2nd half of 14th century
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I have been visiting the Mises.org website daily since I discovered it a few months ago.

Today, I came across this blog entry by Tim Swanson, Is there a future for b-schools? (= business schools) which led me to this article Did Joseph Wharton Cause the US Financial Meltdown?(Oct. 21, 2008). I don’t have any kind of opinion about business schools, and all I know about the Wharton School is that that is where Catherine Austin Fitts graduated from, but a couple of paragraphs in the article caught my attention, because they refer to a theme I’ve been thinking about a great deal over the last few years: what is the point of going to school?

It is worth noting that among the most highly regarded presidents of the 19th century, only one, Thomas Jefferson, attended college or university. Abraham Lincoln, Andrew Jackson, and Grover Cleveland were all self-educated. These three are generally recognized as more original and independent than most of their executive peers.


Andrew Carnegie was a telegrapher and then worked his way up in the Pennsylvania Railroad; his book learning was extensive, but he acquired it from the library, not a blackboard.

I like to tell the story about a good friend of mine, highly educated and intelligent, who graduated from a British university without attending any lectures: being smart, he quickly figured out that the lecturers were all spouting information which was already available in the library, so that was where he spent most of his time (he no doubt had seminars and other small classes which he had to attend).

So, if you can acquire an education without going to school, just by making judicious use of a good library, then what is the point of going to school/university?

Or to ask the question a different way: what (if any) value can a school/university add that a good library can not?

One thing books cannot do is talk back. A book cannot question or challenge the understanding which the reader takes from it; to some extent, a real live teacher can. A teacher can challenge a student’s understanding by asking questions, by requiring the student to express his/her opinions with supporting arguments, a teacher can challenge a student’s reasoning; a book can do none of these things.

This post will be tagged “the bleeding obvious”.

The rest of the article takes a long time to make a fairly simple point: that business schools taught their graduates they could ignore reality, or create their own, and that this led to the financial meltdown. It contains some nuggets, but I’ll blog about them separately. I’m surprised the article made no mention of David X. Li and his mathematical formulae.

A year ago, it was hardly unthinkable that a math wizard like David X. Li migh someday earn a Nobel Prize. After all, financial economists—even Wall Street quants—have received the Nobel in economics before, and Li’s work on measuring risk has had more impact, more quickly, than previous Nobel Prize-winning contributions to the field. Today, though, as dazed bankers, politicians, regulators, and investors survey the wreckage of the biggest financial meltdown since the Great Depression, Li is probably thankful he still has a job in finance at all. Not that his achievement should be dismissed. He took a notoriously tough nut—determining correlation, or how seemingly disparate events are related—and cracked it wide open with a simple and elegant mathematical formula, one that would become ubiquitous in finance worldwide.

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