In my latest Bloomberg column I attempt to design an ideal university from scratch. The point is not that all schools should be this way, rather this is the experiment I would like to see at the margin:
I would start with what I expect students to know. They should be able to write very well, have a basic understanding of economics and public policy, and a decent working knowledge of statistical reasoning. I would give a degree to students who demonstrated “B-grade” competence in all of these areas; what now goes for passing C-minus work wouldn’t cut it.
Most important, the people who write and grade the students’ tests would not be their instructors. So students would have to acquire a genuine general knowledge base, not just memorize what is supposed to be on the exam.
Next, each student would have the equivalent of a GitHub certification page. If you learned three programming languages, for example, or won a prize in a science fair, that would go on your page as a credential. But it would not count as a credit toward graduation. Some students could finish their degrees in a year or two even if their pages were not adorned with many accomplishments, while others might fill their pages but get no degree.
My imaginary school would not have many assistant deans, student affairs staff or sports teams. The focus would be on paying more money to the better instructors.
Instructors would not have tenure, but would have to compete for students — by offering them classes and services that would help them graduate and improve the quality of their certification pages. Teachers would be compensated on the basis of how many students they could attract, in a manner suggested long ago by Adam Smith, who himself lived under such a system in 18th-century Scotland.
The very best instructors could earn $300,000 to $400,000 a year…
The school would hire online instructors too, many of them from poorer countries and working at lower wages. So you might take French from a tutor in Senegal, or have a high school teacher from Tamil Nadu read your essays and offer writing tips. I am a big believer in face-to-face instruction, but in my school it would have to compete with online instruction. For this reason, I think my school would have a much more diverse faculty and instructional base than any other institution of higher education. None of the instructors would be required to have any undergraduate or advanced degrees.
The goal is to introduce competition across as many different margins as possible. There would be an “all on-line” option as well, offered to anyone in the world, though of course the on-line degree might be worth less as judged in the market place.
One issue I did not have time to get into is how the school would “shadow price” its different services to students. Access to different services has to be priced somehow, so should the school hand out total vouchers to each student for use within the school? Should the on-line and also face-to-face classes be priced at marginal cost (plus mark-up)? Or do positive externalities from class cohesion mean that the face-to-face classes should be priced at some additional discount? To what extent should factors other than this shadow price system be used to allocate access to classes?