Archive for March, 2014

Eighteenth Century Bitcoin

March 22, 2014

Or everything old is new again

Richard Arkwright (1732 – 1792) was a Steve Jobs for his times, and one who also organized a type of Bitcoin currency for making transactions. He died 32 years before my grandfather was born, which is of no import except to show that all this happened not that long ago.

The eighteenth century industrial revolution was powered by water and the steam engine, both of which substituted for manual labour and horse power. Before the introduction of railroads, canals were a means used to ship products. Canals had a short life span but some survive and are used mainly for tourism today in the UK.

Arkwright, one of a family of thirteen children was, for financial reasons, home schooled, and first apprenticed to a barber and wigmaker. His main inventions were cotton related. He developed the spinning frame and carding engine, which reduced the labour required to spin raw cotton for making cloth. For the 18th century these developments were as significant in their way as the information age is today in other areas.

The modern factory system was a product of these earlier times. Workers were brought to his factories from other parts of the country ,

“Richard Arkwright’s employees worked from six in the morning to seven at night. Although some of the factory owners employed children as young as five, Arkwright’s policy was to wait until they reached the age of six. Two-thirds of Arkwright’s 1,900 workers were children. Like most factory owners, Arkwright was unwilling to employ people over the age of forty.”  See

Too ensure a steady supply of labour, Arkwright built housing close to his factories so that workers would be on site and on time for work. He also owned stores nearby which supplied the workers and reduced the time needed for travel. These stores became was another revenue source, and this is where an eighteenth century version of Bitcoin enters the picture.

Arkwright was keen that his workers and their families would spend their earnings on things he owned, so he provided a currency specifically for this purpose.  In fact this was the only currency which was acceptable in his stores. Unlike today’s Bitcoin, it was a tangible currency using Spanish silver coins, but these were stamped to show both their value in exchange, and the fact that they could be, and had to be, used in the company stores.

An example of a coin can be seen at

Printed on these Spanish coins by the mill owner are the words “Cromford, Derbyshire and 4/9”. Cromford is where the mill was located, and 4/9 denotes four shillings and nine pence which is what the coin was worth for transaction purposes, although its silver value must have fluctuated over time, creating problems when it exceeded its face value.


Some Economics of Online Learning

March 14, 2014

Who benefits and how much?

From a search of online learning, e-learning, distance education and MOOCs in text, audio and video formats, there is more material on the web than most people will have time to access. And more flows in daily. Journals on this topic include the Journal of Online Learning and Technology, the American Journal of Distance Education, the Canadian Journal of Learning and Technology, and the International Journal of Instructional Technology and Distance Learning, amongst others. Online learning is a rapidly growing field of interest, which can relate to traditional educational systems as well as to those training people for artistic, industrial and other types of activity.

The following looks at some of the costs and benefits of online learning with implications for how traditional university models may change. One aspect to keep in mind in any comparison of distance learning with on campus learning is to understand how they differ. If I watch the Wimbledon tennis championship on television, it is a markedly different experience from attending the championship live, where I can enjoy the matches, mix with the spectators, visit the bars and eat strawberries and cream. Or, if I buy a meal in a restaurant, it is not the same as staying in a hotel with all its facilities including eating in its restaurant. Contrasting these alternatives is a case of apples and oranges, which is also the case for online and on campus courses.

I start by focusing on the three main players of the educational system, the students, the faculty and the university.


Students are required to pay a fee for an online course if they wish to receive a certificate which states that they have completed the lectures, quizzes and written assignments. They may also have to grade the assignments of other students. As an option, a written text may be offered for purchase. Anyone not wishing to fulfill these requirements can access the lectures for no charge, although registration is required. Thus the reports show that several thousand people from around the world are often registered, but only about five to ten percent receive a certificate. Many, like myself, take them for free, out of interest and because of the convenience.

