The Volokh Conspiracy

If you’re interested, I’ll be on C-SPAN Book TV tomorrow, Sunday, February 24, at 1:20 pm, talking about my book, Living With the UN: American Responsibilities and International Order.  It runs about half an hour, and though I have no idea whether I’m especially interesting on the program, I very much enjoyed doing it – I thought the interviewer was terrific (and I can’t seem to find his name on the website) and asked excellent questions.

The book itself has three agendas.  The first is to sketch out an account of international relations in which the US has a dual role in the world system – as both hegemonic actor and biggest player in the UN system.  The UN system of collective security is guaranteed by the US as the hegemon that provides important global public goods – a large part of the world can pay lip service to UN collective security, but at the end of the day depends upon the US.  The book’s second agenda is to give an account of the UN and its deep dysfunction.  The book’s third agenda is to give a critique of the Obama administration’s dealings with the UN – a quite sharply critical one.  The book urges the US to deal with the UN on the basis of its distinct parts and functions – always to engage with the Security Council; selective engagement with particular organs of the UN that work reasonably well; and disengagement with parts of the UN that are always going to end in trouble.

The book came out from Hoover Institution Press in mid-2012, but I think seems surprisingly more relevant in the second Obama administration.  I plan to start blogging on topics related to US-UN relations, of which there are many these days.  Here is a link to the video of the interview; it was recorded on February 8 and aired February 24, 2013.

As Kristen Boon reports over at Opinio Juris, the United Nations yesterday asserted complete legal immunity from any liability or claims arising from the Haiti cholera epidemic, which reportedly was the result of infected UN troops who were part of the United Nations Stabilization Mission in Haiti.  The United Nations benefits from a special treaty, the UN Convention on Privileges and Immunities, dating back to 1946 as part of the creation of the UN; it provides the UN with absolute immunity in national courts worldwide.  Lawyers for various Haitians infected with cholera submitted claims to the UN, working with a Boston-based NGO, the Institute for Justice and Democracy in Haiti (IJDH). Professor Boon explained the filing in an OJ post in October last year:

IJDH filed the complaint under a standard clause in the Status of Forces Agreement (SOFA), signed by the UN and Haiti, that provides for a third party claims procedure before a standing claims commission for disputes of a private-law character.  No such commission has been established in Haiti, nor, it appears, anywhere despite a 1996 decision by the Secretary General that the standard provision should be retained so that the UN does not act as its own judge.  To date, according to the lawyers, the UN acknowledged receipt of the claim, but it has not responded on the substance.   Moreover, there is very little information available on the procedure through which the UN considers such claims internally.  The IJDH lawyers, understandably, have expressed dismay by the lack of transparency with which the case is being assessed.  Indeed, the UN’s handling of this high profile claim stands in stark contrast to its stated position on the rule of law and procedural regularly in other contexts.

Yesterday, then, the UN responded to the claims with a letter under the signature of the UN’s Under-Secretary for Legal Affairs – the UN’s general counsel – Patricia O’Brien. The letter talks about the good things the UN sees itself as having done in Haiti in relation to the cholera epidemic.  But the key legal assertion is a brief paragraph:

With respect to the claims submitted, consideration of these claims would necessarily include a review of political and policy matters.  Accordingly, these claims are not receivable, pursuant to Section 29 of the Convention on the Privileges and Immunities of the United Nations, adopted by the General Assembly on 13 February 1946.

Section 29 says that the United Nations will “make provisions for appropriate modes of settlement of […] disputes arising out of contracts or other disputes of a private law character to which the United Nations is a party”. (Emphasis added.)  The UN’s position appears to be that

the cholera claim is in the nature of a public (rather than a private law claim cognizable under Section 29) due to the political and policy issues it raises.   Nonetheless, there is no explanation in the letter itself as to why this should be considered a public law dispute.

One key element of a public law claim would presumably be that the dispute arises between a state and the UN, but in this case it is absent because Haiti expressly elected not to participate in this dispute.  Perhaps another rationale is that the claim involves public law because the cholera outbreak arose pursuant to a Status of Forces Agreement with Haiti.

Professor Boon suggests that many public law claim elements are missing here and, as she points out, the net result is that

the claimants have no venue to pursue their case.    The UN’s decision cannot be appealed.  Moreover, if the UN were sued in a national court, it would assert its privileges and immunities which would shield it from jurisdiction.   Although the Model Status of Forces Agreement  provides for a standing claims commission, no such commission has ever actually been established in any context.   There is a well developed practice of adjudication by local claims boards for routine claims and injuries that occur during Peacekeeping Missions, although in this case, it appears that such a board in Haiti would not have jurisdiction due to the complexity of the case in addition to the level of compensation sought.

Why would the UN adopt such an uncompromising line?  Professor Boon is sympathetic to the plight of the individual Haitians in this situation, but in her post last year, she identified three reasons why the UN might be unwilling to get involved in any form of dispute resolution here.  I’m not quite sure where I’d come out on this matter, but it bears noting that the UN’s concerns are not minor, and are easily understood as weighty reasons of state:

• First, the UN has taken the position that cholera was not conclusively introduced by the Nepali peacekeepers, and consequently, an open question remains as to ultimate responsibility.
• Second, the financial implications for the UN are profound. Not only will a settlement create a huge financial burden on the organization, but it might deter future peacekeeping efforts.
• Finally, the case is precedent setting. It will unquestionably influence how mass claims against the UN are lodged and resolved in the future.

The effects into the future might well be very bad, if it were to make future peacekeeping more difficult; peacekeeping operations is one of the few bright spots of the organization, despite its difficulties.  In my own book on US-UN relations, Living With the UN: American Responsibilities and International Order, published by Hoover Press last year, I included a chapter on internal UN governance and noted just how appallingly bad it is.  Legally and managerially, it’s a world unto itself.  The notion of accountability as a matter of simply keeping track of the money – auditing and internal fiscal mechanisms standard to corporations – is widely understood to be dodgy at very best.  Such things as financial disclosure of conflicts and the like by the organization’s senior staff is piously urged, but it remains voluntary and is not widely done.

Academics like studying the UN mostly because they’re interested in deep issues of international law and organizations, or exciting topics in international relations.  Not very many people are interested in the most basic mechanism for understanding of all, ‘follow the money’.  Fewer still are interested in the budgeting, accounting, and fiscal management issues. It’s a pity, because in the UN’s case, following the money internally is a highly informative public choice approach to understanding the incentives of the internal actors.  (I do have to say that though my book is mostly witheringly critical of both the UN and the Obama administration’s approach to it and its issues (“a book only John Bolton could love,” as one reader told me, and an “acerbic essay,” as Michael Ignatieff remarked in passing in the New Republic), I have great admiration for Joe Torsella and the work he and his staff do as the US government’s representatives on UN management issues. It’s a thankless task, and yet they slog away, trying to get the UN to be more accountable for its resources and better managed.)

