Greg Mankiw Thinks Greg Mankiw’s Textbook Is Fairly Priced

This is kind of hilarious.

Greg Mankiw has written a blog post expressing his perplexity[1] with The New York Times’ position that textbooks are overpriced:

To me, this reaction seems strange. After all, the Times is a for-profit company in the business of providing information. If it really thought that some type of information (that is, textbooks) was vastly overpriced, wouldn’t the Times view this as a great business opportunity? Instead of merely editorializing, why not enter the market and offer a better product at a lower price? The Times knows how to hire writers, editors, printers, etc. There are no barriers to entry in the textbook market, and the Times starts with a pretty good brand name.

My guess is that the Times business managers would not view starting a new textbook publisher as an exceptionally profitable business opportunity, which if true only goes to undermine the premise of its editorial writers.

It’s worth noting that Mankiw received a $1.4 million advance for his economics textbook from his original publisher Harcourt Southwestern, which was later acquired by the company now known as Cengage Learning. That was in 1997. Now in its seventh edition, Mankiw has five different versions of his book published by Cengage (not counting the five versions of the previous edition, which is still on the market). That said, he is probably right that NYT would not view the textbook industry as a profitable business opportunity. But think about that. A newspaper finds the textbook industry unattractive economically. The textbook industry is imploding. Mankiw’s publisher just emerged from bankruptcy, and textbook sales are down and still dropping across the board.

One reason that textbook prices have not been responsive to market forces is that most faculty do not have strong incentives to search for less expensive textbooks and, to the contrary, have high switching costs. They have to both find an alternative that fits their curriculum and teaching approach—a non-trivial investment in itself—and then rejigger their course design to fit with the new book. A second part of the problem is that the publishers really can’t afford to lower the textbook prices at this point without speeding up their slow-motion train crash because their unit sales keep dropping as students find more creative ways to avoid buying the book. Their way of dealing with falling sales is to raise the price on each book that they sell. It’s a vicious cycle—one that could potentially be broken by the market forces that Mankiw seems so sure are providing fair pricing if only the people making the adoption decisions had motivations that were aligned with the people making the purchasing decisions. The high cost of switching for faculty, coupled with their relative personal immunity to pricing increases, translate into a barrier to entry for potential competitors looking to underbid the established players. Which brings me to the third reason. There are plenty of faculty who would like to believe that they could make money writing a textbook someday and that doing so would generate enough income to make a difference in their lives. Not all, not most, and probably not even the majority, but enough to matter. As long as faculty can potentially get compensated for sales, there will be motivation for them to see high textbook prices that they don’t have to pay themselves as “fair” or, at least, tolerable. It’s a conflict of interest. And Greg Mankiw, as a guy who’s made the big score, has the biggest conflict of interest of all and the least motivation of anyone to admit that textbook prices are out of hand, and that the textbook “market” he wants to believe in probably doesn’t even properly qualify as a market, never mind an efficient one.

  1. Hat tip to Stephen Downes for the link. []
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Editorial Policy: Notes on recent reviews of CBE learning platforms

Oh let the sun beat down upon my face, stars to fill my dream
I am a traveler of both time and space, to be where I have been
To sit with elders of the gentle race, this world has seldom seen
They talk of days for which they sit and wait and all will be revealed

- R Plant, Kashmir

Over the past half year or so I’ve provided more in-depth product reviews of several learning platforms than is typical – Helix, FlatWorld, LoudCloud, Bridge. Understanding that at e-Literate we are not a review site nor do we tend to analyze technology for technology’s sake, it’s worth asking ‘why the change?’. There has been a lot of worthwhile discussion in several blogs recently about whether the LMS is obsolete or critical to the future of higher ed, and this discussion even raised the subject of how we got to the current situation in the first place.

An interesting development I’ve observed is that the learning environment of the future might already be emerging on its own, but not necessarily coming from the institution-wide LMS market. Canvas, for all its market-changing power, is almost a half decade old. The area of competency-based education (CBE), with its hundreds of pilot programs, appears to be generating a new generation of learning platforms that are designed around the learner (rather than the course) and around learning (or at least the proxy of competency frameworks). It seems useful to get a more direct look at these platforms to understand the future of the market and to understand that the next generation environment is not necessarily a concept yet to be designed.

