How to suc­ceed as an aca­d­e­mic econ­o­mist

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A blog par­tic­i­pant (Lyon­wiss) recently made a com­ment about the gen­eral state of aca­d­e­mic eco­nom­ics that was so “spot on” I wanted to share it more widely. I have of course fol­lowed the exact oppo­site of the con­ven­tional route to pub­lish­ing suc­cess that Lyon­wiss out­lines here–and I’ve encoun­tered the neg­a­tive con­se­quences he notes, of rejec­tion by neo­clas­si­cal ref­er­ees and edi­tors.

Here is Lyonwiss’s fool­proof for­mula for pub­lish­ing suc­cess in aca­d­e­mic eco­nom­ics:

Aca­d­e­mics wants to write research papers and have them pub­lished. Uni­ver­sity bureau­cra­cies are not only bean coun­ters, they are also paper coun­ters. Pro­mo­tion depends on the num­ber of papers pub­lished. Pub­lish­ing papers is not the same thing as actu­ally doing research.

Hav­ing read far more  eco­nomic papers that I care to admit, I have worked out the “secret” for­mula for achiev­ing a volu­mi­nous pub­li­ca­tion record in the sub­ject. The “recipe” for pub­li­ca­tion suc­cess is as fol­lows.

Step 1: Cite the work of as many poten­tial ref­er­ees to your paper as pos­si­ble, as this will soothe their egos and shows that you are one of them. Make sure that your paper is seen as merely an exten­sion of the work of one of the gurus and you are not going to “rock the boat”, chal­leng­ing the estab­lish­ment.

Step 2: For the bulk of your paper, bam­boo­zle your readers/referees with a com­pli­cated model or argu­ment, mak­ing any assump­tions you need (how­ever unre­al­is­tic), because Mil­ton Fried­man has already cov­ered you with his essay on “the method­ol­ogy of pos­i­tive eco­nom­ics”. If you have enough com­plex­ity in math­e­mat­ics or argu­ment, it is likely that the reader/referee will not bother to fol­low the heart of your paper in detail.

Step 3: It is vitally impor­tant that in your con­clu­sions that you only make mod­est claims in sup­port­ing the sta­tus quo, such as eg the evi­dence or the model lends sup­port to the effi­cient mar­ket hypoth­e­sis or glob­al­iza­tion or what­ever. Quite often, your con­clu­sions do not have to fol­low from what you did in Step 2. Any strong con­clu­sions, par­tic­u­larly when chal­leng­ing the sta­tus quo, will lead a much closer scrutiny of your paper by the ref­eree, who is tak­ing a career risk in accept­ing your paper. As the addi­tional effort is not per­son­ally rewarded, the eco­nom­i­cally ratio­nal action for the ref­eree is to sim­ply reject the paper.

This “recipe” leads to career suc­cess for many, as there are thou­sands of papers pub­lished by many eco­nomic pro­fes­sors who have made lit­tle dif­fer­ence to eco­nom­ics in any way which mat­ters. The “Egg and Krug” paper is good exam­ple of the “recipe” in action. Read­ing between the lines in some of what Krug­man wrote, I sug­gest that he appears to admit to play­ing such a game.

Aca­d­e­mic col­lu­sion in partly caus­ing the global finan­cial cri­sis has been doc­u­mented in the “Inside Job”, which won the recent Oscar for best doc­u­men­tary. Noth­ing really sur­pris­ing there, but worth see­ing nev­er­the­less. The fraud involv­ing acad­e­mia is prob­a­bly quite exten­sive, e.g. the recent res­ig­na­tion of Gut­ten­berg, the Ger­man for­eign min­is­ter. Full marks to Steve for fight­ing such an aca­d­e­mic fraud.

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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  • Thanks Robbo. That’s a good piece, with more sound analy­sis at Prag­matic Cap­i­tal­ism linked to it.

  • Fur­ther to the Gillard/Clinton planned US Mil­i­tary Occu­pa­tion of Aus­tralia:

    Today’s West Aus­tralia News Rag of Rub­bish (and they call it jour­nal­ism) on pages 5 & 20 are arti­cles to the glo­ri­fi­ca­tion of the US occu­pa­tion of Aus­tralia, being reported from the Hal­lowed Halls of Fame in the USA where Julia is hailed in the flower parades of mag­nif­i­cence of the return­ing hero­ine –more per­haps as a vol­un­tar­ily and eager Cleopa­tra ; the whole of AUSTRALIA with a par­tic­u­lar focus on the West Coast which means West Aus­tralia (maybe that is why Gillard let the incum­bent Pre­mier moron-in-chief win the recent GST bat­tle). The War is Over! 

