Johann Kurtz’s essay on why younger generations feel left behind economically, even while official statistics from GDP to stock markets send signals that our economy is thriving, touched a nerve. 

Kurtz’s central argument is that young people only appear to be doing fine in official statistics because those measures fail to capture the collapse of “social capital”—the free inheritance of trusted neighbors, functional public schools, safe streets, and marriageable norms that previous generations received at no cost. Because that commons has been liquidated and privatized, young people must now repurchase its components individually at market prices. Expensive homes in good districts, private schooling, daycare, credentials, and more—all of it requires substantial financial resources, even as incomes have risen only modestly. Meanwhile, the cost of these essentials has increased many times over. 

The result is a measurement failure: cheap electronics and rising nominal incomes make the young look prosperous, but the actual building blocks of a middle-class life have moved beyond the reach of average Americans, which explains why younger generations are delaying or forgoing them entirely.

The process Kurtz outlines can also be applied to higher education. My basic thesis is that the college degree became a replacement purchase because the American labor market itself once functioned as a common good that has since eroded.

The Degree Replaces the Commons

The standard debate about higher education asks whether college is “worth it,” and the standard answer points to the wage premium. Since graduates out-earn non-graduates by a wide margin, the degree pays for itself. Therefore, the complaints of the indebted young amount to ingratitude. And yet the same young people carry $1.85 trillion in student debt, delay homeownership and marriage on account of it, and report in growing majorities that college wasn’t worth what they paid. Someone is measuring the wrong thing.

Seen in this light, the bachelor’s degree is a textbook replacement purchase. Previous generations received, free of charge, an enormous stock of social capital that sorted and certified young workers: high school diplomas that guaranteed real literacy because the issuing school would have been embarrassed to certify anything less; dense local networks of employers, coaches, pastors, and foremen who could vouch for a young man’s character because they actually knew him; internal career ladders by which a mail clerk became a manager; and employer aptitude tests that measured a job candidate’s fitness for a role. A working-class kid in 1965 was legible to the labor market at essentially no cost to anyone.

Every one of those mechanisms has been liquidated. The high school diploma inflated into meaninglessness. The vouching networks dissolved, along with the neighborhoods and congregations that sustained them. Internal ladders were dismantled as firms outsourced training. Direct aptitude testing was chilled by litigation after Griggs v. Duke Power (1971). 

Every cheap signal was either destroyed or forbidden, with only one left standing. The degree became essentially mandatory in the professional economy, not because the jobs changed but because the free-sorting infrastructure was dismantled. Four years and $40,000 in debt now purchase legibility that a grandfather got with a diploma and a reference.

Immigration finished the job from the other side. It was not enough that the non-degree path was demolished; the wages of that path were then subjected to competition from a global labor pool. The post-1965 influx of immigrants was concentrated precisely in the low-skill segment of the market—the segment the old commons had served. George Borjas modeled the 1990–2010 immigrant inflow and found it increased total hours worked by high school dropouts by roughly a quarter, depressing their wages by around 6% in the short run. One could contest the magnitude of the effect, but not the direction: an increase in labor supply puts downward pressure on wages. 

The high-school-diploma job that once bought a tract house now clears at a wage set against a far larger pool of men who are also generally willing to work for far less because they arrived from economies where far less is a fortune. This closes the pincer: the diploma stopped certifying, and even where it still opened a door, the wage behind the door collapsed. The degree thus became a moat against labor competition in exactly the same way the overpriced neighborhood became a moat against social dysfunction. Instead of a way to get ahead, it became a defensive purchase to escape conditions that policy created and that no individual family can vote away.

This reframes the wage premium. A good can command a higher price because it becomes more valuable or because alternatives are destroyed. The college premium is overwhelmingly the second kind: not a bonus paid to the educated but a fine levied on the uncredentialed, whose access to stable employment collapsed. And, as with housing and childcare, the repurchase registers in official statistics as progress. GDP counts the tuition, the interest payments, and the salaries of the compliance staff—and calls all of it growth. The man forced to buy bottled water because the well was poisoned looks rich in the consumption data.

Now note the terms of the repurchase, which follow the pattern exactly: the replacement good costs radically more and is worse than what it replaced.

The cost side is familiar. In 1970-71, average tuition and fees at a public four-year university were $394, coverable by part-time work, with change. Today the in-state figure exceeds $10,000, nearly triple the real price, excluding room and board. The debt this generates functions, like housing inflation, as a direct tax on family formation: it raises the down-payment threshold, delays marriage, and delays or forecloses having children.

Making the Competition Global

Immigration operates on this market too, at the opposite end. Over a million international students (nearly one in ten) are now enrolled in American higher education, and the elite institutions actively court them: they typically pay full tuition and must document their finances before admission at need-aware schools, thereby cross-subsidizing everyone else. For all the talk of “diversity is strength,” this is a clear revenue model, not a charitable (or revolutionary) act of social justice. 

International students now make up roughly 10 to 15% of Ivy League undergraduate enrollment, even rising above 20% at some schools. The trouble is that elite enrollment is essentially fixed. Harvard’s class is not meaningfully larger than it was 50 years ago—so every seat sold to someone from the global applicant pool is a seat removed from the domestic one.

The American 17-year-old is thus made to compete in a worldwide tournament for a static number of seats, and a tournament is what his college years become: test prep from 14, a curated portfolio of synthetic passions, essay consultants, then—for the winners—four more years of GPA defense and internship scrambling because the sorting never stops. This is why the young report that college is no longer fun, and they are not wrong to see it that way. The old collegiate experience—the low-stakes four-year interlude of friendship, argument, leisurely reading, and wasted afternoons—was itself part of the commons. Fun is what a commons feels like. A tournament is what a market feels like. The students did not change; the ratio of applicants to chairs did.

Paying More for Less

The tripled price did not buy more instruction at America’s colleges and universities. Between 1976 and 2018, enrollment grew 78%, and full-time faculty grew 92%. Full-time administrators grew 164%, and “other professionals” more than 450%. Meanwhile, roughly 68% of faculty now hold contingent appointments, up from under half in the late 1980s: the person actually teaching freshmen is increasingly a pieceworker without an office. The marginal tuition dollar went to bureaucracy, not teaching or learning.

And the learning itself has thinned. Richard Arum and Josipa Roksa’s Academically Adrift found that 45% of undergraduates showed no significant improvement in critical thinking, complex reasoning, or writing after two years of college. Half the sophomores in their sample had not taken a single course requiring 20 pages of writing. Weekly study time fell from about 25 hours in 1961 to 12 or 13 by the 2000s. 

This makes perfect sense once we recognize what the product actually is: when a degree is purchased as a screening credential rather than an education, both buyer and seller have every incentive to minimize the education and maximize the throughput. Grade inflation is, after all, what the customer wants.

The final data point closes the loop: even as a pure screen, the purchase increasingly fails. The Burning Glass Institute and Strada Educational Foundation found in 2024 that 52% of bachelor’s-degree holders are underemployed a year after graduation—working jobs that never required the degree—and a decade out, 45% still are. Half the buyers pay retail for the replacement good and receive neither the education nor the sorting.

So the young are told the degree “pays,” and in the narrow accounting, it does—the way bottled water “pays” once the well is gone. They have spent four years and taken on five figures of debt to buy back, at retail and in degraded form, a certification their grandparents’ society produced for free as a byproduct of functioning schools and legible communities. The apparatus that sells it to them books the transaction as growth.

As Kurtz argues, this is not growth—it is the invoice for a destroyed commons.