Not all legal scholarship is irrelevant twaddle; some of it addresses emerging legal questions that will indeed require answers in the real world.  This student Comment, “What Happens to Our Facebook Accounts When We Die?: Probate Versus Policy and the Fate of Social-Media Assets Postmortem,” by Kristina Sherry, appears in the December 2012 Pepperdine Law Review (40 Pepp. L. Rev. 185 (2012).  Given how much commerce now takes place through social media – Facebook, LinkedIn, Twitter, etc. – the legal questions are not just about dear old Mom or Dad and their photos of the grandkids (though those personal accounts also raise issues).  Here is the abstract (HT @GregoryMcNeal, via ... Twitter):

More than 580,000 Facebook users in the U.S. will die this year, raising numerous legal questions as to the disposition of their Facebook pages and similar “digital assets” left in a state of legal limbo.  While access to and ownership of decedents’ email accounts has been philosophized for nearly a decade, this Comment focuses on the additional legal uncertainties posed by “digital death” in the more amorphous realm of “social media.” Part II explores the implications of digital death by conceptualizing digital assets and surveying the underlying legal principles of contractual policies, probate, property, and privacy concerns. Part III surveys current law surrounding digital death, emphasizing a 2010 Oklahoma statute granting executors and administrators power over decedents’ “social networking” accounts. Parts III and IV consider what the current state of the law means for individuals facing death (i.e. everyone) as social media interacts with both (1) probate law and (2) social-media services’ policies as reflected in their terms of service. Part V explores how the law and proposed solutions may address the salient policy goals of honoring decedents’ postmortem wishes while meanwhile respecting privacy; preserving digital assets; and minimizing probate, litigation and other paperwork-type hassles. Ultimately this Comment suggests while state or even federal legislation may call attention to the importance of digital estate planning, a better solution likely lies between the two extremes of the probate-versus-policy power struggle, and that social-media services themselves may be in the better position to quell the perfect storm of legal uncertainty that looms.

Sherry Turkle is an MIT professor who studies human- robot psychological and social interactions.  She has been documenting and studying the attitudes of humans toward having emotional relationships and affective interactions with robots over time, and notes a gradual shift toward seeing such interactions favorably.  She recently presented at the annual American Association for the Advancement of Science meetings; it was covered by LiveScience (Clara Moskowitz, Human Robot Relations: Why We Should Worry, LifeScience 18 February 2013, HT Insta).  LiveScience is a popularizer of science, of course, and Turkle’s academic research is sober and restrained, and much more sophisticated than a general interest site can easily convey, but the article captures well some important points.  First, attitudes are in fact shifting in the United States:

Turkle studies people’s thoughts and feelings about robots, and has found a culture shift over time. Where subjects in her studies used to say, in the 1980s and ’90s, that love and friendship are connections that can occur only between humans, people now often say robots could fill these roles ...

Turkle interviewed a teenage boy in 1983, asking him whom he would turn to, to talk about dating problems. The boy said he would talk to his dad, but wouldn’t consider talking to a robot, because machines could never truly understand human relationships.  In 2008, Turkle interviewed another boy of the same age, from the same neighborhood as the first. This time, the boy said he would prefer to talk to a robot, which could be programmed with a large database of knowledge about relationship patterns, rather than talk to his dad, who might give bad advice.

Turkle is particularly well-known within the specialist community, however, for her concern that increasingly positive feelings toward machines as companions and replacements for human interaction is not a good thing over time.  She worries (as she said at the AAAS meeting) that humans might come to see machines as the perfect and safe companions – seen as preferable to fallible and much more complicated actual human beings:

Turkle worries about this drive to replace human caretakers with robots. “Its not just that older people are supposed to be talking. Younger people are supposed to be listening,” she said. “We are showing very little interest in what our elders have to say. We are building the machines that will literally let their stories fall on deaf ears.”

Children, in turn, play with more and more robotic and electronic toys. Many, like the Tamagotchi digital pets of the 1990s, and the later robotic dog Aibo, require nurturing, which encourages kids to take care of them, and therefore, to care about them. Some kids say they prefer these pets to real dogs and cats that can grow old and die.  ”People used to buy pets to teach their children about life and death and loss,” Turkle said. We are now teaching kids that real living creatures are risky, while robots are safe.

Turkle’s worries are important, and I would go further to worry that, over time, we might be building a culture and society that rewards those who interact best with machines and worst with humans.  That recognized, however, it’s also important not to sentimentalize human interactions in settings in which the machine might turn out to do a much, much better job.

In the case of elder-care robots, for example, dealing with people with serious dementia or Alzheimers – who might ask the same question over and over again, for example – a cuddly robot that can be programmed to give responses patiently, without getting frustrated or angry, is a blessing, not a curse.  There’s no reason that it can’t be programmed to give the clinically best form of response – e.g., responding a number of times, but then gently seeking to shift the conversation away and out of the loop.

These are in matters where the emotional connection is comforting precisely because it is safe, secure, dependable for an elderly, confused person.  There are other kinds of robots that (certainly I hope) will be developed for elder care or nursing facilities that are not supposed to develop emotional ties – machines intended to free up nurses for more complex tasks that require human skill, judgment, emotions and capacities.  For example, many elderly people would likely prefer a machine – one that is purely an “appliance” – to help them with intimate functions such as toilet-care.  The point of a machine in that case is that it is an extension of you and a projection of one’s own independence; one is not looking for “humanity” here.  What matters is that the machine performs well, is reliable, etc. – but it intended to be thought of as an appliance.

In some respects, then, certain aspects of robots that can make them emotionally most helpful to people with serious illnesses such as dementia or Alzheimers are precisely the ones that make them perhaps harmful in excess to ordinary people without those difficulties, in the ways Turkle identifies.  In  my next posts, I want to take up two related robot-human interaction issues.  One is robot sex; the assumption has always been that human sex will find a way and that robot sex will always be the vinyl blow-up sex doll.  Whereas technological advances and Turkle’s insights might suggest this will not always be so.  The other is a more prosaic question about human attentiveness and self-driving cars.  Stay tuned.

Inside Higher Ed has an amusing story of the unanticipated consequences of a professor’s grading system.   (“Dangerous Curves,” Zack Budryk, 12 February 2013.)  Johns Hopkins computer science professor Peter Frohlich used the following rule for his grading curve:

[E]ach class’s highest grade on the final counts as an A, with all other scores adjusted accordingly. So if a midterm is worth 40 points, and the highest actual score is 36 points, “that person gets 100 percent and everybody else gets a percentage relative to it,” said Fröhlich.

