After Credentials

Paul Graham’s essay After Credentials argues that society is transitioning from judging people by credentials to evaluating them based on actual performance.

Historical Context

Graham traces credential systems back to 587 China. While progressive for its time, credentials create a self-perpetuating cycle favoring the wealthy who can afford test preparation.

The Problem

Credentials function as predictive tools where performance measurement is difficult. But they “leak”—converting parental wealth into credentials across generations.

The Shift

The U.S. economy changed in the late 1970s-1980s:

Startups emerged as viable alternatives
Companies paid market rates for performance
The “yuppie” phenomenon showed youth could succeed through direct evaluation

Market as Solution

Smaller organizations in competitive markets “keep just the good ones” through performance, eliminating credential gatekeeping.

My Takeaway

Performance measurement through market competition proves more effective than credentials at rewarding genuine capability.