11/26/2012 05:54 pm ET Updated Jan 23, 2013

Buying Underwear and Headphones: Selling Higher Education

I bought some underwear the other day at Walmart. I felt pretty good about the price. The package of three was a national name, all cotton. It was cheap, much less than what I would have paid at a department store.

I realized that I no longer care about "the best" consumer goods. I'm not sure I know what that even means. In general, it merely seems to mean the most expensive that I could afford and then some. If I shopped by the standards my parents -- Chinese immigrants -- have maintained throughout lives much more successful than mine in terms of coming up in the world, I probably wouldn't have bothered to buy more clothing at all since I have a dresser full already.

My discount underwear functions fine. I'm sure that if I cared to believe advertisers, I could possess something that was supremely comfortable in high-thread count fabric from the Sea Island. And then I would persuade myself that I deserved that level of luxury and no less. It takes only a moment of sanity to realize how much better off life becomes once you are able to stop worrying about brands -- so long as what you're wearing is clean and fits, you're good.

Yet increasingly I am an outlier.

Before the Beats by Dr. Dre came along, over-the-ear headphones had become passé except among audiophiles. But the folks at Monster Cable created the demand in the marketplace for a celebrity-endorsed bass-heavy alternative to stock earbuds.

You could look at this product as a great example of a hoax, marketing genius, or both. It's a hoax, because the only superior aspect of the sound is its exaggeration of exactly what its name says, the beats, over all else. It's marketing genius of course, for that same reason. It's priced at a premium and no doubt makes an enormous profit. If anyone who listened to the Beats cared to hear their music accurately, assuming their eardrums are even capable of registering details, there are numerous better choices available. Yet none of them can compete effectively.

I prefer to look at this product with admiration. They are distinctive, after all. I look forward to seeing how the promoters respond to the challenge of every young person eventually acquiring the same symbol of individuality. They will need a new gimmick, which I am sure will be good.

Lately, I've been wondering how the importance of the brand will affect higher education. In the science fiction cyberpunk genre, the world economy comes to be dominated by a handful of high-end labels. The experts advise us that the future is here: products either are commodities, just good enough and disposable, or bespoke or a reasonable facsimile thereof, with the cachet to be coveted.

The only unpredictable aspect is which logo will prove to be the good bet. The slogan "Not your father's Oldsmobile" didn't save the automobile division, which was phased out by conglomerate GM in 2004. The cult classic movie Blade Runner, released in 1982, predicted Atari would be the dominant source of entertainment in the dystopian future.

As with fashion, so too with education. Economics may be the dismal science, but its dictates apply to all human endeavors.

Nowadays, every institution of higher education wants to appeal to the Chinese. The Chinese have embraced the concept of the brand with enthusiasm that exceeds the greatest capitalist encouragement. A day strolling through the mega-malls of even second-tier cities on the mainland is enough to make the average American wonder about whether consumer culture should be copied. The new-found materialism of the Middle Kingdom inspires awe. It would be crassly elitist to dismiss the attitudes as those of the nouveau riche.

The Chinese shoppers have overcome the worst deprivation over several generations of recent history. They lack information. Their behavior is rational. They are investing in what they know others have deemed valuable: first-growth wine, fountain pens, handbags. They need not learn anything for themselves in the internet economy.

They instead rely on the aggregated signals of connoisseurs. A problem arises only if at some point there are not enough experts who in fact are able to judge quality. Then the marketplace will be a giant feedback loop based on nothing.

The great advantage for American schools of every type is that Western credentials remain highly regarded. The Chinese will pay extra for them, effectively subsidizing Americans who don't place the same value on the opportunity. Instead of condemning the Chinese propensity for American degrees, the course of action that recommends itself is to exploit such preferences -- for as long as they last.