November 29, 2013

Econ majors and refrigerated gourmet dog food

One of the weirder status markers of the most exclusive colleges is that undergraduates normally can't major in business. West Hunter summarizes the distribution of majors nationally v. at Harvard:
Nationally [ 2009-2010], about 21% are business majors,  10% major in social sciences and history,  8% in “health professions and related programs”, 7% are educational majors,  6% psych majors, 5% in visual and performing arts,   5% in biological and biomedical sciences, 5% in “communication, journalism, and related programs”,  4% in engineering, 3% English and literature, 2% in computer and information sciences, 1.4% in physical sciences, 1% in mathematics and statistics.  I haven’t mentioned everything. 
Harvard [2009] is different. They had 758 kids majoring in economics, 495 in government, 306 in social studies, 290 in psychology, 247 in English, 236 in history, 158 in history and literature, 155 in neurobiology, 154 in molecular cell biology, 154 in sociology, and so forth.

A few colleges have done well for themselves having elite business schools for undergrads, such as Wharton at the U. of Pennsylvania and, in recent years, Stern at NYU. In general, though, letting undergrads study something directly applicable to getting a white collar corporate job is considered de classe. Studying business -- at least before your late 20s in MBA school -- is downscale.

Instead, economics has become the de facto business major at the Harvards of America. You're not dirtying your hands studying anything all that relevant to the vast majority of corporate jobs. Yet majoring in economics shows: Although I Am A Gentleman, I Am Also Interested in Money. So, it's the ideal major for the career path of Wall Street or consulting entry level analyst --> MBA School --> Big Money.

Something striking is how little relevance a strong knowledge of economics has for most jobs. As an old Econ major, I noticed this in the mid-1980s when I was in charge of introducing personal computers into the large marketing research company where I worked. I hired a PC tech guy who turned out to be notably smarter than me in sheer problem solving ability. But, like the Scarecrow in the Wizard of Oz, he didn't have a diploma. He'd enlisted in Admiral Rickover's nuclear Navy out of high school and spent six years minding the reactors on nuclear subs. 

I quickly let him move up from fixing computers to playing a sizable role in tactics and strategy. That led to the one incident in which I noticed a major benefit from my having taken nine full semester courses in Econ. One day in 1987 my assistant proposed that we should stop buying PCs from Dell (or PC's Ltd. or whatever it was called way back then). Instead, we should buy the parts in bulk and hire workers to assemble them for us.

This was back before highly engineered laptops, when PCs were simply big metal boxes with lots of slots in them, so assembling the 100 (or so) parts didn't require any impressive machine tools. Lots of hobbyists assembled their own PCs in those days. (There were opportunities for hot rodding PCs in those days. For example, I got an early IBM PC AT. The CPU's clock speed was set at 6 megahertz, but I ordered a part that made it run at 8 megahertz and enjoyed 33% faster speeds.)

I replied that PCs were a highly competitive business with no obvious barriers to entry, so it's precisely the fact that his plan wasn't ridiculous that meant that it most likely wasn't worth doing: competition would have driven the rate of return down to a level where we'd be indifferent between assembling PCs ourselves or having Dell assemble them for us. Management attention was our main limiting resource, so outsourcing to young Mr. Dell the obsessing over PC parts purchasing and assemblage was a task I was happy to pay him a small premium to do. 

My colleague did not believe me, so I encouraged him to make up a spreadsheet and see for himself whether he could beat Dell's price by much. A couple of hours later he came back and said I was right: if we did everything perfectly, we'd only save $10 or $15 per PC, and we wouldn't do everything perfectly. So why bother?

So that was one instance in which my Econ major's knowledge of economic theory could have saved us two hours of work. But there were surprisingly few others. (Of course, this was in managing a high school grad who would have maxed out a Raven's Progressive Matrices IQ test. A lot of other economic theory he simply grasped without having studied it because it was obvious to him.)

