Education inflation

Posted on December 15, 2011 by

(A previous thread on German housewives became a bit derailed with a conversation about credentialism, so I wanted to move that here.)

If life gives you cherries, make tiramisu

Imagine that we lived in a world where ice cream were plentiful and all identical-tasting, but cherries limited. An ice cream sundae with a cherry would be considered much better than one without, despite the fact that the cherry is not actually very important to the creation of ice cream sundaes. Everyone would demand “a cherry on top” to make sure they are getting the best.

But just think: what if someone developed a brand of better-tasting ice cream? No one would ever find out unless they were able to top it with the highly sought-after, and therefore expensive, cherry. That destroys the incentive of the best chefs to devote their efforts to making better ice cream.

It would be much more effective for a talented newcomer to the market to offer something completely different than sundaes: something cutting-edge and extremely rare. Instead of paying $500 to put a cherry on your sundae, and then struggle to sell your product for $510, you could make a killing selling chocolate cake at $20 a piece. You could then standardize the cake recipe and sell books, set up a baking school and charge fees to attend it, go on television and host a show where you bake in front of an audience. Pretty soon, chocolate cakes with cherries on top would collect a massive premium over those without cherries, and you’d be back to square one.

You see, the most valuable market-player is not the person who has the best cherry, but the one who’s discovering the fine art of crème brûlée in a world where no one has ever tasted any.

Higher education is a basket full of cherries

Credentialism arises because of the oversupply of job applicants and the lack of discernible differences among the applicants. It is an attempt at limiting quantity rather than increasing quality; of making the hurdle higher and higher in order to reduce the number of applicants who can jump over it. You need more and more education because it is so common among the applicants, and therefore of low value to the employer.

Yes, I said that it is of low value. If they highly valued it, then your credential would be the defining reason why you are hired, rather than the minimal requirement to be added to the list of 43 people who want the same job. Your credential is on the same checklist with “is not an ex-con” and “has a good credit score”. It is merely being used to winnow down the competition.

In fact, the current decline and feminization of academia can be traced directly back to credentialism (degrees, certificates, and tenure being examples of that). A post-graduate wasn’t held in high-esteem because his degree made him so smart, but because really smart people so often had post-graduate degrees. Now that more and more smart people are abandoning the system (through homeschooling, self-education, alternative fields, and entrepreneurship), and the system is bloating up with over-subscription, the average intelligence of graduates is dropping, and the credentials they attain are therefore declining in value.

The fairer, but not smarter sex

Women increasingly need college degrees to earn a living wage because women pursue jobs that are heavily oversubscribed and require little academic talent. Their jobs often require interpersonal skills and a quick mind, which is difficult to judge on paper, and this leads to a downgrade of many desirable applicants. This is why I avoided such industries like teaching, despite having an obvious talent for it. The slight advantage my intelligence provides is greatly outweighed by my relative lack of credentials.

Men, on the other hand, are capable of earning a living wage in industries where productivity is the focus, so their abilities and talents are easily measurable, and their income can increase accordingly even without those credentials. This, in a nutshell, is the reason that men generally earn more than women outside of large cities (where most of the productive industries are), but less than them inside of large cities (where credentialism runs rampant).

Standardization is for dummies

One sees the same thing in all mature or highly-standardized industries: the repetitive and easy nature of the work attracts workers in droves, which increases the competition between them, and results in their needing higher and higher-rated credentials to do easier and easier work. Once anyone can do it, everyone will want to do it, and you’ll have to start using more and more criteria to limit applicants. If we continued on our current trajectory, you’d need a Master’s degree to say, “Would you like fries with that?”, the degree would cost you 10 years and $100K to attain, and you’d earn $4/hour.

As I have predicted before, the credential system is overplaying its hand. I don’t need to be lectured to by a grad student when I have a Kindle, and can read straight from the original works, and study them in my book club. This is the classical educational model, which was the model of the original universities, and was incredibly cheap, interesting, and effective. If the college system does not quickly cut prices, reduce enrollments, and raise quality it will go the way of the dodo bird. Good riddance to bad rubbish, I say.

Posted in: Education