be had on one particular sacred geographic plot of land . . . an obligatory rite of passage, the crucible of friendship, and so on and so forth. Against these arguments, I’ve taken to analyzing the college experience by its four main architectural elements: (1) the clock tower, (2) the stadium, (3) the frat/sorority house, and (4) the admissions office.

What these buildings will look like after the next decade will determine how education will have changed.

The clock tower. The clock tower, the most prominent architectural element on campus, represents the amount of time spent studying a subject. Here, as I intimated, colleges have a lot to fear. In four or five years, online offerings paired with man-machine tutoring services will outperform the best course at Harvard in terms of content and the rate of knowledge transmission.

For far too long, the hour chime from the clock tower has been the indirect, substitute measure for skill and knowledge acquisition. Consider that to this day, classes are measured in hours per week, exams are given in hour-length chunks, and students need some requisite number of hours in any subject to signal mastery. A degree is granted based on how many years you walked around a clock tower accumulating hours of study.

What the fireplace, another medieval invention, is to the cold, the clock tower is to learning. Proximity and a schedule used to matter. Now they don’t. Central heating is better.

The stadium. The stadium represents the tribal element of the college experience. It refers to the social ties that bind alumni for life. They buy the t-shirts, they wear the war paint at football games, they cheer the team on in arctic air, and from time to time they riot when the enemy is crushed in a high-stakes match.

The love of the college tribe is big, big business. For example, college basketball and football together generate more than $6 billion in annual revenue. Two years ago, the NCAA and CBS/Turner Sports agreed on a $10.8 billion deal to broadcast March Madness basketball games until 2024.

To call college sports “amateur competition” is a cruel joke. If America were to treat college sports as the multibillion dollar professional league it is, then the demand for this portion of the so-called college experience would diminish.

The frat/sorority house. At their core, colleges are great real estate companies with dating sites attached. A key offering, the Greek house, represents friends and community and network. It represents all those serendipitous collisions, the parties and the hookups.

No direct competitor to this benefit of college has emerged. But gathering a large number of young, talented people into a small area to hang out does not appear to be an intractable problem on par with proving the Riemann hypothesis. It certainly should not cost $55,000 or more a year.

The admissions office. Simply by sending an acceptance letter, the admissions office imprints an identity and perhaps a higher income on a student for life. To be sure, entry to college helps sort quality in the labor market. But as alternatives to learning on campus sprout up, I predict the resemblance between Harvard and Greenwich Country Club will make many people uncomfortable. Instead of being an exclusionary sorting mechanism based on status, the diploma will become an updatable record of a student’s skills and experience.

In sum, the bonds of tribe, status, and friendship are very strong. It may be that the fans of the college experience will continue to pay hundreds of thousands in 2025 for these consumption- and exclusionary status goods, even when learning occurs rapidly and cheaply by other means.

On a panel in Davos, Switzerland, this past year, Reif did at least acknowledge that the current economics are unsustainable. “How can MIT charge $50,000 for tuition going forward?” he asked, “Can we justify that in the future? We see three components to MIT: First there's the student life, then there's the classroom instruction, but for us, the projects and labs activity is where real education occurs. But I don't think we can charge that much for tuition in the future.”

Somebody in a garage is working right this minute to ensure he’s correct. 

A proud Oxford University dropout, Michael Gibson is a policy associate at Thiel Capital and a vice president at the Thiel Foundation.

Higher Ed Will Fundamentally Remain the Same

By Peter Boettke

Sir Arthur C. Clarke famously wrote that “Any teacher that can be replaced by a machine should be.” I agree with that statement 100 percent. But I think enthusiasts of the technological innovations in higher education that supposedly will eliminate the need for traditional teachers and classrooms are not contemplating the full sentence.

There is no doubt that higher education will be transformed over the next 20 years, but perhaps less so than many enthusiasts believe. The idea of a “university without walls” is not new—though ironically people in the Internet age seem to suffer more from “presentism” than previous generations, despite the availability of more information about the past at a keystroke. The idea that learning can take place beyond ivy-covered walls and that a true democratization of knowledge can be achieved has been the vision of many educational entrepreneurs through the ages. In the broadest context, the printing press was an early technological innovation that both promised and delivered on this ideal.

The same can be said for the development of audio technologies, from radio to recording, and capturing moving images on film to digital. Lectures have been recorded since the technology first developed and have been listened to by far greater audiences. My favorite economist of all time is Ludwig von Mises, and I have been able to listen to his lectures despite the fact that he passed away well before I ever even thought I’d care about economic issues. My intense interest in economics early in my education was sparked by watching Milton Friedman lecture and debate others on TV with his Free to Choose series (and as a teacher I have returned to those recordings to capture the imagination of new generations of students about the economic way of thinking). Finally, correspondence colleges have existed for years as an alternative model for higher education.

