Day: August 6, 2025

AI didn’t break higher ed. It revealed the cracks: falling standards, eroded norms, and a growing disconnect between degrees and the job market. These problems predate ChatGPT. Colleges had already begun relaxing expectations around attendance, participation, and performance, especially through online and hybrid formats designed for convenience, not rigor. But the shift wasn’t merely structural. In chasing enrollment and cutting instructional costs, many institutions de-emphasized disciplines with deep traditions of structure and rigor, expanding instead into programs that are easier to scale online—but often less grounded in formal methods or measurable outcomes.

Online and hybrid courses haven’t just changed how students learn; they’ve reshaped what many now expect from faculty, coursework, and from college itself. Even in-person classes now often mimic online ones: asynchronous lectures, automated grading, and minimal oversight. Access may have expanded, but rigor declined. Worse, the system created perverse incentives for both sides. Students can drift through with minimal effort, while colleges collect tuition without paying for proctors, classrooms, or meaningful engagement. By Fall 2023, over half of all undergraduates were enrolled in at least one online course, down from a pandemic peak of 61 percent in 2021—but still far higher than the 37 percent pre-pandemic baseline (NCES).

Courses are filled with countless deadlines for assignments submitted through LMS—on time, flawless, and perfectly formatted. But unless you watch a student produce the work, it’s often safer to assume they didn’t. The occasional flawed submission is almost a relief—it signals genuine academic effort. But when the norm looks artificially perfect, we pile on more busywork to preserve the illusion of difficulty.

It wasn’t always like this. In 1984, when I took financial accounting at the University of Missouri, the grade came from a proctored midterm and final. We had two lectures each week of frenzied note-taking, plus a one-hour lab where the TA demonstrated problems. Homework wasn’t graded—no points, no deadlines. Just a simple question: do you want to learn or not? That structure built discipline, self-efficacy, and the understanding that not all effort is rewarded equally. Today, students in my financial accounting sections complete roughly 75 graded tasks, and the reality is that students are often rewarded for meeting deadlines more than mastering material.

Max Weber described the rise of the industrial economy as rooted in a cultural shift: work became not just survival, but a moral calling. The “protestant ethic,” he argued, prized discipline, method, and accountability—values that once shaped serious education. Students were expected to struggle, persist, and improve under structures that demanded real effort.

Today, we’ve traded that ethic for a customer-service model. The burden of failure has shifted from student to institution, and colleges have responded by softening deadlines, removing requirements, and lowering standards—all in the name of “access.” According to the 2023 Faculty Attitudes on Technology survey by Bay View Analytics and College Pulse, nearly half of tenured faculty say academic standards are falling, and over a third admit to lowering rigor to avoid failing students.

Lowering standards doesn’t help students—it undercuts them. Young people don’t thrive on indulgence. They grow when they’re expected to stretch, struggle, and improve. Easy grades and endless accommodations don’t build confidence, but instead erode it, leaving behind resentment and a quiet contempt for a system that demands so little.

The collapse of expectations has less to do with student effort than with the erosion of program structure. Disciplines like accounting endure because they are built on formal logic, practiced with precision and verified through accountability. In 1494, Luca Pacioli laid out the method of double-entry bookkeeping and insisted it be taught “diligently and with great care,” under a master who explained both the mechanics and the reasoning. That philosophy of disciplined learning became the foundation of global commerce—and it still works.

The university has long served multiple aims: cultivating moral character, transmitting culture, building intellectual capacity, and preparing students for economic life. These goals are not mutually exclusive—but in today’s debt-driven landscape, it’s understandable that students and families focus on financial returns. When institutions mislead on that front, they erode trust not only in their economic promises, but in their civic, moral, and intellectual mission as well.

That ideal of a rigorous education that forms both intellect and skill has quietly been abandoned. In place of structured, skill-based instruction in fields like accounting, nursing, and engineering, many programs now emphasize interpretive, feelings-driven coursework that rewards compliance over competence. The result? Business graduates fluent in “behavioral science” who can’t read a financial report—but can recite ethical frameworks developed by faculty later discredited for research fraud.

Higher education has failed in two ways: by misrepresenting what degrees are worth, and by eroding the standards that give education meaning. AI didn’t cause these failures; it has simply revealed them.

The problem goes beyond pedagogy—it’s economic. Too many degree programs are misaligned with labor markets, yet they’ve become central to the business model of higher education. Students select these programs believing they’re acquiring valuable skills, but often graduate into careers that don’t require a degree at all.

