No One Cares About Your College

The Best Alumni is a Silent Alumni

This was a slow news week so I’m writing about a topic other than finance. If that’s an issue for you, then I’ll see you next week.

As some of you might know, I did a ‘fellowship’ at an American think-tank this past year. It was likely funded by the beneficial owners of Koch Industries, so it was pretty lit. Initially, I was somewhat intimidated by the fact that I was – at the time – attending a middling university while many of the folks in my cohort were graduate students at the likes of Oxford, Harvard, Yale Law, Columbia, NYU, LSE, and what have you. However, the intimidation rapidly dissipated once I heard these folks talk. Although most of them were intelligent, none were superhuman. In fact, many of them would fit in seamlessly amongst the bottom quartile at my dinky little school. It was simply the case that the difference between them and I was that they had stumbled into a ‘name-brand’ university and I had not. Imagine spending an insane amount of time, money, and effort to get into Harvard Law and then ending up having to sit next to me. Ooooof.

That’s not entirely fair to my previous schools. My BA is from a liberal arts college founded in 1789 while my master’s in theology is from the nation’s top university. But, at the time I was being associated with the regional research university I went to for my engineering degree and MBA. I digress.

The thing is though that in America, and many western countries, we seem to have made a fetish out of educational ‘brands’. As anyone who has traveled to the US will tell you, those weirdos love their universities. They wear college apparel surprisingly often. They even buy the clothing of certain schools which they never attended – such as Harvard – solely for the prestige factor. But why? Who the hell cares where you read Don Quixote or learned how to identify mammalian anatomy? Apparently everyone.

A couple of years back The New York Times columnist Frank Bruni wrote a book called Where You Go Is Not Who You Will Be, the thesis of which was that lifetime income was more closely associated with the schools to which one applied as opposed to that which one attended. For example, if you attended Ohio State but had applied to Harvard, you are more likely to have lifetime earnings similar to that of a Harvard graduate than of someone who only applied to Ohio State. The reason for this being that if you think you are smart enough to go to Harvard, you probably are, you just didn’t get in due to bullshit and luck.

However, despite this hopeful message it is becoming apparent to me that the ‘brand’ of one’s school is becoming increasingly important amongst ‘top tier’ professionals. For example, try applying to Goldman Sachs with a business degree from a no-name school versus one from Wharton. All things being equal – and despite squiddy’s HR department’s claims to the contrary – you will be overlooked. That’s how the cookie crumbles. Is it fair? No. But is life? Exactly. But there’s more to it than just name recognition.

Anyone with three brain cells and some exposure to the world of higher education will agree that we are living in an era of immense credential inflation. No longer is a generic bachelor’s degree good enough to land a job on Wall Street. Nor, is it enough to get into law school. Hell, I know of folks with PhDs and master’s in the life sciences who can’t get a second look from top-tier medical schools. Yet, the ambitious amongst us want those dope-ass jobs. So we get honour’s degrees, and master’s, and who knows what else, in the hope that we can stand out and land entry-level positions. I would suggest that credential inflation has led to the situation in which the credential itself matters less and less while where you got it has become the focal point of hiring, or at least interview, decisions.

What’s my evidence for this? Not much. But that’s because the second COVID jab kicked my ass this week. If we think about it logically for a moment we can probably agree that the shiny pieces of paper are a dime a dozen. However, Harvard only takes in ~5% of applicants. Therefore, those doing the recruitment and hiring in elite firms naively assume that the admissions office at Harvard does a hell of a job screening out the schmucks. Consequently, they assume that a Harvard graduate was thoroughly screened – four years prior if they are an undergrad – and thus the hirer does not have to do much on their end. Put differently, no one ever got fired for recruiting out of Harvard.

This point is put forth by the economist Bryan Caplan in his scholarly study, The Case Against Education. Caplan’s main argument is that ~80% of education is signaling.¹ That is, when you go to university your time and money does not go towards learning but rather signaling to would-be employers that you are the kind of person who goes to College Z and thus would fit in at Corporation X.

The real damning argument – outside of the quantitative work Caplan presents – is that there is no rational argument that supports paying high tuition to read Plato if a student’s goal is to work on Wall Street. As someone who has read Plato – and even wrote a master’s thesis on Plotinus – and who is hustling for that finance job, I agree. This is why I studied the humanities for other reasons. But, I am a fortunate individual who engaged in that form of education as a conscious luxury. At no point did I think to myself “knowing the ablative form of vocare will land me a role at RBC.”

