One of the most ridiculous things I’ve heard of recently

From Slate:

The Chronicle of Higher Education reports that [Minnesota] has decided to crack down on free education, notifying California-based startup Coursera that it is not allowed to offer its online courses to the state’s residents. Coursera, founded by Stanford computer science professors Daphne Koller and Andrew Ng, partners with top-tier universities around the world to offer certain classes online for free to anyone who wants to take them. You know, unless they happen to be from Minnesota.

A policy analyst for the state’s Office of Higher Education told The Chronicle that Minnesota is simply enforcing a longstanding state law requiring colleges to get the government’s permission to offer instruction within its borders. She couldn’t say whether other online education startups like edX and Udacity were also told to stay out.

Productivity

The Economist‘s Free Exchange blog has an interesting post about productivity growth during the period referred to as the Great Stagnation.  Essentially it is a summary and critique of the argument made by Robert Gordon’s latest working paper on growth, which is further summarized by FT Alphaville.  The crux of the paper can be found in the conclusion of the abstract where Gordon writes:

Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007. These include demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. A provocative “exercise in subtraction” suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades.

A big part of the productivity equation is the relationship between technology and employment.  Gordon seems to have a problem with the idea that technology has the ability to improve productivity anymore.  He argues that the internet revolution dissipated in about 8 years.  He writes (as quoted by the FT Alphaville post):

A thought experiment helps to illustrate the fundamental importance of the inventions of IR #2 compared to the subset of IR #3 inventions that have occurred since 2002. You are required to make a choice between option A and option B. With option A you are allowed to keep 2002 electronic technology, including your Windows 98 laptop accessing Amazon, and you can keep running water and indoor toilets; but you can’t use anything invented since 2002.

Option B is that you get everything invented in the past decade right up to Facebook, Twitter, and the iPad, but you have to give up running water and indoor toilets. You have to haul the water into your dwelling and carry out the waste. Even at 3am on a rainy night, your only toilet option is a wet and perhaps muddy walk to the outhouse. Which option do you choose?

I have two general responses:

1. It seems that under option B, the concept of running water would come about fairly quickly.  There is ample research in historical economics on the relationship between communication technology and overall economic and standard of living growth (see this for an example).  Someone would think of how to take advantage of water pressure to develop piping from their well to their house, they would write a post on Facebook, someone would Tweet there post and by the end of the week directions would be on every iPad in the world (that’s just using the technology he left on the table in option B).
2. This is my second point.

Responding to the “tacocopter” above, Adam Ozimek writes:

While ZMP [ed. note: see this for ZMP definition] workers may or may not currently be a big problem, it seems quite possible that it could be in the future. Say tacocopters triple what you can buy with a dollar, but cut the marginal product of a large portion of the population in half. Now those who have their wages halved but their buying power trebled are still better off, but it’s quite possible their wages might have fallen below their reservation wage, and they’d rather live off their spouses, parents, kids, or the government. While these individuals may still be better off directly, I think there are reasons to worry about this. If a large enough percent of the population becoming ZMP, it creates a large constituency for a basic income payment. Maybe huge swaths of the country not working would be fine. But I tend to have a little conservative in me where I think there is a chance this has big negative cultural and political impacts. This is the threat of tacocopters.

Gordon may be right about headwinds facing future economic growth.  However, I think he is significantly discounting the adaptability and innovative capacity of the modern economy.

A New Education Platform

One of my favorite blogs, Marginal Revolution, has now introduced Marginal Revolution University.  Tyler Cowen describes the project by saying:

We think education should be better, cheaper, and easier to access.  So we decided to take matters into our own hands and create a new online education platform toward those ends. We have decided to do more to communicate our personal vision of economics to you and to the broader world.

Bryan Caplan offers his take here and writes:

My real view, however, is that MRUniversity is going to do very well for Tyler, Alex, and the world.  A business idea doesn’t have to precipitate a revolution to add tremendous value.  Even if online education tops out at 1% of the higher education market, and MRUniversity captures 1% of that 1%, they’ll be rich.  And it wouldn’t surprise me if they can do better in less-developed countries, whereconformity norms don’t work so heavily against them.  Even if MRUniversity never makes a dime, moreover, it will supply the public good of economic education that the world so sorely needs.

In the end, though, I predict that Marginal Revolution University will be a lot like Marginal Revolution itself.  It won’t be a strong substitute for brick-and-mortar education.  It won’t directly make a lot of money.  But it will breathe new life into the timeless subject of economics – and be a profitable loss leader for two very entrepreneurial economists.

Hate for Driverless Cars

It’s not secret that I am a fan of driverless cars.  That’s why this ad is disappointing.

For the pointer and good commentary, I thank Alex Tabarrok.

Two Marginal Students

Time has an interesting piece on online education.

In terms of learning on the college level, the Department of Education looked at thousands of research studies from 1996 to 2008 and found that in higher education, students rarely learned as much from online courses as they did in traditional classes. In fact, the report found that the biggest benefit of online instruction came from a blended learning environment that combined technology with traditional methods, but warned that the uptick had more to do with the increased amount of individualized instruction students got in that environment, not the presence of technology. For all but the brightest, the more time students spend with traditional instruction, the better they seem to do.

After reading the article, I was left wondering what the impact of increased online higher education platforms will be on the marginal student (i.e. the last student to choose college at its current price or conversely the last student to not choose college at its current price).
Assuming that college is a signaling device nearly as much or as much as it is an actual education tool, there is a chance that the impact of increased online education will have a negative impact on outcomes of students even more than the article suggests.

If attending marginal students choose instead to become online students, their signal strength will be reduced in the marketplace. I actually think that the Time article understates the educational abilities of online classes – after all we are still very much in the experimental stage of these methods; however, the article completely misses the possibility that online education will signal a subpar student. There could be several manifestations of this, all of which would create a marginal increase in doubt by potential future employers.

Of course, there is the non-attending marginal student. The potential economy-wide effect of online college courses will also depend on what the improved signaling of current non-attendees is. This is really the big unknown. What is the increased value of online college versus no college?

TED Thursday – Online Education

Daphne Koller discusses online education.

Something that brings Bill Clinton and Haley Barbour Together

From The New York Times:

Terry McAuliffe, the former chairman of the Democratic National Committee, is starting a company that makes little electric cars. On a sweltering Friday in early July, GreenTech Automotive unveiled its signature vehicle — the MyCar — at a plant opening in the North Mississippi town of Horn Lake. McAuliffe was puttering backstage before the event with his pals Bill Clinton and Haley Barbour, the former governor of Mississippi and archetypal Republican lobbyist.

The story of digital education continues

Today the story is from a David Bornstein Opinionator column in The New York Times. He writes:

Free and open online education could help close this gap, but only if it’s intentionally directed to the people around the world who most need it. Right now, a lot of free education is thrown online without a clear sense of how it will help people prepare themselves for employment. In May, Unesco, the branch of the United Nations that focuses on education, held an international gathering in China, where representatives concluded that the development of technical and vocational education and training — what one official called the “poor cousin of mainstream education” — should be deemed a “top priority” to tackle global unemployment.

TED Thursday – The Self-Driving Car Discussion Continues

Chris Gerdes discusses 150 mph self-driving cars.

 

Even More on Digital Education

From Inside Higher Ed (via Tyler Cowen):

Unlike traditional college courses, these courses will rely heavily on course  materials — a buffet of traditional textbooks, recorded lectures and automated  tutoring software — to instill students with the knowledge and skills they need  to complete assignments and pass exams. Instructors will be available on demand,  but the university hopes to assemble a library of nonhuman learning resources  effective enough so that students will only need to call on professors as a last  resort.