Thanks!

[snowcapk]

<p>Sloan School of Management is a cash cow because of its MBA program...I'm guessing that over the past fifty years, MIT improved the Sloan School by funneling the revenue into improving the faculty and program. Later they were able to add an undergrad management program because they had already hired qualified faculty to teach in the business school.</p>

<p>Caltech isn't starting with the business school, recruiting faculty, and then offering an undergrad major. It's hiring people who are willing to teach business management courses at an institute that has no business management school. (And very few BEM majors for that matter.) The phrase "those who can't do, teach" applies well to people who hold MBAs...why would you turn down a well-paying career in business to teach a few courses here in Pasadena? It's hard to build a reputation for an undergrad business major when you can't hire very many qualified faculty because you don't have a business school. (And virtually no BEM majors to justify the hire.)</p>

<p>Caltech already offers economics, political science, and business management as undergrad majors, but funneling money into those programs to improve them isn't a top funding priority for Caltech right now. They're hardly the worst of the HSS majors we offer, though. We also offer English - can you imagine trying to get into an English Lit Ph.D. program with a BS in English from Caltech? How about History?</p>

[sakky]

<p>
[quote]
Sloan School of Management is a cash cow because of its MBA program..I'm guessing that over the past fifty years, MIT improved the Sloan School by funneling the revenue into improving the faculty and program. Later they were able to add an undergrad management program because they had already hired qualified faculty to teach in the business school.

[/quote]
</p>

<p>Uh, no, actually, your causation link is incorrect. The Sloan School (or, more specifically, what eventually became the Sloan School) had an undergraduate program before it had the master's program. Granted, it was a quite different undergrad program than today's. Nevertheless, the point is, people were earning bachelor's degrees in Course XV well before any master's degrees were granted. The first MIT management bachelor's were granted in 1917, yet the master's program (which later became the MBA program) wasn't even established until 1925. So, if anything, in the beginning, it was the undergrad program that was actually funding the master's program, not the other way around.</p>

<p>Having said that, I agree with you that the current MBA program is clearly a major cash cow and right now probably is carrying the undergrad program. But that just gives Caltech a path that it could follow. See below.</p>

<p>
[quote]
Caltech isn't starting with the business school, recruiting faculty, and then offering an undergrad major. It's hiring people who are willing to teach business management courses at an institute that has no business management school. (And very few BEM majors for that matter.)

[/quote]
</p>

<p>But like I said, this is precisely what MIT had to face in the beginning with its management program; the undergrad was established first, and then later came the master's program, and furthermore, the Sloan School didn't even become its own School until 1952, which is decades after it granted its first bachelor's degrees.</p>

<p>Hence, MIT had to face the same 'bootstrapping problem' that Caltech does. You say that it's hard for Caltech to attract people who are willing to teach business management courses to undergrads. Yet that's precisely the problem that MIT faced, yet MIT figured out how to solve it. If MIT could do it, why can't Caltech? </p>

<p>
[quote]
The phrase "those who can't do, teach" applies well to people who hold MBAs...why would you turn down a well-paying career in business to teach a few courses here in Pasadena? It's hard to build a reputation for an undergrad business major when you can't hire very many qualified faculty because you don't have a business school. (And virtually no BEM majors to justify the hire.)

[/quote]
</p>

<p>I profoundly disagree, and I think you have misunderstood what business academia is all about. Let me tell you a dirty little secret: very few business school professors actually hold MBA's (ironic, but true). Furthermore, many (probably most) of them have actually have significant non-academic work experience. They're academics.</p>

<p>Don't believe me. Since we're using Sloan as the example, go to the Sloan website and click around and see just how many of the Sloan professors actually hold MBA's and/or actually have significant non-academic work experience. A few do, but most do not. </p>

<p>Heck, I'll help you out. Let's talk about some of the superstars at Sloan. Kristin Forbes was the youngest ever member of the CEA, and just recently won tenure at Sloan. Yet she doesn't have an MBA. And her non-academic work experience is basically limited to 1 year in investment banking and 1 year at the World Bank.</p>

<p><a href="http://web.mit.edu/%7Ekjforbes/www/Forbes-CV-05-08.pdf%5B/url%5D"&gt;http://web.mit.edu/%7Ekjforbes/www/Forbes-CV-05-08.pdf&lt;/a&gt;&lt;/p>

<p>Rebecca Henderson has written some of the most groundbreaking papers on technology innovation. Yet she doesn't hold an MBA, and her professional work experience consists of just 2 years at McKinsey.</p>

<p><a href="http://web.mit.edu/rhenders/www/rhenderson_cv.pdf%5B/url%5D"&gt;http://web.mit.edu/rhenders/www/rhenderson_cv.pdf&lt;/a&gt;&lt;/p>

<p>Chris Wheat does some highly interesting work on the impact of social networks on corporate strategy. Yet he doesn't hold an MBA, and his pro work experience consists of 2 years as an engineer.</p>

<p><a href="http://scripts.mit.edu/%7Ecwheat/cv.pdf%5B/url%5D"&gt;http://scripts.mit.edu/~cwheat/cv.pdf&lt;/a&gt;&lt;/p>

<p>Erik Brynjolfsson is one of the leading minds on the impact of information technology on modern business. But again, no MBA, and he has never been outside of academia. </p>

<p><a href="http://ebusiness.mit.edu/erik/Brynjolfsson%20vita%202008-02-04.pdf%5B/url%5D"&gt;http://ebusiness.mit.edu/erik/Brynjolfsson%20vita%202008-02-04.pdf&lt;/a&gt;&lt;/p>

<p>But don't take my word for it. If you think I'm cherry-picking, poke around the MIT Sloan website. Heck, poke around the websites of any of the leading business schools - Harvard Business School, Stanford GSB, Kellogg, Wharton, etc. - and you will see for yourself that most business school profs don't actually hold MBA's and have limited pro work experience. {Now, you might think it's truly bizarre for business schools to be hiring people to teach MBA's who themselves don't hold MBA's, and I think it's bizarre too. But hey, what can I say? I didn't make the rules.} </p>

