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Tuesday, August 31, 2004

Theory of the day

This is my only partial tounge-in-cheek indictment of most of what is taught in business classes, or more specifically what is published in journals of management, marketing, information technology, and so forth. As an economist, I (and many of my economist buddies) have a compensating-differential in poking fun at the ideas generated and published in many of the other business disciplines.

However, as I turn some of my attention towards writing for the common man I have been looking at the books in the "Business" sections of the local book stores. For the most part we have three genres: 1) how to run a small business or how to open small business of type [fill in the blank]; 2) how to invest in the stock market and make a whole crap-load of money; 3) the "management" book that provides the "secret" to making people like you as a manager. (this recent story in the Economist seems to confirm my thinking, in general)

I follow the cynic's line that books of type 1 are probably not much more than common sense, or a check list of how to avoid problems with the IRS. The books I have looked at don't talk about "sophisticated" topics like pricing, demand forecasting, and the like. Probably it is too technical, but also it is probably too scary to the potential buyer of the book on how to start your own at-home funeral business.

Books of type 2 are de facto worthless. Anyone who REALLY knows how to make money in the stock market by definition wouldn't tell anyone else, otherwise their scheme wouldn't work any more. Now, it might be possible to earn a positive return with the latest technical analysis, but that return will not be greater than the market return after taking into account of risk (I have never taken a finance course but I think I believe in some weak form of the efficient market hypothesis).

Books of type 3 are perhaps the worst kind. These books offer the "theory of the day" in it's crudest form. Ranging in topics from how the "It's the Fast That Eat the Slow," how you can make people like you while forcing them to do what they naturally don't want to, that is work, and how you can motivate people by making them stakeholders. If the definitive book had been written, then we wouldn't need any more. So, my take on the expanding list of titles in this area means that the definitive way to be a manager hasn't been discovered.

What does all of this mean? I initially had a sense that that writing as an economist for the common man would not be that easy, but now I think that it might not be that hard. Readers of this blog know that I rarely use high English and with a modicum of economic reasoning it is probably possible to bowl a lot of people over. The question remains whether publishers are willing to promote a book that doesn't provide a bunch of nonsense and "you can do it too" type of cheerleading and whether, in the end, there is even a market for such books.

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