    And, we lost!
    Again. Keat­ing must be so proud.

    It has been rumored that over 100,000 US sup­port staff will be deployed to WA; houses, bases, air­fields, Satel­lite listen/relay Sta­tions (we already have that), ports, dry docks. whore houses, bars, drug dens, guns, drugs and drugs, puke halls, MP’s, pimps, and all that that involves the Camp Fol­low­ers in their entourage . We are about to become the new US pre­ferred point of re-trans­port for illicit drugs from the West­ern Asia (Mid­dle East) to the Home­land (USA). Oh, happy days for Aus­tralia. We now offi­cially have two penal colony Mas­ters. Next thing we know that envoy Tony Blair will become Gov­er­nor Gen­eral and Regent for the Crown.

    Memo to Gillard: The USA is bank­rupt and in final decline! By the end of 2011 the US will be a spent force and its real strat­egy in occu­py­ing Aus­tralia is to gain exoge­nous booty, loot and con­trol of new resources free of charge. This occu­pancy will be paid for by Aus­tralians.

    Ques­tion# 1: Are you rav­ing Mad?
    Ques­tion #2: Have you never seen what the US does to coun­tries it occu­pies? FYI it destroys the whole moral fiber and socio-eco­nomic ethic. It is a viral par­a­site that has obvi­ously already lodged in the oper­a­tions cen­ter of the host.

    http://www.financeandeconomics.org/Articles%20archive/2011.03.07%20Crunchtime.htm

    Back to my story: ~2 years ago I pre­dicted that the USA needed to make War and occupy a new Host in order to strive to sur­vive and half in jest, I sug­gested that Aus­tralia fits its require­ments per­fectly. In all hon­esty I did not envis­age then that Aus­tralia would be given to the USA as a free gift and paid for by its cit­i­zens.

    Am I sur­prised? No.

    It is a sad day.

  • mfo

    Peter­jbolton

    I not so long ago read an arti­cle that an wholly owned Aus­tralian com­pany did win a small cater­ing con­tract worth a few hun­dred k in one of our big mines. All the other bil­lions of dol­lars in works con­tracts went to over­sees busi­nesses.
    I wouldn’t mind get­ting a copy of the con­tract so I can frame it as Aussie suc­cess story.

  • @ mfo
    “ouch”, but please define “our”.

    We Aus­tralians are not allowed to do much except farm and dig holes for OP.
    It is what hap­pens in a Penal Colony.

    It is also why our “lead­er­ship” spend most of their time in the US and the UK — get­ting their orders and Gongs. You don;t give con­victs a sec­ond chance, Mate!

  • Just for the record, the US Mil­i­tary Occu­pa­tion that Julia Gillard is bring to fruition, is reported as for pur­poses of our con­fronta­tion of China.

    China, if you are not aware, is our largest (if not only sig­nif­i­cant part­ner) Trad­ing part­ner. Good rea­son to whack them I guess — Must be all them ~50 to ~70 Mus­lims that is upset­ting the fanger Lobby in Can­berra.

    Sick are these times and the behav­iours of the bar­bar­ians who call them­selves, “lead­ers”.

  • sir­ius

    I read
    http://www.businessinsider.com/the-myth-of-the-exploding-us-money-supply-2011–3

    and was very dis­sat­is­fied with the analy­sis. It is more reward­ing and infor­ma­tive to read the com­ments from the var­i­ous posters…

    The last one (at the cur­rent time) is…

    Beware the Koolaid.

    This arti­cle is set up as a false dichotomy — if not this, then not that.

    There are plenty more ‘this’es and ‘that’s that are not pre­sented, but should be taken into con­sider in a con­ver­sa­tion such as this to be taken as seri­ously cred­i­ble.

    Con­text, peo­ple, con­text.

    I couldn’t agree more.

  • sir­ius

    A whole series of videos by a very ded­i­cated young fel­low…

    IMHO Bril­liant. Not many peo­ple though can han­dle this.

