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Would the economy be better off without MBA students?
- gxs 14y ago>> Similarly, demand for slots in the top programmes is extraordinarily competitive This is something I picked out from the article in a quick skim. And sums it up pretty well. If you can get into a top 10 business school, the consensus is it's worth it. If not, it may be wise to skip it. As always, the truth lies somewhere in the middle.
- TreyS 14y agoI wonder how much benefit an MBA from a top school gives beyond signaling. If you are admitted into Harvard/Stanford/Wharton/etc you've been successful early on in your career. It seems to me that pursuing an MBA at that point is an extremely risk averse move. Credentialing for the sake of credentialing. While there are tons of successful graduates of top MBA programs, it may be a function of who is admitted and not a function of the value added by the program.
- rayiner 14y agoIt depends on what you want to do with your career. If your interests run towards being the next Tim Cook, then an MBA can teach you a lot and help build your professional network. MBA's teach you how to manage the capital structure of a company, optimize operations, etc. This stuff is useless for a web startup, but tremendously valuable for a big organization.
- theorique 14y agoThree words: networking, networking, networking. You are going to get in the trenches with the next generation of self-selected future business leaders. These are the people that will form of the nucleus of your professional network for the next 30 years.
- ikono 14y agoJust thinking out loud here but is it possible that places like Y Combinator will end up fulfilling this role in the future?
- lhnz 14y agoThey're too small to fulfil that role.
- lhnz 14y agoThey're too small and there's not enough of them to fulfil that role. Additionally there aren't very many non-tech areas with yc-type programs for them.
- ikono 14y agoThat doesn't mean it has to be that way, does it? I wasn't implying that the yc model is a replacement today, just that it perhaps could be in the future for at least some subset of people that are currently going to business school.
- theorique 14y agoYes and no, IMO. YC is like a new elite graduate school / bootcamp for startup entrepreneurs. Just like not everyone gets into HBS or Saïd or INSEAD, not everyone gets into YC. B-school is getting more startup and entrepreneurship oriented, but is still aimed, for the most part, at general management at mid-sized and large mainstream firms.
- wtvanhest 14y agoMost people on hacker news don't realize that within business there is a huge amount of types of business jobs. Most people go to business school to switch to a new type of business job. About 40% come from engineering because they realize they hate it and want to do something making more money with less hours. If you had a great job, lets say Investment Banking, you may go to a top business school to switch to Private Equity. To an hacker those don't sound different, but they are worlds apart. The biggest benefit to getting an MBA is that it gives you an excuse to interview with whatever company you want to. It gives you the opportunity to really change your path. Few other places do that.
- ikono 14y agoI completely agree but isn't this really a failing of our current world/society? Many of our best and brightest spend huge amounts of money and two years of their life just so they can have an excuse/opportunity to apply themselves in a different field. Seems like there's something wrong here, no?
- hkj 14y agoI really think you don't understand what wtvanhest is saying. Business is a really big subject. They don't go to school for two years to change from being an accountant to becoming a controller. It is much more equalent to going to school for two years to change from electrical engineering to chemical engineering. Sure the basics are the same but after that they are worlds apart.
- johnrgrace 14y agoYou get to reboot your career and go into a new industry, beyond signals that's the great value of the MBA.
- wpietri 14y agoA friend who went to a top business school after a brace of technical degrees and some work experience said that the only value the friend received was in the network, in the social connections made. There was almost nothing in the curriculum that the friend couldn't have figured out from first principles in short order. I expect the friend would agree with the signaling value as well; the point was more that there was little intellectual heft to the material.
- Aloisius 14y agoThe question is not whether it is worth it for an individual to get an MBA, but rather if MBAs are good for the economy. I don't think anyone is arguing that for an individual, getting an MBA from a top tier university isn't worth it. There is enough MBA-run businesses with a heavy amount of nepotism to ensure it makes financial sense.
- guylhem 14y agoWould the economy be better off without "insert the people you don't like here" Film at 11. Works with : - politicians - lawyers - liberals - libertarians - communists - the military industrial conglomerate Also work with any minority or any ethnic group, although it may result in classifying you with a special tag which is generally frowned upon.
- crooneys 14y agoNot exactly what this article is arguing.
- rayiner 14y agoCan we add flash in the pan "Bubble 2.0" startup founders to the list too?
- lallysingh 14y agoThis is HN. You can say "Would the economy be better off without %s?"
- natrius 14y agoThat's not an accurate characterization of the article at all. It's not asking whether managers are valuable; it's asking whether a popular way of training managers is valuable. It's an excellent question.
- 001sky 14y agoBut it is accurate re: the linkbait title.