Continue reading

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LoudCloud Systems and FASTRAK: A non walled-garden approach to CBE

As competency-based education (CBE) becomes more and more important to US higher education, it would be worth exploring the learning platforms in use. While there are cases of institutions using their traditional LMS to support a CBE program, there is a new market developing specifically around learning platforms that are designed specifically for self-paced, fully-online, competency-framework based approaches.

Recently I saw a demo of the new CBE platform from LoudCloud Systems, a company whose traditional LMS I have covered a few years ago. The company is somewhat confusing to me – I had expected a far larger market impact from them based on their product design than what has happened in reality. LoudCloud has recently entered the CBE market, not by adding features to their core LMS but by creating a new product called FASTRAK. Like Instructure with their creation of a new LMS for a different market (corporate learning), LoudCloud determined that CBE called for a new design and that the company can handle two platforms for two mostly distinct markets. In the case of Bridge and FASTRAK, I believe the creation of a new learning platform took approximately one year (thanks a lot, Amazon). LoudCloud did leverage several of the traditional LMS tools such as rubrics, discussion forums and their LoudBook interactive eReader.

As was the case for the description of the Helix CBE-based learning platform and the description of FlatWorld’s learning platform, my interest here is not merely to review one company’s products, but rather to illustrate aspects of the growing CBE movement using the demo.

LoudCloud’s premier CBE partner is the University of Florida’s Lastinger Center, a part of the College of Education that provides professional development for Florida’s 55,000 early learning teachers. They have or expect to have more than a dozen pilot programs for CBE in place during the first half of 2015. Continue reading

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e-Literate TV Preview: Essex County College and changing role of faculty

As we get closer to the release of the new e-Literate TV series on personalized learning, Michael and I will be posting previews highlighting some of the more interesting segments from the series. When we first talked about the series with its sponsors, the Bill & Melinda Gates Foundation, they agreed to give us the editorial independence to report what we find, whether it is good, bad, or indifferent.

In this video preview (about 4:18 in duration), we hear from two faculty members who have first-hand experience in using a personalized learning approach as well as a traditional approach to remedial math. We also hear from students on what they are learning about learning. In our case studies so far, the real faculty issue is not that software is being designed to replace faculty, but rather that successful implementation of personalized learning necessarily changes the role of faculty. One of our goals with e-Literate TV is to allow faculty, staff and students to describe direct experiences in their own words. Take a look.

YouTube Preview Image

Stay tuned for the full episodes to be released on the In The Telling platform[1]. You can follow me (@PhilOnEdTech), Michael (@mfeldstein67), or e-Literate TV (@eLiterateTV) to stay up to date. You can also follow the e-Literate TV YouTube channel. We will also announce the release here on e-Literate.

  1. ITT is our partner in developing this series, providing video production as well as the platform. []
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First View of Bridge: The new corporate LMS from Instructure

Last week I covered the announcement from Instructure that they had raised another $40 million in venture funding and were expanding into the corporate learning market. Today I was able to see a demo of their new corporate LMS, Bridge. While Instructure has very deliberately designed a separate product from Canvas, their education-focused LMS, you can see the same philosophy of market strategy and product design embedded in the new system. In a nutshell, Bridge is designed to a simple, intuitive platform that moves control of the learning design away from central HR or IT control and closer to the end user.

While our primary focus at e-Literate is on higher ed and even some K-12 learning, the development of professional development and corporate training markets are becoming more important even in the higher ed context. At the least, this is important for those who are tracking Instructure and how their company plans might affect the future of education platforms.

The core message of Instructure regarding Bridge – just as with Canvas – is that it is focused on ease-of-use whereas the entrenched competition has fallen prey to feature bloat based on the edge cases. Despite this claim and despite Instructure’s track record with Canvas, what does this mean? I’m pretty sure every vendor out there claims ease-of-use whether or not there are elegant or terrible designs[1].

Based on the demo, Bridge appears to define ease-of-use in three distinct areas – streamlined, clutter-free interface for learners, simple tools for content creation by business units, and simple tools for managing learners and content. Continue reading

  1. Although I would love to see the honest ad: “With a horrible, bloated user interface based on your 300-item RFP checklist!” []
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