Aside from these direct costs which are low, students can access the material in their own time. They do not have to travel to the lectures or reside away from home or on campus. Convenience and time is acquired for other activities. The main costs for on campus students are fees, residence, if away from home, and foregone income from having full or part-time employment. All three items are reduced or eliminated for online students.

At the same time, some features of the on campus experience are missing, such as the interaction with students and faculty, and the use of athletic and other facilities offered on campus. Interaction with other students does take place online as witnessed by the popularity of social media, and athletic opportunities are often available elsewhere. Direct comparison of online and on campus courses is an apples and oranges situation. They are not the same. Each offers something different from the other.

Another online advantage is that students find it easy to interact at negligible cost with other students taking the same course. They can form discussion groups, create online forums and identify issues which they want to question or dont understand. They feel connected and not isolated. A number of professors emphasise that they have improved their courses by altering the format or material of their inclass as well as their online lectures as a result of listening to and accessing student forums.

Online connection to the internet is not free. It requires owning some form of hardware and paying for wired or wireless access. A printer may also be useful.


The fixed upfront costs of developing the material for delivery online is one of the main costs to the online lecturer. If the person is employed by a university then it is a university salary cost. If the course is delivered by a firm like Coursera, then it is a firm cost negotiated between the teacher and the firm. The Kahn Academy provides instruction online for free for tutoring a student.

These upfront costs can be high but are spread over the number of students taking the course in the current and future years. It is similar to the costs of producing a film where the cost per film are high but the cost per viewer depends on the number of people who watch the production. Since a lecture is a type of video performance, viewers are used to the values incorporated in TV productions. Just putting a camera in a classroom with a teacher is not enough to hold an audience. My admittedly limited viewing has seen cheap unappealing productions from distinguished academics, and those with outstanding production values from lesser known people. Software such as Desire2learn is available to help format lectures.

Duke University Professor Cathy Davison, the instructor of a recent MOOC, which I accessed, writes “We spent an estimated 40 hours a week from May 2013 through January 2014 working on the MOOC — and that’s before the course even begins. The investment in time makes sense for me, since I am passionately interested in innovation in higher education, and (meta again) I wanted to learn about making a MOOC inside and out”. 

The posting from which this quotation is taken is worth reading as one view of the costs and related issues

In Canada, the University of Waterloo is at the forefront of developments. Professor Katherine Acheson in the Department of English has commented as follows:

“The situation with the development of online courses is different now, overall, than it was when the University of Waterloo started its distance education program. Online courses no longer necessarily imitate in-class courses. They are developed using technologies that offer affordances that classrooms can’t. Group work is enabled, potential for content is expanded, contact with the instructor and with other students can be richer. (There are down sides too.) At this point I am not sure that we have enough experience with this model (both the costs and the quality) to come to conclusions. 

But it is apparent that building the infrastructure and cultivating the talent to use the new technology well can be costly. It’s unbelievable to me the amount of admin, space, time, expertise etc. required to produce courses that are really cutting edge. And all online courses are delivered through a Content Management System (we use Desire2Learn) — also used as adjunct to in-class courses. It is expensive and extremely frustrating as it does not always work.”


Costs are incurred in developing the courses, arranging their delivery, both of which involve capital as well as operating costs. It would be interesting to know whether the development costs are treated as capital or operating costs. Athabasca University in Alberta is primarily an online university. Contrasting its financial statements with that of an online university would be one way of making a comparison. While universities publish statements which are available online, comparisons might be difficult, since almost all universities offer some online courses in conjunction with on campus courses, and on campus courses may involve some online features.

A personal note — as far back as 1990, I gave up having regular office hours. Instead I was available by email to interact with students and if desired would arrange an in person meeting at our mutual convenience. It worked more efficiently for both student and teacher, and many issues could be resolved by email. Other faculty did the same. In fact a visit to faculty offices in many departments today finds them unoccupied, as faculty work at home and attend the university mainly for teaching and administrative duties such as committee meetings. Many non-academic businesses no longer offer individual offices but provide shared space which can be used when needed. A university could save on building costs by reducing the number of offices in many faculties. Online teaching should reduce the need for more buildings and may allow existing buildings to be rented out to other users.

