The case against business schools (and the MBA degree, among other things)

From “The Case against Credentialism” by James Fallows, an intriguing essay published 23 years ago:

The rise of the M.B.A. has occurred during precisely the era in which, as anyone who follows business magazines is aware, the content of graduate business training has come under increasing attack. “We have created a monster,” H. Edward Wrapp, of the University of Chicago’s business school, wrote in 1980, in Dun’s Review. “The business schools have done more to insure the success of the Japanese and West German invasion of America than any one thing I can think of.” I’d close every one of the graduate schools of business,” Michael Thomas, an investment banker and author, wrote in The New York Times.

The specific case against business schools is that they have neglected certain skills and outlooks that are essential to America’s commercial renaissance while inculcating values that can do harm. The traditional strength of business education has been to provide students with a broad view of many varied business functions—marketing, finance, production, and so forth. But like sociology and political science, business training has gotten all rapped up in mathematical models and such ideas as can be boiled down to numbers. This shift has led schools to play down two fundamental but hard-to-quantify business imperatives: creating the conditions that will permit the design and production of high-quality goods, and waging the constant struggle to inspire, cajole, discipline, lead, and in general persuade employees to work in common cause.

Every time I see a company buying back its shares rather than investing in R&D and product development, I think of this.

But Fallows’s essay is about much more than this. He sees the rise of ‘credentialism’ as a process that had three roots:

  • The conversion of jobs into “professions” (see, for example, Mark Twain’s account — in Life on the Mississippi — of the way riverboat captains contrived to form themselves into a professional ‘guild’ to exclude outsiders and incomers). Once, “anyone could declare himself a doctor or a teacher or a lawyer, and the choice about who prospered and who failed would be left to ‘the market’, including people who died after trying to cure their cholera with snake oil. Afterward, those who wanted to enter the professions had to go to school, and once they had their credentials they enjoyed a near-tenured status they had previously been denied.” Business managers, says Fallows, began ‘professionalizing’ about the same time that the other groups did, but their alliance with educational institutions developed more slowly. The new body of knowledge that turned business into a ‘profession’ was created by the rise of huge, complex, integrated corporations. By 1910 graduate schools of business had been established at Dartmouth and Harvard.
  • The invention of IQ tests and the dawning of the idea that ‘intelligence’ was a single, real, measurable, and unchanging trait that severely limited each person’s occupational choice. IQ testing was the essential tool for replacing nepotism and corruption with a meritocracy. It also marked the beginning of the psychometrics which are now the curse of surveillance capitalism.
  • the use of government power to influence education by the creation of different educational “tracks” and foster vocational — as well as academic — schools, thereby channelling people toward certain occupations which essentially determined the degree of social mobility they would enjoy in life.

This is a terrific, illuminating essay which takes the long view of the last century or so, and in doing so helps to explain how we arrived at our current predicament.

So what’s the problem with Facebook?

Interesting NYT piece by Kevin Roose in which he points out that the key question about regulating Facebook is not that lawmakers know very little about how it works, but whether they have the political will to regulate it. My hunch is that they don’t, but if they did then the first thing to do would be fix on some clear ideas about what’s wrong with the company.

Here’s the list of possibilities cited by Roose:

  • Is it that Facebook is too cavalier about sharing user data with outside organizations?
  • Is it that Facebook collects too much data about users in the first place?
  • Is it that Facebook is promoting addictive messaging products to children?
  • Is it that Facebook’s news feed is polarizing society, pushing people to ideological fringes?
  • Is it that Facebook is too easy for political operatives to exploit, or that it does not do enough to keep false news and hate speech off users’ feeds?
  • Is it that Facebook is simply too big, or a monopoly that needs to be broken up?

How about: all of the above?

Facebook and the CCTV effect

This morning’s Observer column:

Jeremy Paxman, who once served as Newsnight’s answer to the pit-bull terrier, famously outlined his philosophy in interviewing prominent politicians thus: “Why is this lying bastard lying to me?” This was unduly prescriptive: not all of Paxman’s interviewees were outright liars; they were merely practitioners of the art of being “economical with the truth”, but it served as a useful heuristic for a busy interviewer.

Maybe the time has come to apply the same heuristic to Facebook’s public statements…

Read on

How about an Angry Founders Club?

Lovely rant by Dave Winer:

We should start an “Angry Founders of the Internet” social club to discuss what the fuck happened and how can we tell people about the magic that underlies the crapware that the bigco’s are shoveling at us. It really is beautiful and amazing in there. Think of it this way. It’s easier to take the Interstate highway everywhere, but if you do that, you miss the charming B&Bs, the dramatic beaches, restaurants, jazz clubs. The thrill of riding a bike, hiking the Appalachian Trail, skiing. All that intellectually unperpins this.

