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With the less-than-spectacular launch of the Facebook IPO, I've heard a number of people speculating that the social networking boom is played out and that innovation will now turn elsewhere. I think they're missing out on a big area that is still left to conquer, an Internet breakthrough that will be way bigger than Facebook.

The rap against Facebook is that the activity it captures--essentially, a half billion people gossiping about their own lives--is so ephemeral that it could all disappear overnight, which is essentially what happened to Facebook's precursor, MySpace. As Rich Lowry put it, Mark Zuckerberg is basically the Henry Ford of goofing off. By the way, for my Facebook friends, let me add that I think this criticism is unfair. I've found Facebook useful, for example, as a news feed where people I know post interesting articles they have come across. But imagine if much of the same technology were used to capture an activity with far more substantial and enduring value.

Let's put it this way: if you can build a $100 billion company by using the Internet to replace the college yearbook--imagine what you can do if you use the Internet to replace college.

That's what is just beginning to happen. It all became official when the Massachusetts Institute of Technology appointed as its new president the guy who is responsible for MITx, the school's free online education program.

What makes MITx so interesting is that it isn't just a bunch of lectures posted online. It also includes discussion groups and coursework and a certification program for completion of the work. My first thought when they launched MITx was that it's a little unclear how such a "certificate" differs from a "degree." In turn, that raises questions about how universities are going to be able to keep on jacking up their tuition every year and expecting that students go $100,000 in debt, when so much top-quality education is becoming available for free.

The article notes that the new president's main job will be to raise money: "Left unspoken were the unquestionable expectations for Mr. Reif as a powerhouse fund raiser. MIT raised $3 billion over the course of Ms. Hockfield's presidency, and the university is preparing to embark on a new capital campaign." Well, that's one potentially viable new business model: raise billions in donations so that you can use the Internet to offer a top-quality education to a huge number of people for free.

But there are other business models, too. Newsweek just reported on the start-up of Coursera, a kind of free, online Ivy League college.

"Daphne Koller and Andrew Ng believe the Internet should allow millions of people to receive first-class educations at little or no cost....

"So far they've signed up volunteer professors from Stanford, Princeton, University of Michigan, and University of Pennsylvania. Coursera will offer 35 courses in subjects ranging from math and computer science to world history and contemporary American poetry. These aren't just videotaped lectures; they're full courses, with homework assignments, examinations, and grades"

Note that this, too, is so far being run as a charity, though it is the instructors who are donating their time. But Coursera is also backed by Silicon Valley venture capitalists, and the most interesting part of the story is that they're starting to home in on the central economic factor that accounts for the value of higher education: its function as a kind of corporate head-hunter.

"Coursera doesn't pay its professors, and it has yet to dream up a way to generate revenue, though as Ng says, 'If you're changing the lives of millions of people, there will be a way to make money from that at some point.' One possibility involves charging companies for helping them find qualified job applicants"

Consider what a radical advance this would be for young people: not only is your education free, but it includes a job-placement service.

It's certainly a much better deal than the old system. I just came across an argument that it's immoral to offer unpaid internships, which actually prepare young people for a career. Yet somehow it's considered perfectly normal to charge someone $100,000 or more for a degree from a college that has deliberately neglected to ensure that its service has any marketable value.

I don't know if either of these new business models--MITx or Coursera--is going to become the new model for higher education. Maybe both will be. But a lot of people are now at work on this problem, and they will eventually come up with the right combination to burst the higher education bubble and take down existing universities in the same way that the Internet has taken down the old newspaper publishing business.

That's the comparison used by billionaire entrepreneur and investor Mark Cuban in a blog post that makes several important points. He describes how "the crush of college debt has taken an entire generation of graduates, current and future, out of the economy" by forcing them to spend all of their meager entry-level earnings on a giant monthly loan payment, at a time when they would normally be buying cars and houses and starting to build up savings. He also paints a vivid image of what the higher-education crash will look like when it hits: "Students will stop taking out the loans traditional universities expect them to. And when they do tuition will come down. And when prices come down universities will have to cut costs beyond what they are able to. They will have so many legacy costs, from tenured professors to construction projects to research, they will be saddled with legacy costs and debt in much the same way the newspaper industry was."

More important, he names the attitude that will bring down the universities:

"While colleges and universities are building new buildings for the English, social sciences, and business schools, new high end, un-accredited, BRANDED schools are popping up that will offer better educations for far, far less and create better job opportunities.

"As an employer I want the best prepared and qualified employees. I could care less if the source of their education was accredited by a bunch of old men and women who think they know what is best for the world. I want people who can do the job. I want the best and brightest. Not a piece of paper."