Credentials for online courses

March 12, 2014

Do I get a credit?

The short answer is no, because I am not looking for one.  At my age I enroll in online courses out of interest and for free. I dont write the assignments, answer the quizes or fulfill the requirements that will earn a certificate. This is not the case for students looking for a degree qualification and a job.

 Following are a few facts published by the Babson Survey Research Group:

  1. In 2013, of the 21.3 million students enrolled in higher education in the US, one-third is enrolled online.
  2. Since 2003, annual growth in online enrollment has varied between 35% and 5%, higher in the earlier period when it was starting.
  3. Sixty-six percent of university chief administrative officers think that online education is critical to the long term strategy of the institution.

Another number frequently quoted is that only four to ten percent of those who enroll in online courses actually complete them, presumably meaning that they get some type of certificate. Many like myself take them out of interest and because it costs nothing to enroll.

What is a university degree ?

It represents certification by the university that the person has completed a particular course of study, and is recognized as such by potential employers. Universities are given the right by governments to issue degrees and diplomas. The value of the degree (or course) varies with subject matter (medicine, law, engineering, arts, social science), as well as with the reputation of the institution granting the degree. Thus a graduate in history, engineering or business from Oxford, Stanford or the Sorbonne may receive an intial salary higher than that of graduates from state and local universities in their respective countries. The market is responsible for this outcome and there is nothing surprising about that.

What happens when a person receives a certificate as a result of taking a MOOC? It depends in part on who is offering the instruction. (The term was coined in 2008 by Dave Cormier of the University of Prince Edward Island and now with the National Research Council of Canada.) In the US, three of the firms offering MOOCs are Coursera, Udacity and edX. Each business was started mostly by academics going into business and then arranging for courses to be offered online. There is no one format for how the courses are priced and staffed, but the firms try to make them equivalent to a university course so that they are attractive to students. Others are entering the field and there are many varieties of the online experience. The Kahn Academy offers a different type of instruction for free.

The question is whether a certificate issued by a private firm, received as a result of someone taking an online course given by a PrincetonUniversity professor, for example, is the same as a similar course taken by someone enrolled at Princeton. The answer is no, but the online course does have value as a certificate of accomplishment. An employer will treat the MOOC certificate as a screening device, and may take the person on as an employee on a probationary basis to find out what knowedge the person has. Over time, firms, instructors and online courses will gain reputations (good or bad) for their worth and be rewarded accordingly by employers. 

The MOOC certificate will probably remain valued less in the labour market than the equivalent university course, but the former’s value over time will depend on the experience of employers. In the meantime employment contracts are sufficiently flexible to allow testing to occur, giving opportunities for employees to showcase their skills however acquired. Students will benefit if their costs of education are reduced, a topic for a future posting.


Will Online Learning Replace Inclass Learning?

March 11, 2014

What future for education?

The fact that this is being written on a website suggests that some form of online learning already exists. A web search of this topic provides an ocean of postings with conclusions all over the map. Online learning works; it doesn’t work; it works in some cases, and so on. Because we are in the early decades of the internet age, when developments in communications and information technology are changing how many things are done, it is not surprising that the future is unclear. People are trying to navigate through mists to determine how education, medicine, travel, privacy, crime, government, broadcasting, publishing and many other social, political and industrial activities are being and will be affected.

My interest is to understand how these developments will affect my grandchilren and their parents, by drawing on what little I have learned over the past 80 years, 40 of which were spent in university teaching and research, plus a number of years before that as a student in schools and universities.

One starting point for considering the future of higher education is to decompose the university as an organisation into three parts, staff, students and facilities.

Staff — consists of the academic staff undertaking teaching and research, the support staff and administration.

