My son will soon graduate from an expensive, overpriced college, which is redundant since pretty much every college today is expensive and overpriced. Pondering what to do upon graduation, he mentions he’s considering business school. A couple of years ago, I might have encouraged such ambition. However, three recent events have made me rethink my support for the plan to pursue an MBA.
The first was the recent contretemps during a party held for MBA students from the Northwestern University Kellogg School of Management. Some students apparently smuggled alcohol into the venue at the Field Museum and behaved in a manner better left to the imagination. Let’s just say Tyrannosaurus Sue had never seen such antics and she’s 65 million years old. Not exactly an advertisement for an MBA if you’re a parent. And not unique to Northwestern, more about that later.
The second event was the ongoing financial meltdown. My simple understanding is that the world’s current financial difficulties were brought on in large measure by a collapse in the ever-upward value of real estate, the classic financial bubble. This was compounded by the disastrous failure of all sorts of abstruse financial debt and credit instruments so complex they could only be created, and understood, by who else? MBAs.
What really gave pause were Alan Greenspan’s remarks to Congress. Greenspan, the Chairman of the Federal Reserve for two decades, was considered a genius not long ago, the quintessential role model by business schools everywhere. Greenspan said the best minds at the Fed, including his, couldn’t have foreseen that real-estate values wouldn’t go up indefinitely or anticipated the explosion of subprime lending. He also said, “I made a mistake in presuming that the self-interest of organizations, specifically banks, is such that they were best capable of protecting shareholders and equity in the firms.” I think this means he didn’t know banks and other financiers might become too greedy for their own good.
Another point against MBAs. Hearing this, I harkened back to Jethro Bodine, the dim-witted nephew on The Beverly Hillbillies. Jethro barely made it out of the sixth grade. But armed with only his rudimentary knowledge of “cypherin’”, even Jethro would undoubtedly have grasped what Alan Greenspan and those brilliant MBA’s seemed unembarrassed to admit before Congress.
The final anti-MBA straw came from a recent book, Ahead of the Curve –Two Years at Harvard Business School. The book was written by Philip Delves Broughton , a British foreign correspondent for the London Daily Telegraph who decided to change careers and was accepted to Harvard Business School in 2004. His book is a nuanced portrait, the good and bad of a Harvard MBA and the American business culture. Some of his stories presage the above experiences.
He describes a letter from a 2005 Harvard MBA graduate addressed to the entire 2006 class. Broughton concluded the school required the author to write and distribute it to his class as punishment. In it, the letter-writer discusses the importance of responsibility and leadership. The meat of the letter was an apology for “a regrettable property damage incident” after an evening of drunkenness at an end-of-semester party.
When Broughton showed his wife the letter she questioned the phrase ”regrettable property damage incident”.
“What did he do ?” she asked.
Apparently he had urinated on his neighbor’s apartment door.
“Who wants (these people) leading anything?” was her response.
Later in the book, Broughton describes a prescient encounter with a New York hedge fund manager during a job interview (this, before the current financial meltdown). “I asked him about the reckless way credit was sold to people who could ill afford it. I said they would be ruined. They would lose their homes and possessions. Where were all the checks on this? Who was helping to teach people responsible borrowing? What would happen to all these firms lending like crazy when people stopped paying back their loans? He looked at me like I was a madman and said, ’It’s just economic.’ He meant over time these borrowers would learn their lesson. The economic wheel would keep turning, no matter how many lives had been crushed against it.”
Three strikes. Perhaps my son will ignore all this. In fairness, Broughton speaks well of the benefits of attending business school even as he mentions two graduates whose plans didn’t quite work out as anticipated - Robert MacNamara and George W. Bush.
The best advice Broughton gives came from a fellow who never went to business school, Albert Einstein, “One should guard against preaching to young people success in the customary form as the main aim in life. The most important motive for work in school and in life is pleasure in work, pleasure in its result, and the knowledge of the value to the rest of the community.”
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