Alex is concerned that education can be implemented via lecture-remotely. Alex is very simply wrong about what constitutes value in education. Value in college consists of:
How much work did you do is FAR better of a predictor than professor quality on learning. And so...star lecturers, dear Dr. Tabarrok, do not matter a bit.
The ever-insightful Dr. Caplan is wrong in a different way.
He is stuck in the book/abstract model of learning, as opposed to the action model of learning. Incentives matter, and marginal value matters a lot. The marginal cost and in particular the marginal weirdness factor of online colleges is dropping rapidly. 10% in 10 years is easy. The question for me is 50% in 20 years? Bryan's complacency reminds me of the newspaper industry 15 years ago. How many folks in 1994 realized that the business model of the newspaper industry would be dead in 15 years? Education is in the same spot now as the newspaper industry was back then. There are glimmers of a path that makes the model obsolete. But the fundamentals are thoroughly rotten, and there is room to exploit them. Someone, soon(and if I'm lucky, me) will build a different model of education that massively improves upon the current one. And college will in 15 years, be in the same dire straits that newspapers are in now.
The decline will start (has started -- death count: 2) with small, low marginal value, undergraduate liberal arts colleges, and then leak into community colleges and low-tier state schools. As soon as it leaks into schools with masters/doctoral level programs, the university financing models fall apart entirely, as undergraduates finance huge portions of the education system. High schools as holding pens will be impacted later, as the new model is accepted more. Harvard, other high-endowment doctoral programs, and other high-prestige programs will remain (anyone with several Nobels/equivalent on staff). But the prestige difference between Podunk State and UoPhoenix is not large, and indeed may not even be positive for Podunk State.
Second part of the decline is that evaluation systems will improve. Both IQ tests (Wunderlich) and Personality tests (Big 5-conscientiousness) are legal in many hiring decisions. Someone who tests well on real, deception indexed conscientiousness and IQ will be worth hiring out of high school instead of hiring a college grad at some level of test quality. Indeed, if Dr. Caplan takes his own education signalling posts seriously, he should be expecting some level of verifiable test quality to break the system, with some lag.