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The “Ikea” Degree? A Value Proposition

I have five minutes before I wax poetic on qualitative interviewing in class. This is a serious drive-by post.

Matt Yglesias over at Slate has an interesting blurb today about higher education, cheap-ocity and quality. (Thanks to Sherman Dorn for the signal).

Ikea, for example, has not risen to power by manufacturing better furniture than other companies. If anything it’s worse. Deliberately worse. The profit opportunity is that it turns out that cheap Nordic modern furniture is something a lot of people want. It turned out there was a big market for “somewhat worse but much cheaper” furniture. Lots of people listen to music, but very few people choose to invest in the highest-end products. Things like “it’s cheap” and “it’s convenient” drive people to listen to a lot of MP3s over earbud headphones.

Right now, higher education in the United States is very expensive. Driving some providers out of business by offering a much cheaper but somewhat lower-quality product seems like a reasonable plan.

In order:

1. There are “cheap” higher education options. Sherman pointed out community colleges. Like a dog with a bone I will keep heralding the workhorse of cheap, transformative, accessible education: Historically Black Colleges and Hispanic Serving Institutions and Open Access Publics. If people don’t want to attend them or policy has constrained access to them, then that is a different proposition than “higher education is very expensive” and we need profit motives to drive down costs.

2. I suspect what Matt and others mean is that PRESTIGIOUS higher education is expensive. They are correct. Ikea doesn’t have to contend with prestige and labor market signaling. That makes it an odd analogy. If Harvard is too expensive, you need to take that up with Harvard and not all of higher education. If prestige is expensive, having more low-status profit-driven competition won’t do much to change that. That’s the real tension. People don’t want CHEAP degrees. They want cheap, prestigious degrees. As of yet I have not seen a profit education vehicle that is situated to contend with that. For-profit colleges certainly are not. They’re pricey but not very prestigious. For-profit ed ventures like Coursera and the like are cheap but not prestigious. I am not sure they endeavor to be as much as they are circumventing competition with prestigious colleges, and their high expense,by piggybacking on the prestige elite partners to drive competition with the lower cost, less expensive college options. And I’m not even sure they will do much there. They would have to provide a credential to really be in competition.

No, instead what appears to be happening is opportunistic profit taking. Rapid change and high competition has made education a fertile profit taking vehicle. Some will sell almost any story to further that endeavor.

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4 comments on “The “Ikea” Degree? A Value Proposition

  1. I think Yglesias just likes to push buttons.

  2. Despite the thrifty knocking of IKEA I understand and indeed agree with your appreciation of Community Colleges. However I went to a gem of a uni and appreciate its faults even though its in the top 100. In drivebystyle I will cut to the chase it is Horses for Courses. To expand I would use the local jargon of fit for purpose but politically this statement is banded about to justify whatever. Having just sat thru a Council meet where the majority won I wonder who once said that democracy favours minorities. But hey we have US president that’s black so progress is made all the time. Happy Easter.

  3. Jo VanEvery (@JoVanEvery)
    March 28, 2013

    Of course IKEA isn’t prestigious either. People who wants prestigious decor don’t shop there. And they aren’t putting the prestigious furniture manufacturers out of business either.

    Which is to say that a degree might be like a couch, but then you’d have to understand that the whole market does not operate on the basis of discount marketing. Some people are willing to pay for prestige, exclusivity, etc. And some providers are going to make a profit selling high-end goods to small markets. (I bet Macy’s doesn’t give a damn that most people can’t afford to shop there.)

    The real question is whether we really want education to be provided on these market principles or on principles of fairness. If we make an argument that education is key to social mobility then it follows that high quality education should be available regardless of your social status at point of entry.

    And the other issue, which you point out repeatedly, is that education does not just provide information/knowledge or credentials. It also provides network connections, prestige, and other more abstract benefits.

    One could make that argument about couches, too. But no one would say that furniture is the key to social mobility. And that’s why it’s a stupid analogy.

  4. Ed
    March 28, 2013

    Reading Yglesias on HE is consistently rage-inducing. I can never decide if he’s actually mendacious and sold out to the neo-liberals or just utterly blind to the realities of what he’s talking about because of his own priviledged position and complete lack of professional experience and qualification (and of course, that privilege is nowhere more evident in his complete comfort pontificating despite lacking any clue). I usually end up thinking it’s a lot of option 2 making it easy for him to confuse option 1 with courageous realism. Anyway, always nice to see his nonsense properly called out as such.

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This entry was posted on March 27, 2013 by in Uncategorized.
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