What about an MBA, then?

I opened a rather large can of worms with my post about whether or not one should do a PhD last Friday, for the most popular question I have gotten since then is whether one should do an MBA – is it “worth it”?

Here are my thoughts on the subject:

  1. Just like the PhD, so also with the MBA. You are doing it to get a job, or get more money in your current job. You should be clear about this. You are not doing it to get better at business, or to start your own business. 1
  2. The major difference between an MBA and a PhD is that one is a marathon, and the other is a sprint. There is some satisfaction to be gained from simply finishing the marathon – but the point of a sprint is to win it. You need to be faster than the others – or the others need to be slower than you.
  3. And if that is true (and I think it is), and if your job is likely to come from the placements process, then “winning” at the placement process becomes oh-so-important. Or, here is another way to think about it – if you think that you CV will look better by being able to say that you got placed in a “good” company while in college, then your MBA degree is about “winning” at the placement process.
  4. And that, unfortunately, makes the acquisition of an MBA degree a zero sum game. You only win by defeating everybody else. Because you don’t get the best job offer by making sure that the others get the best job offers – there’s only so many best job offers to go around.
  5. Walk into an MBA education with your eyes wide open: that’s why you are there, to be the best in a zero-sum game. By definition, the MBA game is a cut-throat game. If that is the world you want to inhabit, then an MBA is a great education to acquire.
  6. Remember, though, that the education isn’t what you learn in class. That education, these days, you can get for free online, and it’ll be better than the education you get in your college. The education that you get is learning how to be demonstrably better than your peers while being part of the same community for two years. You then have to apply these learnings to your career.
  7. That makes the MBA one of those rare degrees where the quality of the college really matters. Not because the faculty is likely to be better, or because you will get better facilities, or because the library will be better. All that is likely true, but the reason you want to get into a “good” college is because you need to show that you have beaten the best, twice over. You first beat everybody else by getting into this college when so many others couldn’t, and you beat everybody else who got in by scoring more than they did. It really is the ultimate zero-sum game!
  8. An MBA with prior work-experience is worth so much more than an MBA with no prior work-experience. Identify the gaps in what you know about the corporate world by working in the corporate world, and then do an MBA.
  9. You do an MBA for the job, for your peer group and for what you learn in the classroom – in that order.
  10. If you are faintly horrified by what you have just read, don’t even think about doing an MBA. If you can’t wait to get started, you should definitely do an MBA!
  1. I’m talking about the median MBA candidate here[]

Links for 9th April, 2019

  1. “What is not useful is the sense that measuring GDP is the problem, and measuring gross national happiness is the solution. Few societies have ever really focused on either. We should all be happy about that.”
    Tim Harford reminds us that the truth lies somewhere in the middle. In this case, the article is worth reading for understanding how GDP can’t really be measured, and how that may not be a bad thing. In addition, please read the article to understand that Bhutan probably isn’t all that “happy” a country in the first place!
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  2. “Given the pressure on all unions to negotiate higher-than-average wage increases, using monetary policy to reduce inflation would inevitably aggregate spending to fall short of the level needed to secure full employment, but without substantially moderating the rate of increase in wages and prices. As long as the unions were driven to negotiate increasing rates of wage increase for their members, increasing rates of wage inflation could be accommodated only by ever-increasing growth rates in the economy or by progressive declines in the profit share of business. But without accelerating real economic growth or a declining profit share, union demands for accelerating wage increases could be accommodated only by accelerating inflation and corresponding increases in total spending.”
    Monetary nerds only, it should go without saying! David Glasner runs a blog called Uneasy Money, which is well worth reading, but only if you want to find yourself steeped in all things monetary. This post takes a slightly critical view of Arthur Burns tenure as Fed Chairman.
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  3. “Amazon’s economists game out real estate decisions, set the lowest prices that will deliver a profit, precisely determine what customers care about and whether advertisements are working — all using machine-learning algorithms that automate decision making on a massive scale. It’s the kind of asset that smaller companies can’t always pay for, allowing Amazon to pull further and further away from the competition.”
    Amazon has, in case you didn’t know, probably the world’s largest collection of PhD’s in economics. This article helps you understand what it is that they do once they’re in Amazon. A helpful read if you are considering building a career in economics.
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  4. “The White House explains why it’s predicting such big growth: the TCJA will cause a surge in business investment by “substantially raising the target capital stock and attracting increased net capital inflows.” And this rise in the capital stock will cause a surge in productivity. Except that there’s no sign of a surge in business investment: the report cherry-picks a few numbers, but overall orders for capital goods, probably the best real-time indicator, are showing nothing much (that 2015-6 slump, by the way, was about fracking, which fell off for a while when world oil prices plunged)”
    Paul Krugman is less than impressed with the 2019 Economic Report of the President, and provides data to show why he is less than impressed. The chart that follows the excerpt is worth looking at too.
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  5. “There’s one biosignature that Seager, Guyon, and just about everyone else agree would be as near a slam dunk for life as scientific caution allows. We already have a planet to prove it. On Earth, plants and certain bacteria produce oxygen as a by-product of photosynthesis. Oxygen is a flagrantly promiscuous molecule—it’ll react and bond with just about everything on a planet’s surface. So if we can find evidence of it accumulating in an atmosphere, it will raise some eyebrows. Even more telling would be a biosignature composed of oxygen and other compounds related to life on Earth. Most convincing of all would be to find oxygen along with methane, because those two gases from living organisms destroy each other. Finding them both would mean there must be constant replenishment.”
    That’s just one of many, many excerpt-able pieces from a very long, but also very rewarding article about the search for ET. Take your time with this one – about an hour or so, and pay particular attention to the infographics.