<p>Hence, your question of "why would you turn down a well-paying career in business to teach a few courses here in Pasadena?" has two responses:</p>

<h1>1 - Many of them are not turning down a well-paying career. Like I said, many of these new professors are those with PhD's in economics, sociology, psychology, organizational behavior etc. but who have never actually held a real job before in their lives. They don't really have that option of turning down a high-paying job.</h1>

<h1>2- Lots of newly minted Phd's, even coming out of the business schools, are looking for academic positions and can't get one, or get only mediocre ones. I am quite sure that many of them would have preferred to have placed at Caltech, because it's better than what they got, despite the fact that Caltech doesn't have a business school (yet).</h1>

<p>For example, consider the new PhD grads from the UCLA Anderson School who became assistant professors (hence scroll down in the link). Not all of them placed at great schools. I suspect that the guy who ended up going to Iowa State or the University of Central Florida might have preferred to go to Caltech instead. </p>

<p>UCLA</a> Anderson School of Management | Marketing | Ph.D. Placement</p>

<p>Heck, here are the doctoral placements from Harvard Business School. Not all of them got great academic placements. Those who ended up at San Diego State or San Jose State might have preferred Caltech instead. </p>

<p>The point is, you can get some of these guys. Sure, you probably can't get the very best guys. They're obviously going to want to place at HBS, Sloan, Wharton, Kellogg, Stanford GSB, and places like that. But not everybody gets that. In fact, only a small minority do. The Caltech brand name is well respected, and so I'm sure that a lot of new academics who ended up placing at no-name schools would have preferred Caltech even though Caltech doesn't (yet) have a business school. For example, given the choice between working being an assistant professor at the business school at the San Diego State business school and at Caltech (but no business school), I think I would take the latter. </p>

<p>
[quote]
Caltech already offers economics, political science, and business management as undergrad majors, but funneling money into those programs to improve them isn't a top funding priority for Caltech right now.

[/quote]
</p>

<p>But that last sentence right there is suspicious. Funding priorities? That implies that you actually have budget problems. Yet, like I said, Caltech actually has a higher endowment per capita than MIT does. So I don't see why Caltech can't afford to spend more if it wanted to. It clearly has the money. </p>

<p>Of course, the real question is, does it actually want to spend the money... </p>

<p>
[quote]
They're hardly the worst of the HSS majors we offer, though. We also offer English - can you imagine trying to get into an English Lit Ph.D. program with a BS in English from Caltech? How about History?

[/quote]
</p>

<p>Well, not everybody in the country is going to get into a PHD program. Indeed, probably only 1% of all college graduates nationwide do. </p>

<p>I don't think we should worry so much about preparing humanities students for PhD programs, so much as worrying about just giving them a reasonable option to get the education they want without having to transfer away, so that they can get that all-important bachelor's degree. Let's face it. Like it or not, in this world, you basically need a bachelor's degree if you want to get a decent job. Other than certain exceptions like entrepreneurship or professional sports or entertainment, you basically need a degree. It doesn't even really matter what the degree is in, it just have to be in something. Many companies won't even interview you if you don't have a degree.</p>

[snowcapk]

<p>
[quote]
Funding priorities? That implies that you actually have budget problems. Yet, like I said, Caltech actually has a higher endowment per capita than MIT does.

[/quote]

No, having funding priorities does not imply that you have budget problems. (I hope you're not in business school, sakky, with that attitude.) It implies - no, by flat-out definition, it means - that there are things you'd rather spend your money on than others. Caltech could afford to start a competitive ballet academy, but it won't.</p>

<p>Per capita be damned - Caltech's endowment is five times smaller than MIT's. That doesn't mean we can afford to have a 1/5-scale version of every program that MIT has. An endowment of $5N billion earns well more than five times the interest that an endowment of $N billion earns. In addition, Caltech is trying to rapidly grow its endowment (press</a> release) which means that it is spending less than five percent of its returns. I bet that MIT is spending a larger (5.5%?) portion of their already larger interest revenue on the endowment. Bottom line: proportional to student body size, Caltech does not have as much money to put into new buildings, faculty, and programs.</p>

<p>
[quote]
I don't think we should worry so much about preparing humanities students for PhD programs...

[/quote]

Why should we worry about this? Because it's an indication of program quality. Caltech didn't earn a reputation by educating half-assedly. It's up to the students to earn a diploma that has meaning - why should we have an easy track* for them to "get that all-important bachelor's degree?" Come on. We're not going to issue sheepskin consolation prizes so that failing students feel better. As hard as it is to transfer to Stanford or Harvard from Caltech if you have bad grades, you can always go back to Compass-Direction State University and get your humanities diploma there instead. Cry me a river.</p>

<p>*I'm not saying English is inherently easier, but it certainly is here at Caltech, because we don't have the faculty or the resources to make it a rigorous major.</p>

<p>
[quote]
I suspect that the guy who ended up going to Iowa State or the University of Central Florida might have preferred to go to Caltech instead.

[/quote]

I dunno...which of these jobs sounds more fulfilling to you? ISU has 3900 business majors; UCF has 8200; Caltech's last graduating class had 29 BEM majors and every one of them had a primary major in an actual science. At ISU and UCF you, the BEM instructor, would have many colleagues; at Caltech there are two dozen social science professors total. (But odds are good you'd be hired as an adjunct - "non-professorial faculty" - anyway.) Assuming you were conducting research, Caltech would not have the literary resources (library, journal subscriptions) and industry connections you'd probably appreciate. At ISU and UCF many students probably plan on pursuing business as a career. Many Caltech students double-major in BEM because the courses are just as easy as any other social science that you might take to meet your HSS requirements, and with just seven non-HSS requirement courses (six of which can be taken P/F, some of which can be in applied math or even the retardedly easy intro to psychology courses) you have an extra major. You wouldn't be teaching much; you wouldn't be researching effectively. Why would you choose Caltech over those other schools? Because of its US News rank? ;)</p>

[sakky]

<p>
[quote]
No, having funding priorities does not imply that you have budget problems. (I hope you're not in business school, sakky, with that attitude.) It implies - no, by flat-out definition, it means - that there are things you'd rather spend your money on than others. Caltech could afford to start a competitive ballet academy, but it won't.