His Young Game Theorists, however, thought about the payoff table and realized the unintended consequences of the grading policy.  So they organized a collective boycott of the final exam.  Because they all did so,

a zero was the highest score in each of the three classes, which, by the rules of Fröhlich’s curve, meant every student received an A. “The students refused to come into the room and take the exam, so we sat there for a while: me on the inside, they on the outside,” Fröhlich said. “After about 20-30 minutes I would give up.... Then we all left.” The students waited outside the rooms to make sure that others honored the boycott, and were poised to go in if someone had. No one did, though.

Why didn’t anyone decide to go in?  As one of the students explained:

“Handing out 0′s to your classmates will not improve your performance in this course ... So if you can walk in with 100 percent confidence of answering every question correctly, then your payoff would be the same for either decision. Just consider the impact on your other exam performances if you studied for [the final] at the level required to guarantee yourself 100. Otherwise, it’s best to work with your colleagues to ensure a 100 for all and a very pleasant start to the holidays.”

Professor Fröhlich was sanguine about the collective boycott, congratulating the students on their ability to come to a collective strategy, and abiding by the unintended consequence of his grading policy.  He has also changed it going forward, however, to say that “0 points = 0%.”

In a Hoover Institution essay a few weeks ago, the Brookings Institution’s Benjamin Wittes asked, “How long do we really think it will take before a gun enthusiast arms a remotely-piloted robotic aircraft with his favorite handgun (very doable by a competent layperson with a few thousand dollars to burn)?” He points at Lawfare today to a new YouTube video of a hobbyist who has mounted a paintball gun on a hobbyist drone.  The paintball gun is impressively accurate, all things considered.  I leave to Dave Kopel and other gun law experts here the legal ins and outs of whether an actual handgun mounted on a drone; my uninformed assumption is that it is illegal, indeed criminal, now; the YouTube video says repeatedly that a real weapon would illegal. I’m  not a legal expert in this area (on Gun Appreciation Day, following Dave Kopel’s suggestion to consider supporting Second Amendment groups, I re-joined the NRA after several years of lapse from sheer inattention, but I don’t follow this area save international law issues such as the proposed arms treaty).  However, I learned of this video from former Deputy Attorney General Jim Comey, at a conference that looked at what it called the gradual proliferation of “many-to-many threats,” including cyber, bio-weaponization, and certain aspects of robotics and autonomous robotic systems.  “If this is what a novice with a small budget can accomplish,” the voiceover narrator says with understated ambiguity, “then clearly, this technology has a lot of potential.” Actually,from the standpoint of the individual gun-owner whose interest is self-defense, my guess is that this technology is pretty limited in its application, unless there were a considerable amount of automation introduced into the technology. It might be useful to home defense, I suppose, to send a drone rather than sending yourself, but it might turn out to be more useful to several attackers, one of whom controls a drone that comes at an individual gun-carrier from several directions. A lot in that case depends on where the automation of the system might go. Given all those contingencies, I think it will be peripheral at most to self-defense and almost certainly illegal.

Co-Conspirator Jonathan mentioned posts at Lawfare blog discussing the Drone White Paper that has been much in the news along with notice that the Awlaki OLC memo will be shared with Congress, and all  with the Brennan hearings for CIA director.  I have added a post at Lawfare that Volokh readers might find interesting; it points out that one of the much commented issues of the White Paper, the question of “imminence” as a condition of attacking in self-defense, actually has a long history in US law and policy.  At least since the early 1980s, the US has embraced a standard of “active self-defense,” as I note at Lawfare.  Here, for example, is a statement of it in 1989 by then-Department of State Legal Adviser Abraham Sofaer, in an interagency cleared speech, and which references statements by then-Secretary of State George Shultz:

Some States, such as Lebanon, are simply unable to exercise authority over terrorists, even if they were inclined to do so. The United States must be free to utilize force with sufficient flexibility to defend itself and its allies effectively against threats resulting from such breaches of international responsibility. As Secretary of State George P. Shultz predicted in 1984: “We can expect more terrorism directed at our strategic interests around the world in the years ahead. To combat it, we must be willing to use military force.” ….

In 1984 Secretary Shultz described this policy as an “active defense.” “From a practical standpoint,” he said, “a purely passive defense does not provide enough of a deterrent to terrorism and the states that sponsor it.” Later that year he described why an active defense was needed to deter:

“We must reach a consensus in this country that our responses should go beyond passive defense to consider means of active prevention, preemption, and retaliation. Our goal must be to prevent and deter future terrorist acts, and experience has taught us over the years that one of the best deterrents to terrorism is the certainty that swift and sure measures will be taken against those who engage in it. We should take steps toward carrying out such measures. There should be no moral confusion on this issue. Our aim is not to seek revenge but to put an end to violent attacks against innocent people, to make the world a safer place to live for all of us. Clearly the democracies have a moral right, indeed a duty, to defend themselves.”

A few days ago I posted on WSJ and NYT articles talking about the opening of new law schools in the midst of a crash in law student applications.  Since then, a couple of other professors have posted comments on the topic, and I thought I’d flag them.  NYU law professor Robert Howse, writing at Prawfslawblog, argues that the gloom and doom is overwrought, and suggests that American law schools will be able to look to foreign students, not just to fill LLM slots, but JD classes as well:

Application for JD slots are down-we all know that. But even assuming that’s a longer-term trend rather than a reflection of th economic anxieties and difficulties of the last years, there is no reason for panic or despair.  The potential of America’s law schools is only starting to be realized.

The global market for US legal education was traditionally regarded as composed of a relatively small group of foreign-educated lawyers seek advanced degrees. But this changing. Increasingly, a US JD degree is an attractive option for foreign students. And you have probably noticed more non-US JDs in your classes. In most countries law is the subject of a first degree after high school. The market could be expanded of US law schools were to offer a combination undergraduate degree in another discipline and a law degree-what about a 5 or 6 year program that leads to a BA in economics or political science or philosophy and a JD?

The fact is that American law schools have a competitive advantage. To be sure there is excellent legal education in some other countries. But my considerable global experience suggests to me that those countries are few. In most places, legal education is dominated by old-fashioned rote learning and by professors who spend much if not most of their time in private practice. Innovation is rare and slow. Class sizes are often huge.

If we are not distracted by US News rankings, we will observe that in all kinds of law schools all across the US there are world class intellectuals and leading specialists on the faculty. Of course national law schools abroad have a captive audience of students who can’t study in English and/or whose first and immediate priority is to qualify for the local bar or who can’t afford foreign study (though we can reach out to the last group through distance education and foreign campuses).   But overall the number of students with global ambitions, and the prevalence of English as a global language of law, are growing, from what I can tell.