Take the University of New Mexico’s psychology program, its second-largest undergraduate major. It advertises pathways into clinical work, management, and executive leadership. But the data tells a more constrained story. According to the College Scorecard, median earnings for UNM psychology graduates five years out hover around $45,000—roughly equivalent to the wage for Social and Human Service Assistants, the most likely outcome, though likely not the career students imagined when they enrolled. Students enrolled with the promise of upward mobility. What they got was debt and disappointment.

This is bigger than one program at one school. Psychology is the fifth most commonly awarded bachelor’s degree nationwide, with 129,600 degrees conferred in 2021–22 (NCES, Table 322.10). But it also ranks among the majors with the highest underemployment and lowest median earnings (Federal Reserve Bank of New York, 2024). That misalignment between promise and outcome is at the heart of higher ed’s trust problem.

Psychology isn’t inherently unserious. But in too many institutions, it’s taught more as a vibe than a discipline, an appealing blend of activism, pop science, therapeutic language, and minimal math demands. For students uncertain about their future, it feels relevant and affirming. For universities chasing enrollment, it’s low-cost to deliver and easy to market. The result is a major that often substitutes engagement for rigor, offering students neither the intellectual structure of the sciences nor the labor-market traction of the professions. This isn’t merely misrepresentation—it’s institutional negligence.

And it raises the central question in education: who are we teaching, and what are we teaching them? For centuries, the “who” was narrow, often restricted by class, gender, and race. Expanding that access is one of higher education’s great achievements. But access alone is not justice. If we broaden the “who” without safeguarding the rigor of the “what,” we give students seats in the classroom but deprive them of meaningful outcomes. A degree means nothing if it represents nothing. It may carry symbolic weight, but it doesn’t pay the bills. Students may not always see the gap at first, especially if grades are high and expectations low. But over time, outcomes speak louder than intentions. And when those outcomes disappoint, trust in the system collapses.

That failure doesn’t just appear in earnings data; it shows up in the classroom. A system willing to exaggerate economic outcomes cannot be trusted to assess learning outcomes. Students learn quickly what’s real and what isn’t. They see a university that rewards the appearance of effort more than the substance of learning. Work is submitted that wasn’t written by the student, and instructors pretend not to notice. Assignments are polished, but understanding is shallow. The rituals of college persist, but the substance has withered—and under scrutiny, the system unravels. Not because of AI, but because of poor leadership.

That’s why AI feels so dangerous to modern universities. It doesn’t just threaten pedagogy—it exposes the illusion. When anyone can generate passable work with a prompt, the weakness of our assessment systems becomes obvious. The answer isn’t to ban AI. It’s to raise standards. Design assignments that demand original thought and reinforce structure, effort, and accountability.

If we want students to thrive in a world of intelligent machines, we must demand more of them—not less. That means restoring rigor in the classroom and holding students accountable for their own learning. Real learning pushes them beyond comfort and into competence. There is no shortcut. We already know what works: proctored exams, high expectations, and treating learning as the student’s responsibility, not the institution’s. These reforms may shrink enrollment, but they will restore higher education’s integrity and purpose, and create the conditions for sustainable growth.

We are entering an era of economic expansion that will dwarf the Industrial Revolution. Just as Max Weber observed that prosperity was fueled by a new ethic of disciplined work, the age of artificial intelligence will demand thinkers trained in structure, logic, and rigor—on a scale we’ve never seen.

But higher education is not preparing them. Instead of deep, demanding scholarship, many colleges now offer convenience, illusion, and credential inflation. As Jefferson warned more than two centuries ago, “If a nation expects to be ignorant and free … it expects what never was and never will be.”

At its best, higher education is both a cornerstone of civil society and a driver of economic mobility. The public recognizes this and supports it through generous subsidies. But like any large, publicly funded system, higher education suffers from inefficiencies and abuse. Chief among them is the erosion of rigor: colleges have replaced the hard work of instruction with rubrics, deadlines, and automated tasks. Students submit work they didn’t write. Faculty assign work they don’t read. What passes for engagement is often simulation. And at the program level, degrees are frequently misaligned with labor markets—sold as pathways to opportunity but producing few measurable returns.

