From time to
time, I get a letter from some aspiring academic who wants to know
whether he should go on to a Ph.D. in economics. He wants to know
where he can get a Ph.D. in Austrian economics.
he wants to know if an MBA would be better than a Ph.D. in economics.
While my degree
is in American history, with my concentration in colonial America,
I rarely receive an inquiry about whether a Ph.D. in history would
be wise, nor does anyone ask me which specialty or which university.
I have a stock
reply to these inquiries.
do you want a Ph.D?
What are your career plans?
Is a Ph.D. required for this career?
Why do you think the post-1968 Ph.D. glut is over?
What college wants to hire an Austrian School economist?
Why do you think a college will be looking in 3 years?
Why won’t it hire an Ivy League Ph.D.? Or a Chicago grad?
Do you plan to work for a tax-funded school?
If so, why?
There are a
series of mistakes in the minds of most would-be Ph.D. students.
The main one is some version of the labor theory of value. They
assume that if they work hard enough, and jump through enough academic
hoops, some college will hire them.
They do not
begin as entrepreneurs. They do not ask the key question: “What
is the likely state of the market in three or four years for holders
of a Ph.D. in the field that I want to earn mine in?” Why not? Because
they do not see economic value as something imputed by buyers of
the services supplied by holders of a Ph.D. They see consumer demand
as somehow generated by the work it takes to earn a Ph.D.
in free market economics should understand this. Someone interested
in Austrian School economics should see it, for Austrian economics
focuses, above all, on two concepts: (1) subjective economic value
as imputed by consumers; (2) the entrepreneur as the person who
deals with present uncertainty about the future condition of a market.
ago, I was sitting in an evening seminar for graduate students.
The teacher — I forget who — asked a question: “Why do
you want to get a Ph.D.?" I don’t recall what I said. I do
recall what Gordon Geddes said: “I like to read. If I can get hired
as a professor, I will get paid to read.” That made sense.
his Ph.D. He did not wind up as a professor. His wife, who holds
an M.A. in English, got hired at a community college. She did get
paid to read books and grade papers. Finally, they retired. Now
they both get paid to read: pensions. Sometimes our plans take more
time to execute than we think.
goal of every career should be to help members of a targeted market
to improve their lifestyles. For non-charitable careers, this means
that the people must be persuaded to pay for services rendered.
If you like
to read books, as I do, find a service that will enable you to transform
book-reading into income. This will force you to read certain kinds
of books, but for confirmed readers, this is not a major liability.
So, your motivation
should be service, but service governed by two limiting factors:
doing something you like to do at a price you are willing to accept.
There is usually a trade-off between these two. Maybe for Michael
Jordan there was no trade-off, but now he is too old to do what
he did before. He suffered a loss, though perhaps not a financial
loss, given his success as a businessman.
You don’t need
a Ph.D. to be a scholar. You need one to be hired by a university
that will pay you. But the odds against getting hired full-time
by a university are high. This has been true since 1969 in most
If you are
a good writer, you can write your way into any field. You may not
be able to get published in peer-reviewed journals, but if you make
a breakthrough, you can get your story to interested people through
the Web. The gatekeepers now guard gates for which the walls no
longer are impenetrable.
If you discover
something unique, post your findings on-line. Establish the date
of publication this way. Your academic competitors must wait until
their peer-reviewed papers get through a committee and into print.
This is fine for government-funded grants and tenure-track career
strategies, but who cares? This is for papers that will not be read,
implemented, or footnoted. A major breakthrough will be cited and
The only peer
review that counts in the world of scholarship is peer implementation
and acceptance, not some committee’s acceptance of an article that
never gets read. Peer-reviewed articles count for academia. They
do not count for academics.
got hired by a university. Neither did Freud. They changed the world.
got famous because of Capitalism
and Freedom and Free
to Choose, especially the PBS TV series. Neither book would
have counted for tenure. He established his professional reputation
with a co-authored book, A
Monetary History of the United States (1963). His co-author,
Anna J. Schwartz, joined the staff of the National Bureau of Economic
Research in 1941. She got paid to read. That helped, but it was
her work, not her employer, that made her famous.
If you are
not good enough to write your way to money and influence, then a
Ph.D. will only provide a high-risk hunting license for a lifetime
job in a no-name college, where you will be paid to teach bored
students who will not recall your name 40 years later. Or even 20
years later. Or maybe next semester.
Think of Ben
Stein’s teacher in Ferris
Bueller’s Day Off. “Anyone? Anyone?” That is your future.
The MBA, academically,
is useless. Unless you attend one of the top half dozen schools,
it will not pay off. This is the dirty little secret of the business
for the Big Six is the Rolodex factor. The schools are Harvard,
Chicago, Stanford, MIT, Kellogg (Northwestern), and Wharton (U of
Pennsylvania). You meet people who are on fast tracks. One of them
may be able to help you land a good entry-level job.
these schools, you are on your own. With well over 100,000 MBA’s,
the market is glutted.
If your employer
will pay for it, fine. But why should he? You may quit because some
other employer thinks your MBA means something.
If you have
a degree in a non-business field, such as chemical engineering,
then an MBA might look attractive. It might mean that you can talk
to engineers and managers. But top MBA programs, other than Harvard’s,
are so heavily theoretical and mathematical, that chemical engineers
do not have to learn to communicate with businessmen.
The MBA suffers
from the same problem that all professional schools do. The degree
is awarded by academics, not by people who have competed successfully
in a competitive free market. The universities screen in terms of
writing unreadable papers, not making a profit. Rodney Dangerfield
got it right in Back
you want to get paid to read, academia is for you. If you want to
get paid to communicate ideas, find buyers who are paying. Then
find out what they are paying for. Then specialize here. But you
must learn marketing. Remember the words of the late Mac Ross: “If
you build a better mousetrap and don’t have a marketing program,
you will die alone and broke with a garage full of mousetraps.”