Fortunately for the dynamism of American business, most econ majors never take the quietist lessons of econ theory to heart. While U. of Chicago economics professors are said to never bother to pick up $20 bills off the sidewalk because surely the efficient market would have done it already, most Harvard econ majors are blithely immune to econ's basic model of perfect competition reducing profits to the risk-adjusted interest rate.

Two questions: 

1. What are the effects on the student of the upscale study path of econ -> business v. the downscale path of business -> econ? 

2. What are the effects on America of a social structure in which econ majors make up a sizable fraction of the rich and connected?

I've never seen any academic studies of either question. 

Off the top of my head, it would seem like it would make more sense when you are younger to study narrower topics of business; then, if you wish, come back to academia once you have some real world experience and study the broader topics of economics.

I was an unusual student in that I went directly from undergraduate to MBA school in 1980. Something I noticed was that at age 21-23 I enjoyed the MBA school topics more than the undergrad topics because they felt more age-appropriate. As an undergrad econ major, I was supposed to worry about things like: What should the Fed do now? I had lots of opinions on the Fed, but I never felt like the Fed was on the verge of calling me up and asking me for advice, much less paying me money to tell them what to do. In B-School, however, we talked about case studies like: should a pet foods company bring out a line of gourmet refrigerated dog foods for the luxury market? * That seemed like the kind of topic that a company might plausibly pay me money in the next few years to advise them upon.

As for the current dominance of econ majors in our national lives, it wasn't always like this. As an econ major in the 1970s, there was a sense that we band of brothers, we happy few were taking on the palpable ignorance that had led to idiocies like the President declaring a national wage and price freeze on August 15, 1971. 

The good news is that a country run by econ majors isn't likely to do that again.

The bad news is that certain fetishes of econ majors, such as an unthinking advocacy of free trade or open borders, become totemic status markers of having majored in Big Money Econ. Americans respect people with lots of money and so they respect econ majors, so they tend to be unskeptical about ideas that econ majors absorbed during their impressionable late teenage years.

Hence the elite credulity about open borders is understandable: dismissing immigration restrictionists as ignoramuses who obviously haven't majored in econ does correlate at some level with making a lot of money on Wall Street. 

But it's a helluva way to run a country.

* In case you are wondering about gourmet refrigerated dog foods, a little poking around on the Internet shows they they were not successful back in my day, but have over the last few years become an established category. I suspect a necessary condition was the development of stand-alone pet food stores and/or small, cheap refrigerators that are now ubiquitous in retail outlets, typically for soda pop. The big problem I noticed in 1981 with the idea (besides the obvious questions about whether it's stupid and does your dog really care?) was that supermarkets would be reluctant to stock dog food in with refrigerated human food, while pet food aisles in supermarkets didn't have refrigerators.


Anonymous said...

Expanding on a comment I made at West Hunter, I took several economics courses in college even though that wasn't my major. Most of the students who were majoring in the subject had plans to get MBA's. In two of the courses I took, and there may have been others, the teachers would announce on the first day of class that going on to get a graduate degree in economics would open more doors in the business world than would getting an MBA from a non-elite program. This wasn't self-serving, as the fairly small college did not have graduate courses in economics.


Anonymous said...

The Economics degree at elite universities is mainly about ideological education, signalling, and allegiance. It's where you "learn" that neoliberalism is good, free trade is good, that being "fiscally conservative, socially liberal" is good, etc. Having the Econ degree signals to employers, professionals, elites, etc. that you believe or at least won't work against these things and that you're with the program.

Anonymous said...

Harvard has become somewhat vocationally oriented.

Anonymous said...

The most highly ranked undergrad business school is Notre Dame.

Bill said...

Community colleges should offer small business administration as an extension of home ec. for the more ambitious and upwardly mobile wives-to-be. Most people don't need an MBA to run a business.

Given the example of my successful, self-employed uncles (an engineer, a customs broker, an aviator and a salesman), having a wife who can manage a small business is an enormous productivity enhancement.

Forget the Harvard econ majors -- they might as well be necromancers as far as most of us are concerned.

SFG said...

