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College and the Reputation-based Economy

College and the Reputation-based Economy

Anya Kamanetz l GOOD

April 05, 2010

In his novel Down and Out in the Magic Kingdom (free download here), science fiction writer and free-software activist Cory Doctorow posited a society that ran on “whuffie,” or a reputation-based currency. For instance, by doing something creative, impressive, or otherwise helpful to others, you gained whuffie. And if you knocked down an old lady in the street or stole someone else’s ideas, you would subsequently lose whuffie.

In our society, an important part of our reputation is where, and for how long, we went to school.

Having a four-year college degree is a threshold for entrance into a large proportion of decent-paying jobs. As it’s become illegal to discriminate in hiring anyone on the basis of race, creed, color, gender or sexual preference, employer discrimination by education level is just about the only allowable screening device left.

And among college graduates, people discriminate even further—where Ivy League and some other private college degrees are considered to be worth more, which is part of the reason those colleges are able to charge hundreds of thousands of dollars for their seals of approval.

College diplomas are important signalers for social networks and dating, too. There are special groups like The Right Stuff that introduce only graduates of “excellent schools” including Ivies, major research universities, and competitive liberal arts colleges. More broadly, people tend to prefer to marry people of similar education levels, which is one of the factors contributing to rising income inequality—a married couple with advanced degrees tends to earn many times more than two high school dropouts.

But there are problems with relying on a college diploma as a major reputation signaling device. One is that it can be faulty. Not every graduate of an Ivy League college is a sterling example of humanity—just ask the alleged victims of Amy Bishop, the University of Alabama neurobiologist, Harvard PhD, and murder suspect in a recent multiple shooting. Conversely, many people who have acquired the right skills and qualifications for jobs, but who haven’t completed a degree, get denied the opportunity to compete. (There are millions of Americans who have some college but no degree; only 56% of those who begin a four-year program actually complete it within 6 years.)

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