This post prompted some pushback by my Opinio Juris colleague Kevin Jon Heller, an American legal academic who has moved to Australia to be a law professor at Melbourne University:

It is nice to see someone dissenting from the conventional doom and gloom, and Rob [Howse] makes a number of valuable points. But I feel compelled to take issue with (1) his description of non-American legal education, and (2) his assessment of the potential for American law schools to attract large numbers of foreign students ...

I am also skeptical of Rob’s belief that foreign law students represent a vast and largely untapped market for American law schools.  His point about the greater value of a JD on the international market is well taken; my law school, Melbourne, recently shifted to a JD-only model precisely in order to maximize the international marketability of our law graduates. I also agree that a graduate law degree can be a significant draw for students in countries where law is an undergraduate subject; approximately 15% of our JD students come from outside Australia.

That said, I question whether American law schools are particularly well-situated to attracting foreign students who don’t intend to practice in the US. Most obviously, American legal education is absurdly insular — far more so than legal education anywhere else in the world. Outside of the elite American law schools, students receive almost no education in international law. Comparative law is almost non-existent. All, or nearly all, of the professors are American. Exchange options are limited — and many foreign law schools are off the table, no matter how elite, because they don’t offer graduate-level classes. How much do most non-elite American law students know about how law functions in the rest of the world when they graduate? I’d venture it is vastly less than law students who graduate from law schools almost anywhere else.

And then, of course, there is the expense of American legal education — something that Rob doesn’t even mention. Why would a large number of foreign students want to spend $200,000 on an American JD when they can get law degrees in their home countries for next to nothing (even at the most prestigious law schools) or can attend elite non-American law schools for half the price? (Melbourne falls into the latter category.) Rob suggests that universities create five or six year joint BA/JD programs to attract foreign students. Barring a radical transformation in financial-aid practices, however, attending such a program would simply mean more debt for a foreign student — perhaps more than $300,000. How many non-wealthy foreign students would want, or could handle, that expense?

To be sure, for students able to afford Yale, Stanford, or NYU, the additional expense of a JD may well be worth it — even taking into account that starting legal salaries tend to be much lower outside of the US. But lower-ranked schools? I don’t see it.

Professor Howse has responded at Opinio Juris:

[T]hese days the notion of American decline is it seems so widely held among pundits and professors that saying that America remains a leader in anything may start sounding atavistic and unappreciative of the genuine achievements of other societies.  My sense is that the demand for high quality legal education cannot be met in many countries by existing institutions in those countries as they now operate. That’s not based on some kind of personal arrogance but two decades of globetrotting as a legal academic. Mostly I am reporting the judgments of students and professors themselves in the countries in question.

I hope I did not say or imply that the foreign JD market is “vast”. Indeed, I mentioned one of the main limits of that market in my original post-law is a first degree in most countries and so we would need to rethink our own approach to address that extremely important factor.

Kevin makes a very important point about the expense of an American law degree compared to the cost of studying in one’s own country (or even an elite institution in a third country).  Some of my readers took me to be suggesting that I think students will pay that cost because they will have access to high-paying jobs at prestigious law firms as a result of the American degree.  That is far from certain, and we shouldn’t be marketing ourselves based on that premise.  I’ve talked to foreign students who have chosen JD study in the US, and not only in the so-called “elite” law schools.  The reasons they give for this choice are multiple, but usually involve both a perception of the relatively higher quality of US legal education to that which would be accessible to them at home and additional reasons for choosing the US over some of the great institutions in other countries that Kevin mentions.  Again, I emphasize that I am not talking about a “monopoly” by any means.  But rather that we have a degree of competitive advantage in a real market that we need to understand better, and better serve.

Volokh Conspiracy readers might also be interested in a new leader in the Economist this week, “Guilty as Charged: Cheaper legal education and more liberal rules would benefit America’s lawyers – and their clients.”  This editorial is not very persuasive, in my view, though phrased in the Economist’s house style of unshakeable self-confidence. One reason is that it runs very distinct things together.  It talks about the cost of legal education and asks whether the third year of law school is worth it, and also asks whether it would be better to make law a graduate, rather than undergraduate, degree.  Certainly these are ideas under discussion.  But it then turns to claim that a proximate cause for why the costs of legal education are so high is the guild rules that won’t allow law firms to have non-lawyer owners (save in the District of Columbia) or have public shareholders.

Does the capital financing of law firms really have much bearing on the cost of legal education?  Of course in some general way, restricted access to capital puts upward pressure on legal fees, but even so, wouldn’t things like the availability of student loans be more relevant to law school costs?  As a law professor, much as I would like to blame the massive costs of legal education on the financing of law firms, that hardly seems the direct or primary culprit.

As to the Economist’s outré idea, public shareholders for law firms, it is anything but obvious to me that law firms stand in need of that kind of capital or that it would produce very much besides mischief and unintended consequences. What is public shareholder capital required for, anyway?  Not to render legal advice; a chief reason would be to finance lawsuits, I suppose.  Given the general criticisms the Economist has made over the years of America’s lawsuit industry, making (more) capital available to finance lawsuits does not seem like such a brilliant idea.  Traditionally law firms were partnerships, in order to ensure attention to things like lawyer ethics (both through unlimited partner liability but also by not having shareholders and the conflicts of interest they present).  But it was also also because professional partnerships don’t require massive amounts of capital in order to provide professional advice; they are not engaged in industrial production.  (The Economist seems to think that the fact that an Australian law firm has gone public shows how unremarkable the idea is; as with so many of these facile cross-border comparisons, the below-decks dissimilarities greatly outweigh the above-decks similarities).

Far from undermining clients’ interests, allowing non-lawyers to own equity in law firms would reduce costs and improve services to customers by encouraging law firms, many of which are still knee-deep in paper, to use technology and to employ professional managers—the kind of people who tend to expect stock options as part of their package—to focus on improving firms’ efficiency. Anyone who thinks American lawyers do not already face pressure to make money could use the services of a different kind of professional.

Other countries have started liberalising their legal professions. Australia has the world’s first publicly listed law firm, in which anybody can buy shares. Britain has blessed “alternative business structures”: lawyers can now link up with other professionals, be bought by private-equity firms and even go public. America should follow.

Finally, several readers emailed me to comment on the reasons why high achievers on the LSAT – 170 or 175+ scores would be skipping law school, given some modest softening of the competition at the top schools.  One suggestion was that these LSAT takers could essentially “bank” the score and take up law school at a top school later; they retained the option to do so.  Could well be, though I don’t think LSAT scores remain valid forever and re-taking the LSAT years and years down the road does entail some risk.  I also query whether the next year or two might not mark a bottom on terms of competition among students applying to the very top schools, as students realize that competition is indeed less stiff at the very top, and they then apply and arbitrage it away.  I’m speculating, that’s all.

