JULIA LA ROCHE 00:00
We have David Thompson and he says, you’ve said several times that the best way to learn about business is to study the multi-decade financial results of great companies. You’ve even said business schools that don’t adopt this method are doing their students a disservice. Would you mind elaborating on how a professor or individual should go about building a curriculum around this approach? What, for example, would you recommend as course materials?
CHARLIE MUNGER 00:36
Well, here’s what I meant. By the way, the Harvard Business School, when it started out way early, they started out with a history of the business. They’d take you through the building of the canals and the building of the railroads and so on and so on. You saw the ebb and flow of industry and the creative destruction of the economic changes and so on. It was a background which helped everybody. And, of course, what I’m saying is that if I were teaching business I would start the way Harvard Business School did a long time ago.
I think they stopped because if you taught that course, you’d be stealing the best cases from the individual professors of marketing and so on and so on. And I just think it was academically inconvenient for them. But, of course, you should start out by studying the history of capitalism, how it worked, and why before you start studying business. And they don’t do that very well — I’m talking about the business schools.
If you stop to think about it, business success long term is a lot like biology. And in biology, what happens is the individuals all die, and eventually, so do all the species. And capitalism is almost as brutal as that. Think of what’s died in my lifetime. Just think of the things that were once prosperous that are now in failure or gone. Whoever dreamed when I was young that Kodak and General Motors would go bankrupt. You know, it’s just, it’s incredible what’s happened in terms of the destruction. Of course, that history is useful to know.