[/quote]
</p>

<p>No, you don't understand, and I suspect it's because you don't want to understand. Like I said, Caltech has a higher endowment per capita than MIT does. That means that Caltech could decide to spend more money than it is now, and still have a very large endowment. </p>

<p>Besides, what are we really talking about here? Trust me, B-school profs ain't that expensive. How much are we really talking about? They don't require expensive labs. They don't require huge computing resources. Hire 10 new promising business scholars, and that probably only costs $2-3 million a year. Caltech can't afford that? Really? </p>

<p>I think it's more accurate to say that Caltech doesn't want to afford that, and that's a different problem entirely. There's a big difference between "can't" and "don't want to". </p>

<p>
[quote]
An endowment of $5N billion earns well more than five times the interest that an endowment of $N billion earns.

[/quote]
</p>

<p>Oh? How's that? So you're actually claiming increasing rates of return on fund size? Really? The general consensus within the finance community is the exact opposite: that rates of return actually decrease with fund size, simply due to the law of large numbers: the larger your funds, the more difficult it is to change your market positions simply because your very size makes the market move against you. For example, unloading 1000 shares of Microsoft is easy, but if you tried to sell a million shares, the price would start to drop before you could dump it all. </p>

<p>But in any case, if you actually know the secret to actually increase rates of return with fund size, then perhaps you should just drop out right now and take a job as a consultant for the asset management industry. You would surely become highly successful because you seem to know something that the rest of the finance community doesn't know. </p>

<p>
[quote]
In addition, Caltech is trying to rapidly grow its endowment (press release) which means that it is spending less than five percent of its returns. I bet that MIT is spending a larger (5.5%?) portion of their already larger interest revenue on the endowment. Bottom line: proportional to student body size, Caltech does not have as much money to put into new buildings, faculty, and programs.

[/quote]
</p>

<p>Yeah, because it doesn't want to spend its money. But that's quite different from saying that it can't spend its money. You and I both know that it could, it just doesn't want to. That's precisely the point. </p>

<p>
[quote]
Why should we worry about this? Because it's an indication of program quality. Caltech didn't earn a reputation by educating half-assedly. It's up to the students to earn a diploma that has meaning .

[/quote]
</p>

<p>Uh, why, you ask? Simple. Because the other schools are doing it. Caltech does not exist in a vacuum: it has to compete with those other schools.</p>

<p>So consider the ex-ante problem. Somebody is admitted to both Caltech and Harvard. That person rationally understands that he stands a better chance of graduating from Harvard, hence, if he is risk-averse, he chooses Harvard. That's a big reason why Caltech's yield is so low, relative to that of its peer schools.</p>

<p>But the problem extends even beyond ex-ante. Like I said, Caltech has the lowest graduation rate of any of the top schools, because some people come to Caltech and find out that they can't hack it, and so don't graduate. We both agree that that's a problem. Now, as I have said on other threads, by far the best solution is to simply not admit these people in the first place. But given that Caltech does admit these people, the second best option is to, yes, offer them an easier track. See below.</p>

<p>
[quote]
- why should we have an easy track* for them to "get that all-important bachelor's degree?" Come on

[/quote]
</p>

<p>Why not? Come on. Again, because other schools are doing it. Stanford has an easy track. Harvard has an easy track. Heck, even MIT has an easy (or at least easier) track. Yet none of them seem to have been hurt by it. So what's so bad about Caltech doing the same?</p>

<p>Look, I'm not saying that the current programs need to be made easier. Let the Caltech natural science and engineering programs be as hard as they are now, so that those students who want the difficulty can have it. But what's so terrible about doing something for those students who don't want it to be that hard? </p>

<p>To wit, just consider the history. Even Ben Golub has freely admitted that Caltech is a significantly easier school than it was in the past, when a far larger percentage of the undergrads would not graduate. In other words, Caltech has effectively already instituted an "easier track". Hence, this is clearly not impossible to do. Yet I don't hear anybody complaining that a Caltech degree of today is not a "real" Caltech degree compared to one from decades past. So if Caltech can do that, why can't Caltech also create some more easier tracks? </p>

<p>
[quote]
I dunno...which of these jobs sounds more fulfilling to you? ISU has 3900 business majors; UCF has 8200; Caltech's last graduating class had 29 BEM majors and every one of them had a primary major in an actual science.

[/quote]
</p>

<p>Well, first off, not to disabuse of the illusions that you seem to have about business academia, but believe me, a lot of business profs are not very interested in teaching or otherwise dealing with students. They're interested in research. Heck, even at the Sloan School (in fact, perhaps especially at the Sloan School), there are many profs who clearly do not enjoy teaching. Hence, having fewer students and fewer teaching responsibilities would actually be considered an advantage to these profs. Heck, I can already think of several Sloan profs for which this is clearly the case. {But I won't name them.} </p>

<p>
[quote]
Assuming you were conducting research, Caltech would not have the literary resources (library, journal subscriptions)

[/quote]
</p>

<p>Uh, yes you do. You're really selling yourself short, and I don't think I should be telling you what Caltech has, but I just checked your library's website, and you guys already have all the electronic resources you need. You have JStor. You have EBSCOhost. You have EconLit. You have LexisNexis. </p>

<p>What you seem to have missed is that these academic databases are selling complete bundles, and Caltech is already subscribing to these databases for the science/engineering/math papers. But since these packages are bundled, Caltech has also bought the access to the econ/business/sociology/psychology/OB/etc. materials. Caltech just isn't using it, but it still has it. Hence, there is no extra cost.</p>