    Search on YouTube for “how it all ends” or go to the fol­low­ing link

    http://www.youtube.com/watch?v=mF_anaVcCXg&feature=PlayList&p=92EE5DBE2987982F&index=0&playnext=1

    Risk man­age­ment

    http://www.youtube.com/watch?v=LwuDDZ5HM_U&feature=PlayList&p=92EE5DBE2987982F&index=7

    Solu­tion

    http://www.youtube.com/watch?v=L7z6lHW4vzk&feature=PlayList&p=92EE5DBE2987982F&index=39

    This is how I con­sider things. It took sev­eral mil­lion years of sun energy to cre­ate the com­pacted energy we call oil. Dur­ing this time the atmop­sphere of the Earth was chang­ing.

    Now con­sider that we have burnt through roughly half of that oil energy in about 100 years (I dis­count the early years after 1859 since oil use was min­i­mal then com­pared to now).

    Is it not then con­ceiv­able that this amount of energy released in such a com­par­a­tively short period of time would indeed have an mate­r­ial effect on cli­mate?

    Let me be clear here I con­sider that I am sur­rounded by B*llSh*t sci­ence and I have been informed on sev­eral occa­sions that the “sci­ence” that belies the global warm­ing debate has been dis­cred­ited.

    How­ever I look to my own intu­ition about these things.

    I usu­ally ignore the “cli­mate change” debate as there is a whole host of other impor­tant things that need to be resolved and for which there is clear evi­dence to sup­port them.

    Finally I want to pose another ques­tion “What hap­pens to Aus­tralia when she had dug up ‘all her good stuff’ and shipped it off to China?”.

    I know this may take “sev­eral years” and peo­ple often don’t con­sider things a prob­lem if that prob­lem is a few months away let alone a few years but nonethe­less what will Aus­tralia use as a replace­ment busi­ness ?

    It still feels odd to dig up stuff over a few years/decades, stuff that you can­not replace and ship it abroad. Seems bizarre, espe­cially now.

  • Rajiv

    Alan Gres­ley,

    Do not rely on wikipedia, par­tic­u­larly on polit­i­cal top­ics — and “Club of Rome” has become a polit­i­cal topic. You quoted accu­rately from the wikipedia entry .But the wikipedia quote is incor­rect, and is a col­lec­tion of phrases that have been mod­i­fied, and stitched together to imply a mean­ing to what was writ­ten, that was not in the orig­i­nal text.

    The orig­i­nal text can be found here

    I can­not copy and paste from the book, because it is a scanned image and does not have text that can be copied or searched.

    See pages 70 and 71 of the book (ref [5] in wiki entry). In the ref [6] of the wiki entry (page 115 of the book) which is also referred to, the quoted phrases are not present.

    In my research work, I have found that while wikipedia is use­ful, it is often inac­cu­rate, and one has to go to the orig­i­nal sources, as well as check­ing other ref­er­ences.

  • Christo­pher Dob­bie

    huh?!

    I think you need to re analyse your state­ment that you think you’re sur­rounded by Bullsh*t sci­ence espe­cially after you just pro­moted “how it all ends”.

  • Philip

    This panel and the selected topic looks inter­est­ing.

    The Strug­gle Against Main­stream Eco­nomic Ide­ol­ogy

    The three papers will speak to dif­fer­ent aspects of this essen­tial issue, and with dif­fer­ent view­points. Michael Perel­man will directly address decod­ing eco­nomic ide­ol­ogy. Howard Sher­man will present on the issue of get­ting polit­i­cal econ­omy back into the under­grad­u­ate cur­ricu­lum. Doug Hen­wood will talk about how all these years of try­ing to “cor­rect” main­stream eco­nomic ide­ol­ogy have led him to the con­clu­sion that it’s nearly impos­si­ble: the “com­mon sense” of the masses is so deeply formed by pre­vail­ing social and ide­o­log­i­cal struc­tures that no amount of fact-check­ing is going to change that. ”

    http://www.leftforum.org/civicrm/event/info?reset=1&id=248

  • Lyon­wiss

    Rajiv

    Good point. The quote from Wikipedia is mis­lead­ing. The state­ment that human­ity is the enemy only refers to the fact that human­ity is the cre­ator of many of its own prob­lems. Any link to a con­spir­acy to estab­lish global gov­ern­ment to con­trol human­ity is rather ten­u­ous in the book. Just the oppo­site, as fail­ures of gov­ern­ments detailed in the book argue against a global gov­ern­ment.

