Employers routinely pay a considerable wage premium to candidates holding a particular university degree, even for roles in which the specific subject matter of that degree is never directly used on the job -- a marketing role filled by a graduate in literature, an operations role filled by a graduate in classical history. If the actual content of the degree is not what the employer is paying for, since that content plays no visible role in the work itself, the question follows naturally: what, exactly, is the employer paying for?

One answer, considerably less flattering to the education system than it first sounds, is that the degree is valuable to an employer not for what it taught but for what successfully earning it reveals about the person who earned it. Completing a demanding, selective degree requires sustained effort over several years, the ability to meet deadlines, and a baseline level of general capability that would otherwise be difficult for an employer to observe directly before hiring someone. Two candidates who look identical on paper except that one holds a considerably harder, more selective degree give the employer a real piece of information, even if neither candidate's coursework has anything to do with the job itself: the degree-holder has already, at their own cost, cleared a demanding, competitive filter that the employer did not have to design or administer.

This signalling mechanism depends entirely on the credential remaining genuinely costly and difficult to obtain for anyone who lacks the underlying trait being screened for. If a demanding degree suddenly became something any candidate could obtain with minimal genuine effort, regardless of their actual diligence or ability, it would stop functioning as a signal of anything at all, because the very thing that let an employer distinguish a diligent, capable candidate from a less diligent one -- willingness to bear a real cost that a less capable or less diligent candidate would find considerably harder to bear -- would have quietly disappeared. A signal that costs nothing to fake tells an employer nothing worth knowing.

This dependence on cost creates a genuinely wasteful dynamic over time. As a given credential becomes more common, and therefore stops separating candidates from one another as effectively as it once did, employers respond by requiring a higher credential for the same job -- a bachelor's degree becomes a master's degree, a master's degree becomes a specialised further qualification -- not because the job itself has grown more demanding, but because the credentialing arms race needs a costlier signal to keep sorting candidates who might, in raw underlying ability, remain almost indistinguishable from one another. Every step up this ladder consumes real resources -- years of a person's working life, considerable tuition fees, opportunity costs that could otherwise have gone toward genuinely productive activity -- purely to re-establish a sorting function the previous, cheaper credential used to perform just as well.

Credentialism, properly understood, reveals that the market value of a degree splits into two genuinely different components sitting inside one identical piece of paper: the actual skill or knowledge the degree conveys, which is productive in the ordinary sense of making its holder genuinely more capable at the job, and the pure, costly signal of underlying diligence or ability the degree provides regardless of its content, which sorts candidates without making any of them more capable of anything at all. Only the first component represents a genuinely productive use of society's resources; the second is closer to an elaborate, expensive method of proving something about oneself that a cheap, well-designed aptitude test might, in principle, prove at a small fraction of the cost -- if only employers, and the candidates responding to what employers reward, could ever be persuaded to trust it as much as they currently trust a degree.