My general sense about the foreign student market is, first, that for a decade at least, high education in the US, including the law schools, have been anticipating that it would be its salvation as the baby boomlet tapers off in the US.  I think there are many problems with that scenario, both from the business model of the university and the educational and mission model as well.  That, for universities generally, another day.  But for law schools, it’s simpler, I think – speaking as someone who teaches many, many LLM students from around the world, at a mid-tier school with a very strong reputation worldwide among potential LLM students.  There aren’t that many potential LLM students to go around and certainly not enough at the rates US schools charge; I’ve had family members of LLM students from past years tell me that they just can’t afford a US LLM, much as they’d like to do one.  The JD of course even more so.  Attempts to brand a law school in China and capture value back to the home US school might conceivably work for a handful of schools – NYU, perhaps, or a few others, but that model is not going to save the bricks and mortar US law schools and their professors, I think.

So I don’t think foreign students will save the law school business model, and in any case, all these considerations point to a basic conclusion.  The fundamental problem is less quality than cost.

Coming on top of news of the sharp declines in law school applications, the Wall Street Journal reports today on new law schools opening.  The headline captures it: “A Crop of New Law Schools Opens Amid a Lawyer Glut.”  Jennifer Smith reports that thought law school applications are at “their lowest in a decade,” a handful of universities are moving forward to open new law schools:

 Some of the new schools are intended for regions where law schools are scarce or are being built to round out a university’s suite of professional schools. But many of them are likely to find themselves competing for a shrinking pool of would-be lawyers and sending hopeful graduates into one of the toughest markets in years for law jobs.

Indiana Tech’s new law school in Fort Wayne will be the state’s fifth when it opens this fall. The law school the University of North Texas plans to open in Dallas next year will be just down the road from Southern Methodist University’s Dedman School of Law, and less than an hour’s drive from one in Fort Worth that Texas A&M University is in the process of buying from Texas Wesleyan University, one of nine in the state.

The numbers don’t favor these new schools. Last year the pool of law-school applicants shrank to about 68,000, down about 13% from 2011 and more than 30% from the past decade’s peak of about 100,000 in 2004, according to the Law School Admission Council, a nonprofit group that administers the Law School Admission Test and compiles admissions data.

Probably many of these universities figure that they can afford long time-lines, as the article points out, and so can treat the current downturn as merely cyclical.  These law schools have also probably been in the university pipeline for years, with long-running strategic plans that have been underway for a decade or two.  Shutting down these kinds of major plans must be very hard for a university, especially if it has invested significant resources pulling the project together.  However, the basic bet for these schools is that this current downturn is merely cyclical and not structural.  As to that, I have serious doubts.

The upfront cost of law school plus borrowing costs seems completely out of synch with the returns to law practice.  Worse, for all but the very top schools, the investment in law school appears less and less predictable.  If you’re at the top, it can still be treated as an investment with a greater or lesser net return.  If you’re very far out of the top schools, it looks like a bet – even before you can get to the net return on your lawyer job, you have to go through an up or down bet on whether you’re going to get employed in a “lawyer” job at all.  I don’t see anyone predicting a cyclical return to the growth rates of the last couple of decades in lawyer employment or general upward movement in salaries; the question is whether it gradually recovers to bring us closer to the numbers of new lawyers produced each year in relation to the law jobs out there, so to close the gap.  That would be the “good” recovery scenario, and even that one appears brutal on the business model of legal education and many of the students in the system.

The reports on LSAT numbers and law school applications are striking for the steepness of the downturn.  But something I don’t fully understand is why the decline is so sharp among the highest LSAT scores – 170 and above, and (if I understood correctly) even steeper at 175+.  Do these students have such wonderful opportunities outside of the top five or six law schools that would make it not worth picking up the degree as a credential along with way, and then going on to hedge fund work or whatever, still making a zillion dollars? Especially as there has to some softening of the competition to get in to the top five schools.  Is the cost of that education so high that even a Harvard or Yale law degree, even as a pure credential, is no longer worth it?  Are there other ways of signaling talent that make even those law degrees no longer as valuable as credentials – meaning, you actually have to plan to practice law for some years and take into account the cost of borrowing and opportunity costs for some other activity.

Have the costs and benefits of the most elite degrees shifted so very much for those who are competitive for those schools?  This is something I don’t understand very well. If you have a somewhat competitive but still considerably lower LSAT, I understand why you might very rationally conclude that the bet is not worth it, especially given the burden of actually paying off the loans even if you do get a decent lawyer job.  But if you are competitive for the top five, perhaps top ten schools?

Meanwhile, talk is turning to layoffs and buyouts at bottom ranked law schools.  Vermont Law School, the Boston Globe notes, has turned to both. No faculty were involved, but Bill Henderson is quoted in the Times story on what happens when lack of tuition-paying bodies meets law school expenses:

“In the ’80s and ’90s, a liberal arts graduate who didn’t know what to do went to law school,” Professor Henderson of Indiana said. “Now you get $120,000 in debt and a default plan of last resort whose value is just too speculative. Students are voting with their feet. There are going to be massive layoffs in law schools this fall. We won’t have the bodies we need to meet the payroll.”

The pain will not be spread evenly, however – “we” law schools are not a homogenous cohort.  It’s obvious that schools at the bottom face enormous pressures; they were able to price for a long time thanks to loans but also the fact that they were a little bit like a monopoly supplier: students rationally go to the best school they can get into.  Since Harvard won’t admit them, that school, no matter how ranked, is essentially their “Harvard.” That being so, schools have the ability to charge approximately what Harvard does to those students.  At some point the gap between what students pay and what they might eventually earn widens to overtake that dynamic, but it means that law school pricing bears no relationship to any ordinary pricing model that the highest ranked schools charge the most for their degrees.

In my experience of discussions of these business model issues, the assumption is that if you teach anywhere in the mid tier schools, there will belt-tightening and budgetary constraint, but not disaster.  It’s the bottom tier that’s in trouble.  Which might be true.  But I think the distress might be much more widespread into the mid-tier.  The reasons are two-fold.

One is that even if one closed the bottom twenty percent of law schools, I’m skeptical that it would take the pressure off lawyer employment in a meaningful way – and by extension, on law schools further up the food chain.  The bottom tier students are mostly not competing with the mid-tier schools and their students for jobs; they inhabit different credential and employment worlds, so much so that even if all those annual graduates disappeared from the market, it wouldn’t really help the mid tier or above students, because they weren’t competing for those (non)-jobs anyway.  The structural problems of lawyer employment are not just a glut of homogenous graduates, but that the jobs that traditionally existed for mid-tier law students-lawyers, but not really for bottom tier graduates, have cratered structurally for reasons all their own.