<p>Now, to be fair, obviously Caltech doesn't have access to numerous highly specialized and expensive business databases. But, frankly, neither do most business schools. For example, sure, maybe Caltech doesn't have access to the Sand Hill Economics database on venture capital firms investments and returns. But, frankly, neither do most business schools (for example, not even Harvard Business School has this). </p>

<p>
[quote]
Assuming you were conducting research, Caltech would not have the literary resources (library, journal subscriptions) and industry connections you'd probably appreciate

[/quote]
</p>

<p>So then let's take a trip back through time.</p>

<p>It's 1914. MIT doesn't have strong business connections. MIT at that time doesn't have a strong brand name in business. MIT doesn't have the business resources that some of the other business schools had. MIT would have to compete against several other business schools that had already been established, including Wharton, Kellogg, Tuck, and of course, Harvard Business School (which of course begged the question of why would anybody want to teach management at MIT when they could just teach at nearby HBS instead). </p>

<p>Given all that, MIT could have easily said: "Woe is us, we won't be able to compete against the competition, nobody is going to want to teach business here, so let's not even start the program." But they didn't say that. They decided that they would start such a program. Thank God they did, because the Sloan School is now one of the best business schools in the world.</p>

<p>How about another? It's 1955 at MIT. Arguably the best and most famous political science department in the world is right up the river. You (as MIT), on the other hand, have zero standing in the world of political science. Everybody thinks of you as a tech school. You probably lack the resources to perform poli-sci research. So, you could reasonably ask: if we start a poli-sci department, why would any decent political scientist ever want to come? Yet, MIT decided to launch the department anyway, and now the department is ranked in the top 10-15. </p>

<p>How about one more? MIT has always offered undergrad econ ever since it was founded, but it was frankly, quite mediocre until around the 1940's and 1950's when it became one of the very best in the world. And again, like poli-sci, the MIT economics department had to compete against arguably the most prestigious econ program in the world right up the river. In those days, one could surely ask why any decent econ prof would ever want to teach at MIT? Harvard was probably laughing at the notion that MIT wanted to become a player in Econ. Fortunately, MIT stuck with it, and look at its Econ department now. It maybe be even better than Harvard's. Harvard surely isn't laughing anymore. Who could have imagined that back in the old days? </p>

<p>Look, snowcapk, everybody has to start somewhere. MIT didn't start life with strong business/social science departments. MIT had to create them through bootstrapping. If MIT can bootstrap its programs from scratch, surely Caltech can too. By your logic, nobody should ever try anything new.</p>

[snowcapk]

<p>
[quote]
think it's more accurate to say that Caltech doesn't want to afford that, and that's a different problem entirely. There's a big difference between "can't" and "don't want to".

[/quote]

This is exactly what is meant by the phrase "funding priorities," which is not coincidentally the phrase I chose to use. Did you miss the ballet academy analogy? I will be more explicit: Caltech has enough money to build a thriving business program, but it doesn't want to. And please don't trot out that retarded "all the cool schools are doing it" argument again to justify why we should feel obligated to add a business school. Caltech does not <em>need</em> a business school (or a full humanities line-up or easier majors, for that matter) to compete with the big boys, as it has clearly demonstrated...and at risk of being misunderstood yet again, Caltech does not <em>want</em> a business school or full humanities offerings, either.</p>

<p>
[quote]
But in any case, if you actually know the secret to actually increase rates of return with fund size, then perhaps you should just drop out right now and take a job as a consultant for the asset management industry.

[/quote]

As a matter of fact, I do know how to increase rate of return with endowment size. The "secret" (hardly a secret - every university does it) is that the endowment is by nature split into many separate funds. For example, Harvard's endowment is split across over 10,000 funds. Large donations can be and often are made in the form of endowments for particular buildings (e.g. maintenance of libraries), programs, scholarships, etc. The "endowment" that we speak of is the conglomerate of these endowed funds for the university. An endowment of $5N billion is likely to be made up of five times as many smaller funds as an endowment of $N billion. Obviously that investment can be diversified in many ways so that the market does not "move against you" when a small margin of profit is skimmed off each year. If you would like more information on the rate of returns on endowments of various sizes (or "proof" that historically larger endowments have greater rates of return), please consult this</a> page because I am tired of stating the obvious.</p>

[dLo]

<p>
[quote]
Hire 10 new promising business scholars, and that probably only costs $2-3 million a year.

[/quote]
</p>

<p>There is the issue that Caltech currently has a no growth policy so doing this would require them to cut 10 people from other departments.</p>

<p>
[quote]
Yet I don't hear anybody complaining that a Caltech degree of today is not a "real" Caltech degree compared to one from decades past.

[/quote]
</p>

<p>Actually, I think some alums may argue with that.</p>

[lizzardfire]

<p>Like a certain JPL lifer who once deigned to teach an intro-to-analog-build-a-radio class... :P</p>

[sakky]

<p>
[quote]
This is exactly what is meant by the phrase "funding priorities," which is not coincidentally the phrase I chose to use. Did you miss the ballet academy analogy? I will be more explicit: Caltech has enough money to build a thriving business program, but it doesn't want to. And please don't trot out that retarded "all the cool schools are doing it" argument again to justify why we should feel obligated to add a business school. Caltech does not <em>need</em> a business school (or a full humanities line-up or easier majors, for that matter) to compete with the big boys, as it has clearly demonstrated...and at risk of being misunderstood yet again, Caltech does not <em>want</em> a business school or full humanities offerings, either.

[/quote]
</p>

<p>Exactly - it doesn't want to, which has always been my point. </p>

<p>Yet there was a time when MIT didn't really want a management program, and didn't really want any social science programs. Things change. </p>

<p>But the bottom line is, if Caltech does not want to expand its offerings, then Caltech is always going to have a problem with students coming to the school and then later finding out that they don't really want to stay because they'd rather study something that Caltech doesn't offer. Furthermore, Caltech will always have the ex-ante problem with yield in terms of attracting students who want to hedge their bets by choosing a school with a wider range of offerings. </p>

<p>Which gets back to my entire involvement in this thread. I pointed out that Caltech has a low graduation rate, relative to its peers. The question is, do you want to fix that or not? If you want to fix that, then I am offering suggestions. On the other hand, if you're simply not interested in fixing it at all, that's fine, then just say so and we will at least know where you stand. </p>

<p>
[quote]
And please don't trot out that retarded "all the cool schools are doing it" argument again to justify why we should feel obligated to add a business school.