- gojomo 14y agoThe MBA credential is but one special case of general 'degree pollution', overinvestment in credentials as relative-rank signalling. See for example this analysis: http://econlog.econlib.org/archives/2012/09/degree_pollutio.html http://econlog.econlib.org/archives/2012/09/degree_pollutio.... As suggested there (including the author's expansions in the comments), when an activity confers private benefits but at a cost in negative externalities, a traditional economic/policy response is to tax the activity in proportion to its net externalities. So perhaps excessive upper-level/professional degrees should be taxed, rather than subsidized. (That is, tax the degrees themselves, not any consequential rise in income, if any.)
- wissler 14y agoYES. More importantly, the economy would be better off without the reason why an MBA has some value -- too much government-induced bureaucratization.
- stephengillie 14y agoThis is the "IT certification" argument all over again. Paper MBAs are as useful as paper MCSEs. Who's more valuable to your startup, someone with a degree/certification learning about what you need, or someone with years of experience doing what you need?
- Tloewald 14y agoWow, take that Betteridge's Law!
- xaa 14y agoThis floored me: "The professionalisation of management has, some argue, been the single biggest factor behind the economic advancements of the past 100 years." Not electricity, rapid transportation, semiconductors/computers, telephones, the assembly line, or public investment in research. Professionalization of management. Mmkay.
- KeroseneKid 14y agowell the operative word is "economic" .. you may have all of the above but without commercial acumen there is nothing economic.
- stephengillie 14y agoYou can have economies without commercial acumen. And you can gain commercial acumen without a college education. Many have done this by growing fruit and then selling it.
- pjscott 14y agoI want to argue with this, but I'm not sure what you're trying to say. Please clarify?
- rayiner 14y agoYou're mixing up management acumen and business acumen.
- stephengillie 14y agoPlease note the past 100 years barely includes WWI. Professionalization of management is not a phrase I've read before, but I'm assuming it means management as a profession. The benefit here is that managers are supposed to be interchangeable gears driving a company forward. The drawback is that the "interchangeable gears" idea really doesn't work in practice.
- yuhong 14y agoIt reminds me of this: http://news.ycombinator.com/item?id=2011013 http://news.ycombinator.com/item?id=2011013
- fudged71 14y agoVery interesting debate format. I like it! Great way to combine the strengths of the internet with expert opinions.
- pixie_ 14y agoI agree, I'm more interested in this innovative design than the debate itself. It gets me thinking as well, like what if people for and against the issue could vote up comments independently. So you get the the agreed talking points on both sides of the issue facing off against each other.
- southphillyman 14y agoYup.
- rickmode 14y agoThe oppositions opening remarks do not, in fact, refute the motion. Instead of talking about how MBA's benefit the economy as a whole he talks about how MBA's benefit the individuals who obtain an MBA degree.
- wpietri 14y agoIt's a similar problem when you think about the number of lawyers in America. Individual lawyers and MBAs can have handsome incomes while being a net drain on the economy. Anybody who has been on the receiving end of a frivolous lawsuit can understand how that's true for lawyers. But it's less obvious for MBAs. A good example, though, is Simmons Mattress: http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?pagewanted=all&_r=0 http://www.nytimes.com/2009/10/05/business/economy/05simmons...
- simba007 14y agoThis question totally retarded and I'm incredulous that the economist entertained it. Would the economy be better without MBAs? Really? There are people out there who are trying to tell other people that the entire economy would be much better without a small group of people spending another couple of years at university learning more about business? A better question might be 'Would a startup be better off with out MBAs?' or something more specific. But to try and claim that the entire economy would be better off because a tiny proportion of young people decided to do a masters is incomprehensible. Disclaimer: I have an MBA.
- wpietri 14y agoIt's a serious question. Did you even read the article? Not all that many people do law degrees, but the Economist has repeatedly covered studies that suggest the number of lawyers we have is well above the economic optimum, that having too many lawyers harms the economy. Further, since you have an MBA, you should be fully aware that the tiny number of MBA holders have wildly disproportionate influence on the economy. As the article says at the beginning, 40% of Fortune 500 CEOs hold an MBA. So it's entirely reasonable to ask whether the degree, like a law degree, is really benefiting everybody. Perhaps it mainly benefits MBA-holders at the expense of others.
- luk3thomas 14y agoSolid advice from the comment section in the article: "Major in business? Just read Business Week and the Economist every week and you'll pick up more than you will in a business program. Major in something worthwhile."
- kreilly 14y agoI have a business degree and an MBA and I agree with this statement. If I could go back, I would major is something more technical. But, I also have an MBA. And I would get that again.
