Will free MOOCs destroy Higher Education?

Joshua Gans:

MIT Strategy professor Michael Cusumano published a lengthy opinion piece where he argued that free online courses may have much higher costs and consequences than the socially minded people promoting them intended.

I worry, however, based on the history of free products and services available on the Internet and their impact on the software products business as well as on the music, video, book publishing, and newspaper and magazine businesses. We have learned that there can also be “negative” network effects. In education, this would occur if increasing numbers of universities and colleges joined the free online education movement and set a new threshold price for the industry–zero–which becomes commonly accepted and difficult to undo. Of course, it is impossible to foresee the future. But we can think about different scenarios, and not all of them are good.

The piece is a bit frustrating with some internal inconsistencies that would take too long to go through. But, by way of example, as I’ll get to in a moment, Cusumano’s concern is that free online courses by elite institutions may wipe out the non-elite ones but at the same time suggests that a free price sends a signal that those courses are of low value. So, on the one hand, their free price combined with high value will wipe out the non-elite courses while their free price sends a signal of low value compared to non-free courses offered by non-elite institutions. You can’t have it both ways.