The other reason is something that University of Baltimore professor Richard Bourne noted in a 2012 paper – the cost structures of the T-15-T-50 schools resemble those of the T-15 schools, but without the deep resources to support them.  That amounts to supporting the research agendas of the professors and the upwardly mobile aspirations of these schools which require scholarship.  Much of it turns out to be Red Queen behavior – running in place since all the other schools in that tier are doing the same – and consuming ever greater resources doing so.  But the professors find it in their individual interests to play the free-agency game, particularly as the rewards at the very top schools have increasingly been not merely prestige but monetary, and the schools have their own reputational reasons.  This also means doing everything possible to purchase the highest LSAT scores – with the effect, Bourne argues, that the lower performing students (locked into finishing law school by having jumped over the first year cliff in borrowed money for tuition) wind up subsidizing the higher performing students who bring better LSAT scores.  There’s a looming question whether this cost model can be supported by schools that have small or negligible endowments and essentially tuition dependent.  But those schools, Bourne points out, are often ranked T-15 to T-50.

(The Atlantic also has a scary – if you’re a law professor, anyway – article titled, “Law School Applications Are Collapsing (As They Should Be)“.)

VC readers, being eclectic polymaths, are likely to heard of the “Uncanny Valley” – the hypothesis advanced by roboticist Masahiro Mori that a ”person’s response to a humanlike robot would abruptly shift from empathy to revulsion as it approached, but failed to attain, a lifelike appearance. This descent into eeriness is known as the uncanny valley.” Mori’s article appeared more than 40 years in an obscure journal in Japan called Energy, but was never widely available in complete form in English.  Last year, Automaton, IEEE/Spectrum’s robotics blog, published a complete translation of the article.  I had never read it in full, and I thought it might interest VC readers.  The notion of the Uncanny Valley has taken on greater importance as robots are gradually being developed that are intended to have greater human-machine interaction.  And the article is important in its own right as part of the intellectual history of science and technology.  Here is the editor’s introduction, from which the above quote is taken:

More than 40 years ago, Masahiro Mori, then a robotics professor at the Tokyo Institute of Technology, wrote an essay on how he envisioned people’s reactions to robots that looked and acted almost human. In particular, he hypothesized that a person’s response to a humanlike robot would abruptly shift from empathy to revulsion as it approached, but failed to attain, a lifelike appearance. This descent into eeriness is known as the uncanny valley. The essay appeared in an obscure Japanese journal calledEnergy in 1970, and in subsequent years it received almost no attention. More recently, however, the concept of the uncanny valley has rapidly attracted interest in robotics and other scientific circles as well as in popular culture. Some researchers have explored its implications for human-robot interaction and computer-graphics animation, while others have investigated its biological and social roots. Now interest in the uncanny valley should only intensify, as technology evolves and researchers build robots that look increasingly human. Though copies of Mori’s essay have circulated among researchers, a complete version hasn’t been widely available. This is the first publication of an English translation that has been authorized and reviewed by Mori.

The “Law and Robotics Conference” will take place on April 8-9, 2013, at Stanford Law School (it follows on the highly successful law and robotics conference that took place at University of Miami last year).  Conference organizers are seeking proposals to present conference papers – I should have posted this a while ago – and paper proposals are due by this Friday, January 18.  Matthew Waxman and I plan to submit a proposal on comparing self-driving cars and autonomous weapon systems (I’ve been exploring some of these ideas, brainstorming for the paper, here at Volokh), and I am 100% certain the conference will be terrific with outstanding papers and great discussions.  Here is the link if you’re interested.

Meanwhile, over at Lawfare, Human Rights Watch’s Tom Malinowski, Benjamin Wittes, Matthew Waxman, and I have been debating the recent HRW report calling for a ban on “Killer Robots.”  Tom’s latest response – though mostly a serious discussion, well worth reading though it does not succeed in persuading me – has a video at the end that I will always, always fondly treasure.  It’s great.   (It’s in Hindi, and though I didn’t know Tom knew Hindi, I’m going to trust his subtitles.)

In my earlier posts comparing self-driving cars and autonomous weapon systems, I pointed out that in neither case are we seeing a sudden, systemic paradigm change, a shift from one whole technological system to another.  Not, at least, in the sense that I had long assumed – that a change-over to driverless cars would require necessarily a systemic change from individuals driving their individual cars to a centralized computer system dealing with all the vehicles in the system as a whole system – including things like sensors in the roads, no commingling of system-controlled cars with individually-controlled cars, etc.

Instead, the changes in these particular technologies are occurring incrementally.  It might be different for other technologies, but for these, it so happens that the changes are taking place bit by bit.  Cars are being sold one-by-one that are gradually incorporating more and more of these automatic systems, as safety and convenience features.  This fact alters the nature of the legal, ethical, and policy review that has to be made of the systems – regulatory review, too, has to be incremental.  Moreover, changes toward automation often occur in highly discrete technological functions within the larger activity – braking systems in cars, or the detailed and particular criteria used for target identification in weapons, for example.  Legal, ethical, and policy decisions have to address both the particular function and its impact on the overall machine system.  In this regard, I once again highly recommend the new report by Bryant Walker Smith (Stanford Center for Internet and Society), on the legality of self-driving cars in the US. For those of us interested in weapon systems, it provides a useful basis for comparing ways in which vehicle codes will have to gradually take account of evolutionary technologies with what the legal review for automating weapon systems has to be.

Still, vehicles and weapons are different for many reasons – starting with the intentions behind their uses as technology.  Vehicles are not intended to be violent; weapons are – intentionally potentially violent and often lethal.  But what does that difference in intention finally net us?  The machine itself doesn’t have an “intention” as a human being does; it has its programming.  The problem of the programmer is to mimic that human intention in the machine’s behaviors.  We might refer to this as a “Ethical Turing Test” – behind the veil, so to speak, can we distinguish between the behaviors of the intentionally ethical human and the “behaviorally” (i.e., programmed) ethical robot?  I don’t know (with respect to either vehicles or weapons) whether, to what extent, or in what particular activities machines might surpass humans on the “Ethical Turing Test.” That will only be answered by the progress of technology.  But technology has made remarkable advances up to this point – I would not have guessed how quickly self-driving vehicles would be emerging, for example, and I would not have guessed that it would be possible to create the technology without a complete technological paradigm shift.

