The Education Hierarchy and Signaling
By Arnold Kling
suppose that instead of a single dictator, there is an elite class, which has general control over most cultural organs and elite institutions but whose political ascendancy is somewhat tenuous. Like the dictator, it will want signals of loyalty
In a previous post, I talked about two systems. Since then, I decided that Oliver Williamson’s terms “markets and hierarchies” are appropriate for the systems. However, I am less focused on the differences in transaction mechanisms between markets and hierarchies. Instead, I wish to speculate on the sociological differences between the two.
In a hierarchy, signaling respect for the hierarchy is very important. That is another similarity between academia and government, which I have discussed before. That is, part of the process of getting ahead in academia is showing respect for the academic hierarchy.
I think this offers a potential insight into the signaling role of education. It does not just signal intelligence or conscientiousness, which could be signaled more cheaply in other ways. It signals respect for hierarchy. Thus, large organizations will tend to value educational credentials, while small organizations may not need to do so.
If educational credentials signal respect for hierarchy, then this makes the role of such credentials less puzzling. There is no cheap alternative to educational credentials if you want to signal respect for hierarchy. Looking for an alternative signal is fundamentally self-defeating. Any attempt to evade the educational credential system inherently signals a lack of respect for hierarchy!