But remember that this is still very early in the game. We don't yet know exactly what the future of higher education will look like, in much the same way that we had no idea what people would really end up doing with the World Wide Web back in 1995. But I will hazard a few guesses.

Entrants like Coursera still look a lot like the early reaction of the print media to the Web. They took the existing newspapers and magazines and basically just put them on the Web. Similarly, a lot of these early efforts in higher education are just taking a traditional university education and putting it on the Web. But the new medium will lead to some big innovations in the whole experience of higher education--a field whose basic structure hasn't changed all that much since the first universities arose out of monasteries in the late Middle Ages.

One of the radical changes I think we will see is the decoupling of the humanities from technical and professional education. As it is, universities package together two forms of education with radically different economics. Scientific, technological, and professional courses teach skills that are judged by objective standards and have direct, measurable economic value.

The humanities, at best, have an economic value that is indirect and difficult to quantify. Perhaps it will make you more creative and a deeper thinker. Maybe Steve Jobs sitting in on classes in calligraphy helped inspire the Macintosh. But then again, the humanities departments are also packed with a bunch of charlatans who will waste your time with things like--well, here's an example. Check out a hilarious review by Joe Queenan of an impossibly pretentious and utterly nonsensical academic tome on the deeper meaning of that important subject, Harpo Marx.

As someone who came out of the humanities departments--I have a degree in philosophy--I assure you that this sort of thing goes on all the time, and your tuition dollars are paying for it. Obviously, there is no reason why they should pay for it, so eventually they won't.

Do you want to know the actual function of humanities education in the job market? For most people, humanities education is a kind of finishing school. It is less about acquiring useful skills or knowledge than it is about learning mannerisms and etiquette, teaching students to act and talk and write like a member of the educated class. In My Fair Lady, Eliza Doolittle offers Henry Higgins five shillings to teach her to "talk more genteel-like" so she can get a better class of job. Now we do that with four years of college education, at $30,000 per year.

Obviously, it is possible to do this more cheaply and efficiently, and there is no reason why you have to purchase that service from the same people who are teaching you more tangible skills like engineering or medicine.

And when we think of fields like medicine or law, we see a big conflict looming on the horizon. These are fields in which there is no alternative to existing universities because they have been granted a legal monopoly. When my wife was studying to become an architect, for example, you could still get a license to practice architecture without having a degree from an architecture school--if you were willing to serve nine years of internship. She chose to go through school, but given that the architecture schools have their share of charlatans, it was an option worth exploring. In many states, though, professional regulators have closed off that option by requiring a bachelor's or master's degree in architecture. This kind of professional regulation is a nice gravy train for the entrenched educational establishment.

I used to think that these restrictive professional barriers to entry would be one of the last forms of regulation that we would choose to take on in the battle for economic liberty. Now, I suspect that a fight could be looming much sooner. Megan McArdle recently reported on how a new Internet-based car service has sparked a battle over restrictions on taxi medallions. Similarly, the impact of the Internet will spark a fight over the equivalent of taxi medallions in fields like architecture, law, and medicine. As online education takes over from the traditional universities in fields that do not require government licenses--and in a few that do; one of my readers directs me to a website that offers relatively inexpensive online training for the "professional engineer" license exam--how long are people going to accept paying so much more to enter those fields where the universities have been granted a labor monopoly?

Most profoundly, an educational revolution that puts less importance on a "piece of paper" from an established institution will cause employers to re-evaluate how they hire people, and many of them will realize that the best way to find out who will be a good employee is not to take the word of a bunch of bearded, tweed-clad college professors, but rather to see how young people actually work.

I mentioned the comparison between higher education and unpaid internships. In the future, such a comparison may become meaningless, as the barriers between learning and work are broken down. The engineering giant Siemens, frustrated with the inability of vocational schools to provide workers with the skills it needs, is already paying kids just out of high school to go through a technical-school training program, from which it will hire those who show the most promise. Could that happen with white-collar skills, as well? Imagine the competition to get accepted into a top university being replaced by the competition for an unpaid internship at a top corporation, where you will be expected to supplement your work with a course of online scientific, technological, and professional education. The reward: a full-time, paying job with an employer who knows you're qualified because you have already been working for them. The bigger reward? Spending four years of your life starting off in the world of work rather than going into debt.

All of the technology already exists to support such a revolution in higher education. Today's profusion of online video, blogs, wikis, and social networks can fill in for all of the old elements of the universities: classrooms, discussion groups, academic journals, reference libraries, alumni associations. Which means that the same technology that has revolutionized how you find cute pictures of cats is going to revolutionize how you learn, how you get hired, and how you work.

Now that will be a status update worth keeping track of.


Robert Tracinski is senior writer for The Federalist and editor of The Tracinski Letter.

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