    The sug­ges­tion of a global soci­ety is based on the fact that many prob­lems are global in scope and need a global forum. They point out (p. 125): “dif­fi­cul­ties of inter­na­tional gov­er­nance, at which level many of the national prob­lems tend to accu­mu­late and become com­pounded”.

    There isn’t much I could take excep­tion to in the book. Their solu­tion includes “Think global, act local” approaches and reliance on indi­vid­u­als, which means (p. 136): “the role of edu­ca­tion is thus even more vital than we have imag­ined.” The need to make all indi­vid­u­als think clearly makes the cor­rup­tion in the insti­tu­tions of learn­ing (also referred to in “Dis­ci­pline Minds” you men­tioned) all the more unfor­giv­able.

  • WAR or “mil­i­tary Key­ne­sian­ism” From Zero­Hedge — link below

    For­mer Gold­man Sachs Ana­lyst Charles Nen­ner Joins Marc Faber and Ger­ald Celente in Pre­dict­ing Major War”

    Val­i­da­tion: Is Aus­tralia to be the Host for the next USA ini­ti­ated War? and will this War be against Asia — Was Orwell cor­rect but got the dates wrong (like the rest of us)?

    I am get­ting to sound like a crack­pot but every­thing I have said since Per­e­stroika has been cor­rect in major socio-eco­nomic terms. 

    Answer: Yes, the USA is dri­ven by freaks of Nature and they will Ini­ti­ate World War III.

    Australia’s Posi­tion?

    1. Have we no choice?
    2. Do we lust to War as well ?
    3. Is our econ­omy ready to implode and we think that we have no choice, as well?
    4. Does Aus­tralia have some regional ambi­tions on Asia?
    5. What does Aus­tralia get for Host the US War Machine?
    6. Can’t we remem­ber those that did not come home after WWII, Viet­nam, Iraq, Afghanistan?
    7 Have we become insane? 

    http://www.zerohedge.com/article/former-goldman-sachs-analyst-joins-marc-faber-and-gerald-celente-predicting-major-war?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+zerohedge/feed+(zero+hedge+-+on+a+long+enough+timeline,+the+survival+rate+for+everyone+drops+to+zero)

    War is my great­est fear and it should also be your great­est fear.

  • Rajiv

    @Lyonwiss,

    A friend of mine Mar­tin de Waele just pub­lished a book — “Gov­ern­ing the World: The Eth­i­cal Imper­a­tive.” In it he talks of ethics and how the seek­ing for wealth leads to uneth­i­cal behav­ior.

    In the chap­ter “How the Seek­ing of Wealth Cre­ates Poverty” he states:

    In a remark­able lit­tle book titled “Poverty in Plenty: The Ethics of Income,” pub­lished in 1931, Hob­son expounded on the argu­ment that free mar­kets do not lead to just prices. His argu­ment holds equally well for mar­kets of prod­ucts as for labor mar­kets. While Hob­son cer­tainly should not be labeled as a social­ist or a com­mu­nist, he was deeply con­cerned about the lack of an enlight­ened under­stand­ing of the eco­nomic sys­tem and the absence of an eth­i­cally jus­ti­fied eco­nomic order.

    Con­trary to the eco­nomic beliefs of the day, Hob­son argued that an inequitable dis­tri­b­u­tion of income and prop­erty causes mal­ad­just­ments in pro­duc­tion and con­sump­tion that, in turn, lead to unem­ploy­ment, poverty, and waste. This is so, he argued, because prices are deter­mined both by the force of eco­nomic power and the pur­suit of per­sonal gain. His argu­ment goes directly counter to the belief that, through the play of com­pet­i­tive self-inter­est among buy­ers and sell­ers of prod­ucts and ser­vices, the laws of sup­ply and demand lead every eco­nomic par­tic­i­pant to apply his pro­duc­tive ser­vices in such a way that the global out­come is ben­e­fi­cial to all.

    In the spe­cific realm of mar­kets for prod­ucts, for exam­ple, Hob­son denied that the play of sup­ply and demand leads to a just price.

    On the whole the book is well worth read­ing.