Are you really that non-cynical? Immigration is favored by Democratic elites because it means votes and by Republican elites because it means low wages.

The NYT actually had Bill Keller respond to all the non-elite liberals braying about how it was driving wages down.

Steve Sailer said...

Notre Dame also tried to have a heterodox econ department (but I think they finally gave up).

I wonder if there was a connection? If you intend to let undergrads get a first rate business education, you figure you can afford to have an econ department that takes chances, but if you don't let undergrads major in business, you have to make sure there's nothing non-mainstream about your econ department?

Anonymous said...

When I attended Princeton in the mid 2000s, I started wanting to study econ but switched and my impression was the following.

There's really only about 2 years worth of basic, interesting material for an undergraduate to learn in economics (2 classes/semester for 4 semesters). So, if you test the intellectual waters and decide on being an econ major by the end of your sophomore year, you can spend your junior and senior years on the main coursework then graduate.

But let's say you come in as an ambitious freshman and start taking those classes as soon as possible, which is fairly common. You'll finish off that coursework pretty quickly and if a college education was really about gaining knowledge, then you'd graduate early.

But no one at Princeton graduates early; everyone takes the full four years. So you could take gut classes for the remaining semesters and debauch yourself until it's time to graduate and join a bank or hedge fund.

However, it probably wouldn't help the country club image if a sizable chunk of the students followed this path. So the econ department has to fill up the time with some sort of coursework to keep the econ students busy until the old Alma Mater releases them into the world of finance. As a result, a decent amount of graduate-level technical classes became part of the upper-level undergraduate program.

Daniel said...

I was a humanities major but took some economics courses. I found them to be worthless, both in a practical sense and in furthering my understanding of how things work. What is true about economics is obvious and evident. Not need to construct an entire course of study about it.

However, I do recommend that everybody study some accounting. Since college I have taken some extension course in accounting and have found every one of them useful and insightful. I recommend one take a sequence of intro accounting, financial account and managerial accounting. Altogether this should be covered in 5 or so courses. The investment will be time and money well spent.

Mountain Maven said...

I majored in econ in the mid 70's when Keynsian economics was being disproven. (remember the "shifting" phillips curve?) Also almost all of my professors were marxists or fellow travelers. No good jobs were available so I went to business school which was basically trade school and got a great job and career afterwards.
The main benefit of studying economics beyond waiving a bunch of b-school classes is that it helped me when I un-brainwashed myself about 10 years after college. Also I know when someone is lying about economics.

The main problem with studying econ is the hard left faculty. Instead of objectivity and wisdom you get propaganda and lies. Of course that is the problem with most non-STEM college degrees. At least at B school a lot of the profs had worked in industry.

My nuclear seaman acquaintance is finishing his degree in physics.

Daniel said...

From the link to West Hunter:

>Least popular majors at Harvard, 2009: Earth and Planetary Sciences 28, African and African American studies, 27, Folklore and Mythology, 21, Studies of Women, Gender, and Sexuality 16, Near Eastern Languages and Civilizations 14, Slavic Languages and Literature 13, Astronomy and Astrophysics 5, German Languages and Literature 5, Sanskrit and Indian studies 3.<

So, despite the elite obsession about making the "marginized" (aka Blacks and Women) worthy objects of scholarship Harvard student are smart enough to not waste their time in majoring in Black or Women's studies. Good for them.

What? No Greek or Latin majors? I think that it would be pretty cool to study and master Sanskrit.

Anonymous said...

Here's a study on how the study of economics might affect society:

He has other good stuff here:

Anonymous said...

I graduated from Harvard over a decade ago, and have a couple of points to add, regarding "Ec." "Ec" not Econ is what it's called at Harvard, in case you want to signal to someone that you went to school "in Boston" without even mentioning Boston.

Beyond the already sizable number of Ec majors, an even vaster number of students take the introductory class, Ec 10, which used to count for Core credit, i.e. a distribution requirement for those majoring in other subjects. So the influence of Ec goes way beyond those who actually major in the topic.

