The decline of the MBA will cut off the supply of bullshit

I'd like to know what counts as bullshit. Six Sigma and other such fads certainly seem like they ought to be included. But, what's not bullshit? A good MBA program is an amalgam of fundamental concepts in economics, sociology, mathematics (at least stats), and such. Six Sigma might be analyzed, but it's not presented as a fundamental truth or even a profound idea.

Let's take a specific example: the concept of "agency costs". An economist defines these to be the inefficiencies resulting from one's agents (those doing work for him, and those doing work for those agents, etc.) having different incentives than himself. MBA program include agency costs as one of many economic concepts discussed.

A friend with a Harvard MBA was selling his house while living in another city. He noted that the traditional real estate agent's "6/4" commission structure (6% of the first 100K and 4% thereafter) causes a rational agent to sell as many homes as possible without regard to the actual selling prices. Why bother seeking out a buyer willing to pay $20K more when you only get $800 of that? It would be easier to seek out an additional seller instead. An agent incentivized with this structure likely would not act in his best interests.

So, my friend persuaded an agent to accept a very different plan: 2% up to the price he felt he could get by putting out a FSBO sign in the front yard and 10% thereafter. With this, the agent could earn significantly more by working to find a high-paying buyer. The house ended up selling for a little more than the "FSBO sign" price, so he at least saved on commission.

Those here without MBAs might also think in this way -- much as those without CS degrees might also understand algorithmic complexity. It's not that the content of a top MBA program can't be learned through self study in the same way that good developers are sometimes self taught. But, to suggest that the fundamental content of an MBA program is "bullshit" ignores what is valuable.

Perhaps we are most aware of frat-boy MBAs' self-important yapping, but the fundamental concepts of these programs are generally sound. I have an MBA from a less-than-Harvard program and have found what I learned there to be of benefit. And, I consider myself pretty much bullshit free.

Medical specialists make more money.

That's a pretty shallow explanation though, because the question is why. Assuming some level of supply and demand still applies to the medical profession, people seem to go to specialists more often than GP's even for things a GP could probably handle. But why do they do that? One possible explanation is that people don't like doctors, so they only go when something is wrong with them, at which point they spend most of their time seeing a specialist for that particular ailment and then forgetting about it.

Oh, yeah, liability. A GP can reduce their liability by referring you to someone else pretty often.

It's also possible that being a specialist carries other benefits, like prestige and status and personal interest.

Sports teams spend hours every day watching film for a reason. You have to study the problem you're facing in order to figure out the best way to handle it. Business is simply solving one problem after another until you've got a profitable company.

You learn a ton by starting and running a business, but a formal education can give you a more encompassing framework on how to think and approach specific situations.

I'm going to an undergraduate business school right now, and I'm also a web developer and entrepreneur. Sure, some stuff is common sense, but I've also learned a lot that was under the surface that I've already found to be invaluable in my endeavors.

The Fed began expanding the M3 monetary supply at a historically unprecedented rate in the 80s, and has become more and more aggressive with this policy over time. The entire point of this policy is to stimulate business by encouraging spending, make credit more attractive because the value of debt loses value over time due to inflation, and discourage saving. As consumers spend more, businesses make more, sending signals to the job market that getting into business and getting an MBA is a really good idea because you make more money. So that's exactly what people have done. Now that the American consumer is tapped out, broke, and unable to take on any more credit, obviously businesses are going to do poorly because their goods aren't being purchased, and they certainly can't afford to hire any more expensive MBAs. Do you agree?

A growing and productive world workforce does lead to additional production/wealth creation, and I do think this is conducive to business, but I don't think it's the significant factor explaining the current glut in the job market for people with MBAs in the United States.

The population in China is still expanding, workforce is growing, and GDP is still booming, so if this were the driving force fueling the demand for MBAs from America then that demand should still be there.

"No financial man will ever understand business because financial people think a company makes money. A company makes shoes, and no financial man understands that. They think money is real. Shoes are real. Money is an end result."

Peter Drucker