  • mahaish

    i dont know sir­ius,

    the arti­cle is pretty spot on, from just about any way you look at it

    sup­ply siders and hyper­in­fla­tion­ists take note,

  • sir­ius

    As I said pre­vi­ously — peo­ple often mis­un­der­stand me. We are guided by ou pre­dis­po­si­tions. So when I show some­thing to you you will likely focus on some­thing dif­fer­ent to what I was try­ing to demon­strate.

    This is (one of the many) dif­fi­cul­ties with blog for­mats as opposed to being face-toface with some­body and be able to high­light and explain what I would wish oth­ers to see.

    Not wish­ing to engage in a long dia­logue I will say two things…

    Firstly. What I really liked was how the young man put for­ward the use of sci­ence, prob­a­bil­ity and results based upon *incom­plete infor­ma­tion*. More­over the young man points out we are in the “mid­dle of the exper­i­ment”.

    Sec­ondly. The “b**ts**t” sci­ence was really aimed at what appar­ently has been a leak of a whole bunch of (edited) emails from a UK uni­ver­sity where the “sci­ence” has alledgedly been that of wish­ing a desired result and then “fit­ting the data” to arrive at this result. (Sounds famil­iar with eco­nomic sta­tis­tics no).

    Not that all this makes much dif­fer­ence. What has become very appar­ent to me these last 2 years in par­tic­u­lar is that peo­ple will believe what­ever they want to believe.

    I am about to start read­ing a book
    “The Logic of Fail­ure: Rec­og­niz­ing and Avoid­ing Error in Com­plex Sit­u­a­tions ”

    http://www.amazon.com/Logic-Failure-Recognizing-Avoiding-Situations/dp/0201479486/ref=sr_1_fkmr3_1?ie=UTF8&qid=1299844852&sr=1–1-fkmr3

    to see if that is use­ful for peo­ple to read to see if it helps peo­ple appre­ci­ate “dynam­ics”. Peo­ple think I am try­ing to con­vince them of things. That is no longer true (it was). I just want peo­ple to see as much prac­ti­cal and cred­itable infor­ma­tion as pos­si­ble.

    Peo­ple tend to dis­miss what they regard as “incon­ve­nient”.

  • chain­gangchar­lie

    Is neo­clas­si­cal econ not some­what sim­i­lar to the old idea of ‘the divine right of kings’ , except updated to read ‘the divine right of financiers’ ?
    The par­al­lels are obvi­ous. Mon­archs sup­ported the idea that they were divinely ordained because it put them in an unas­sail­able soci­o­log­i­cal posi­tion, right on top of the heap. ( “A-Num­ber One ! King of the Hill!” sang Sina­tra ) They also sup­ported those who were pre­pared to explain to the hoi pol­loi ( with impec­ca­ble logic) exactly why & how they had to be where they were. ( “It’s a law of nature!”)
    Nowa­days we have an equally barmy the­ory ( neo­con econ) sup­port­ing the idea that all things finan­cial are self max­imis­ing per­fect dis­tri­b­u­tion mod­els that pro­vide the great­est mate­r­ial ben­e­fit to the great­est num­ber via the awe inspir­ing mech­a­nism of per­fectly effi­cient & ratio­nal mar­kets & the mag­i­cal abil­ity of these won­der­ful mar­kets to actu­ally self reg­u­late them­selves , like the trusty per­fect gov­er­nor on a steam engine, ever in well oiled equi­lib­rium, hum­ming mer­rily away in the best of all pos­si­ble worlds.
    The the­ory seems to be backed by more in the way of ‘you wouldn’t under­stand’ math­e­mat­i­cal mumbo jumbo than observed cor­re­spon­dence to real­ity — “only a Phd in eco­nom­ics can hope to com­pre­hend!” ( yes some Fed cen­tral banker actu­ally said that ) .
    So when the day came when the mag­nif­i­cent self reg­u­lat­ing global cap­i­tal­is­mus machine actu­ally fell to bits one of the few con­so­la­tions was watch­ing the New High Priests fight­ing down the mor­tal panic & com­ing up with ever increas­ingly nutty rea­sons why the Per­fecto Machine needed just a teeny weeny few tril­lions of tax­payer wealth to patch it up back to per­fec­tion & all would doubt­less be well again. O Joy.
    Neo Clas­si­cal Eco­nom­ics is much more reli­gion than sci­ence. And those wealthy few who ben­e­fit will of course do any­thing they can to keep This Insane Finan­cial Reli­gion going, bankrolling trusts & foun­da­tions & uni­ver­sity chairs , telling you that your won­der­ful bright tom­mor­row is *just around the cor­ner* when the Mag­i­cal Money Machine finally Trick­les your share your way, in the mean­time swan­ning off to Davos with the other bright Lords of Finance in their Mag­i­cal Cloaks of Power.
    Stamp­ing out this per­ni­cious dis­ease of an ( ahem) “Eco­nomic The­ory” , con­sid­er­ing the resources of it’s uphold­ers, con­sid­er­ing the power of those who ben­e­fit, will take a while, as it took a while to stamp out the vested inter­ests of Catholi­cism in Eng­land.
    ( Am I sug­gest­ing they should be burned at the stake ? Well, never rule any­thing out … )