It was well-known that whereas genuinely demanding schools like MIT demanded that you know calculus to take an economics class, Harvard offered a math-free or math-lite sequence, so you could pick up the free-market Goodthink even if you couldn't do math. Ec 10 doesn't require much math, and even in the second-year sequence, Ec 1010 was a math-lite alternative to Ec 1011.

Ec 10 used to be taught by Martin Feldstein, head of Reagan's CEA, and more recently has been taught by Greg Mankiw. Mankiw is a very popular and engaging lecturer, also wealthy from the blockbuster sales of his textbook, the one he uses in that class. It was always taught in Sanders Theatre, home to the most popular courses and a good place to feel elite.

Part of the thrill of Mankiw-ism was the way that Ec 10 could be used to tweak the pieties of Cambridge liberalism. Unions are inefficient! Rent control is inefficient! The earned-income tax credit is more efficient than the minimum wage! Thinking about my classmates who majored in non-Ec fields, catch-phrases like "revealed preferences" and "incentives matter" simply became part of life.

A counterpart to Ec 10 would be the Social Studies major, a magnet for gunner-types angling for Harvard Law and appeals-court clerkships. In Social Studies, the frame of reference ranges from Habermas to Foucault. Needless to say, no Russell Kirk, no Edmund Burke. By comparison with Social Studies, Ec 10 counts as "conservative" because it suggests that the state is not the solution to every single problem.

Typical Mankiw parable: it's more efficient for Michael Jordan to pay someone to mow his lawn, than to mow his own lawn. I don't need to spell out for readers here that this is very satisfying to an audience of people who will be hiring, not driving, lawn mowers.

It was well understood that for the i-banking track, you really didn't need that much math -- just to be able to use Excel and work long hours.

By contrast, if you want to be a professional economist, it is better to take a lot of math courses than a lot of economics courses.
"Economics of this" or "Economics of that" on a transcript are less impressive to an economics grad program, than a list of hard math classes.

Luke Lea said...

About textbook trade theory that these econ. majors are supposed to learn about at Harvard, when I picked up a copy of the classic teaching text by Caves and Jones a few years ago I was surprised to learn that the principle of compensation was an integral part of the theory -- the winners were supposed to be able to compensate the losers out of their winnings to make everyone better off than before. This so-called Pareto principle was usually considered just a minor detail in the classic Ricardo example of specializing in the production of one product in one country (say grapes in Spain) in exchange with for another product in another (pots and pans in England). The numbers of grape growers in England was relatively small and could soon be absorbed into the growing pots and pans industry.

But, as Caves and Jones pointed out, what is a minor detail in the Ricardian case is nothing of the kind when a country's comparative advantage lies in its relative abundance of one of the three factors of production, land, labor, or capital. Then compensation must actually be paid unless an entire class be driven to the wall.

This happened with the English gentry when corn tariffs were lifted on imports from land rich America; the landed aristocracy were replaced by the rising industrialists as the new ruling class even as wages for factory workers remained at the subsistence level.

Today of course the case concerns China, whose comparative advantage lies in its relative abundance of low-wage labor in comparison with the United States (and Europe too if the EU is foolish enough to abolish trade barriers with China).

I think it is safe to say that those Harvard econ majors know nothing about modern neo-classical trade theory (aka Heckscher-Ohlin trade theory) even though they majored in the subject. Free trade, it turns out, is the political correctness of the right wing of the new oligopolistic ruling class.

agnostic said...

A world of marginalized econ majors gave us a risible yet harmless attempt to freeze prices, and annoying long lines at the gas station.

While the world of triumphant econ majors gave us...

Unchecked immigration

The long housing bubble

Bank bailouts

Too Big Too Fail

Plummeting savings

Soaring household debt

Five credit cards instead of layaway

Higher ed bubble

Soaring student loan debt

Stagnating middle class incomes

Wasteful conspicuous consumption among elites

Downsizing, outsourcing, and off-shoring...

Gee, what a miserable world it must have been before Econ wisdom took root!

