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ThisSpaceAvailable comments on Separating university education from grading - Less Wrong Discussion
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Well, according to the signalling theory, we should see education focusing on material for which the ease at which students learn it is correlated with how productive an employee they would be. So, for instance, if people with a comparative advantage in memorizing the entire Divine Comedy in the original Italian also tend to be good workers, but people who with a comparative advantage in memorizing baseball statistics don't, then signalling theory predicts that schools will teach the Divine Comedy, and not baseball statistics. And signalling theory does predict that there would be strong pressure to improve educational standards; it's just that that pressure would be towards making sure that students actually have memorized the Divine Comedy, rather than making sure that they have actually increased their human capital.
Employers who focus on the signals your education emits seem to focus on where you studied rather than on what you studied. In other words, they seem to think that having a degree from Oxbridge correlates with being a good worker more strongly than memorizing the Divine Comedy does, or acquiring any other specific set of knowledge does. This belief (in the superior signalling value of an Oxbridge degree) seems to be quite weakly correlated with what Oxbridge and competing universities actually teach their students. It seems to me that universities' reputations are quite sticky, so that even if a red-brick university tried to raise standards in order to raise the signalling value of their degree, they wouldn't be able to beat the signalling value of an Oxbridge degree. If this is true, then employers' focus on signalling implies a very weak pressure on educational standards. If employers are going to give your degree pretty much the same signalling value regardless of the content of your course, then universities' will not be incentivized to improve or even maintain educational standards.