Students — include full and partime students, on and off-campus students, online, out of town and by correspondence, and former students.

Facilities — include land, buildings (classrooms, offices, residences), equipment (vehicles, laboratories, computers), athletic, medical and other.

This is a bare bones description of a university as an organisation and in some ways similar to a conglomerate firm, because of the range of activities undertaken. Consider these and the associated facilities. They may include student residences, athletic facilities, restaurants and cafeterias, book, computer and other stores, a post office, medical and nursing facilities, banks and cash machines, parking and security services.

Like firms, universities compete with each other and look for a wide variety of revenue streams to meet their costs. Like firms, universities have to negotiate with unions and faculty associations. Another way of looking at a university is to see it as a community neighbourhood, village or suburb.

The complexity of the administration is something I did not appreciate when I was a faculty member, and even when I held a minor administrative position. As a student it never crossed my mind. 

Similar to a conglomerate, a university has certain activities which are essential such as teaching and research, while others are useful or convenient to have but less essential. The business models include full service universities and others offering less services. When I attended the London School of Economics in the centre of London, it consisted of classrooms, library, computer facilities, squash courts, cafeteria, pub, bar, admimistrative offices and washrooms. Other facilities such as residences, restaurants, pubs, cinemas, theatres, book and other stores, parking, and tennis courts were available nearby but not owned by the university. Costs for a university will vary with the services offered, while revenue streams come from fees, rent, research and government grants, donations from alumni, and from various services, such as parking.

Common to many universities is the under utlisation of the facilities, both daily and year round. This has changed as some courses are offered in the evening and year round, such as summer courses, both on campus and online off campus. This is where online teaching can further change the economics of universities.

On and off campus courses

Discussion of online learning often focuses on Multiple Open Online Courses or MOOCS, offered by commercial enterprises in conjunction with university and other academics. A more useful distinction for present purposes is to contrast on campus with off campus delivery of courses.

Earlier versions of off campus delivery were correspondence courses where students were mailed material, listened by radio or view by television, and then wrote proctored examinations near where they lived. E-learning, a general term which includes off campus courses began in 1960 at the University of Illinois and Stanford University. In 1969, the Open University opened in the UK and continues to the present, while in Canada the University of Guelph was an early entrant in the field. MIT was another pioneer.

“ MIT OpenCourseWare (MIT OCW) is an initiative of the Massachusetts Institute of Technology (MIT) to put all of the educational materials from its undergraduate– and graduate-level courses online, partly free and openly available to anyone, anywhere. MIT OpenCourseWare is a large-scale, web-based publication of MIT course materials. The project was announced in October 2002 and uses Creative Commons Attribution-Noncommercial-Share Alike license.” (Source: Wikipedia).

Today, university offerings range from one hundred percent on campus to one hundred percent off campus delivery of courses as well as blends of the two using various combinations of hardware and software. This is the likely future direction which delivery will take.

Consider some alternatives using the internet. Video lectures are delivered online. Forums are set up for students from around the world to discuss with each other and with the instructor the material presented in the lectures. Social media such as Facebook and Twitter are used to create a community of those participating in the online lecture. Assignments are set and marked by fellow students online with some direction from the instructor.

Contrast this with the past where lectures were “the sage from the stage” variety on campus. Students were given a reading list, encouraged to read ahead of the lecture and perhaps could ask questions, if time permitted in large undergraduate classes. Discussion groups might be held on campus lead by teaching assistants with often few students attending. One possible blended course format would be for students to watch an online lecture from a first rate professor, and then attend on campus classes where discussion of the lecture would take place. Such blended possibilities are numerous and are already occurring on a formal and informal basis.


The question posed in the title of this posting remains unanswered, because it depends on two other sets of factors, how credentials for off campus learning are established and recognised, and the likely economic implications for students, faculty and universities. These will be discussed in subsequent postings.

