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The World Doesn’t Need More MBAs

Stumbled across the article “Yes, the World Needs More MBAs. Here’s Why” while on Bloomberg the other day. My initial assumption was that the piece was sponsored content, extolling the virtues of MBA programs and then links to a select few schools at the bottom. What happenstance!

MBA

Wasn’t the case. Instead, it was an op-ed piece written by the Dean of the Kellogg School of Management at Northwestern University, the crux of which was “the world needs more MBAs.” Really? Some quick contemplation has me concluding that without these “more MBAs,” what, a number of professors might go hungry? Perhaps a few property development bubbles never see the light of day? The list goes on, but I think you see the direction I’m heading.

There’s brief acknowledgement that Bill Gates, Jeff Bezos, et al., are all “MBA-less,” and that one could certainly become “rich and powerful” without one. But then shifts and implies that if creating a similar empire yourself, you will be hiring MBAs. And why might that be? Because of their skill set, which is the elusive combination of training, critical thinking, and business network. All good things… but achievable only through an MBA? Many would argue not.

While proposing that business is basically the center of our universe, the force driving all humanity (an assessment I don’t disagree with), she draws attention to the fact that it is also flawed. Inexplicably holding up the BP disaster and General Motors’ recall(s) as examples of what I am not entirely sure. That these could have been avoided, or minimized, if only more forward-thinking “quality leaders” that only MBA schools (her school?) can produce were working for them? Unless mistaken, I’m certain plenty already do. At both.

Fun fact: The United States produces roughly 150,000 MBA graduates each year, and 103 MBA holders from Kellogg alone work for BP (according to LinkedIn membership data from 2012).

There are a plentitude of MBAs working in almost every major corporation and bank in the United States. To imply that many of society’s ills could be resolved if only we had more seems rather disingenuous, as many of these very same corporations and banks were involved, in one form or another, the Enron scandal, the 2007–08 financial crisis, the Madoff Ponzi scheme, and a whole litany of accounting scandals. Quite the resume.

The article moves focus to the need for “leaders who deeply understand markets… who fully grasp that markets, while highly efficient, are not fair, kind, or wise.” These very same leaders will apparently be able to realize that “prevailing market price, while efficient, is not inherently just.”

This is the conclusion that one can only arrive at by spending US$100K at Kellogg or similar?

Why not instead spend just 0.0001% of that amount and pick yourself up used copies of Mackay’s Popular Delusions and De la Vega’s Confusion (hell, even throw in a used copy of Lefèvre’s Reminiscences) and then spend the next few days at a coffee shop tearing through each, enjoying the atmosphere, and learning about the markets through the pages of these classic (and still very relevant) must reads? Then back home, fire up the computer, and study markets in real-time, maybe even open a demo account with an online trading company and practice with virtual funds… to me this is how you study a market.

I will concede that there are some very valid reasons for getting an MBA. Perhaps the most common I hear, regarding networks and “door-opening” possibilities, makes a lot of sense. And I’m sure it’s extremely relevant for a few. From personal experience, though, I’ve found that while networks are great for socializing they are not the best for actually making money. Getting you in the door? Sure, maybe. But money is made through knowledge, luck, audacity, and grit. This isn’t theoretical, this is business. I’ve never signed a deal simply because I knew someone… most of my deals have come from hard work.

So no, I counter that the world does not need more indebted MBAs running our business culture or our institutions with fuzzy big data, sketchy new accounting tricks, and flawed statistics. The world could do with a bit of downsizing, the type that isn’t taught in MBA classrooms. The world desperately needs local businesses, local banks, local farmers, and local leaders with local solutions. Globalization is, arguably, part of the disease and not the cure. Real estate does not continually go up. Markets are manipulated. Fiat currency is disastrous. “Free trade” is definitely not free. And corporatism is wreaking havoc in our governments and communities. I’m not laying this entirely at the feet of those with MBAs, as obviously governments and society in general own a piece as well, but it’s not an altogether unreasonable place to start either.