Drawing upon recent literature on educational inflation, overeducation, and the diploma disese, this paper examines analytically both the positive and negative aspects of degreeism in developed as well as in developing nations. Some of the positive effects of degreeism found are, for example, (1) a positive employment effect, (2) a proxy information effect, and (3) ritualistic effects. Among the major negative effects of degreeism discussed are (1) economic waste, (2) imbalance between job expectations and labor market realities, and (3) consumer deceit. Finally, alternative policy suggestions are presented for addressing the problem of degreeism. Some of the policies discussed are the degree tax, incomes policy, improved labor market information services, and modified civil service procedures. The major implication of such policies is to direct attention to the real issue of competency, not diplomas.