This was a good question posted as a comment to my last posting:
"I have posed this question to various friends and colleagues of mine who are in academia: At what point does the machine become so dysfunctional that the experience machine no longer operates? Is there a breaking po tint, or canhere be perpetual mediocrity?"
For what it's worth, I think the experience machine for students will eventually hit the wall. The student demand for high curves is a function of risk aversion. Even the best students want the curve to make sure there is a safety net in case they fall short. Eventually I think the market will force them to distinguish themselves. They will understand that part of the reason they cannot find jobs is that they refuse to take the risk of a grading system that will allow them to shine. For example, when I give a B, it really means anything from a to a B+. I think they may come to realize that the "nurturing," lecturing, multiple choice testing teacher may not be preparing them for life after law school.
For faculty, I think the machine will never break. As standards slip there will be new rationalizations. If all else fails one can stay in the experience machine by reciprocal citations, self promotion and creating yet a another top 10 list. The point is that any threat to the experience machine is dealt with by modifying it and unlike the students there is no outside mechanism to force reevaluation. It is stunning to me how malleable the machine is. The other day I happened upon a popular teacher's power point. The entire power point had to have been prepared for form not substance. I cannot go into here but it was comparable to a slogan. No doubt students love it and the administration loves it when the students love it almost without regard for whatever the "it" is. The "it will move as necessary.