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.