Is a Harvard MBA Bad for You?

Is a Harvard MBA Bad for You?

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A recent article in Inside Higher Ed argued that “We need to abolish the Harvard M.B.A degree for the good of the people who pursue that path, as well as the world at large.”

This is a nice sentiment, but the problem is bigger than the Harvard MBA, or even MBAs generally.

The underlying problem is increasingly mercenary values in society, and the rising popularity of MBA programs was more a symptom than a cause. The reason I am pretty sure the causality runs largely the other way is that it was during the 1980s that societal values moved in a big way towards valuing profits and markets over relationships and communities. This in turn was the product of a long-running, well-funded effort by then extreme right wingers to undo the New Deal and make prevailing views in the US more friendly to Corporate America. The strategy for that project was set forth in the 1971 Powell memo.

It is true that the explosion in MBA programs, and the number considered to be high quality, has exploded since I was a kid. Then, the prestigious names were Harvard, Stanford, Wharton, and Chicago, and for Wall Street jobs, you could add Columbia. Since then, a raft of programs considered second-tier (Darden, Sloan, Tuck, Yale, Kellogg) are now seen as close to on a par with the glam programs.

The resulting growth in the number of people getting MBAs who expected to earn big bucks in turn led to MBAs colonizing not for profits like hospital and higher education administration. That in turn has led to societal harm like the corporatization of medicine (see Health Care Renewal for a long-form treatment) and less and less university revenue going to teaching, and more to turning the schools into hedge funds with educational arms attached to them.

Tolerance for misconduct also rose. It would have been inconceivable in the 1960s that someone who had gone to prison, like Mike Milken, could ever recover any semblance of respectability. Admittedly, Harvard Business School did go through a bout of navel-gazing after some alumni were involved in 1980s scandals. But the school then determined that students’ moral compasses were set long before they went to grad school. HBS resolved to enroll more ethical students, but that sounded like a silly idea, since the crooked types would figure out what to say.

Similarly, just having more MBAs out there doing whatever they do is probably a bad thing because studying economics, even thinking about economics, makes people less compassionate, and MBA logic is economic logic with a little less jargon.

But as the same time, there’s corruption in fields where MBAs are scarce to non-existent. Look at scientific publication. As Dr. Marcia Angell, who had been the editor in chief of the New England Journal of Medicine, wrote in 2009:

It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor.

However, MBAs were positioned to benefit most from the rise of “Greed is good”. And the fact that economists promoted the idea that companies existed to increase shareholder value, a made-up idea with no legal foundation, led to equity-linked executive pay, which led to its explosive rise.

And the rise in MBAs is directly related to the increase in inequality. The 0.1% consists largely of hedge fund and private equity managers, fields colonized by MBAs. The 1% is the domain of CEOs and top professionals.

Now we get to the second beef about the Harvard MBA, that it makes people miserable, as confirmed by Charles Duhigg’s report on his 15 year reunion.

Again, the causality is backwards. Most people are miserable. The great world religions’ main purpose is to reconcile mortals to the inevitability of suffering. Money does not make you happier once a certain (not all that high) level of income is met.

On top of that, highly unequal societies are unhappy societies. Stress is high, even at the top, because if you fall, your decline in status is great and you are almost certain to lose all of your former supposed friends. Most MBAs live in worlds where the gradients are high.

The Victor Frankl school is that what keeps people going is having creative work they consider to be important or a strong personal relationship. MBAs, almost by definition, are not creative in the Frankl sense (as in artists, writers, scientists). They have (hopefully) average to high intelligence and decent social skills along with being sufficiently organized and responsible to be allowed to be in charge of things.

MBA programs select for ambition, and then the competitiveness of most schools plus the pressure cooker of the most sought-after recruiters further encourages graduates to invest in their careers at the expense of their personal lives. And despite the plush settings and lofty pay, the substance of many MBA jobs isn’t that great. A classic scene from Frank Partnoy’s book Fiasco has the members of the Morgan Stanley derivatives team saying to a person that they hate their work, they’d rather do anything else, even dig ditches….as long as they could make the same amount of money.

But things may have gotten even worse by virtue of younger people being over-coddled and over-praised and having even less realistic expectations for their adult life. For instance, in an essay I hope to address soon, the author wrote, “I came into my job as a McKinsey consultant hoping to change the world from the inside…” I think he sincerely meant that. I would not be surprised to learn that McKinsey made a sales pitch along those lines.

In my day, (mid 1980s), if anyone had said that, they would have been seen as a nutter. One of my friends who wound up being the first woman partner in M&A on Wall Street, said of her job, “It’s indoor work”. A job at an elite firm was understood to confer high wages, respectability, and good downside protection if it didn’t work out. If you wanted to change the world, join the Peace Corps.

So I’m not surprised to learn that most MBAs are unhappy, and I suspect that unhappiness is much more pervasive these days due to 24/7 demands on just about everyone and much greater career instability. I do know some people in my peer group who seems happy, and a couple that I think are genuinely happy. But they had the same temperament when they were young. But many people who get MBAs, particularly the sort that winds up at McKinsey, are insecure overachievers. So their dissatisfaction should come as no surprise. Those highs of meeting a goal are short-lived and the underlying anxiety resurfaces pretty quickly.