The benefits from these innovations might well be so great that we would make a tragic mistake not to explore them, irrespective of whether or how close they get to ethical adequacy, and that’s as true of weapons systems as it is of self-driving cars.  Contra Human Rights Watch’s recent, problematic report (remarkably unconsidered for a HRW report and, to be blunt, simply unserious) calling for a preemptive international ban on autonomous weapon systems or any research and development that could lead to such a system, this is true of weapon systems.  Not to undertake the research and development into how automation can increase precision and discrimination, finally lessening the harms of war – particularly when highly relevant and similar development is already proceeding in such areas as vehicles – entails a potentially steep and tragic opportunity cost.  What might be given up by adhering to HRW’s quite irresponsible call to ban even such research and development seems to me profoundly wrong to give up – indeed immoral.  We owe it to future generations to seek to use the same technologies that we might find will gradually, incrementally protect human life in activities from driving to surgery to the care of the elderly – all technologies that will involve machine decisions about potentially lethal actions – to decrease the harms of war.  It’s frankly inconceivable to me, in any case, that future generations accustomed to automation in the name of superior safety in all these other areas of human activity, if that’s what the new technologies succeed in bringing about, would not simply presume as a matter of course that they would be applied as feasible in weapons and conflict.

What does seem important in comparing vehicles and weapons, then, is that at the granular level, though they differ in the intentions behind their use, each inevitably involves decisions implying the possibility of violence and even lethality.  Yes, it matters ethically and legally that a weapon is intended to have lethal application, whereas the technologies of self-driving cars are intended to avoid violence and lethality.  But at the granular level of the actions that the technologies take, they are programmed to make decisions and initiate actions that might well still cause violence directly, or collaterally, or by error.  As Gary Marcus pointed out in the New Yorker a few weeks ago, even vehicular automation technologies will one day (not so long from now) have to start grappling with programming decisions about whether to risk the driver in order to spare, say, the school bus full of children; that is an intentional decision about life and death made by a human programmer and written into a machine.  And that decision will likely be part of a system beyond human intervention, at least at the speed with which it will be made in a real life possible crash.

Moreover, as far as “humans in the decision loop” is concerned, the automotive technology already overrides human actions in some narrow yet crucial matters – anti-lock brakes, for example, exist to prevent and override a systemically predictable but wrong human response, at least among most drivers.  In one sense, anti-lock brakes carry out the highest level human intention – stopping the car – but at the granular level they override the immediate human intentional action in braking.  But the technology does so at the level of one crucial, yet relatively small, part of driving the car; a self-driving car is thus actually better understood as a whole bunch of particular systems and functions in the car, which, in a completely self-driving vehicle, must all come together – braking, steering, acceleration, etc. The automation of the vehicle has to address each of them, and all of them together.

The same is true of complex weapon systems. They are bundles of particular systems and functions forming a larger whole.  Permitting or not permitting automation has to take the unbundled bits on their own; next as a whole system; and finally as one weapon system in relation to other military systems with which it might interact, sometimes in unexpected and unintended ways.  This is, by the way, the approach taken by the best practice policy in this area, the recent Department of Defense Directive on Autonomous Weapon Systems, which requires legal and policy evaluation of any autonomous or semi-autonomous weapon system on a basis integrating incremental review of the system parts throughout the development process, review of the system as a whole, and finally review of its interaction with other military systems.

(In my next post on this topic, I query framing real life robot debates in terms of pop culture.)

I’m continuing my series of posts on automated vehicles (the last one was some initial thoughts on comparisons between self-driving cars and autonomous weapon systems).  Today I want to recommend this January 12, 2013 NYT story, by John Markoff and Somini Sengupta, on the current state of safety systems for cars in the incremental advance toward fully automated and finally self-driving vehicles.  Plus, in order to understand the regulatory and legal context in which this transformation necessarily takes place, I also highly recommend the new report by Bryant Walker Smith (Stanford Center for Internet and Society), on the legality of self-driving cars in the US. It makes a useful basis for comparing the ways in which vehicle codes will have to gradually take account of evolutionary technologies.

New York State, for example, requires in its vehicle code that drivers have one hand on the steering wheel at all times; that obviously won’t be compatible with the emergence of self-driving cars. Even Nevada (a state that has positioned itself ahead of the curve by adopting a self-driving car provision) requires that the car have a human driver who is responsible and able to take over driving.  Texting while the car drives itself is okay, in other words, but getting into the vehicle drunk and telling it to drive you home is not, because you would not be able to drive if necessary.  Yet technology will presumably alter that, and the vehicle code will presumably adapt as the technology improves, given that a core purpose of self-driving vehicles is to drive people who are incapacitated, by alcohol, but more importantly by age.  After all, Google is betting its self-driving cars on a market among elderly baby boomers who can’t (or shouldn’t) be driving.

Which goes to illustrate that a key focus and market for robotics in America will be, one way or another, the elderly.  It isn’t necessarily about Robbie the Robot – or Awesom-O, if you prefer – your robot friend and servant.  As Gary Marcus points out in another useful New Yorker column, “Why Making Robots Is So Darn Hard,” there are important reasons why personal or genuinely useful consumer robotics is so much harder than, say, robots on the industrial workshop floor.  But robots will increasingly feature further back in the supply chain of, for example, elder-care.  Amazon’s genius in no small part consists of convincing aging boomers like me that we’re cool and hip and not old at all because ... we order all our stuff online and it arrives like magic at the front door – we don’t stop to tell ourselves that both by inclination and capacity we’re less and less interested in going out. But Amazon will increasingly automate its warehouses and fulfillment processes, and eventually the aircraft delivering at least some of it will become remotely piloted, and finally delivery trucks will automate too – though it’s an open question how the goods will be dropped at your door, as you and I and our fellow boomers struggle with our canes and walkers (though we hope that automation can improve those too).

As Matthew Waxman and I have argued  in a different context from vehicles (automated weapon systems, in the latest Policy Review), changes that increase automation (to the point of the machine making decisions and executing them without human intervention) in self-driving vehicles (and, for that matter, weapons, but this will be the topic of my next post) are coming incrementally.  That would not be true of some technological systems, where the change-over has to be a genuine paradigm change of the whole system. Many believed this would be true of cars, for example – I certainly did.  A technological change to self-driving vehicles was widely presumed to require a centralized computer network to control all the cars in the system.  Yet in this case, it’s not turning out that way – because the sensors and other automated technologies can be applied (and sold mostly as safety features) car by car, and they are able to cope with non-self-driving cars cars and other hazards that are not corralled within a single controlled system.  The Times article addresses exactly this point:

The systems offer auditory, visual and mechanical warnings if a collision is imminent — and increasingly, if needed, take evasive actions automatically. By the middle of this decade, under certain conditions, they will take over the task of driving completely at both high and low speeds.

