So we won't all be fired then

Whenever I read stories about the growth of MITx or other equivalents, I get a bit nervous about the long run for academics. I've consoled myself with that academia is really a rather more complicated product than just book-learning: there's all kinds of consumption and complex human capital formation bundled in with it; MITx can't easily replicate that bundle.

Noah Smith helps ease my mind.

Economists (including at least one in my PhD graduating class) have dedicated untold numbers of papers to showing that college doesn't produce useful skills. But I think that this is missing the point; useful skills, which you mostly learn on the job, are not the only valuable form of human capital. There are three extremely important forms of human capital that you can't acquire on the job:
1) Motivation,
2) Perspective, and
3) Human networks.
These, I believe, are the types of capital that college is designed to build, both in Japan and in the United States.

Motivation, in Noah's setup, isn't about showing that you can complete arbitrary tasks on a deadline (like assignments); rather, it's about building a network of people who will smack you around if you slack off.

Perspective is what you get when you're immersed in a rich environment different from the one you came from - you learn from others just what it is that you want to do. I knew going into university what I didn't want to do: farming and working outdoors where temperatures can hit -40. I didn't know that I wanted to be an economics prof until a few years into study.

And the human networks are self-explanatory.

MITx can replicate the book learning. If it's awfully careful in how it sets up local tutorial groups, it might be able to replicate some of the motivation aspect, but not unless you can get a substantial number of high quality students to flip from traditional universities to the MITx model. I have a harder time seeing how it replicates the "figuring out what I want to do with my life" aspect of university; human network formation too requires some push from the university equilibrium to the MITx equilibrium.

College is useless as a mechanism for signaling intelligence. It's probably somewhat useful for signaling the ability to work hard and resist temptation, at least in the U.S. where many colleges require hard work (but not in Japan). It is about consumption, but it's too concentrated in time to be mostly about consumption. College is really about human capital, of the kind not conveyed in classes - motivation, perspective, and networking. Rather than a hideously, inefficiently expensive signaling mechanism, college is an ingenious technology for building the kinds of human capital that are scarce among smart people in rich countries.

The biggest risk isn't from students wanting to switch from universities to online options like MITx, it's from governments deciding that massive subsidies to help high human capital types better network with each other isn't worth the public investment. The best counterargument is that publicly funded tertiary education with a strong bias towards subsidizing lower income students directly rather than having broad-based tuition subsidies or interest-free loans is probably the best way of facilitating upwards mobility among kids born in lower deciles but with higher innate ability. Noah's 'Perspective' argument here seems pretty critical. If you go to trade school to become a mechanic, you learn to be a mechanic, but you don't get exposure to the wider range of potential life options.