Wednesday, February 18, 2009

The America Harvard Didn't Ruin

Kevin Hassett argues in a fun article for Bloomberg that "Harvard Narcissists with MBA's" killed Wall Street.
When Wall Street was run by people randomly selected from the population, it was able to survive everything. After the best and brightest took over, it died the first time real-estate prices dropped 20 percent. Are the two facts related? In other words, did Harvard kill Wall Street?
Well, there was plenty of Harvard and other Ivy Leaguers.
The statistics are striking. Back in the 1970s, it was typical for about 5 percent of Harvard graduates to work in the financial sector, according to a recent study by Harvard economists Claudia Goldin and Larry Katz. By the 1990s, that number was 15 percent. It probably climbed since then.
And the narcissism of the MBA types was plenty destructive.

What do you get from an MBA? One recent study found that MBAs acquire an enormous amount of self-confidence during their graduate education. They learn to believe that they are the best and the brightest.

This narcissism has a real career impact. Psychologists at Ohio State University studied the behavior of 153 MBA students, who were put in groups of four and asked to orchestrate a large financial transaction on behalf of an imaginary company. The psychologists observed that the students who had the strongest narcissistic traits were most likely to emerge as leaders.

According to Amy Brunell, the lead author, the results of the study had large implications for real-world settings, because “narcissistic leaders tend to have volatile and risky decision- making performance and can be ineffective and potentially destructive leaders.”

But if "Harvard narcissists with MBA's" were ruining Wall Street, that means they weren't ruining the rest of society.

If Hassett is right about the destructive narcissism emanating from Harvard, there were dozens of fields that did better because the Ivy's weren't so involved. Politics, education, the arts, medicine, engineering, architecture, urban planning, international organization, and diplomacy would have all been better off because the "best and the brightest" weren't that involved.

Wall Street might be dead, but American society as a whole would have been a gainer.

Maybe it's a good thing the Ivy's are so hostile to the military.

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