Online Learning – some initial thoughts

March 2, 2014


A MOOC, offered by Coursera (, entitled The Future and History of Mainly Higher Education provides an introduction to how developments in information technology are affecting the way education and its delivery is viewed by those who specialize in and study this topic. The issues discussed are not only the impact of the internet and associated sites like Wikipedia and blogs but how email, Facebook, Twitter and social media influence what we do and how we do it as it relates to education. The historical approach provides information about what has and has not worked in the past, while the future reviews how current conditions may be improved.

A second theme of the MOOC is to contrast top-down learning, the sage on the stage, to more collaborative forms of learning where those being taught may provide input to both what is taught and how it is taught. What may be new to older generations, like myself, is the extent to which students are expected to provide such input. While graduate and undergraduate students at Duke University and the University of North Carolina, where this MOOC is located, may, because of screening for admission, have the knowledge to provide useful input, I would have doubts about whether less qualified students would be able to contribute much, and especially students at junior and high school levels.

Cases discussed of where students have and are providing input to the structure and operation of classes are impressive, but I suspect they are few in number, and as suggested involve students who have been screened for the caliber of their educational achievements. This is a minor quibble with what is a highly stimulating course. For me it was worth listening to the online lectures a second time as well as reading the referenced material.


Economics of online learning

How are institutions (schools, colleges and universities) affected by online developments? Consider first the case of university students – for college students it would be similar.

For an on campus experience, the main costs are fees, books and equipment, living costs, borrowing costs and foregone income if the student would otherwise have a job. Savings may be made by living at home, working part-time during the school year and working during vacations. The expense of an education is an investment in the future and financial institutions will provide loans which can be repaid when earnings commence. For those planning on entering a profession, loans are easily obtained, and the transaction is similar to obtaining a mortgage to purchase a house.

Time is saved by a student attending an online class as opposed to travelling to and from the lecture room. Reading materials may be available online and at a cost lower than by purchasing these items. Interaction online may take place between those enrolled in the class and with the instructor, so that the learning experience is improved. Of course, something is missing, the face-to-face relationships between students and between students and instructors. The social and perhaps cultural aspect of university attendance is lost by online learning. But there can be all kinds of hybrid alternatives where online displaces only some of the on campus experience, and today’s students are active users of social media.

In the case of the institutions, costs will depend on the extent of the changes and the mix (blend) of online and onsite lectures offered. Graduate courses and those requiring face-to-face seminars and lab work will still require onsite facilities. Some institutions are moving to online only which means that they will not offer courses which require an onsite presence. Much experimentation is underway. There will probably be high fixed capital costs in the initial move to online offerings, but these will be spread over the years. Savings will be possible with operating, especially salary, costs if less instructors are required. Technical and administrative staff will have to be trained to manage and run the new types of online offerings. Fewer buildings may be required.

This is a quick look at some of the factors in the costs of online learning. Institutional experimentation is underway, and has been for some time. The results will provide data for a clearer assessment of the future. Doubtless, governments will pressure institutions to make cost saving changes.


Where to look for data on online learning?

Wikipedia is an obvious starting point both for the numbers involved and for the types of experiments under way. Following are a few published facts (Babson Survey Research Group):

  1. In 2013, of the 21.3 million students enrolled in higher education in the US, one-third is enrolled online.
  2. Since 2003, annual growth in online enrollment has varied between 35% and 5%, higher in the earlier period and 5% in 2012.
  3. Sixty-six percent of chief administrative officers think that online is critical to the long term strategy of the institution.
  4. E-learning, a general term which includes online courses, started in 1960 at the University of Illinois and Stanford University. The Open University in the UK opened in 1969, while in Canada the University of Guelph was an early entrant. Correspondence courses predate the online variety.

A search of Wikipedia for online learning takes you to e-learning with extensive discussion and references to issues associated with online learning. There is also a Journal of Online Learning and a World Association of Online Learning.