[/quote]
</p>

<p>It has nothing to do with 'being cool'. Lots of top schools don't offer business schools, at least not for undergrads. Princeton and Brown don't have B-schools for any students, grad or undergrad.</p>

<p>On the other hand, Princeton and Brown have significantly higher graduation rates than Caltech does. Hence, they don't really seem to have a problem. </p>

<p>To be clear, I never said that business schools would by themselves solve all of a school's graduation problems. I'm simply talking about the general concept of expansion of programs, with B-schools merely being an example. Caltech could instead decide to expand its social science programs which is precisely what MIT decided to do in the mid 1900's. Caltech could add a media technology program like the MIT Media Lab. Granted, the Media Lab's degree programs are still only for grad students, but at least it offers undergraduate courses. In fact, that's a way that Caltech could one-up MIT: by offering a media technology program for undergrads. </p>

<p>But again, the point is to explore the possibility that Caltech could expand its offerings. I don't see why this is such an outrageous concept, as Caltech has done expanded in the past (and still is). For example, the entire HSS division didn't exist when Caltech was founded; it was founded only decades later. Similarly, the Caltech biology department - one of the best biology departments in the world - didn't exist when Caltech was founded. That happened decades later, and in fact, the founding of that division was precisely why Thomas Hunt Morgan, the nation's most esteemed biologist and soon-to-be Nobel laureate, was brought into Caltech in the first place. Caltech's geology/Earth sciences department is arguably the best in the world, but it was also similarly a product of expansion.</p>

<p>The point is, if Caltech can and has successfully expanded in the past, why is it so outrageous to think it couldn't do so again? Is Caltech never supposed to evolve? I put the ball back in your court, snowcpk. Perhaps you could explain to us why Caltech can never expand, given its very own history of successful expansion. </p>

<p>
[quote]
As a matter of fact, I do know how to increase rate of return with endowment size. The "secret" (hardly a secret - every university does it) is that the endowment is by nature split into many separate funds. For example, Harvard's endowment is split across over 10,000 funds. Large donations can be and often are made in the form of endowments for particular buildings (e.g. maintenance of libraries), programs, scholarships, etc. The "endowment" that we speak of is the conglomerate of these endowed funds for the university. An endowment of $5N billion is likely to be made up of five times as many smaller funds as an endowment of $N billion. Obviously that investment can be diversified in many ways so that the market does not "move against you" when a small margin of profit is skimmed off each year. If you would like more information on the rate of returns on endowments of various sizes (or "proof" that historically larger endowments have greater rates of return), please consult this page because I am tired of stating the obvious.

[/quote]
</p>

<p>That hardly proves your point, because it completely fails to show how a fund in aggregate can enjoy increasing returns to scale by merely splitting itself up into pieces. So you say that Harvard can split itself into 10,000 separate funds. So? That still means that Harvard has to manage 10,000 individual funds. It is clearly easier to monitor fewer individual funds. </p>

<p>Besides, let me put it to you this way. If you are truly claiming that you have the secret to increasing returns on fund size, then why hasn't the finance community realized this apparently basic fact? There are literally thousands and thousands of individual wealth management firms out there (not just individual funds, but entire firms). If what you are saying is true, then there should really only be a handful of giant firms out there (with each firm running thousands of funds). In other words, the boys on Wall Street should be smart enough to acquire and merge together as many individual firms as possible in order to take advantage of these increasing returns to scale that you claim exist. So why haven't they done that? Are they just being stupid?</p>

<p>Look, I am tired of stating the obvious: if you really believe you've discovered a secret to fund management success that the finance community has apparently not discovered, then what you are doing in academia? Go take a job in the finance sector, and you will surely make billions. Otherwise, please ask yourself why don't wealth management firms don't just engage in a crazy number of mergers such that the world would end up with only a handful of giant firms. How do these thousands of tiny firms manage to stay in business when they're constantly battling these supposedly increasing rates of return?</p>

[snowcapk]

<p>
[quote]
The question is, do you want to fix that or not?

[/quote]

If the only suggestions are: add easy HSS majors, a business school, or a media lab, then no. I personally prefer efforts at improving the quality of student life as a means to improve offer acceptance rates and graduation rates. People who are not yet dedicated to science/math/engineering can feel free to "hedge their bets" and go somewhere else.</p>

<p>
[quote]
The point is, if Caltech can and has successfully expanded in the past, why is it so outrageous to think it couldn't do so again?

[/quote]

Not couldn't, sakky, wouldn't (not a business program, at least), because we do not want to expand in the directions you've listed. We <em>just</em> had this discussion about the difference between "can't" and "don't want to." <em>facepalm</em></p>

<p>Every once in a while a humanities prof will speak up at a faculty meeting and suggest that Caltech should expand those programs for undergrads. Sometimes it will even make the student paper, usually as an editorial about how there would be more attractive women on campus if the proposal went through. The suggestion always gets shot down, because we want more money spent on the science programs that we have, instead - or on the new IST department we're launching. The majority does not want expanded HSS offerings for undergrads.</p>

<p>But to my knowledge you are the first in decades to suggest a business school. It's outrageous because nobody actually attending Caltech wants one. There are so many things that we do want, but not a business school. Or a media lab. It's ridiculous to think that adding something that nobody here wants would increase the graduation rate!</p>

<p>
[quote]
So? That still means that Harvard has to manage 10,000 individual funds. It is clearly easier to monitor fewer individual funds.

