A SIGNAL, OR A CREDENTIAL? University Diaries links to a James Twitchell essay in Wilson Quarterly arguing that the famous universities function to certify students to enroll in famous graduate and professional programs.

When Consumer Reports rates and compares cars, it measures them on the basis of categories such as performance, safety, reliability, and value. It tries to measure “outputs”—in short, what the car does. U.S. News mostly looks at “inputs” (money spent, class size, test scores of students, degrees held by faculty), rather than assessing what the college or university actually accomplishes for students over the lives of their enrollment. If Consumer Reports functioned like U.S. News, it would rank cars on the amount of steel and plastic used in their construction, the opinions of competing car dealers, the driving skills of customers, the percentage of managers and sales people with MBAs, and the sticker price on the vehicle (the higher, the better).

The emphasis on “inputs” explains why the elite schools aren’t threatened by what others fear: the much-ballyhooed “click” universities, such as the University of Phoenix and Sylvan Learning Systems, Inc., because those schools generate no peer effects. So, too, there’s no threat from corporate universities, such as those put together by Microsoft, Motorola, and Ford, or even from the Open University of England and The Learning Annex. The industrial schools have not yet made their presence felt, though they will. The upper tier on the small side of the hourglass is not threatened by “learning at a distance” or “drive-through schools,” because the elites are not as concerned with learning as they are with maintaining selectivity at the front door and safe passage to still-higher education at the back door.

One wonders, however, whether that approach is sustainable. There's a passage in Freefall of the American University (details or compare prices), reviewed here, that ought give the elite colleges pause. (It's p. 311)

At a dinner party discussing this book's premise, most guests were shocked to hear about the decline of the university, especially the Ivy League. Not so with one guest, president of one of America's top companies. "Yes," he said, "I've noticed the decline in the quality of graduates. I used to travel to the Ivy League every year to interview potential executives, but no more. The elite university graduates had a real lack of general knowledge -- they were not helpful to my company. They were smart, all right, and thought they knew it all. They knew nothing. Now I never recruit from the Ivy League, only from second-tier colleges and state universities. These grads have been much more satisfactory; they're willing to learn."

One anecdote does not a trend make; on the other hand, the market test for a university must include employer and graduate program satisfaction with the graduates, as well as student satisfaction with the waterparks.