Open Courseware Runs Afoul the Free Market

Higher education is now almost absurdly expensive. In an effort to reduce the cost of developing and delivering educational material, there are a number of initiatives around open curricula right now. The idea is that content generated by the academic community can be made freely available so that professors and publishers don’t have to reinvent the wheel each time. It’s basically a commons for educational content. The folks at the Community College Consortium for Open Educational Resources (who have a pretty great blog on this subject) call it “OER.” Ultimately, advocates like CCCOER hope to make higher education more accessible. The Open College Textbook Act of 2009, for example, notes that 200,000 students do not enroll in a higher education system due to the cost, which includes an average annual textbook budget of $805 to $1,229. The bill appropriates $15 million in 2010 for one-year grants to anyone who wants to create open content.

A few weeks ago, the Obama administration announced a $12 billion investment in community colleges, and $500 million of that is allocated to sponsoring the creation of open courseware. As described by Inside Higher Ed:

The Departments of Defense, Education and Labor will work with one or more community colleges and the Pentagon’s learning network to find ways to award credit “based on achievement rather than class hours,” and to “rigorously evaluate the results,” according to the White House briefing materials on the program.

The material would be made available to anyone, since it’s open, but it will be specifically focused on community colleges. The plan is to create a set of resources for educators that they can then customize for their own classes. Frederick Hess of AEI (“Reinventing the Wheel” at NRO and Inside Higher Ed) has taken issue with this. First, he asserts that this violates the Department of Education’s charter:

Federal law has long buttressed academic freedom and intellectual pluralism by prohibiting the U.S. Department of Education from exercising control over “curriculum, program of instruction … text books, or other educational materials by any educational institution.” The administration would suddenly have the department funding the creation and dissemination of entire courses.

Implementation is important. I’m certainly skeptical of any attempt to Federalize educational content, but I don’t think that’s what’s happening here. If the courseware is open, and properly licensed, it’s not “owned” by the U.S. Department of Education. They may have paid for its creation, but (if properly nurtured) it will have a life of its own, outside the purview of the Department. This is a significant feature of open content, which causes Hess some additional misunderstandings:

The proposal is both short-sighted and destructive. It’s one thing to encourage providers to develop ”open source” wares and to promote measures that encourage publishers, colleges and universities to reduce costs and save students money. But it’s another thing entirely for the federal government to use taxpayer dollars to provide services that will undercut those offered by self-sustaining private enterprises.

Again, I believe he’s missing the point. It’s not at all clear that funding the development of freely available content will crowd out the existing publishers. There is certainly a threat to content publishers if their business model is predicated on controlling access to content. But whether they realize it or not, vendors of textbooks and distance learning programs are selling much more than just content. They’re adding value through packaging, supplementary materials, and either an implicit or explicit certification process. They’re already competing, after a fashion, with programs like MIT’s OpenCourseWare and Open Yale Courses. Unless I misunderstand the market completely, the Administration’s program should be about as threatening as Wikipedia. If anything, content vendors should be delighted that the government will be providing a baseline of content that they can subsequently ignore or improve upon. You could almost understand it as a subsidy. Hess continues:

Today, the chokepoint is often not the lack of existing online courses or materials but the fact that colleges and universities offer them at prices that approximate those charged to students enrolled in more costly traditional instruction. Of course, this stickiness in price has been due to credentialing and regulatory practices that impede the emergence of low-cost entrants; state-funded institutions that use new e-learning students to cross-subsidize other units; and proprietary operators that have happily responded to this cozy arrangement by competing on convenience rather than price.

Hess is making a valuable point. While it’s certainly good to have free content available, it will not necessarily lower the cost of delivering that content to students. The costs are getting higher for a number of reasons, and it’s not because content is suddenly more expensive to produce. Yet another reason content providers shouldn’t feel threatened by the measure.

Here’s where he misunderstands the economics of freely redistributable content:

This is sensible only if one assumes that federal contracting and oversight ensure better outcomes than market transactions. But this is the same administration that explains that the “public option” is desirable in health care precisely because it believes in market competition.

I have to believe he’s being disingenuous in that second sentence. The difference between open content (which cannot be made scarce) and a “public option” in health care is profound. The first point is valid, however. If the government is going to be producing content, and retains control over the maintenance of that content, this program will be a waste of money. If, on the other hand, the content created is licensed under a  permissive Creative Commons license — say, the “CC-BY“, which allows for both commercial and non-commercial use with attribution, we worry less about the DoD, DoL, and DoE creating valuable content. If they do create useful content, it’s easy to imagine a community of educators, publishers, and institutions that would self-organize around their respective areas of interest and carry the content forward. Open source software communities do this all the time. If they cannot, it was an expensive failure.

So now we can create an understanding of what it would take to make this initiative work. There are three main objections, which I’ll summarize as “It’s wrong for the federal government to create content, and if it does, it won’t do it well, and even if it does create good content, it will crowd out an existing industry.” I don’t believe there’s any real threat to those delivering content today. That industry is growing just fine in the face of the open courseware efforts already underway. I believe we should be concerned about the open courseware program being intentionally or unintentionally used to assert some kind of control over the curricula in community colleges and elsewhere. Properly licensed content, though, regardless of its origin, reduces this threat. The threat can be further reduced by ensuring that in implementing this program, the DoE is supporting a community, not creating customers.

I am skeptical of this $500 million number, and suspect that this program is best structured as a series of small bets that fund a collaboration between DoD, DoL, DoE, and the open courseware community that already exists. With the economy the way it is, there are already concerns that open courseware cannot sustain itself. This seems like a simple way to ensure that the raw materials for higher education are inexpensive and of high quality — and it can be done for significantly less than the headline-grabbing half-a-billion the administration’s proposed.

Executed in this way, there’s little threat of centralized control, no chance of crowding out existing vendors, and freely redistributable content is available to anyone, significantly lowering the entry cost for those who want to enter the distance learning, community college, and other educational markets.

[HT: Glyn Moody, Paul Coen and Timothy B. Lee for getting my mind working on this.]

2 thoughts on “Open Courseware Runs Afoul the Free Market

  1. “Unless I misunderstand the market completely, the Administration’s program should be about as threatening as Wikipedia.”

    — For everyone not in the encyclopedia business, Wikipedia is very non-threatening. Current educational content producers see the trend and what it means to their established business models. Their profitable model will get crowded out. That isn’t to say that they can’t radically adapt and benefit from the changing conditions.

    As far as distributing content to students, as far as I can tell the costs are only going down, not up.

    And a closing thought: Pre-Wikipedia, I wonder what would have happened had the government made it an objective to create an open content encyclopedia by jump starting the process using federal dollars. Would the outcome have happened sooner and or better than Wikipedia?

    (Overall, if we are going to spend money at the federal level on education, fostering OER probably is one of the safer plays)


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