Owl said...

When I was an undergraduate at Rice in the 1990s, there was a Managerial Studies major, but it could ONLY be your second major (not your only major). On campus, no one used the word "business" to refer to "MANA" classes.

Even the business school back then was called the Jesse H. Jones Graduate School of Administration. Later, the name was changed to the Jesse H. Jones Graduate School of Management. Only in 2009 did it become the Jesse H. Jones Graduate School of Business.

Is "business" becoming more acceptable in places where it was once thought unsophisticated? Or is Rice going downscale?

Anonymous said...

Is "business" becoming more acceptable in places where it was once thought unsophisticated?

It's acceptable as a graduate school name. Harvard's biz school is called simply Harvard Business School. Stanford's is the Stanford Graduate School of Business.

I think they use "business" more than simply "management" because "management" training was more about training people who were going to manage industrial, manufacturing concerns, and most business school grads don't go into that anymore. They mainly work in finance, not managing industrial corporations.

Anonymous said...

Supermarkets don't buy the refrigerated cases for fresh dog and cat food that you'll see in the pet food aisle. The product vendors supply them.


slumber_j said...

Maybe things have changed in the thirty or so years since I was a freshman, but back then one reason nobody did Sanskrit was that the guidebook to fields of concentration (majors) actively and quite explicitly discouraged undergraduates from studying it.

Anonymous said...

As someone who majored in both economics and a business field at a major state school, my experiences were similar.

Like you, I found the economics courses to be much more abstract (and boring!) and the business courses to be concrete and practical. Also, most professors espoused neoliberal views, though I suspect some favored Keynesianism; of course, protectionism and other Sailersphere ideas were big No No's if ever mentioned.

Overall, what I learned in business school is still applicable to my job to some degree, while I never retained much of what I learned in econ. Actually, and I think this is more because of where particularly I went to school, I hardly learned anything about economics in econ classes in the first place. But I did get great experience in drawing graphs and solving equations with meaningless (to me) variables.


map said...

Interesting topic.

I was an econ major at the University of Chicago in the early 1990's. This was at the time when several faculty members were getting Nobel Prizes. I had Robert Lucas for Macroeconomics and several other fairly big-name professors like D. Gale Johnson, Casey Mulligan, David Galenson, Robert Fogel, etc. I was there when James Heckman structured the econometrics class to study Charles Murray's book.

Anyway, U of C did not have an undergraduate business program, but undergrads were allowed to take classes at the B-school and even classes at the graduate school with departmental approval. I took accounting and marketing at the b-school with that option.

It was also the first time where quants were becoming big so it was encouraged, but not required, to take heavy-duty math classes. I had mathematical statistics with Steven Stigler and analysis and algebra in the math department. Great stuff.

Casey Mulligan was an awesome professor at the time. The first thing he did walking into class was draw the symbol for a partial derivative on the blackboard. Then he waited to see if anyone left. Apparently, Harvard, where Casey got his undergrad degree, was notorious for having half the students up and leave a class as soon as math came up.

Mulligan would also tweak the sociology grad students by calling his problem sets the "Economics of Billary" and prefacing statements with comments about the government stealing your money through taxation.

It was also interesting when one of the teaching assistants discovered that his Ph.D in econ did not give him a pay premium over the GSB MBA.

In general, U of C economists were much more careful about their free market polemics than is generally imagined. Saying "free market good" and "government bad" was mightily discouraged in favor of careful, empirical analysis.

Steve Sailer said...

""Ec" not Econ is what it's called at Harvard"

Is it pronounced eek or eck?

Anonymous said...

I absolutely agree with map above. I graduated econ from U of Chicago in the mid 2000s and also had a similar experience with the professors being rigidly adherent to empirical analysis and fact over dogmatism. I distinctly remember my International Economics class where the professor, through the rigors of his data-based case studies, came to the conclusion that the benefits to international trade were uneven on the micro-level. More striking was that he even argued international trade was net negative for certain countries.

While I was astounded by this occurrence, it certainly was not unique.

