MOOCs and Parking Lots: Privatization on Auto-Pilot

Photo: Granada parking lot, Santa Barbara, CA.

By 6 am this Sunday morning a neon sign was blinking silently inside my head. It flashed MOOC, MOOC, MOOC, MOOC.  The house was dark and the sun nowhere to be seen, but I got up to see who left the sign on.

Most people now associate MOOCs with Udacity, Coursera, edX, and the other newborns of the Year of the MOOC.  Given where I work, I associate them with the proposal for the "cybercampus," or "11th campus" of the University of California, first floated during the Furlough Summer of 2009.  Two weeks before the watershed Regents meeting on the furlough vote and the new president's emergency powers, Berkeley Law School Dean Christopher Edley wrote an editorial in the Los Angeles Times that presented online education as a way of using technology to make up for budget cuts.  The false implication was that we could get around Arnold Schwarzenegger's abrogation of the Compact and his 20% cuts to state funding by replacing a lot of teachers with technology.  This is the core of the MOOC vision that created UC Online Education out of the Commission on the Future process, which sputtered along and how now been decisively bypassed by the three big entrants mentioned above and other smaller ones--bypassed for market share, that is, in the market for individual college-level courses, which is in fact not the university's market.

Elsewhere in his July 2009 article, Dean Edley stated the core problem perfectly:

Five years ago, when I became dean of the UC Berkeley School of Law, I worried that California leaders were no longer committed to having a world-class university, especially law schools. Nowhere is it decreed that a state must challenge the best private universities, though California was proudly unique in that regard. But a generation of stingy state investment suggests that the goal of "world-class K-16 education for all" has become, simply, "better than Mississippi."

True. But creating a UC cybercampus, say a UCOL, is not the alternative to California higher ed's reversion to the norm.  It is that reversion to the norm. It is a reversion to mediocrity--or so we must assume without actual evidence that online is educationally equivalent to intensive learning.

Fast forward to November 2012, after a year of another 25% cut to UC's general fund revenues and a non-cut year thanks to the successful resolution of the hostage crisis known as Proposition 30.   Gov Jerry Brown went to a Regents meeting that month to revive this 2009 solution to an educational crisis that he will neither define correctly nor fix honestly.  Which brings me back to my title and the question, why won't he?


The simple answer is that Jerry Brown has always been an Austerity Democrat, oddly lacking the interest in social development that defined his father's political generation.  I wrote about the roots of his extension of Arnold's neo-Hooverism in 2011.  Over at the Baseline Scenario James Kwak has reminded us again of the current political terrain:

The Democratic Party today, as I’ve said countless times over the past year, has become the party of smallish government and tax cuts for most people, while the Republican Party is the party of tiny government and tax cuts for everyone. There is no party dedicated to the New Deal and the Great Society. We need one.

Not according to Jerry Brown, who is a founding father of the tax-cuts-for-most-people New Democrats. UC online is the "smallish government" party's idea of a public university.

Another piece of the answer for Gov. Brown's enthusiasm for online Public Us is that he is fine with privatization, where public services are pushed off the public books by being given to private agencies. A local Santa Barbara story about city parking lots offers an illustration.

The City of Santa Barbara set up a state-backed Redevelopment Agency (RDA) to build, along with parks and affordable housing, parking lots in the center of town. It used California Redevelopment Agency legislation first passed in 1945, which allowed governments to "use a portion of property tax money to partner with developers to encourage development in blighted areas . . .After agencies repay their existing bonds, those revenues . . . go instead to schools and special districts."

Last year, Gov. Brown pushed for the total elimination of all 420 RDAs in order to save money in the state budget, and he succeeded. He also overcame a court challenge (the citation above is from the Los Angeles Times report on the judge's decision in that law suit).  The argument against RDAs was that they were an expensive use of public money to subsidize projects that enriched private developers but did little for their local areas. In Santa Barbara, most assets were transferred without trouble, but not the lots.

Santa Barbara's parking lots had the public function of maintained traffic to the city's downtown and preventing the decline that had damaged other urban cores and had elsewhere encouraged big-box sprawl.  Santa Barbara's leading journalist, Nick Welsh, put it like this:

Since the 1960s, the City of Santa Barbara has sought to provide cheap and easily available parking to encourage shoppers to come downtown and keep the central business district economically healthy. Since the 1970s, the city’s Redevelopment Agency spent millions to that end as part of a sustained effort lasting 40 years. After that agency was forced to dissolve earlier this year ​— ​as part of the legislative response to California’s ongoing budget crisis ​— ​the city sought to transfer the parking lots to City Hall itself.

First, the Department of Finance sought legislation to stop the transfer, but when that was successfully rebuffed, the finance department asserted itself administratively to prevent City Hall from taking title to the parking lots. . . . [The city attorney] said the state’s objections have “no basis” and are “nonsense.”

 In an update on January 3rd (not on line), Welsh detailed those objections from Gov. Brown's Department of Finance.  The parking lots, DOF wrote, do not constitute "a legitimate government function." They would qualify for this status only if the lots "were exclusively occupied by City Hall employees."  Since they are mostly occupied by the public, the DOF demand is that the parking lots, though built with public funds, be put up for auction and sold, undoubtedly to private companies. Private owners are unlikely to continue the free-then-low-cost parking policy.