  • Lyon­wiss

    Very true. The Financiers have bought out gov­ern­ments (cam­paign dona­tions, bribes, reg­u­la­tory cap­ture etc.) and the aca­d­e­mic econ­o­mists (endow­ments, grants, named chairs etc.) These groups are in cahoots to con­sol­i­date the mon­e­tary and polit­i­cal power of the elite. 

    Money from ordi­nary peo­ple has been stolen and trans­ferred to the elite through bailouts and money injec­tion using gov­ern­ment debt, higher taxes and infla­tion. The fraud has been made pos­si­ble by the neo­clas­si­cal decep­tion of the mar­ket and by the pub­lic ser­vice decep­tion of the gov­ern­ment. Mar­kets have failed and gov­ern­ments have failed. 

    Both the mar­ket and the gov­ern­ment have lost cred­i­bil­ity. There is an intel­lec­tual vac­uum wait­ing to be filled. We can start with a new eco­nomic par­a­digm.

  • You guys obvi­ously don’t belong to the right Club for if you did, you would know that you must buy both the gov­ern­ment plus the banks in order to suc­ceed as they are a syco­phan­tic pair.

    Those who donate more than £50,000 in a sin­gle year can join the “Leader’s Club” and get access to din­ners, lunches and other meet­ings with the Tory party leader.

    The above is the algo­rithm that defines “Eco­nomic The­ory” per­fectly.

    http://www.guardian.co.uk/business/2011/mar/11/serious-fraud-office-conservatives.

    Also yes­ter­day it seems that a Brazil­ian Banker ran down 40 bicy­cles rid­ers and claims his inno­cence (self-defense) while the BoA appear to be dump­ing their toxic assets into a “bad bank” which I assume will be secu­ri­tized and sold on.

    But a mes­sage from “A” should strike ice-cold fear into the bel­lies of those bankers :http://www.zerohedge.com/article/hacker-group-anonymous-brings-peaceful-revolution-america-will-engage-civil-disobedience-unt

    Asym­met­ric war­fare has risen to the chal­lenge of insti­tu­tional impo­si­tion: The War has begun.

    Ques­tion du jour: Why do the Irish call their Pound a “Punt”.
    Answer: Because it rhymes with bank man­ager.

    Insan­ity & Des­per­a­tion appear to be two com­modi­ties that are expe­ri­enc­ing no short­ages but if Japan goes off with Nuclear radi­a­tion, it will bring a quick end to the stu­pid­ity of Nuclear Energy — not to men­tion the need­less loss of lives of mil­lions of peo­ple all around the World.

  • DrBob127

    scream­ing clax­ons

    Risky loans stage come­back”
    http://www.ft.com/cms/s/0/9f7c528c-4da3-11e0-85e4-00144feab49a.html#axzz1GWVSyNmY

    Mean­while, the boys at the top are get­ting all they can out of it before crash v 2.0

    Mean­while, pri­vate equity-backed com­pa­nies are bor­row­ing at a record rate this year to pay spe­cial div­i­dends to own­ers. At $15bn, the pace fol­lows a record year for pri­vate equity-related div­i­dend deals in 2010.”

  • Lyon­wiss

    Here is an exam­ple of what uni­ver­si­ties are doing to aca­d­e­mic stan­dards:

    http://www.theaustralian.com.au/higher-education/macquarie-and-its-malcontents-under-scrutiny/story-e6frgcjx-1226017971156

    This inci­dent is not unusual among uni­ver­si­ties or other pub­lic insti­tu­tions. Busi­ness or pub­lic admin­is­tra­tion, i.e. bureau­cracy or man­age­ment sci­ence is another great con.