[/quote]

It doesn't matter if it's easier to monitor fewer funds: the extra money they're making is more than enough to employ additional managers. I'm sorry you can't understand why larger endowments have higher returns, which is why I provided the link. It shows clearly that larger endowments do have higher returns. And that's that, I've made my point that per capita endowment is a misleading figure. Other investment firms are not germane to this conversation. If I shared the secret to higher returns with you then I'd be out of a job moonlighting as an investment banker - fortunately for me, it appears you won't understand it on your own. ;)</p>

[sakky]

<p>
[quote]
If the only suggestions are: add easy HSS majors, a business school, or a media lab, then no. I personally prefer efforts at improving the quality of student life as a means to improve offer acceptance rates and graduation rates. People who are not yet dedicated to science/math/engineering can feel free to "hedge their bets" and go somewhere else.

[/quote]
</p>

<p>The first thing I would say to that is that guys had already done some of this. For example, like I said, HSS did not exist when Caltech was founded: it was added decades later. Hence, I can imagine us going back in time and telling the Caltech administrators of the old days that they should not be hiring Munro and they should not be adding HSS at all, and that those Caltech students of the future who want to study those topics should never come to Caltech. Heck, maybe you could wander over to Baxter Hall right now and tell the people there that HSS should not exist and should never even have been founded and, heck, maybe Caltech should think about shutting down HSS completely because, like you said, people who want to hedge their bets should not come to Caltech at all. Why not just be a HSS-hater? </p>

<p>Now, I suspect you are not that extreme and that you have no problem with HSS existing as it does today. But that just begs the question of why was it OK for Caltech to add HSS majors before, but not OK to do so now? Just because it happened years ago, that makes it OK? What's the difference? </p>

<p>
[quote]
Not couldn't, sakky, wouldn't (not a business program, at least), because we do not want to expand in the directions you've listed. We <em>just</em> had this discussion about the difference between "can't" and "don't want to." <em>facepalm</em>

[/quote]
</p>

<p>Facepalm indeed, on your part, because you concede my central point, which is that Caltech can do many things, it just doesn't want to do those things. </p>

<p>But that only begs the question of - why? For example, why was Caltech more open to expansion of programs in the past, but not now? More generally speaking, why doesn't Caltech want to do certain things?.</p>

<p>What I have found in life is that people (and institutions) are rarely ever constrained by what they truly can't do, but constrained by what they want to do, and self-improvement almost always means first getting people to change their view of what they want to do. Caltech, just like any other institution, will never get better if it doesn't change what it actually wants to do. </p>

<p>
[quote]
Every once in a while a humanities prof will speak up at a faculty meeting and suggest that Caltech should expand those programs for undergrads. Sometimes it will even make the student paper, usually as an editorial about how there would be more attractive women on campus if the proposal went through. The suggestion always gets shot down, because we want more money spent on the science programs that we have, instead - or on the new IST department we're launching. The majority does not want expanded HSS offerings for undergrads.

[/quote]
</p>

<p>And should the majority really decide? Let me ask you this. If a vote at Caltech came up to shut down HSS completely and divert its existing funding to science/engineering programs, I suspect that the majority at Caltech would probably vote 'yes'. So does that really mean that HSS should indeed be shut down and liquidated, as the majority wants? </p>

<p>Look, this is not a democracy here. Institutional change usually requires doing things that the existing majority doesn't want. When any company is deciding whether to launch a brand new product, the existing employees almost never want that to happen. For example, when Apple was considering launching the Ipod, the existing Mac division managers and engineers clearly did not want that to happen, for they would have obviously preferred that Apple continue to invest in its current products. What mattered is that Apple is not a democracy and Steve Jobs decided that he wanted the Ipod, even though it had nothing to do with its contemporaneous product lines, and in fact, would serve to greatly agitate the power balance of the existing workforce. Similarly, very few existing employees in Microsoft wanted the company to develop Internet Explorer or the Xbox before those divisions were created. Organizational change inevitably means upsetting the established order, otherwise you never change anything. </p>

<p>I explore this notion further below. </p>

<p>
[quote]
But to my knowledge you are the first in decades to suggest a business school. It's outrageous because nobody actually attending Caltech wants one. There are so many things that we do want, but not a business school. Or a media lab. It's ridiculous to think that adding something that nobody here wants would increase the graduation rate!

[/quote]
</p>

<p>Uh, don't you realize the utter endogeneity of what you just said? Come on, dude, you go to Caltech, so you're a smart guy, so you should be able to see this. Of course nobody currently at Caltech wants a business school. After all, everybody who actually wanted one would have simply gone to a place that actually has a business school. Similarly, by definition, there were obviously few if any Ipod supporters within Apple before the Ipod was even started. After all, the people who actually cared about building good digital music players were naturally working for companies that were actually making digital music players. If you cared about digital music players, why would you take a job at Apple back in the days when the company didn't care a whit about digital music players? </p>

<p>Look, the point of any institution is not just to cater to the people who are already stakeholders, but also to the people who could be stakeholders in the future. For example, no company exists merely to serve only its existing customers and no others. If all you're going to do is continue to serve your existing customer base, then, frankly, you're eventually going to die. Companies always have to be searching for new customers, and that, by definition, must mean sometimes ignoring your old customers. </p>

<p>It is simply ridiculous to argue otherwise. One need only look in the past and see that Caltech has indeed changed before and wasn't a prisoner of its existing student/faculty base. Like I said before, Caltech successfully added HSS despite the fact that the existing students and faculty at that time probably didn't want it, and, heck, probably would have voted it down if put to a majority vote. Or how I suspect that the majority of existing people at MIT probably would have voted down the Sloan School if it had been put to a vote. Just like how many employees at GM and Ford would rather just keep making big SUV's and trucks rather than small hybrid cars. Change inherently means doing things that your current people don't really want. Otherwise, you're not really changing at all. Institutions that don't change are the ones that are eventually rent asunder. Again, think of GM and Ford, who would not be facing bankruptcy if they had stepped away from SUV's and trucks years ago, but of course their employees didn't want to step away. </p>

<p>
[quote]
Or a media lab. It's ridiculous to think that adding something that nobody here wants would increase the graduation rate!

