Sunday, September 20, 2009

MBA, not PC

During the 1990s, there was a lot of hullabaloo about political correctness, a thing that simply did not exist. I remember picking up a couple of books on political correctness back then, and all of them were actually attacks on it. One of them had even been originally published as a series of satires in Playboy magazine, and another had actually made up most of the things it was complaining about and attributed to them to the fictitious "Hyphen Society." To this day, I have failed to find any book or campaign that genuinely supports political correctness.

Granted, there was some laughable pamphlet from some liberal arts college I had never heard of that honestly attempted to tell undergrads how to avoid sexual harassment, but any such things that did crop up were ridiculed -- they had no power over me, much less over the culture at large.

What did have power over the culture at large was microeconomic thinking, with more and more people getting MBAs -- and fewer and fewer people studying English (and foreign languages), where most of these allegedly pernicious gender studies and the like were taking place.

Now, an English professor in the US has published some figures showing the relative shift in influence from the early 1970s to the early 21st century:

In one generation, then, the numbers of those majoring in the humanities dropped from a total of 30 percent to a total of less than 16 percent; during that same generation, business majors climbed from 14 percent to 22 percent.

The rise of business majors is especially unfortunate because MBAs are taken to be economists. In reality, they are more bookkeepers than economists. When you get an MBA, you learn essentially to run a business, and that entails balance sheets -- income versus expenses, assets versus liabilities. The thinking is in/out, not circular.

For society at large, this thinking at the level of an individual business is inappropriate. Money circulates in a society, so the consideration of the cost of something is different in macroeconomics than it is in microeconomics. In microeconomics (MBA), you want to lower costs because you lose that money, but in macroeconomics that money is not (necessarily) gone -- it depends on how you spend it. A company may want to lower wages to cut costs, but a government might want to raise the minimum wage to keep consumer spending up.

But the most pernicious thing about MBAs as opposed to macroeconomics is the relative lack of discussion about society altogether. While I am not naïve enough to believe that macroeconomics is purely about ethics, the entire discussion is at least attempt focused on finding a way to keep the national economy healthy, whereas MBAs are just about making money yourself. Is it any wonder, then, that we have things like Enron and the current banking crisis?

The problem, therefore, is not that the influence of politically correct humanities, but rather the increasing influence of MBA thinking. Even a shift towards macroeconomics would help. I'd be willing to bet that very few Americans who have studied "economics" have actually focused on macroeconomics. Though I cannot find any figures right off, I bet almost all of them are MBAs, i.e. microeconomists.

The situation is the same in Germany, where the University of Freiburg is the only one in the country that offers a PhD in macroeconomics.

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