As far as an economics degree is now, it essentially is a mathematics-lite degree that allows for the development of useful analysis skills: statistics, econometrics, etc. Economics degrees are absolutely not about learning much in terms of practical knowledge, rather, they are about learning methodological approaches to problem solving and analytical thinking.

Anonymous said...

As far as an economics degree is now, it essentially is a mathematics-lite degree that allows for the development of useful analysis skills: statistics, econometrics, etc. Economics degrees are absolutely not about learning much in terms of practical knowledge, rather, they are about learning methodological approaches to problem solving and analytical thinking.

The econ degree at Harvard and elsewhere is not a math-lite degree at all. There's hardly any math at all.

Anonymous said...

Is it pronounced eek or eck?


Mr. Anon said...

I don't understand the gourmet dog-food trend. Dogs will eat garbage straight out of the can; dogs lick up thier own vomit. Dogs are about the least discriminating eaters there are. Feed a dog anything better than garbage or vomit, and he will love you for it. So why serve little fluffy pate and risotto?

Peter the Shark said...

There is absolutely no reason to study "business" in college. You learn how to run a business on the job, not in a classroom. Nor is "business" a discipline - to be a good businessman you need to draw on actual disciplines such as math, English, maybe geography and history, etc, and you should learn those skills in high school. The introduction of "business" at numerous colleges as a major starting in the 1950s was basically an admission that colleges had become credential factories rather than places of learning. I agree that "Economics" is the elite version of the same - a vocational major for people who don't really need a college education for their future careers.

Anonymous said...

I've been involved in both econ and business, through college, grad school and as faculty. Controlling for the school, the econ faculty are always more interesting, intellectually curious, and just plain more aware of what they're doing, than b-school faculty.

Sam said...

Luke Lea
Depends on what you mean by free trade. If you consider NAFTA and the EU for being free trade organisations then yes free trade is the dogma in the establishment and not just the right wing.

However among the hardcore anti-establishment free marketeers these organisations are enemies of free trade. This is why in the 90's Paleo movement you had Buchanan on the one hand railing against NAFTA for taking away American jobs through free trade and the paleo libertarians on the other hand opposing it for NOT being free trade but managed trade on behalf of big business at the expense of everybody else.

You can always tell by the fact that the 19th century which had genuine free trade is always railed against as an era evil capitalism of exploitation. Before I got understand the difference I didn't get why leftist supported the EU when it supposedly stands for free trade.
Here is the paleo-lib attack on NAFTA

With that qualification I still want to hear the case against free trade by Saler and other paleo-cons. Would love to read or hear any detailed refuation of free trade. I have asked before but I normally get a refence to Japan, China etc rather than any theoretical or empirical study.

Anonymous said...

LOL - knowing that it's pronounced "eck" not "eek" is another status marker! Isn't it great how that works?

beta_plus said...

The purpose of studying in Econ is to get a quantitative degree that most employers will respect (yes, there are decent econ jobs outside of banking, believe it or not). Most people can't hack it through a Mechanical Engineering degree because either they can't comprehend it or (as in my case) the workload becomes overwhelming - you are simply given more than you can do. It's also less risky than engineering in that engineering degrees usually come with strict time limits on completion and the number of classes that one can fail without expulsion while having credits that are difficult if not impossible to transfer to other schools.

It also gives one the opportunity to take computer and math classes at a pace that realistically allows mastery that are also highly valued that would simply be impossible for most given the workload required by an Engineering degree.

It's not about conspiracy, it's about employability.

An English Degree from Princeton is just as worthless as one from MidWest State University. Those great networks of the rich aristocracy giving favors to their children long ago abandoned the Ivy Leagues as the schools grew so wealthy that they could no longer control them. Not to mention, the world is simply so much more competitive now that even those priveleged children who do go need to show a bit more for their efforts.

They American Aristocratic Rich are more likely to be networking at country clubs or beach communities. If you are looking for a grand conspiracy, you'll have much better luck finding it in Martha's Vineyard than Yale.
Having gone to a NE boarding school, it sure didn't look like they really do that anymore at school.