[/quote]
</p>

<p>Actually, the opposite is true: it's ridiculous to think that it wouldn't increase graduation rates. The simple economics of the situation says so: by giving students more options about what they can study, you increase the chances that they will find something that they really like. I really don't think this is a difficult concept to grasp. For example, a big library is more likely to have the specific book that I want than will a small library. ITunes is more likely to have the specific album than I want than will a small record store. </p>

<p>
[quote]
I'm sorry you can't understand why larger endowments have higher returns, which is why I provided the link. It shows clearly that larger endowments do have higher returns.

[/quote]
</p>

<p>Uh, no, the link you showed me shows no such thing. You have the causality backwards. What it actually shows is that endowments with large returns become big, but not that big endowments will have large returns. I'm sorry that you can't understand that. </p>

<p>I'm even more sorry that you fail to understand the even more general point which is that you think you have stumbled upon a great secret within the finance community that nobody else seems to have found - that of increasing returns that are actually caused by fund size. I'm perfectly willing to match my CV with yours to determine which of us has a better understanding of modern finance, but if you truly believe in what you are saying, I don't know what you are doing here, when you could be making a fortune in selling your expertise to the wealth management community. </p>

<p>But it seems to me that you will never understand this point, when all I'm trying to do is help you become rich. ;-)</p>

[foo182]

<p>ok, so waaaaaay back sakky said "The point is, if MIT has managed to build some strong social science undergrad majors in a relatively short period of time, surely Caltech can do the same. "</p>

<p>and as you discussed later, yes it can, but no, it doesn't want to. and you know what? i wouldn't apply to caltech if it did. sakky you seem not to understand that caltech is a specific school, the only in the US from the top top schools, which doesn't want to be a sell out, and it actually does what it wants and does it good. caltech pool of applicants being small is a great thing, because it's already self selective (not like harvards 30k+ students, which have 50% of students applying because it's harvard, or MIT which is becoming harvard) and if you ask me it's better this way.. opening a caltech's version of sloan school would attract more applicants to caltech which were never initially caltech targets. ok, it would offer more options for students which are already go there, graduation rates would be higher blabla, but grrrr, why did those people decide to go to caltech anyway? why didn't they choose harvard or mit or whatever if they were unsure about their love for science? if you bite more then you can chew, it's your mistake live with it. don't make others suffer by spending money instead on new labs and equipment (for those 88% that do graduate) on media center or who knows what (for those 12% which are idiots)..</p>

<p>there's always some debate about caltech not having enough applicants, enough big rate of enrolled ppl, enough majors, enough departments, not being enough commercialized.. i say screw that! we don't need ppl who want to go to caltech because it's prestige or who want to go to caltech so they could finish an english major!</p>

<p>maybe i missed the subject, dunno, but i hate those "who's better mit or caltech", why does this why doesn't that... bla bla. caltech is what it is and that is that. love it hate it, whatever, but don't say it should change "because everyone does/has that". normal is bornig :P</p>

[Dauntless9]

<p>foo182, I can appreciate your enthusiasm for Caltech, and understanding that that humanities and media and business is not what we choose to focus on. Caltech is what it is, and isn't afraid to be. However, you have an extremely naive view of those "12% who are idiots". I know you're a very smart guy, but as a prefrosh, you just don't know what it's like to actually be at and take classes at Caltech. You could even be one of "those 12%", for reasons that aren't even necessarily academic. Some people, who are doing just fine academically, still burn out. As a frosh, I have not been tested by fire quite yet, but until you go to school here, I would ask you to reserve judgment on those who are unhappy or are doing poorly here. They are my friends, and it saddens me to watch it happen. </p>

<p>P.S. I hope there's lots of free, poorly guarded food at international orientation . . .</p>

[RacinReaver]

<p>Dauntless, I can't wait for the club fair again this year, the food they had there was fantastic last year.</p>

<p>Also, to foo182, I'm currently a grad student here at Caltech, and I didn't get in in undergrad. I did great at my undergrad school (Carnegie Mellon), but I think had I gone here, I would have definitely transferred out. Caltech has a very particular view on how classes should be taught and what sort of material is important, and it seems to pervade every class here. They don't seem to be so much about what you can do with what you've learned, but making you go WOW THIS IS REALLY HARD THIS IS SO COOL I CAN DO IT. For me, an experimentalist engineer/scientist, it's a very difficult atmosphere to deal with, and I know whenever I have to deal with classes, I always get frustrated with their style.</p>

<p>I also think it's a little misguided to say the 12% that don't quite make it at Caltech are idiots. Most people I know of that have difficulties at school at the caliber of Caltech don't have trouble with the academics, it becomes more of a problem of depression and emotional issues that cause them and their grades to slide. Often they'll do fantastic for the first half of a semester, but then tank when a problem outside of their academics comes up.</p>

[foo182]

<p>sorry guys, i didn't express myself precisely there.. i didn't mean idiots as stupid or unintelligent, but more idiots as a personality.. if i were having such trouble i would just suck it up and not whine about how caltech is bad and how it should change, because it would be my problem and my bad choice.. i wouldn't want to turn caltech into MIT so i could have the easy way out, but try to live with my mistake as long as i have to, and then try to fix it. (transfering out, dropping out caltech and trying to get in to some other college, starting over, going back to my home country).. and don't get me wrong, i don't dare to think that i'm smarter then any of those guys who are having trouble, and i'm actually scared **** that i will be one of those 12% but i'm coming to caltech to major in physics, and that's what it is, if i cannot major in it, i failed and i'm going back home, and i'll do some lousy job or something because i'm just not cut for the real thing. i wont go **<strong><em>ing about not being able to major in dance from caltech just so i could finish something or because it just hit me that i never liked science at all.
grrrr, i hope you get what i mean.. i really didn't want to insult anybody, because i'm sure there's a lot of different reasons and people that drop out from caltech, but i'm *</em></strong>ed off on those who want to change it just because they don't like it. really sorry if it sounded.. hmm pretentious.. i guess that's the word i'm looking for ;)</p>

