An epidemic is running riot through our university administrators in Australia. Infected individuals can be identified by their obsession with the quantity and quality of their university’s online course offerings; the mass emails they send with startling frequency advertising sundry “online resources” that they urge academics to take under advisement when planning their courses; and their audible gulps and stares of terror during meetings at the mention of any type of new web-based collaboration software.

These are the classic symptoms of MOOC-spook: an overpowering fear of Massive Open Online Courses. Victims envision catastrophic consequences of MOOCs, chief amongst which is usually a wholesale redefinition of the higher-education sector, complete with mass redundancies and a dramatic reduction of the university’s market power, leading to tanking profits and the eventual bust of universities that cannot weather the storm. With students directly in charge of their own learning, and most academics and administrators made superfluous, it will be the end of Australian higher education as we know it.

Or so the nightmare goes. Fortunately, there is a cure for this syndrome, and it is an understanding of economics. Herewith the antidote.

1 – The essential difference between today’s “online learning” landscape and the learning landscape facing previous generations is that more information is more easily available to more people – even those who have not paid enrolment fees. This has always been the case to a limited extent, through the unmonitored sharing of course notes and the availability of textbooks in libraries and bookstores. The difference now is that the information is easier to access. In economic terms, transaction costs have declined. Importantly, the signalling value of obtaining one’s degree from a university that has a good reputation is still very much alive and well.

2 – The most efficient means of producing human learning of a specific task varies greatly by task. For simple physical algorithms like walking, simply watching someone else do it is sufficient to learn the task. For more complex tasks, more active engagement through writing, verbal repetition, or directed application to examples or case studies is often the most efficient way to learn. In almost all cases, human learning at an intellectually advanced level is inherently a social activity, and is in general most efficiently accomplished when a person teaches another person face to face. This is partly because there is an emotional component to most successful university-level learning that is very hard to replicate outside of the face-to-face context.

3 – Those universities who are selling MOOCs and otherwise offering their products online in many cases trade off of their reputations (or lack thereof) as bricks-and-mortar institutions. MIT and Harvard are still respected sources of MOOCs and online case study materials because of the reputation of the actual physical institutions, complete with real live professors and on-campus students. Similarly, the online offerings of “institutions” that are exclusively virtual generally occupy the bottom rung of perceived quality. Moreover, whole degrees are often not offered online by reputable providers – only singleton courses – and completing one or even a set of singleton courses has far less signalling value than completion of an entire degree.

4 – The results of centuries of experimentation appear to indicate that the production function for new knowledge involves getting a lot of smart, well-trained, motivated, and creative people together in one place with lots of resources and letting them ask and try to answer questions. This kind of place is a hotbed for the research frontier in almost every field and is thus the best place to train the next generation of researchers. Bricks-and-mortar institutions provide such an environment.

5 – An important influence on a given student’s success is also an important influence on his engagement with the traditional university: his motivation and commitment to study. Under-motivated students will not learn well from MOOCs because they are unable to adequately discipline themselves to work through the material, whereas students with plenty of motivation will want to come to universities and have full-blown learning experiences firsthand.

The rise of online learning will have far less an effect on the present constellation of teaching, learning, the student experience, or physical infrastructures of good universities than many other changes we are presently grappling with, including demand-driven admissions and changes in international student movements. Online learning may put some pressure onto programs of study that are primarily about learning rote algorithms, such as TAFE programs and “light” programs at universities, but even there the effect will be marginal.

To the extent that universities are implicitly targeting a niche essentially identical to MOOCs, for example through providing insufficient resources for meaningful and high-quality student-teacher interaction (including by casualising their staff, letting student-staff ratios get too high, or relying too heavily on under-trained tutors), student enrolments may fall slightly.

But all of this is if anything a positive force for the longer-term preservation and fortitude of the international academy. Good students will continue to be pulled to the research frontier locations, which will continue to be housed within good universities, and poorer students will find themselves in need of more spoon-feeding than they can obtain from online courses, and thus will also end up at universities. The lower transactions costs of acquiring basic knowledge through online courses may even whet the appetites of those who would otherwise not consider university, and thereby increase the inflow of students to campuses.

Recovering MOOC-spook victims may be observed campaigning for re-investment in their university’s physical infrastructure, in hopes of providing the maximum bang for the buck in the face-to-face lecture hall and tutorial, and for the enrichment of the campus experience. They may also be seen arguing for higher investment into recruiting top-quality researchers from around the globe, and for re-structuring the teaching personnel arrangements on campus so that fewer ill-trained or temporary staff are in charge of classes. Truly reformed MOOC-spook survivors will start explicitly asking the government for money for such initiatives.

Might MOOCs spell the end of Australian higher education as we know it, after all?