Many people like and want to have degrees and certificates. Other people and organizations prefer people who have degrees and certificates over those who don’t or have fewer of them.
We like to believe that the value of such a document comes from the fact that it indicates (certifies) some qualities, skills, and knowledge of its owner. This is, to a very large extent, true. At the same time:
The value of a degree (certificate) comes from the fact that others don’t have it.
This statement does not conflict with a degree’s (certificate’s) role of indicating skills, abilities, knowledge etc.
Imagine that a country would decide to issue certificates that attest a highly important ability for anyone’s life: correctly counting from 1 to 10. All citizens who passed the age of five would receive this certification and, precisely this, would make the certification valueless and useless.
The role of a degree is to discriminate between those who have and those who don’t have certain qualities (abilities, skills, knowledge etc.).
Qualities (in a broad sense) that are certified through degrees are valuable because they are relatively scarce. We trust doctors because they went through the effort of graduating medical school and fulfill the yearly requirements of continuous education. We go to doctors because most of us don’t have the qualities doctors have.
A quality’s value is proportional to its rarity.
Only a few hundred years ago, being able to read and write was a scarce and valuable quality (skill). Nowadays, in the developed world, being able to read and write is a quality that almost all adults have. This universality of being able to read and write does not decrease the intrinsic value of the skill, but it decreased its relative value. Nobody expects higher pay or higher social status because she or he is able to read and write.
The certificate doesn’t sing
In an old Romanian movie, a group of artists organized a selection for a female singer to join them. One candidate mentioned that she has a participation certificate from a singing contest. When asked to perform she sang completely out of tune. When she was given the traditional “don’t call us, we’ll call you”, the candidate kept insisting that she has the certificate … the reply: the certificate doesn’t sing.
This anecdote illustrates the most relevant quality a degree, certificate etc. must have: honesty.
A degree, a certificate must honestly (accurately) indicate that its possessor has the quality it attests. Imagine that a (European) country would indiscriminately issue, to all its citizens, certificates that attest the ability (skill) of speaking Chinese (Mandarin). It is self-evident that these certificates are not honest since, except for China, there is no other country whose all citizens speak Chinese.
In the real world, we have situations less extreme than the one above. We have some institutions that issue dishonest certificates, degrees etc.: that (claim) attest that their holders have qualities that they don’t actually have.
The example that first comes to mind is “fake” universities that issue degrees in exchange for money. But this isn’t the only situation in which dishonest degrees or certificates are issued. Consider the institutions where the examination is neither thorough (exams are way too easy, fraud is tolerated etc.) nor truly discriminating (75% of students get As).
There’s both good and bad news regarding the dishonest indicators (degrees, certificates).
The good news:
People have developed ways to deal with dishonest signals of individual qualities such as intelligence, conscientiousness, hard-work, knowledge etc. Degrees and certifications are not the only way in which these qualities are communicated. Work experience, individual reputation, personal behavior etc. also indicate these qualities. For example, someone who holds a dishonest degree in history can easily be spotted as a fraud when she or he talks nonsense on the topic.
The bad news:
Because there are other ways in which one’s qualities can be assessed, when there are many impostors who hold degrees, certifications etc. issued by the same institution or by institutions that have certain commonality, then all the indicators that come from those institutions are perceived as less valuable and even worthless.
Simply put, if a university (institution) issues many dishonest indicators of qualities (degrees, certifications), then all of those university’s degrees and certifications will be perceived less valuable (worthless?).
The bad news is that the honest and valuable students of those institutions will come-out short because their degrees (certifications) and subsequently their individual qualities will be perceived as less valuable.
Moreover, when an institution is issuing deceiving degrees and certificates it discourages achievement and performance seeking. When 75% of students get As the students who truly deserve B+s and As are not going to be motivated to shine.
Summing up, the value of a degree has two sources:
(1) the rarity of qualities it indicates (signals) and
(2) the honesty (accuracy) with which it indicates these qualities.