There has been an influx of articles written about a topic I’ve literally been writing about since 2009, the overall low ROI of an MBA education in particular as well as the low ROI of a traditional academic education. I wrote many articles about how it made little sense for someone that knew he wanted to go into music production to be forced to take introductory math and English literature courses and why forcing a student that had no interest in such topics to pay and spend time attending such classes was a waste of the student's time and money, though beneficial to the bottom line of a university. I wrote other articles exposing the many problems of an educational system built around an exam system that encouraged regurgitation of memorized information rather than developing critical thinking skills and encouraging the boundaries of a student’s creativity and curiosity to expand in a manner that would eventually lead to true exploration of a subject matter. I wrote even more articles about the problems of a system that enforced rigid segmentation by age and encouraged students to become enemies of one another in pursuit of higher grades that often meant little regarding reflected intellect of the student garnering the highest grades. I also spoke about the need to revamp education frameworks into ones that encouraged peer to peer learning and a cooperative environment in which all students would be challenged the most to learn. Finally, I addressed the outdated nature of many subject matters taught in school because students often received little knowledge of real value in the classroom, i.e. knowledge they could apply in the real world to improve their quality of life, even in science classes like mathematics and physics. However, back then, very few people agreed with me, because well, as such recognition spurs a high level of cognitive dissonance, it’s a difficult proposition to admit that we spent a disproportionate amount of money and time in our lives engaged in “educational” forums that really imparted little knowledge that would ever improve our quality of life.
However, more than a decade later, it is a different story. Given the downturn of the global economic cycle deliberately created by the ruling banking and political class, a self-evident truth that, if one cannot understand, deftly illustrates my point of institutional academia imparting useless information to students, more and more students are finally waking up to the scam that is not education, but the scam that is institutional academics that provides very little useful education to the masses. Education that provides the benefits I stated above is always of high utility. Unfortunately, this is not the type of education provided in the vast majority of institutional universities and colleges. In fact, the only reason that most people don’t realize and understand this truth is because we are told, from the day we are born, the absurd notion and make-believe story that the only option for our education is to engage institutional academia when in fact, our options for education are limitless, a subject I explored in this podcast in which I discussed how nearly everyone views the world as a binary 0 and 1 system and fails to ever see the 2s, 3s, 4s, and 5s that abound.
The latest topic about the poor value of traditional education involves buyer’s remorse of MBA programs. In a Bloomberg Businessweek survey conducted of 3,532 MBA students at 95 graduate programs around the world from May to early August, many students said the price of their education, some at a ridiculous cost of more than $80,000 a year, was no longer worth it. The higher the expense of the program, the higher the level of dissatisfaction expressed for the value of the program seemed to be. Among MBA students attending MBA programs ranked in the top 10, 63% stated that the costs of their education was not worth the value received.
To the above, I ask, Why does this surprise any MBA student? Was this not self-evident the very minute you decided to attend business school? And if it were not, why was it not, because plenty of people, including myself, had written and published numerous articles exposing the extremely low ROI of attending business school for over a decade now? I’ve written numerous articles over this time span that would have saved MBA students collectively hundreds of millions of dollars had they only read these articles, available for free, about the high value of education but low value of institutional schooling, here, here and here. Furthermore, I am 100% certain that I could provide a consultation that might last just a few hours in which they would learn not only far more valuable information than they would in an entire two-year period of attendance at a so-called elite MBA program, but also, in the process, save hundreds of thousands of dollars and two years of their lives.
Eldwood Cubberly, the future Dean of Education of Stanford University, in his 1905 dissertation for schools, argued in favor of implementing a factory-like production model in classrooms “in which raw products, children, are to be shaped and formed into finished products…manufactured like nails, [with] the specifications for manufacturing com[ing] from government and industry.” This is not a one-off comment. Historical documents regarding the formation of the Prussian model of education in America that was eventually exported to the rest of the world also exposed a deliberate process of stripping science out of the process of teaching mathematics at Ivy League schools like Colombia University. And for those naïve enough to think such models of factory-like conditioning rather than critical thinking development are no longer the aims of most business schools today, just because more than a century of time has passed since such comments were made, one only need appeal to common sense to understand that such deep skepticism of the global academic platform is still merited today.
To begin, one only need ask oneself, if one is of the proper age demographic and has not committed to a graduate level of schooling as of yet, What did I learn during my undergraduate years that I can apply right now in the real world that would significantly improve my quality of life? If most undergraduates could answer that question, then the majority of adults under the age of 30 would not be living at home with their parents in 2020, as reported by a study recently conducted by the Pew Research Center. Sure, most of those adults may rationalize their need to move back home and live with their parents as a consequence of covid lockdowns enforced by their politicians, and I do not doubt that this played a factor in the need of more than half of all adults under the age of 30 to move back in with their parents this year.
However, had their undergraduate education truly taught them real world applied knowledge skills, how to be resourceful during times of hardship, how to endure through struggle and overcome, and how to create something out of nothing when required to do so – in other words all the skills one should learn as an undergraduate - perhaps 20% of adults under the age of 30, instead of 52% would have moved back in with their parents this year, covid lockdowns or not.
In my opinion, these are the skills every single undergraduate should have in their toolkit upon graduation from university and college, because what good is knowledge if one cannot apply it during unexpected downturns to adapt, create and survive? And regarding the type of knowledge all MBA programs should be teaching their students, this should include the history of money, the role of gold and silver in global monetary history, the difference between asset prices and values, the reasons why fiat currencies give rise to societal wealth inequality, and the true market mechanisms that control asset price behavior, just to name a partial list of essential topics completely absent from the curricula of 99% of business schools around the world. I, unfortunately, did not realize the near useless utility of information taught in MBA programs until after graduation, and if I had to assess its utility now, after embarking on more than a decade of entrepreneurship, I would still rate an MBA program’s utility in the assistance of efficiently launching businesses at near zero.
Given that as an undergraduate, I attended the Ivy League university that runs the Wharton business school, whose Dean Erika James stated earlier this year, “We continue to appreciate our students’ willingness to trust us as we embark on this new reality together,” I would assess her comment to be spot on, though I would amend her comment with the insertion of one word. It is only through “students’ [blind] willingness to trust” MBA program administrators to provide a good ROI will MBA programs continue to attract solid enrollment in future years, because quite frankly, the ROI of most MBA programs, even top programs like the one I attended are atrocious. One would be much better served by saving the $180,000 to $225,000 cost of attending programs like Wharton and to invest this money into an entrepreneurial pursuit that will provide real tangible returns, especially in the post-apocalyptic world that will emerge after the next global financial crisis precipitates, which should happen sometime between now and 2022. However, if students actually perform any type of solid research into the applicability of the knowledge being taught at 99% of MBA programs today, they will arrive at the same conclusion as 2020 Wharton graduate Alex Karas, who stated, “It’s disturbing to me that they feel entitled to ask us to pay the whole full freight of tuition. It shows a lack of recognition of the massive resources that they have that alumni have contributed,” and at the same conclusion of a 30-year old student at a top European MBA program that wished to remain anonymous that stated, “A one year MBA that was 60% online is not worth a $85,000 investment. Huge disappointment.” To these statements, I give a standing ovation for their ability to recognize the fact that they were duped into buying high expense, low value services, as this recognition will serve them well during their lifelong timeline of educational pursuits.
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