- irahul 14y ago> I have a business degree and an MBA and I agree with this statement. If I could go back, I would major is something more technical. I don't know much about MBA programs, but don't you study Economics, Accounting, Finance...? Or Economics isn't considered technical enough?
- saraid216 14y agoI wouldn't consider economics to be technical at all. Traditional Economics is the art of taking outdated physical models as analogies for sociological phenomena. There are modern branches of economics that are useful and arguably even technical, but I doubt you get into them as a typical undergraduate.
- johnrgrace 14y agoIn my opinion you don’t get a lot of hard skills at a MBA program. MBA program usually gets you 1-2 courses on any specific topic. If you get a Harvard MBA, you'll get two Finance and one Accounting course, and part of one course will cover econ. Just look at the curriculum http://www.hbs.edu/mba/academic-experience/curriculum/Pages/required-curriculum.aspx http://www.hbs.edu/mba/academic-experience/curriculum/Pages/... I had the choice of getting an MBA or MS in Finance. I went for the MS Finance and took these courses; 2 stats, 2 econ, 2accounting, 2 Managerial Analysis, and 8 Finance courses as my paid for course load. I took non-required courses in Operations management, MIS, Leadership, Business Law, and Marketing at the cheap Grad student rate and sat in the same classes as MBA’s. Go to my schools website and you can see the simple thought approach difference between an MS and MBA The MBA program landing page is all about school rank, how to get in, cost. The course work isn’t directly linked to that page. http://bauer.uh.edu/graduate-studies/mba/index.php http://bauer.uh.edu/graduate-studies/mba/index.php The M.S. Finance page tells you the goals about what they want you to learn, and has the curriculum http://bauer.uh.edu/graduate-studies/ms-finance/index.php http://bauer.uh.edu/graduate-studies/ms-finance/index.php MBA programs are LARGELY about getting credentials. They are profit centers for universities, and get run that way. Most students are there to punch a card. You can see that mindset in terms of how the websites are set up.
- MattRogish 14y agoHaving an MBA myself (nowhere near from a top-10 school, although friends who have gone to better schools report similar curricula) I don't see B-Schools teaching/reinforcing what it is to be a "manager". I think the MBA does a disservice because it often either doesn't teach "people management" at all or (worse?) reinforces hard-core Taylorism (http://en.wikipedia.org/wiki/Scientific_management#Taylor.27s_view_of_workers http://en.wikipedia.org/wiki/Scientific_management#Taylor.27...). We get disastrous manage-by-the-numbers and "us vs. them" mentality, ultimately devaluing the role of the manager! If all you need to manage is a report that says how many widgets employee X made relative to compensation you can automate away most management. Yes, under that definition (not all MBA programs are like that, but it seems the majority are), I think the MBA is bad for the US economy. It promotes underperformance, lack of innovation, and sucks up resources that could better be spent elsewhere. Instead, they should teach Drucker-ism (http://en.wikipedia.org/wiki/Peter_Drucker http://en.wikipedia.org/wiki/Peter_Drucker) and Organizational Systems Theory (http://managementhelp.org/organizations/systems.htm http://managementhelp.org/organizations/systems.htm). Managers can and do amazing things by enabling their coworkers to scale better by: * Removing roadblocks that get in their way * Listen to, and allow employees to change and shape the culture * Coach coworkers to improve skills and develop flow * Help mentor and guide the organization as it scales up Though, we need far fewer of them if we leave it to stuff like this. It allows organizations to be a lot flatter and scale better without dedicated managers, putting causing downward demand on managers so it seems something most MBA programs won't adopt. Still, it would prevent wholesale manager-bankruptcy that I envision is the future for the "managing" class in most businesses.
- marblar 14y agoAn aside: As of this comment, that wikipedia article on scientific management needs some serious work.
- jewbacca 14y agoContinuing off-topic: It's vandalism. I just did an hour of procrastinatory cyberstalking, it's the work of a high schooler in Ohio. Probably vandalizing articles they read for class. Speculation: if not just out of frustration, perhaps sabotage against classmates reading later? Is that a thing now? ---- Last good revision: http://en.wikipedia.org/w/index.php?title=Scientific_management&oldid=521213480 http://en.wikipedia.org/w/index.php?title=Scientific_managem...
- zalzane 14y agoOf all the useless, worthless, pants-on-head retarded degrees out there, why have they chosen to rant on business degree? At the very least, a business degree would be theoretically applicable for doing work in the real world. Why isn't this discussion about art, history, or political science majors?
- johnrgrace 14y agoThey rant on it because far too many people don't think it's a pants-on-head retarded degrees.