Defenders of the system point out, rightly, that not all value can be measured in dollars. Intellectual growth, civic understanding, and moral development matter, and higher education has long been a home for those goods. Greek and Latin, subjects without discernible economic return, carry enduring civic value. However, while these goods are real, they’re often pitched as byproducts of programs marketed as career gateways. When students take on debt expecting increased earnings, those promises become a public concern. We have no macro-level tools for measuring intellectual development, but we can measure debt, wages, and employment. And by those metrics, many programs fall short. Degrees marketed as career pathways often produce earnings no higher than a high school diploma.

Federal law now reflects this distinction: under Section 84001 of the 2025 One Big Beautiful Bill Act, programs that fail to improve earnings over a high school baseline lose loan eligibility. Colleges are free to offer philosophical enrichment or spiritual exploration. But once they take public funding and market themselves as engines of economic opportunity, they incur an obligation to deliver. As the line goes: Render to Caesar the things that are Caesar’s, and to God the things that are God’s. The moment you take Caesar’s coin, you accept Caesar’s accounting.

Every right is a liability. A pension, a healthcare benefit, a tax deduction—even the right to private property—derives its validity from being legally enshrined in one form or another. Yet beneath this legal articulation lies a fiscal reality. Protecting and enforcing each of these rights requires a financial commitment that the state must honor through lawful public means: transparent and lawful taxation, properly allocated budgets, and reliably managed currency.

Trouble begins when the state reaches the limits of its financial capacity. At that point, it can no longer fulfill its fiscal commitments within the boundaries of law. Instead, it begins to meet them at the margins of legality—through improvisation, manipulation, and disguised extraction. The result is not just economic degradation. It is the erosion of the rule of law.

This raises the question of what, exactly, the rule of law demands. Legal theorists have offered a range of answers, often speaking of it in idealized terms. Some define it procedurally: the rule of law requires general, prospective, stable, and publicly known laws. Others adopt more substantive definitions, encompassing rights to property, equality before the law, or access to justice. Some go further still, suggesting that the rule of law must include expansive claims to social and economic justice—redistribution, affirmative rights to housing and employment, environmental equity, and so on.

But these accounts share a common limitation: they treat the rule of law as a purely ideal concept. There’s nothing inherently wrong with that, but it creates a risk—we focus so much on what the law should be that we overlook what it needs to function. The result is a vision of legality disconnected from the practical realities that sustain it.

This means that the rule of law is not simply an independent variable in the architecture of the modern state; it is also a dependent one. Lawyers—inveterate normativists that we are—tend to fixate on what the law ought to be, losing sight of the material and institutional conditions it requires to function. But the rule of law does not arise from legal principles or political will alone. It relies on underlying material and institutional conditions—especially the state’s ability to remain fiscally solvent.

When that solvency erodes, the machinery of legality begins to stall. Rights go unenforced, procedures become empty rituals, and the state operates increasingly by discretion rather than by law. When the state nears the outer limits of its fiscal capacity, the consequences are stark. The state then turns to functional substitutes for taxation: methods of financing public obligations without formal tax increases or budgetary debates. Chief among them is inflation.

Inflation is a tax by other means. It transfers wealth from savers to the state, from the private sector to the public ledger, without a single vote being cast. It erodes the real value of nominal public liabilities—such as pensions, social benefits, and government debt—diluting what the state owes its citizens. It also distorts private obligations, quietly rewriting contracts and undermining expectations. But that is a separate concern. What matters here is that inflation operates as a form of unlegislated taxation, bypassing the formal procedures and public accountability that define democratic legality.

Inflation is only one such tactic. Depending on the seriousness of the fiscal shortfall—and on the government’s ability or willingness to reduce spending—insolvent states may also freeze bank accounts, convert savings into low-yield bonds, impose retroactive taxes, or use regulatory takings to confiscate private assets. They may declare emergencies to bypass legislative procedures, defer payments, or devalue the currency overnight.

These are not routine exercises of administrative discretion within a stable legal framework; they are extraordinary responses to fiscal breakdown. I witnessed some of these measures firsthand growing up in Brazil during a period of fiscal distress and hyperinflation (which at one point reached 6,000% annually), when emergency decrees, account freezes, payment moratoria, and index manipulation became part of everyday life. While such actions were typically carried out under color of law, they blurred the line between legality and expediency. What unites them is the substitution of legal rule with administrative discretion—a shift that tends to gradually undermine the rule of law.

