Yale professor Robert Shiller is best known for writing Irrational Exuberance and predicting the mid-2000s housing bubble and the ensuing financial crisis. And for winning the Economics Nobel last year for his work on behavioral economics.
What’s less known is that he loves to teach! He still teaches a 300-person freshman class at Yale. And his recently-concluded Financial Markets course on Coursera had over 165,000 students enrolled — that might be the largest online course ever taught!
I had the recent privilege of speaking with Professor Shiller. I must admit to being a little intimidated before the conversation (it’s not every day that I spend 30 minutes speaking with a Nobel laureate), but my fears were quickly allayed by his warm conversational style. We chatted about the future of education, what causes financial bubbles, the pitfalls of specialization, and why it’s important that smart young grads go to work on Wall Street.
Here’s the full interview.
How did you decide to teach the Financial Markets course on Coursera?
I love teaching! I’ve been putting my lectures online for a few years now, as part of the Open Yale initiative. So when Coursera came along, it was already my fourth time teaching a course online.
Online learning has an important future. As we get better at it, it will make a big difference to the world. As a teacher, I want to be a part of this movement and disseminate my knowledge to as many people as possible.
How does teaching on Coursera compare with teaching on campus at Yale? Are online courses the future?
Technology changes society, but not always in the way people expect. The need for community and social connection is stronger than most technologists believe. In 1876, when the telephone was invented, people thought cities would disappear, but it didn’t happen.
The human mind requires a sense of relationship, and social connection. MOOCs do these things better than textbooks, but still have a long way to go. My Yale classes are big (the latest had over 300 students), so I don’t get to know most of the students. Yet, there is a sense of community. And that’s important.
Are you saying that the online course was less effective?
I’m saying that it’s not as easy to build deep connections in an online course. On Coursera, I held office hours and responded to questions. Yet, I found myself spending more time thinking about my 300 Yale students than my 165,000 Coursera students, because I saw my Yale students every week.
I felt guilty for paying less attention to the larger number of students, but I couldn’t help the deeper feelings I felt for my on-campus students.
So what does this mean for the future of education?
Online classes are here to stay, but perhaps the right answer is ordinary-sized classes rather than the “massive” classes currently in prevalence. I suspect the future will involve smaller online class sizes, more interaction with faculty.
There is a large opportunity in making online classes resemble traditional education more closely. For instance, tools to create better relationships even at a distance, record of professors’ communication with each student so they can refresh their memories.
What about teachers who think MOOCs are a threat to universities and their jobs?
Modern communication threatens lots of jobs, but also creates jobs. Some reallocation of jobs will occur. That’s progress, it’s nothing new!
But has the education industry seen this kind of change before?
In fact, it has seen many changes. At Yale in the 1800s, we already had what are now being talked of as “flipped classrooms”.
The old Yale college catalogs show that there were about 6 professors who were real scholars. For teaching, they were supported by textbooks (e.g. the works of Adam Smith) and a lot of tutors. Universities then were more religious institutions, and focused on the meaning of life.
It’s only as the 19th century wore on, that people started being professor of something (e.g. math, chemistry, etc.). Specialization and departments happened. We may be overly departmentalized now. Tony Kronman, former dean of Yale Law School, wrote a book that says universities are too specialized.
That’s fascinating! Moving to a different subject. In 2007, you predicted the housing bubble, when everyone else looked the other way. What did you see that others didn’t?
Calling the bubble needed judging people and their motives. Widespread prevalence of dishonesty, even when not extreme, is a good leading indicator of a bubble. It’s very important to teach ethics and principles. If you look at my Financial Markets course, I’m very concerned about principles and purposes.
Another problem is that our economy has evolved around specialization. People are overly focused and don’t see the big picture.
After the financial crisis, young people seem to be turning away from Wall Street…
Yes, and that’s a shame! Occupy Wall Street was important to draw attention to the malpractices in finance. But it also created an impression that everyone in finance is money-grubbing and that good people shouldn’t enter the field. This is really bad — if moral people were to abandon finance, that would be bad. Finance is an important mathematical and sociological field and is very central to the economy — it determines resource allocation and it’s important that our best minds work there.
What advice do you have for our readers?
We all have different purposes. Young people should not look at starting salary and immediate opportunities. Einstein worked as a clerk in a patent office after his PhD.
Don’t focus on the short term. If you love something, pursue it. Do not separate vocation from interest.
What’s an interesting fact about you that not many people know?
I always thought I’d be a scientist, because I loved science. It’s kind of a religion to me – discovering the truth and facts. As a child wanted to be an astronomer or physicist.