I mention these examples to stress only that (a) we have had the technology to learn beyond the classroom for centuries, and even modern technologies for roughly a century, and (b) I appreciate the aspiration of a university without walls, and have benefited myself from the use of modern technology to be exposed to economic ideas that I could not get within the confines of the particular walls and halls of higher education that I walked. But still I want to suggest that those predicting the disappearance of the traditional college/university are not considering several key factors.

The first thing I want to stress is that any institution that has persisted as long as the traditional college and university must have some efficiency properties that are perhaps hidden from the view of even the most astute observer; otherwise these alternative learning channels would have represented more of a challenge. I’d like to suggest that the alternative models—including the most technologically advanced version—simply cannot capture the educational experience that students receive in the traditional college/university. Online education and online peer-to-peer learning can be superior for many subjects, and the opportunity they provide to those who otherwise would be denied access to education is phenomenal. But what online education doesn’t capture is the face-to-face teacher–student interaction, or the student-student interaction, that “clustering” in a single location delivers. In this sense, online education produces an inferior good to what could be (and should be) produced through the traditional college/university educational experience.

As an undergraduate, not only did I benefit from the exposure to Milton Friedman’s teachings of economics through his Free to Choose series and book, but also from the writings and lectures of Ludwig von Mises, F. A. Hayek, Murray Rothbard, Israel Kirzner, and even Adam Smith, J. B. Say, and Carl Menger without having been in their physical presence. But I was able to benefit precisely because in developing an appreciation of these individuals and their work, I was guided by a master teacher, Hans Sennholz, who encouraged my study, forced me to consider questions I would not have thought to ask on my own at that stage of intellectual maturity, and caused me to think through answers that were startling to me at the time but now seem obvious.

My understanding of economics came from that teacher–student relationship, and it was further strengthened during my advanced studies in the discipline with Don Lavoie, Kenneth Boulding, James Buchanan, Gordon Tullock, and others in George Mason University’s economics department in the early 1980s. Each of these teachers inspired me to probe deeper into understanding the logical structure of economic argument, and the historical record of the operation of these ideas in theoretical debate and in practical experience.

But as important as teachers are, so are the face-to-face peer interactions with students of similar interest. As a graduate student this is obvious, because you cluster together with roughly 30–40 other students who share a deep passion for a discipline. One gains knowledge exponentially in such environments. But even as an undergraduate with all the other social distractions around me, as I matured in my intellectual interests, I sought out conversations with peers who shared those interests. Online chat and social media sites do not compare to the hands-on, face-to-face working through of difficult issues that the physical clustering of learners provides.

If I had just watched Milton Friedman’s Free to Choose and read his book on my own, I might have acquired information about economic policy, but I believe I would not have developed the knowledge of economic theory, economic history, and economic policy that I in fact did develop through teacher-student guidance and peer-to-peer interaction. The pure online experience is very good at communicating information, but very bad at producing knowledge. And that is the key reason that the traditional college/university will not disappear.

My prediction is that a hybrid model will continue to be perfected. I believe the competition from alternative educational institutions will spur teachers to be better and will enable students to learn faster. But as in my own example, students will continue to need the guidance of master teachers to learn that which they are unprepared to learn at the moment they most need to learn it. Once we know it, we often think we could have learned it on our own. But this conclusion is a mistake. Difficult ideas seem obvious because a master teacher has guided us through the process of transforming information into real knowledge. The physical plant associated with colleges and universities provides the setting for this sort of engagement, and online technologies will not replace that. If anything, online technologies will steer the most ambitious to wanting to learn more by attending the physical location where their favorite lecturers conduct their work.

Sir Arthur Clarke was right—any teacher that can be replaced by a machine should be—but the best teachers will not be, and the most curious students will seek out interactions with other curious students around those teachers. It happened in Athens, it happened in Oxford, and it is happening all the time in colleges and universities across the world to this day. Long and enduring institutions persist for a reason, and not just because of institutional inertia. The future of higher education will be different due to technological innovations, but shockingly it will also be a lot like it has been through the centuries precisely because of the benefits of face-to-face teaching and peer-to-peer learning.

Peter Boettke is a FEE Trustee, a University Professor of Economics and Philosophy at George Mason University, and director of the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center.

40 %

60 %

View Previous Arena Results >>>