Forget Bribery. The Real Scam Is Pretending That Degrees Have Value.
(Bloomberg Opinion) -- As any remaining illusion of a college meritocracy swirls down the drain, there remains one school where students are still admitted based on unadulterated academic aptitude: Caltech.
No bonus points for legacy applicants, nor for star athletes. Even if an underqualified student does happen to slip in, they don’t have an easy way out. The California Institute of Technology does not engage in grade inflation, and the four-year graduation rate stands at 79 percent, well below that of its elite peers.
Quick, name a famous Caltech alum! Maybe Sheldon Cooper? Jean-Luc Picard? No, those are fictional characters. Truly devoted nerds might be able to name Gordon Moore, founder of Intel, or Hal Finney, Bitcoin pioneer.
Despite being an intellectually rigorous institution, Caltech does not graduate many future elites. Alumni go on to be successful in their academic fields, but don’t tend to dominate finance, tech or politics. An academic meritocracy does not reflect how the world actually works.
Incidentally, none of the parents involved in the recent college admissions bribery scandal tried to get their kids into Caltech or MIT, the sort of universities where students are generally expected to acquire skills relevant to a productive career. As it turns out, parents pay obscene sums to marshal their offspring into elite schools not for the sake of education, but to secure their offspring’s socioeconomic status.
Successful parents in the upper middle class can leave money to their children, but that doesn’t guarantee entrée into the social elite. The more reliable way for powerful parents to buy power for their children is through a name-brand, exclusive education.
Jared Kushner’s father famously secured Harvard acceptance for his son with a $2.5 million charitable contribution. A direct financial bequest of the same size to Kushner from his father would have been subject to a 40 percent estate tax. When deciding how to best allocate his progeny’s inheritance, Charles Kushner chose the tax-deductible one. Amortized over two kids, that university donation looks like an attractive investment indeed.
Online courses (and before that, public libraries) rendered institutions of higher learning unnecessary for, you know, learning. But the idea that massive open online courses, or MOOCs, will replace colleges is a complete misunderstanding of the purpose of a university degree. When something is both expensive and of no practical value, it’s clearly intended as a means of wealth transfer.
The solution to this madness also happens to be one that will never happen: Drastically increase the number of admissions spots available at top schools. The developed world’s concept of wealth is having something that others don’t have. If Ivy League diplomas are handed out like candy, they’ll be worthless for signaling social status, but if they ever had intrinsic value, they still would.
However, that wouldn’t be the end of socioeconomic inequality, which is the real underlying complaint about legacy admissions and bias in the Ivy League. Powerful people will find something else to denote elite status, and it will be just as unattainable for the less powerful.
As long as Ivy League alumni occupy positions of power, academic credentials will remain costly and scarce. Ongoing credential inflation is not evidence of a bubble about to burst, but a reflection of how successful the elites are at convincing the greater populace that degrees are valuable.
To contact the editor responsible for this story: Philip Gray at philipgray@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Elaine Ou is a Bloomberg Opinion columnist. She is a blockchain engineer at Global Financial Access in San Francisco. Previously she was a lecturer in the electrical and information engineering department at the University of Sydney.
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