The signaling at elite universities is perhaps the most extreme. For example, at Harvard, the graduation rate is normally ~98%.² No one fails at Harvard. This tells me that Harvard is not very hard. I feel supported in this assertion by the policy of Harvard professor Harvey Mansfield, who for almost two decades now has given students two sets of grades: the one they deserve and the one which grade inflation awards them.³ Even a simpleton can piece together that if Harvard is a place where the nation’s smartest are pushed to their intellectual edge, then you expect at least 10% to fail out. Instead, the professors push them through because it satisfies the university’s KPI metrics.

Thus, elite education is one in which the students are there – relative to other top performers who are rejected – due to luck while not having to really do anything once they are inside the institutional gates. Yet, recruiters look at this situation and go ‘wow, these are the best and brightest, we must have them.’ In reality, they’re usually just a bunch of schmucks like the rest of us.

Oh, and the entire elite education thing is corrupt as shit. Whether it’s Chelsea Clinton – purely on her own merits I’m sure – attending Stanford, Columbia, and Oxford, or Aunt Becky photoshopping her kids into USC of all places, we all know that just getting your foot in the door is no guarantee of virtue. Yet, if you look at recent American presidents, the current Supreme Court justices, or the CEOs of major American corporations, it seems as though a degree – or two – from elite institutions is a prerequisite for professional and public success. But why? Indeed, there is a strikingly simple argument to be made that having a degree from such institutions is a sign of mediocrity rather than genius in the workplace.

In a chapter from his Skin in the Game – republished for free on Medium – Nassim Taleb makes the convincing case that if someone looks like they ought to have the job that they do then they are likely inferior to those who do not fit the aesthetic. For example, imagine that you are at an investment bank and there are two managing directors. The first looks like a Brooks Brothers mannequin came to life who boasts of an MBA from Wharton. The second looks like an average bloke and does not mention where he went to school, or whether he did at all. Who do you think is better at their job? The second guy because he rose to the same level as the first, not because of credentials and ‘fitting in’ in terms of looking the part, but because he delivered results. Thus, if you find yourself chatting with a firm or team that claims they only hire from ‘top tier schools’ – which is not uncommon in finance – then you can assume that the firm is, on average, mediocre relative to their non-exclusivist competitors.

Despite Taleb’s compelling argument, professionals still act as though where you go to school, and what you got while there, matters. This is strange because I’ve never been asked in an interview about what I studied. They simply wanted it to be the case that I had studied. Therefore, we collectively find ourselves in the situation where elite education is:

1.     Increasingly sought after;

2.     A means of recruitment exclusion;

3.     The product of luck;

4.     Functionally meaningless in terms of correlating with academic rigor;

5.     Indicative of mediocrity vis-à-vis workplace performance.

It is as though elite education is all that matters while meaning nothing at all.

We’ve collectively deluded ourselves into believing that merit corresponds with prestige. And what do we have to show for this fetishization? Well, we have young people working themselves to their breaking point to get into top universities. If they fail to get in, they begin to feel as though they are fucked in terms of career prospects. Worst of all, due to the meritocracy rhetoric spewed forth by elite institutions, folks who don’t get in are made to feel as though they did not get in because they weren’t ‘good’. From an economic point of view, the ramification here is that elite corporations miss out on some of the best talents because they restrict their fishing to an incredibly small and narrow-minded pond. Not to mention those of us who consciously rejected even applying to those institutions because we wanted nothing to do with them.

Oh, and don’t forget the financial extremes to which students and their families are willing to go to get a piece of paper from one of these grand institutions. For example, a recent article in The Wall Street Journal painted a brutal picture of the debt that master’s level students take on in order to receive useless degrees from Ivy League schools. The leading example is one gentleman racking up $300,000 in student debt to grab an MFA in film from Columbia. Why? Because assumably the dude bought into the notion that the Ivy Leagues are the key to perpetual success. Want to be a big-time director? Better go to Columbia for a few years. Except filmmaking depends on your ability to create not whether or not you can sit through a lecture.

For what it’s worth. If I were hiring and saw two applications, one for someone who went to Wyoming Catholic College, the other someone who went to Yale, I’d go with the person whose education included mandatory backpacking through the Tetons

1. Bryan Caplan, The Case Against Education: Why the Education System is a Waste of Time and Money, paperback ed., (Princeton: Princeton University Press, 2019), 4)

2. https://college.harvard.edu/resources/faq/what-harvards-graduation-rate

3. https://www.thecrimson.com/article/2001/2/5/mansfield-to-give-two-grades-pstudents/