Silicon Valley Guy said...

Yes, economics is common sense, but mostly only after you've studied economics and given it time to sink in. I work with some intelligent engineers and it's stunning how confused they can be about common sense economics. For example, their investments consist of the stock of their own company, of related companies (because those are the companies they think about), and real estate in Silicon Valley (highly correlated with those stocks, as well as with the market value of those engineers' human capital).

Or, so close to one of this blog's central concerns: think of the Ameican people's disastrous failure to grasp the simple economics of immigration. Yes, there's self-deception and misguided nostalgia at play here, but right now the contest is a close one and isn't it plausible that if blacks could be widely made aware of how bad mass low-IQ immigration is for them, that a possibly decisive fraction of them might put their *economic*self interest ahead of their emotional animus against everything "white" that they might rally to the cause of patriotic immigration reform?

As for Steve, he's selling himself short. A few months ago he gave us an explanation of the efficient markets idea that was so stunningly lucid and elegant I'm kicking myself right now that I can't remember what post it was in.

map said...

Anonymous at 11/29/13, 10:44 PM -

The mathematical rigor of an econ degree is not uniform across programs. The key distinction is whether or not the program is teaching Price Theory. At the U of C, all of the starting microeconomics classes are price theory classes, which are mathematically rigorous because all graphical displays can be converted to equations.

Other economic programs may not include a rigorous study of price theory and instead treat econ as a survey course of competing theories.

map said...

Anonymous at 11/29/13, 10:44 PM

Who did you have for international trade?

I've also come to a similar conclusion about international trade, mainly by rejecting David Ricardo's comparative advantage theories with a more "absolute advantage" model.

Anonymous said...

"Real Businessmen Respond to Quantity Signals, Not Price Signals"

Anonymous said...

I had no idea that "business" is now the most common undergrad major, by a wide margin.

Maybe someone can enlighten me: aside from intro accounting, is there anything in this 4-year course of study which is useful in business and not picked up within a month on the job?

Is a business degree from PapaDoc U (or Criminal Justice) similar to a PhysEd degree (now Kinethesiology)from decades ago?

jody said...

maybe a harvard economist can explain why the prices of the 4 main bitcoin exchanges are so different, and why nobody is making a killing via arbitrage.

then again, i think if somebody like paul krugman tried to understand the economics of ASIC mining machines his head would probably explode.

Philip Neal said...

Britain had several wage freezes under Harold Wilson (Labour) and Edward Heath (Conservative). Both studied Philosophy, Politics and Economics at Oxford (it is not possible to study economics as a single subject), and Wilson was awarded more or less the highest possible grades.

Anonymous said...

The Econ major at Stanford (2009) was highly math-centric. It was not a pre-business program, although no doubt many Econ majors went on to business and finance jobs or business school. (I work at a trading firm.)

The Econ program was highly rigorous with respect to multivariable calculus, statistics, etc. If anything, it was taught with an eye toward producing future Econ PhDs, even if only a small proportion of students actually wound up taking that path.

My most prominent professor was probably John Taylor, who was extremely numerate for a political appointee (Under Secretary of the Treasury). Even in that class, which featured plenty of anecdotes and talk about current events, there was a lot of math.

Personally, I think there is much value in being able to think about problems in a structured, quantitative way. Ideally, a good Econ program, like a good math or physics program, accomplishes this rather than fostering extensive discussions about dog food marketing.

Moreover, I wouldn't blame a quantitative, empirical method of inquiry for the misguided political or social conclusions that some people may draw. If models are wrongly specified, if motives are self-interested, or if some people have an autistic indifference to the nation-state, etc., that's not the fault of Economics. Garbage in, garbage out.

In any case, where are you least likely to find, say, fanatical devotion to open borders: an Economics Department, an Ethnic Studies Department, or an agribusiness boardroom full of b-school grads? I'd say the Econ Department.

Anonymous said...

