"I think that the division of 'town' and 'gown' has grown in some ways more obvious over the 30 years I have lived here," wrote Mary Beard, in the Cambridge News. "My own adult kids, when they visit, go through the centre of town and now complain a bit how much of the place seems cut off to them."

Beard is like the Midas of current affairs, everything she touches turns to news. But there is something in the old "town" and "gown" division – in the bits that seem normal, in the bits that seem strange – that momentarily catches much broader chasms, of class, wealth, access to public space and sense of belonging.

"This division, the notion of being a townie seems to be pretty universal," said Edward, 22, who is doing a master's in physics, having previously been at MIT. Bhasi, 20, also American and doing a physics master's, disagreed slightly: "I went to a pub in my gown, because it was after a formal, and people were like: 'Wow, I can't believe you're a Cambridge kid. You're so nice to be around.'" Edward, laconically, remarked: "You realise you're just complimenting yourself …" "No, I don't have that air of superiority."

The haughtiness, they think, is more of an undergraduate thing, since undergrads tend to be British. "And for the British," says Edward, "there's this feeling that they've made it. So there's already a status issue for them."

They don't all feel like this; some of them find it excruciating. William Raynaud, a 20-year-old maths undergraduate, said: "I don't like the whole gown thing, and the separation via clothing, where people invest money to look different. It's absurd. But," he continued, seriously, "it's just about the best place in the world. It's beautiful, and it's a functioning city."

The professor of anthropological science and life fellow of King's College, Alan Macfarlane, wrote of the place that it is a "total institution", comparable in this to prisons, boarding schools or army barracks. "The central feature of all these total institutions is that different parts of life occur within one physical space – sleeping, eating, drinking, sport, prayer and thought. The walls, literal or virtual, are there to form a strong boundary between 'the outside' and the intensely overlapping worlds within."

But that ancient sense of the cloister – that the outside world had to be shut out as a function of the intellectual work within – had been torpedoed, really, by modern life. An emeritus fellow of one of the larger colleges, who wished to remain anonymous, said: "It was always believed, per Lord Haldane's principle, that academics should be left to do research. Increasingly, research councils are putting forward themes that they see as useful to the competitiveness of industry. So the Haldane principle has been compromised, and this is upsetting a lot of academics who say that research not driven by application often has the greatest benefits."

But this demand for usefulness has made modern Cambridge what it is, as well as unquantifiably destroying what it was; global citations for its academics' papers have exploded since then. A hospital such as Addenbrooke's, where Fran Remington and Fran Elliott, both 25, work as pharmacists, "has the status it has because of the university, and the research side of things, especially oncology," according to Remington, explaining why they both returned to Cambridge, having grown up but not studied there.

The surrounding tech companies – it's known as Silicon Fen, and 50,000 people are employed in the area – have created their own industrial ecosystem, which may not be the landowner that the university is, but has more jobs, in between "professor of physics" and "porter". House prices are really high – "£500,000 for a studio flat in that block," a taxi driver told me, "so they can stare at that patch of grass and watch people drinking" – wages in the university are really low. Never mind how much the bedders (people to make students' beds, which might partway explain their problems with status) are paid, half the junior research fellows earn less than the minimum wage, were one to count their actual hours. Lectures are valued at £70 an hour.

So if you're in a field that is useful to the surrounding businesses – which I think means "physics" – you'll end up Jack Lang (co-founder of Artimi and Raspberry Pi, entrepreneur in residence at Emmanuel College) … "But it's not so great if you're a classicist," said the unnamed emeritus fellow, wryly. His wife, who sadly must also remain anonymous, added: "The junior fellows never had any money. When he started in the 70s, I had to work on a hot-dog stall just so we could feed the children. The master's wife said to me once: 'Exactly what is it you're doing in that van?'"

Indeed, little of the town/gown split of the past was based on money at all: in the good old olden days, they kept their divisions alive through snobbery, sheer force of will. Now a layer of net wizards (high-net wizards?) with a tonne of money has slipped in over the top, but it doesn't seem to have changed much, except to act as patrons to the techies and push the rest of the middle further towards the bottom. "I don't see an issue," said Peter Edwards, 53, a furniture manufacturer. "We all take a course in life. I work with my hands. They work with their brains. Which isn't to say I haven't got a brain. I think a lot of people are good and kind and want to share what's available."

• The standfirst of this article was amended on 22 April 2014 to correct the name of the Cambridge News, from Cambridge Evening News as the original said.