- wpietri 14y agoBecause this is The Economist? Further, the harm, if any, of most degrees is to the person who pays for it. People are generally allowed to do stupid things that don't hurt others. But Mintzberg and others argue that the harm caused by MBAs is to the economy, while individual MBA-holders profit. That would be a tragedy-of-the-commons situation, which isn't self-correcting.
- Spooky23 14y agoMBA's are different than people with degrees in Sociology. They tend to hire other MBA's, and stuff organizations with fellow MBA buddies. They damage things. IMO, the problem is that these degrees give you the technical tools needed to function as a manager, but fall short in developing leadership skills -- which is bad news when companies automatically place McKinsey alums with top X MBA's in influential positions.
- cdcarter 14y agoMy arts degree has been very practically applicable for doing work in the real world! I'm an employed artist!
- tnuc 14y agoOn one of the toilet paper dispensers at my college someone had written; "Pull for Arts Degree." Underneath it someone else wrote. "Wipe for Business Degree."
- localhost3000 14y agoso, i dropped out of Dean Danos' program just hours before moving to New Hampshire. i have the utmost respect for his program and the people they admit - everyone i met seemed highly intelligent and extremely driven. it may yet be in my future. to anyone interested in an MBA - take a long look at Tuck. i was admitted to several elite schools and this one stood out to me. it felt the most like a family, which is what i wanted. for me, a poor 27 year old (relative to the typical MBA entrant) with a strong interest in early-stage technology, the arithmetic didn't make sense. i had a moment, late in the evening before leaving Boston for good, where i saw into a future in which i was saddled with extreme debt and forced to make decisions about where to work and what career to pursue based upon a pending loan payment rather than a passion. it would take several years post-mba to pay off the debt over which i'd begin adding expense to my life e.g. kids, house, marriage, car... i'd likely earn a great deal of money (by my measure) and i'd find myself in a strange mix of being stuck, due to circumstance, but also comfortable and content. i would pay my loans off but, would i realistically be willing/able to leave that lifestyle? the answer to me was clearly, "no." so, the choice was: take extreme risk now, when i have no baggage and next to nothing to lose or, take extreme risk never. i wasn't comfortable with the latter option. explaining this decision to my parents was a horrific experience.
- noblethrasher 14y agoInteresting comment on the problem of MBA programs: http://news.ycombinator.com/item?id=2470694 http://news.ycombinator.com/item?id=2470694
- mitchi 14y agoI'm surprised no one has said it. Experienced programmers should manage programmers, experienced professors should manage university affairs. Not a freakin MBA! Let's have people learn how to do useful work. Then, the people who have the experience will be able to lead the others. We need more engineers, more computer scientists, more scientists. Not MBAs. http://thedailywtf.com/ http://thedailywtf.com/
- thedufer 14y ago> Free markets are generally good at determining value, and for decades the market for young business leaders has given a strong vote of confidence to the graduates of top MBA programmes. The opposition's entire argument hinges on this one sentence, but they supply no evidence to refute the idea that this segment doesn't behave like a free market at all. As the moderator pointed out, there's no reason to believe that this is anything other than the effect of the "old boys' network". The opposition needs to come at this from another angle - to show that an MBA gives advantage to the holder in such a way that it isn't clearly an effect of networking rather than learning. Unless they can do that, I will remain unconvinced. I will, however, admit that this a big ask. Performance of business leaders is difficult to measure in a meaningful way.
- jacques_chester 14y agoWorse, he's conflated merit with value-at-market. Hayek taught us to be smarter than that, dammit. I'd expect a good MBA to know that.
- krat0sprakhar 14y agoThere's another dimension to be looked at here - especially in India's case. I'm currently enrolled in a Bschool and my class mostly comprises of students from an engineering background. Most of them have joined an MBA program to switch careers. Their primary argument is that they were forced to do engineering and when they figured out that they'd rather be doing something else it was too late. Since none of them wanted to spend their early life debugging code for big IT company (read: TCS, infosys) they preferred to do an MBA program.
- epa 14y agoI think that MBA's teach a very valuable thing (also found in undergraduate commerce degrees): How to efficiently and effectively work with different types of people in teams. No one ever addresses this issue when talking about the bad aspects of MBAs.
- spiritplumber 14y agoyes
- smoyer 14y agoThere are two types of MBAs ... a) people who can already "get stuff done" and then went on to add an MBA to their credentials b) people that have no other skills and (IMHO), no underpinnings for their new business knowledge. I think the second type is typified by someone that goes to college in business for their undergrad degree and moves straight into the MBA program. I don't know what the current climate is, but early in the last decade, MBAs were about half the salary of a good programmer. It was economical to hire one for about every 2-3 programmers just to offload some of their non-programming tasks (updating MS Project schedules, specifications, etc - and yes ... it was BDUF).