It should be pointed out that the selling of public assets to private developers is not an accidental byproduct of the dissolution of RDAs, but is the Brown-DOF's intention.  As Welsh reports,

This past summer, the department got language included in a bill that would have precluded any municipal government from taking possession of former RDA assets unless it passed the 'legitimate government function" test.  [And] that bill specifically barred city parking lots from consideration.

Although its legislation failed, DOF continues to try to enforce this interpretation, and the City of Santa Barbara happens to be the "first California city to confront this question." The legislation spelled out two elements of the thinking lying behind the Brown Administration's cost-cutting efforts. First, "legitimate government functions" do not include public uses that sustain community development. Second, public assets can and should be sold to private interests.

In the world of parking lots, that would mean selling them to a private entity like those once controlled by developer Rick Caruso. Caruso, as Welsh explains, made his initial fortune in private parking lots in Los Angeles. Caruso is now the owner of Montecito's Miramar Hotel, a property that had been an affordable beach motel from the late 19th century, was closed in 2000 by its first mogul purchaser, Ian Schrager of Studio 54 fame, and which a series of mogul owners has over the past 12 years never managed to reopen.  Caruso has spent his Miramar time extracting a 15 year county tax abatment in exchange for actually tearing down the buildings that have sat half-demolished for a decade. Consruction of a new hotel on this beachfront property is still off in the future.

Brown-style Democrats often use public money not to develop society directly but to subsidize the allegedly parallel efforts of private interests.  The result with the Miramar hotel is low- and middle-income people losing a beach hotel they could afford, and instead paying for tax breaks for a possible future hotel that they cannot.  The same thing will happen if the city lots are auctioned to Caruso-style parking companies.

Which brings us back to MOOCed universities.  Teaching technology is nothing new on college campuses, and "distance learning" is quite old.  Here's an Ansel Adams photograph of a chemistry lecture being sent elsewhere. This is UCSB professor Edward L. Tripplett conducting "televised instruction," circa 1966.

What IS new then? The technology has obviously improved, even if the concepts have not.  In addition, the current "honey I shrunk the budget" UC doesn't have money for tech upgrades that can compete with start-ups funded by wealthy private universities, in the case of edX, or by venture capitalists, in the cases of Udacity and Coursera. Finally, MOOC technology would be coming from private startups rather than from the faculty, staff, and students who use it (and who in some cases invented it). Provders say this will cut costs.

We have quite a bit of experience that allows us to assess whether this is true.  The argument is always that privatization of public goods saves money.  Like HMOs have saved Americans a pile of money in health care. Or like the privatization of British Rail improved service at a lower price.  Like selling academic journals to private publishing conglomerates has made the results of publicly funded research widely accessible to the public.  Like the UK Cameron government's massive cuts to English and Welsh universities have improved college quality while lowering costs . . .

These things may have happened somewhere, but not on this planet. The US health care system is 2.5 times more expensive than the nearest competitor for inferior overall outcomes.  A UK Treasury study of "private financing initiatives" showed they typically added 40% to the cost of public services.  Academic publisher Elsevier's 37% profit margins are a big reason why its articles cost 8 times more apiece than do their open source equivalents. And of course the Cameron government's massive cut to British universities resulted in an immediate, nearly-universal tripling of fees and a likely increase of 100 billion pounds to public debt. 

Jerry Brown's November intervention at the Regents' meeting will be followed by a presentation about online to the Regents's Committee on Educational Policy on January 16th. The agenda is not yet public, but if precedent serves, the ideas will be coming 100% from outside providers and 0% from UC faculty, even when that faculty includes figures like UC Berkeley Professor Phillip Stark with a lifetime of experience in online instruction.

UCLA is hosting a prequel to the Regents' meeting, in the form of a day-long gala called "Rebooting California Higher Education." The subtitle is "leveraging innovations in online education to improve cost effectiveness and increase quality."  The day offers a number of prominent speakers --Candace Thille is a lead developer of Carnegie Mellon's Open Learning Initiative, which is arguably the online gold standard, and Udacity co-founder Sebastian Thrun is an excellent online instructor, which I know because I am enrolled in his Udacity statistics course.

But form (and political connections) are likely to dictate content.  The title reflects the absurd premise of most ed-tech proselytizing, which is that higher ed is currently frozen, or off, or stuck in an infinite loop where nobody is scrambling to increase efficiency or quality.   The sponsoring organization has one of those pretentious names, 20 Million Minds, designed to make public universities seem small and elitist. It is a micro-organization founded by the former President Pro Tem of the California State Senate, Dean Florez, and its event is introduced by Darrell Steinberg, the current President Pro Tem of the California State Senate. Florez was behind the free textbook library created by legislation signed by Jerry Brown. The event appears to concretize a power structure rather than probe the weaknesses as well as the strengths of the solution it announces in its title. 

If we aren't careful, privatization history will repeat itself, and UC in its desperation will invite on board a host of outside service providers who will have a seat at the curriculum table and a claim on a piece of UC's shrinking revenues.  (A figure I have heard is that the provider takes 50% of the first seven years' revenues on each course it develops.)  Without contrary proof, I will assume that these providers would lower higher ed costs for all Californians to the same extent that Rick Caruso would offer free parking for Santa Barbara civic life.  The least we can ask of these industry efforts to redefine public higher ed is that they provide concrete accounting for future costs and specific descriptions of their unique educational benefits, and not the usual empty assurances.