Education as a market

By | June 2, 2013

houseThere has been an interesting debate recently on one of the Chronicle of Higher Education blogs about a new educational start-up called “Udemy”, which is essentially an open marketplace in which individual teachers create and manage their own courses, dealing directly with individual students and splitting their fees with the company. Leaving aside for the moment the strong resemblance between this and the medieval university model from which all higher education has evolved, there is no question that this would represent an almost complete inversion of current “traditional” academic practice wherein almost all power resides in the institution rather than the faculty or the student. And it raises the basic question of the degree to which higher education should or should not be considered as a “market”.

[FULL DISCLOSURE: I will be writing more about Udemy itself, since I may well try to do a course through them. And a good bit of what follows was adapted from some of my contributions to that blog discussion, which I though deserved more direct exposure.]

The term “education” obviously refers to many things. Fundamentally, it refers to the mental and moral values acquired by the student (hopefully) in the course of transaction with the educational system; that long-term value may influence the ultimate success of the individual and/or his/her employers, but success is not its primary purpose or justification. But in a more proximate sense, “education” refers to the certification of being educated that is provided by some institution to a consumer (student) in return for some investment of time and money in that institution and some demonstration that the student has absorbed something. Education is thus a consumer (although not consumable) good, and can be provided largely by a restricted number of sellers.  Education in this sense is indeed a market, and is ultimately subject to the same market forces as any other good. Market dynamics do differ, of course, by type of goods involved; as a metaphorical equivalent here, let’s consider  real estate, where there is a sense of long-term commitment even if the transaction is short term.

The for-profit degree, like the community college degree, is the starter home in South Central; the no-name university degree is the tract home in the Valley; and the Harvard/Brown axis degree is the mansion in Beverly Hills.  Here, the value is contained mostly in the location, and only in part in the intrinsic quality of the property. Any one of these houses may be well-built and well-designed, or it may be termite-infested and full of bad plumbing, just as any of these educational institutions may be able to provide the student with a high-quality and enriching educational experience or merely a certificate that the student was there and met certain minimal standards for participation. Each property costs a certain amount, and can be sold for a certain amount; likewise, each degree costs a certain amount in money, time, and effort (which can vary substantially), and can be sold to a potential employer for a certain amount in salary and position. Only by living in the house for a while can you learn its intrinsic value in termites and plumbing; only on the job can the employer learn the real value of the education acquired by the employee. But in both cases by then it is too late; so the location of the property and the nature of the degree serve as proxy measures for quality.

Well, you get the point. This extended and perhaps stretched metaphor simply establishes that education as a system participates in the market and is valued according to market forces. The survival of various participating institutions is likely to be much more a function of their place in the market than the actual education provided, and the application of the “disruptive innovations” model is useful. Even if these new entries into the education market do not ultimately succeed, they will have at least thoroughly upset the old marketplace. Old Ivy may well find that its horticulture is more valued than its degrees, while its professors’ research is recognized for the rather expensive hobby that it is rather than the “scholarship” it was supposed to represent. We may well be on the verge of the educational equivalent of the 2007 meltdown in the real estate market; on the other side, we don’t know what will emerge, but we do know that there is no way to restore the status quo ante 2006. The ultimate result is likely to depend more on termites and plumbing than on huffing and puffing about the educational quality provided by traditional institutions.

As the meltdown proceeds, places of real value will emerge, and hopefully a new arrangement of quality education will coalesce around these shards. We don’t know what it will look like yet. But this is neither the first nor the last meltdown and re-coalescence in educational institutions. The present higher education system, we sometimes forget, is hardly set in stone, no matter how ivy-covered those stones might be. It is actually the product of the gigantic reorganization of education that followed the GI Bill after WWII and the infusion of Federal dollars during the Cold War. This expansion of colleges and universities to accommodate all those great unwashed, often the first in their families to even complete high school, let alone consider college, was deplored by old line academics and alumni alike in terms even more vitriolic than those now being applied to the expansion of for-profit and MOOC educational models. Of course, with time this new university alignment, like the equally-deplored  expansion of land-grant-based universities before it,  became acceptable and then even enshrined as the course of nature. This post-war alignment was shaped by specific factors – a great crunch of new students coupled with a vast expansion of Federal investment in Cold War-relevant technologies that supported infrastructure creation. But since those conditions are no longer dominant, it’s not at all hard to see how the present systems might be unsustainable, and every reason to suppose that some new models will emerge. They won’t satisfy everyone, but they will be real.


  • Hello JD, I suggest that education is not solely providing mental and moral values. First I propose education is any endeavor in which person A informs person B how to be successful in endeavor C, so it is not limited to mental or moral activities. Secondly, when referring to education, I suggest that referring to it, and not stipulating what is authentic education and what is inauthentic education, is less than valuable. There are plenty of courses taught in universities and given credit to the student who finishes the course, that provide no information at all that can be practically used in real life conditions to produce any success, to produce even failure. And all such courses should be called inauthentic education.

    Then there is morality, which I claim is doing what is necessary to obtain an excellent outcome in an endeavor; which makes morality activity dependent (what is moral for activity D is not what is moral for activity E). And, further, that type of morality can’t be taught, other than to delineate the definition of morality, and can only be learned by the individual in the process of doing her daily activities. I know that plenty of courses claim to teach ethics, and even offer advanced degrees in that field. But all such information is contrived, and following it never leaves a person with a sense that what he did was righteous to do, that sense being present every time a human performs an authentically moral act.

    There have been people offering courses in non-academic institutions for decades, so I am unclear about what is special about Udemy, unless they are going to offer courses whose content is the same, and whose name is the same, as courses offered in universities for credit. And in the latter case, where the person is not getting an official degree necessary to perform one’s work, like getting an md or law degree to be a physician, I can’t see what would be the problem.

    • DrEvel1

      Very interesting questions you raise here, Warren; interesting to the point where I’m going to have to do an entire column on them. I agree with part of your points; others, as you might imagine, I don’t, or agree only partly. But you deserve the best reply I can make, and that’s going to take more space and time than I have in a comment response. Watch this space!

      Thanks for being here, and raising authentically interesting issues. You have no idea how much spam I have to contend with here; it’s great to see that someone actually reads this and cares enough to respond! You are my hero!

  • I actually blog too and I’m authoring something very similar to this post, “Two Boards and Most of the Idea”.
    Do you care in cases where I reallymake use of several
    of your own ideas? Thanks a lot -Riley

    • DrEvel1

      Just be sure to give credit for anything major that you adapt; I need the readership!