But the new systems are poised to refashion the nature of driving fundamentally long before completely autonomous vehicles arrive. “This is really a bridge,” said Ragunathan Rajkumar, a computer science professor who is leading a Carnegie Mellon University automated driving research project partly financed by General Motors. “The driver is still in control. But if the driver is not doing the right thing, the technology takes over.”

Although drivers — at least for now — remain responsible for their vehicles, a host of related legal and insurance issues have already arisen, and researchers are opening a new line of study about how humans interact with the automatic systems.

I agree that there will be an important field of study concerning human-robot interactions – calling Susan Calvin, etc.  Some of that will be at the level of general human behavior – I mean in the sense of the Uncanny Valley and that kind of psychological study of human beings.  But much of that will be at the level of highly particular technological systems that deal with such apparently mundane, un-SusanCalvin behavior as how humans brake, accelerate, and have difficulty estimating distances and angles in parallel parking and what kinds of machine systems can address it.  A lot of it won’t be psychology as such, but instead simply machine consequences of the fact that the automation of some parts of the system (“platoons” of self-driving cars on the highway, for example, operating at distances and speeds that would be radically unsafe if not impossible for human beings) will put the decision making and execution beyond human capability.

We are still a ways from that, however.  To get a sense of the incremental changes coming today, consider the kinds of activities ripe for automation on this sidebar list from the Times article, naming various automated safety systems available or coming for cars:

Already in some cars:

Antilock brakes
Electronic stability control
Lane keeping
Lane departure warning
Pedestrian detection
Driver fatigue/distraction alert
Cruise control/adaptive cruise control
Forward collision avoidance
Automatic braking
Automated parking
Adaptive headlights
Traffic sign detection

Coming soon:

Traffic jam assistance
Super cruise control
Night assistance thermal imaging
V2X communications
Intersection assistance
Traffic light detection

(In my next post, I return again to the comparison of self-driving cars and automated weapon systems, and raise the idea of an “Ethical Turing Test” for evaluating the ethical behaviors of human beings and machines.)

The Obama White House knew, of course, that creating a web-based system for ordinary citizens to call on the government to do something, and promising a response if 25,000 people or more sign an online petition within 30 days, would inevitably produce some silliness. There’s a reason we’re not a direct democracy, no matter how dysfunctional Congress has become.  There have been some serious matters raised, such as MPAA Chris Dodd’s (shocking, shocking) insinuations that the Obama campaign owed taxpayer goodies to Hollywood.  And anything genuinely offensive can simply be ignored.  We live in a knowing and ironic age, and what might once have seemed beneath the dignity of the White House can be an opportunity for some light-hearted national and, dare one say it, decently unpartisan fun.

Hence the official White House reaction to the petition calling upon the Obama administration to “secure resources and funding, and begin construction of a Death Star by 2016,” which garnered some 35,000 signatures.  As reported by Entertainment Weekly  (the only truly canonical outlets for this kind of news would have to be EW or Wired, Hollywood or Silicon Valley), here is the official administration response, from Paul Shawcross, Chief of the Science and Space Branch of OMB (we must assume this went through the interagency clearance process and perhaps even constitutes the opinio juris of the United States for purposes of international, nay interstellar, law):

“The Administration shares your desire for job creation and a strong national defense,” begins Shawcross, “but a Death Star isn’t on the horizon.” He cites a Lehigh University study that calculated that a Death Star would cost a deficit-exploding $852,000,000,000,000,000 (that’s $852 quadrillion), notes that ”the Administration does not support blowing up planets,” and rightly points out that it would be foolhardy to build a space station “with a fundamental flaw that can be exploited by a one-man starship.”

Shawcross then goes on to tout the many space endeavors, both public and private, that are currently underway. (“Even though the United States doesn’t have anything that can do the Kessel Run in less than 12 parsecs, we’ve got two spacecraft leaving the Solar System and we’re building a probe that will fly to the exterior layers of the Sun.”) He concludes by encouraging the diligent soul(s) who created the petition to pursue a career in a science, technology, or math-related field, declaring that anyone who does so embraces the power of the Force: “Remember, the Death Star’s power to destroy a planet, or even a whole star system, is insignificant next to the power of the Force.”

Melissa Korn and Jennifer Levitz ask a good question in a news article about so-called “Massive Open Online Courses” in today’s Wall Street Journal: what’s the business model?  How do they generate revenues?  There is a lot of discussion about how online education is going to shake up the cosseted business models of today’s brick and mortar universities, and MOOCs are often raised as a first wave of change.  Coursera, Udacity, edX, and a few others have attracted significant investor support, as well as leading universities, seeking to be the first movers in the field.  I don’t doubt that online education is going to significantly change university education, credentialing, cost structures of universities, and pedagogy.  But the models – including the MOOC model for content delivery – are as yet untested and barely birthed.  And a large question, of course, is how this is supposed to pay its way.

The most popular [MOOCs] enroll hundreds of thousands of students globally, and while they’re taught by star instructors from top universities, they generally don’t carry credit that can be applied to a college degree. While backers say the short, digestible lessons are nothing short of revolutionary, MOOC providers are still figuring out how to keep basic course access free while generating revenue.

One idea has been to match students with employers – a sort of job placement service.  Udacity and Coursera, for example, have been experimenting with this, but haven’t seen much success so far.  The Coursera model allowed online students to opt into a job placement service, where recruiters can “access details of their class performance.”  But Coursera, according to the article, hasn’t finalized a fee structure and in any case only a handful of companies stuck their toes in the water.

What’s the problem?  In the short run, the problem is the usual one of extracting nickels and dimes from massive numbers of online eyeballs, in a way that’s efficient and doesn’t scare away people who, in any case, assume everything on the internet is free.  Maybe online ads, or any of the usual mechanisms for monetizing content on the web.  Over the medium term, the draw presumably has to be not just education, but a credential that goes with it, reflecting a reputation in the wider community about the meaning of the credential – something for which someone will pay.  Maybe that can be badges or certifications; all of this seeks to unbundle the university’s four year degree, as Glenn Reynolds has often noted.

Over the much longer term, the strategic question for the business plan is whether the new competitors intend to compete with the traditional university model or join it.  Business strategy at this long term horizon has to take careful account of the sources of the traditional university’s rents.  There are three (maybe more), at least when it comes to tuition paying undergraduates, particularly in the generalist and non-technical degrees of the liberal arts: “sorting” at the admissions office front end; the credential in the form of the bundled four-year degree; and actual education in the form of knowledge and skills. Continue reading ‘What’s the Business Model for Massive Open Online Courses (MOOCs)? And What Does Online Education Strategically Mean for the Long-Run Rent Structure of Higher Education? Is this Truly Disruptive?’ »