It costs $144,000 US to get a Master of Business Administration degree at the Harvard Business School (HBS). Anyone paying that amount of money isn’t just buying an education – they’re also buying into a reputation, and gaining entry into a self-perpetuating elite circle of control. That’s why business journalist Duff McDonald’s new book, The Golden Passport: Harvard Business School, The Limits of Capitalism, and the Moral Failure of the MBA Elite, is a much-needed critique. It takes an uncompromising look at how HBS operates, and how the negative effects of those operations resonate throughout societies and economies.

I work at a business school that doesn’t cost hundreds of thousands of dollars to attend. I suspect I also get paid considerably less than most HBS faculty members. So I want to be clear that my agreement with much of what McDonald says doesn’t come out of bitterness or jealousy at not being part of HBS. Actually, after reading his book and seeing the statistics on how many faculty members at HBS actually end up getting tenure, I’m quite happy to be where I am.

But even at this distance I see the influence of HBS on other business programs – such as the use of the case-based teaching method that HBS promotes as one of its strengths, and the number of HBS-written case studies that are part of other schools’ business courses. So the problems that MacDonald identifies with HBS should be a concern to business schools everywhere, because of that trickle-down effect. And if you think that how business education operates isn’t all that important, keep in mind that business is consistently among the most popular majors for undergraduate university students. So if HBS is one of the agenda-setters in business education, by extension it is also setting the agenda for a significant portion of all of post-secondary education.

HBS, and, I would argue, business/management education in general, was born out of two factors: a perceived need for more trained managers as a result of industrialization in the early part of the 20^th century, and the belief that the characteristics of successful management could be identified and taught to managers, in the same way that other professional practitioners (e.g. doctors, lawyers) are trained.

That second belief, McDonald contends, has turned out to be untrue. There are some hard skills that potential managers can be taught, such as how to understand and interpret financial statements. But, to a large extent, what is appropriate or effective management behaviour depends on the specific situation and the the individuals involved in it. Potential managers can be taught how to identify options in these situations, but it’s difficult, if not impossible, to create reliable measures that can consistently predict the best option to use.

McDonald suggests that being unable to quantify effective management practices helps HBS justify the education it offers, regardless of the circumstances. If the economy is in a downturn, then obviously managers need more education to help them make better decisions. If the economy is doing well, then obviously management education is working because managers’ training is helping them to act smarter. With that sort of slippery logic, making significant changes in economies and workplaces is almost impossible – as demonstrated by the 2008 financial crisis. Those cataclysmic events should have produced a great deal of soul-searching and meaningful change in business education – including the programs offered by HBS –  but that didn’t happen.

McDonald also makes a very compelling case that HBS students are taught to value individual wealth and achievement over the common good. He cites several studies showing that even if students enter business education with collectivistic values, they tend to graduate with highly individualistic values. This may be partially due to the “get along by going along” mentality, where students adapt to the dominant norm that they think they need to follow to succeed – but McDonald also identifies another source of those priorities: the pro-corporate, anti-worker, shareholder-value-maximizing attitudes that he sees in HBS’s operating style and teaching materials.

Now, to be fair, probably every business program will produce some graduates with those attitudes, regardless of what they are taught or how they are taught. But McDonald also points out that HBS graduates tend to hire other HBS graduates, and that HBS also tends to hire its own doctoral graduates as faculty members. That creates a system in which there is little room for HBS’ values and messages to be challenged. HBS has been awarding MBAs since 1908, which means it has an extremely large group of alumni – many of which can be found at the highest levels of business and government.

Some HBS graduates, like Michael Bloomberg, have managed to become extremely rich while also demonstrating at least some social conscience. But it’s sobering to look at the career paths of the majority of alumni that McDonald mentions. An HBS credential, in McDonald’s view, facilitates entry into a largely closed and elitist system that doesn’t seem to have a lot of external checks and balances, or even a strong moral compass.

Some readers might have a problem with McDonald’s in-your-face writing style. He certainly doesn’t take any prisoners in describing what he sees as HBS’s most serious flaws and failings. For example, in discussing how HBS enthusiastically adopted agency theory as the theory du jour in the 1980s, he offers this characterization of a research paper by HBS professor Michael Jensen: “The solution [Jensen and his co-author] offered was premised on this pessimistic view of man, and, having started from the assumption that we are all whores, they naturally ended up with prescriptions on how to try to make us well-behaved whores” (p. 368).

Yes, this is harsh, and I’m pretty sure that I wouldn’t want to see any of my research described like this. But, in the larger context of the significant problems that McDonald is dissecting, I think this sort of verbal kick in the pants is appropriate. If it draws attention to an influential force in business that has largely gone unexamined – if anything, it has been imitated and celebrated – then this strong language serves a useful purpose.

The Golden Passport is extremely well-researched, and it’s a good read as well. I recommend it to anyone who’s interested in management education, in education in general, or in how business and business-influenced thinking affects society as a whole.