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Do you or does your department care about the quality of the students you promote or attract? If so, having and reflecting on grading standards is relevant to that.

If you just want to be a research department with a minimal or laissez-faire approach to your undergraduates, then yeah, why even bother with grading.

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Were the majority of students attending Berkeley in the 30s and getting 2.35s (intellectually) worthless people?

Can a department only care about quality if it says most people don't have it? Even if that is true of the general population, who are you to say that's necessarily true of your classroom?

Grades are not binary. An average grade doesn't indicate worthlessness, intellectual or otherwise.

To answer a slightly different question than the one you asked: I don't think a department can care about quality of its students if it marks differently-qualified students as equal.

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