I’m not a ‘founder’ — though I count some of them among my friends. But I sympathise with Dave. The technology remains as magical as ever. It’s the corporate capture of it that rankles — plus the passivity and gullibility of so many of our fellow-humans.

Why is WhatsApp founder quitting Facebook? You can guess the answer

This morning’s Observer column:

Early in 2009, two former Yahoo employees, Brian Acton and Jan Koum, sat down to try and create a smartphone messaging app. They had a few simple design principles. One was that it should be easy to use: no complicated log-in and authentication procedures; instead, each user would be identified by his or her mobile number. And second, the app should have an honest business model – no more pretending it’s free while covertly monetising users’ data: instead, users would pay $1 a year after a certain period. Searching for a name for their service, they came up with WhatsApp, a play on “What’s Up?”

Read on

Learning from Marx

Interesting interview with Gareth Stedman-Jones about his new book about Marx. I was struck in particular by this Q&A.

What should we keep from Marx’s thinking then?
The one thing we should preserve from what he said is really the sense of the overpowering nature of capitalism; of its dynamism; of the way it undercuts hierarchies; something which is restless and never ceasing to ‘move’. The idea of something so volatile and unstable has been with us – and is as much with us now as it was then – that’s really something which I would want to credit him with above all.

The second point I think is where he came from in terms of an intellectual formation. He was part of the Young Hegelian movement and that involves a critique of religion, which ends up with the idea of reversal: that it’s not God who created man but man created God. Marx transfers that thought into the way we identify with commodity production, commercialist society, capitalism. Where we think of ourselves as the creatures of a system rather than those who create the system – and that I think is also an important insight.

Thinking ten years ahead

Ben Evans is one of the tech commentators I follow. This para from one of his blog posts struck me:

First, ecommerce, having grown more or less in a straight line for the past twenty years, is starting to reach the point that broad classes of retailer have real trouble. It’s useful to compare physical retail with newspapers, which face many of the same problems: a fixed cost base with falling revenues, the near-disappearance of a physical distribution advantage, and above all, unbundling and disaggregation. Everything bad that the internet did to media is probably going to happen to retailers. The tipping point might now be approaching, particularly in the US, where the situation is worsened by the fact that there is far more retail square footage per capita than in any other developed market. And when the store closes and you turn to shopping online (or are simply forced to, if enough physical retail goes away), you don’t buy all the same things, any more than you read all the same things when you took your media consumption online. When we went from a corner store to a department store, and then from a department store to big box retail, we didn’t all buy exactly the same things but in different places – we bought different things. If you go from buying soap powder in Wal-Mart based on brand and eye-level placement to telling Alexa ‘I need more soap’, some of your buying will look different.

Intellectual imperialism and the behavioural turn in economics

Further to the decision of the Nobel committee to give Richard Thaler this year’s prize for economics (about which I bloggeda few days ago), Frank Pasquale pointed me to an interesting critique by Juan Pablo Pardo-Guerra, who picks out “three problems in economics and its relation to the ‘real world’ it inhabits”.

Firstly, it skates over the fact that what Thaler is being rewarded for — realising “that people can be influenced by (mostly social) prompts to alter their behavior” — was, well, rather old-hat in other social science disciplines. So the Swedish recognition of behavioural economics is really just “a legitimation of economic imperialism: a finding is only truly relevant if published by an economist (corollary: being an economist from Chicago helps).” Ouch!

Secondly, though Thaler’s contribution might make economics “more human—and real”, the behavioural turn “doesn’t make away with the ontological commitments of discipline, privileging market processes and individual action as the fundamental sources of virtue.” Take the metaphor of the ‘nudge’, as articulated by Thaler and Sunstein. “Rather than questioning the economics of general equilibrium”, says Pardo-Guerra, “‘nudging’ is a proposal in calculated engineering: we can build policies that create outcomes similar to those of theory by gently walking slightly irrational, bounded economic agents through the correct ‘architectures of choice’”. But who conceptualises those architectures? And within what ideological constraints?

And finally, this year’s prize confirms that to win a Nobel prize in economics, it really helps to be male and white. To date, only one woman — Elinor Ostrom — has been recognised, and Amaryta Sen is the only non-white laureate so far. I don’t know much about the overall demographics of the economics discipline, but if the Nobel list is representative then one can see why it might be more problematic than the Swedes recognise.