  • Philip

    If you think that man­age­ment sci­ence is a con, you may be inter­ested in this arti­cle:

    http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-the-management-consultancy-scam-2057127.html

  • noah cross

    Funny and true at the same time. Mgt Con­sult­ing is a mon­strous con but it works because organ­i­sa­tions are so fear­ful of risk. If there is a fault they can blame the con­sul­tants. The con­sul­tants are a priest­hood. The worst of is that now so many man­age­ment jobs require an MBA ( this is a degree that George W Bush has and is obvi­ously with­out any merit) but the mind­less accep­tance and val­i­da­tion of the MBA and Mgt con­sul­tant will not end.

  • Philip

    noah cross,

    I have an MBA from an Aus­tralian uni­ver­sity. What I even­tu­ally real­ized at the end (but they don’t tell you) is that man­age­ment sci­ence is barely a sci­ence. Pre­vi­ously accepted facts are quickly dis­carded in favor of new man­age­ment gim­micks, with the cycle occur­ring every 5–10 years. As bad as it is, I would rate it slightly higher than that of eco­nom­ics. For instance, knowl­edge man­age­ment was the big new thing of the 2000s, but now it is been qui­etly swept away because aca­d­e­mics are start­ing to real­ize it is a man­age­ment field that has very lim­ited util­ity and is mostly based upon asser­tion and assump­tion rather than empir­i­cal evi­dence.

  • Lyon­wiss

    I used to be an asset/investment con­sul­tant for a few years, long enough to have suf­fi­cient con­tact with clients to know that the con­sult­ing indus­try is largely a scam. There are some gen­uine rea­sons for con­sul­tants, such as access­ing data and data analy­sis.

    But the main func­tion (as men­tioned by noah cross and in Philip’s arti­cle) is “arse cov­er­ing” for sack­ing work­ers, for get­ting an “inde­pen­dent” advice to jus­tify all sorts of actions by com­pa­nies and gov­ern­ments such for exor­bi­tant CEOs pay increases, for buy­ing toxic CDOs in super­an­nu­a­tion, for pri­va­tiz­ing roads, elec­tric­ity etc. You name it, every major deci­sion which changed soci­ety, in the last few decades would prob­a­bly have had con­sul­tant advice as par­tial jus­ti­fi­ca­tion at least.

    But all con­sul­tants dis­claim any respon­si­bil­ity for actions fol­low­ing from their advice, includ­ing the credit rat­ing agen­cies which gave AAA rat­ings to secu­ri­ties which had 90 per­cent default rate. No one chal­lenges con­sul­tant advice, because users get the con­clu­sions they paid for and out­side observers do not have the eco­nomic ratio­nale or resources to do the demo­li­tion job.

    I have read con­sul­tant reports in my field by big account­ing houses, KPMG, PWC etc., by rat­ing agen­cies Moody KMV, S&P etc. and by indus­try lobby groups. Most do not stand up to close scrutiny either because the data are sus­pect or con­fi­den­tial or the method­olo­gies are unsound or inap­pro­pri­ate or the con­clu­sions are not jus­ti­fied by the evi­dence they present.

    Why don’t orga­ni­za­tions do their own research to jus­tify their deci­sions? The con­sult­ing indus­try exists largely due to cow­ardly and incom­pe­tent man­agers occu­py­ing the upper ech­e­lons of many major orga­ni­za­tions. It is time that the scam is exposed.

  • noah cross

    Lyon­wiss is right about mgt con­sult­ing and its effects. I can­not name names as I work in that field but I am sur­prised at the medi­oc­rity of the peo­ple who run cor­po­ra­tions and the guff they buy; mostly, it has to be said, that appeals to their van­ity and their sta­tus. Organ­i­sa­tions that will not decide cap­i­tal pro­grammes or invest­ments because they had a trauma years ago and only use con­sul­tants to make deci­sions. Their share­hold­ers would be appalled.
    I have often won­dered ( face­tiously) if any­one has eval­u­ated the total invest­ment of MBAs and the prof­itabil­ity of all cor­po­ra­tions to divine a cor­re­la­tion that shows that MBAs are worth it. Not really; it is a face­tious idea after all