"Britain had several wage freezes under Harold Wilson (Labour) and Edward Heath (Conservative). Both studied Philosophy, Politics and Economics at Oxford (it is not possible to study economics as a single subject), and Wilson was awarded more or less the highest possible grades."

My understanding is that for PPE you get an introduction into all three, but after the first year you focus on only two of the disciplines, so it's possible Wilson and Heath did not actually study all that much economics.

Not that field undergraduate study matters all that much -- Enoch Powell studied classical languages but had a better grip on the fundamentals of economics than any other politician of his era. Great man.

Jerry said...

It was I think in The Closing of the American Mind (and not in Giants and Dwarfs) that Allan Bloom pointed out that the equivalent to an econ or business degree would be a degree in sexology... which would cater to a student's desire for sex in the same way that a business degree caters to his desire for money. Instead of thinking about the Good Life, students are now merely acquiring vocational skills, Bloom argued.

By the way, what a confused and beautiful book The Closing of the American Mind is! Steve, have you read it? It would be great to have your take on it.

Anonymous said...

Most undergrad business sub-majors are garbage. My undergrad used to boast that it had one of of the best Marketing programs is the country. La-dee-fricken-da. If you are looking for someone to do marketing work, you're better of hiring an English major who at least knows how to write, rather than someone with a bogus "Marketing" degree.

The one business sub-major that most certainly is not garbage is Accounting. The career path is relatively straightforward; get an undergrad degree in Accounting, pass the CPA exam, go work for a prestigious accounting firm. In fact, the overseers of the profession became a little embarrassed at how straightforward and vocational the path to an accounting job had become, therefore they decided to require a fifth undergrad year to be eligible to sit for the CPA exam. Most likely so that they can claim that accountants are just as academically well-rounded as those Econ-majoring Wall Street big shots.

E. Rekshun said...

@Anon: "...if you want to be a professional economist, it is better to take a lot of math courses than a lot of economics courses."

I think I recall seeing somewhere that Econ undergrad majors have the highest or nearly the highest GRE math scores. (Education majors have the lowest.)

Anonymous said...

The econ degree at Harvard and elsewhere is not a math-lite degree at all. There's hardly any math at all.

That's not necessarily true. I wasn't an ec concentrator but knew some several of them, and at a minimum, they all had studied basic multivariable calculus and linear algebra. That included a few who took Ec 1010 instead of Ec 1011, which was a decision related to the timing of their math courses. For the more mathematically gifted, it was possible to add as much math to the curriculum as required. One of my ec concentrator acquaintances took at least one semester of Math 55.

David said...

>Maybe someone can enlighten me: aside from intro accounting, is there anything in this 4-year course of study which is useful in business and not picked up within a month on the job?<

Better to get that month out of the way before starting the job.

Although credentialing is indeed a pain. Here is my Law of Credentialing:

In any field, the amount of necessary credentialing is directly related to an increase in the population of job-seekers and/or a decrease in the number of available jobs. The larger the mass, the straiter the gait.

I was looking for a job in Tennessee in 2009 and came across an ad for a job working in a small library branch. The pay was something like $9.00 per hour. The required qualifications included a Ph.d in Library Science and 10 years of experience.

fondatori said...

I've noticed that Economics is the prestige 'social science' in the way sociology and psychology were in mid-20th century America. Looking at culture back then you can't get away from the 'findings' of psychology and sociology, it seems like every learned person had to respond to them in some way. Of course nowadays no novelist or whatever needs to 'respond' to whatever psychologists 'figure out'.

Nowadays economics are not as relevant to the broader culture but seem to be just as prestigious among much of the educated class.

Cail Corishev said...

David, yes, I looked into being a librarian once. The requirements to work in a library for minimal pay (aside from the free volunteers they get) are completely insane. Apparently so many people want to be a librarian that you basically have to buy your way into the job by spending so much money on the credential that you'd need another job or a wealthier spouse to cover the cost.

Sordid said...

"Will eating nuts save your life?"

It did in Oz

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