History is full of episodes where state insolvency did not merely erode legal order—it obliterated it. Ancient Rome offers a distant, but instructive, illustration. While the Roman Empire lacked a modern legal order, it depended on legal and monetary institutions to maintain stability. In the third century, mounting military expenditures, administrative burdens, and declining revenues led emperors to reduce the precious metal content of coins. But debasement meant to stretch limited fiscal resources unleashed high inflation. Faced with growing instability, Emperor Diocletian issued the 301 AD Edict on Maximum Prices. The law fixed prices under penalty of death; yet it proved unenforceable, drove commerce underground, and contributed to a broader erosion of confidence in imperial institutions, paving the way for the mounting civil strife that followed.

Many centuries later, Weimar Germany offered a modern counterpart: a constitutional state undone in no small part by fiscal collapse. Hyperinflation in the early 1920s wiped out savings, shattered public trust, and made a mockery of legal and contractual commitments. In response, German jurists developed the theory of Wegfall der Geschäftsgrundlage—the disappearance of the basis of the transaction—as a way for courts to adjust debts and obligations no longer tenable in nominal terms. In the chaos that followed, the door was opened to the demise of democratic institutions and the rise of political forces we now recall with unease and revulsion.

Argentina offers a more recent example. In the early 2000s, confronted with a collapse in public finances and an inability to meet its obligations, the government faced a deep fiscal and financial crisis. It responded by freezing bank accounts and soon after forcibly converting dollar-denominated deposits into devalued pesos—an emergency measure that wiped out household savings and shattered financial expectations. In the years that followed, the state manipulated inflation statistics, seized pension funds, rewrote private contracts by decree, and expropriated private assets, all under the banner of expediency. These were not merely improvised policy responses; they marked a deeper unraveling of legal certainty. As the state’s solvency eroded, so too did the rule of law.

Brazil tells a parallel story. There, fiscal fragility has repeatedly corroded the reliability of legal protections. In the 1980s, facing acute budgetary strain and hyperinflation, the government relied on monetary restatement mechanisms, wage and price controls, and complex indexation formulas to reallocate resources outside the formal budget process. These tools not only altered private contracts but also allowed the state to quietly redefine its own obligations—delaying, diluting, or reshaping payments it was otherwise bound to make. The pattern continued into the early 1990s, when President Collor—the first democratically elected leader in decades—abruptly froze personal checking accounts of individuals and companies in a desperate attempt to reduce liquidity and contain inflation. The move upended financial expectations and triggered a wave of litigation that dragged on for more than twenty years. Although the severity of these interventions has diminished, the underlying dynamic of fiscal weakness compromising legal certainty remains visible in Brazil to this day.

Even the United States is not immune. In 1933, amid collapsing revenues and rising debt burdens, President Roosevelt took the country off the gold standard, nullified gold clauses in public and private contracts, and required citizens to exchange their gold holdings with the Treasury under threat of severe criminal penalties, including prison. These extraordinary measures sharply reduced the real value of federal obligations and triggered a constitutional showdown. In the 1935 Gold Clause Cases, the Supreme Court narrowly upheld Roosevelt’s actions, even as it acknowledged the threat they posed to the sanctity of contractual commitments. A generation later, in 1971, President Nixon, facing mounting balance-of-payments pressures and eroding confidence among foreign central banks, suspended the dollar’s convertibility into gold, severing the last external check on US monetary expansion. From that moment on, fiscal and monetary restraint would rely almost entirely on domestic institutions: rules, norms, and political self-restraint.

But as expenditures grew and deficits deepened, those internal constraints began to erode. Over the past two decades, the Federal Reserve has purchased trillions in Treasury securities—especially in response to the 2008 financial crisis and the COVID-19 pandemic—effectively financing deficits without direct legislative approval. These measures, while technically legal, bypass the deliberative rigors of the budget process. Informal workarounds like these have increasingly displaced formal fiscal governance. The result is a slow but significant institutional drift, and one that blurs the line between emergency response and permanent exception—a quiet slide toward rule without accountability.

This pattern is not merely a matter of economic policy. It reveals something deeper: the contingent nature of legality itself. The monetary constitution—the framework of rules and norms that governs how money is created, valued, and managed—serves as a backbone of the broader legal order. When fiscal pressures grow too great and those rules give way, legality begins to unravel. Law continues to be cited, but no longer constrains. Its forms persist, but its substance erodes. What remains is a hollowed-out shell: the rule of law in appearance, but not in effect.

To preserve the rule of law, we must stop treating it as an autonomous force, detached from material realities. Legal constraints depend on solvency. No constitutional text or institutional reform can substitute for the fiscal capacity that makes law enforceable. The rule of law may restrain the state—but only if the state can afford to be restrained.