[lizzardfire]

<p>RacinReaver, I understand your point about the classes here being theoretical in nature (at least I hope that is your point--if you really feel that our courses are simply there to be difficult and not actually offer useful skills; I'm somewhat bewildered) , but keep in mind that almost all of us here are "experimentalist engineers/scientists". Although theory is much more important here proportionally than at other major universities (i.e., more people choose to study it proportionally) the vast majority of students at Caltech are experimentalists.</p>

<p>In addition, I have found almost all of my classes to be practically geared and useful for application. (EE Major). It's true that in many cases our classes are more theoretically geared than others, but I see it as offering a rigorous theoretical background with the idea that you as a student can now "recreate" that applications of that background as opposed to simply memorizing the applications.</p>

<p>An example for you: At many universities, feedback amplifiers are taught hand-in-hand with SPICE. It's a very useful tool, but also sort of a crutch. If you're allowed to tweak your component parameters in SPICE to get a "better" amplifier, you may learn something--but not as much as you would learn if you had to design the amplifier on paper, manually doing all of the math that SPICE would normally do for you. This isn't exactly theory, but it's the same type of fundamentals based learning. We're given the math necessary, the desired characteristics, and from there we learn the rest.</p>

<p>EDIT: </p>

<p>foo, I think the part dauntless was trying to convey is that you really don't know what you will do until you get here. In any case, dropping out of Caltech and going home just because you can't hack physics is ridiculous. You can always become an E&AS major... (you can't spell EASy without E&AS!!)... what about MechEasy?!? EE has two Es in it so it must be ExtremelyEasy too...</p>

<p>oh and of course there's always bio :P</p>

[Dauntless9]

<p>EE is incredibly easy. They have these joke, GPA booster classes called EE 51 and EE 52 that require very little time and almost no effort . . .</p>

<p>I've always found it really funny that two of our "drop down" majors are E&AS and MechE, considering at most other schools, kids drop out from engineering to something else. Granted, our ChemE's do drop down fairly frequently</p>

<p>And no harm done foo182. I would be sad to see Caltech turn into MIT too. I would like to point out though, you are certainly allowed to whine (well, after pass/fail), and there is nothing wrong with seeking help when you have problems or run into difficulty. And there is certainly nothing wrong with switching majors if you find something you like better than physics. Ph1bc anal track will certainly help you determine that. There will probably even be a Challenges and Choices skit about that kind of stuff at Frosh Camp (which should be a blast, btw).</p>

[lizzardfire]

<p>we just tell people that 5x is hard so they don't find out how easy EE is. Those 30 hours a week when I was supposedly in Moore? Well, I was in Moore... in the PARTY ROOOOOOOOOOOM</p>

<p>that or I was making an oscilloscope</p>

<p>one of those two things</p>

<p>they're practically the same thing anyway</p>

<p>right?</p>

<p>RIGHT!??!</p>

<p>aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaah</p>

<p>FACEBOOK STATUS: Lizzardfire is now a MechE.</p>

[sakky]

<p>
[quote]
sakky you seem not to understand that caltech is a specific school,

[/quote]
</p>

<p>Uh, trust me, I think my level of understanding is pretty darn good.</p>

<p>
[quote]
i wouldn't apply to caltech if it did. sakky you seem not to understand that caltech is a specific school, the only in the US from the top top schools, which doesn't want to be a sell out, and it actually does what it wants and does it good.

[/quote]
</p>

<p>Is it a matter of "selling out"? Then, like I said before, Caltech is a sell-out. How's that? Because Caltech built HSS. Caltech wasn't founded with HSS, and wasn't forced to create it later. It chose to create HSS because it wanted to broaden the reach of the school. So does that mean that Caltech sold out? </p>

<p>In other words, why is it not a sell-out for Caltech to have added HSS before, but is a sell-out if Caltech wanted to add some more programs today? What's the difference? Or, put another way, why was Caltech allowed to add programs before, but not allowed to add programs now? </p>

<p>
[quote]
opening a caltech's version of sloan school would attract more applicants to caltech which were never initially caltech targets. ok, it would offer more options for students which are already go there, graduation rates would be higher blabla, but grrrr, why did those people decide to go to caltech anyway?

[/quote]
</p>

<p>See above. I'm sure that some people questioned why Caltech needed to add HSS under the notion that those students who are interested in those topics can just go to another school. But Caltech added HSS anyway. </p>

<p><a href="for%20those%2012%%20which%20are%20idiots">quote</a>..

[/quote]
</p>

<p>
[quote]
i didn't mean idiots as stupid or unintelligent, but more idiots as a personality.. if i were having such trouble i would just suck it up and not whine about how caltech is bad and how it should change, because it would be my problem and my bad choice..

[/quote]
</p>

<p>I think right there we just identified the real heart of the problem: that a lot of Caltech people (or, in foo182's case, future Caltech people) are simply not interested in helping those students who are having trouble. </p>

<p>Now, sure, I can agree that maybe these students had perhaps made a bad choice in coming to Caltech. But come on, they were just 17-18 years old when they made that choice. They're just kids. I think you have to feel some sympathy to these kids. Not every 17-year kid really knows that they truly love science. </p>

<p>I think what's fair is to implement a shared sense of responsibility. Sure, those students perhaps made a mistake in coming to Caltech. But on the other hand, Caltech made a mistake in admitting those students. Hence, both sides are at fault. Yet because it is the student who suffers most of the damage, and furthermore, because Caltech ought to have far greater experience in terms of knowing who should be admitted (for Caltech admits hundreds of students a year, and have done so for decades, but individual students only apply to college once in their lifetime), I think it is only fair for Caltech try to help these struggling students as much as possible. </p>

<p>Again, I don't see what is so controversial about the notion of Caltech broadening its programs. It did so before, so why can't it do so again? By doing so, not only will you help those students who come to Caltech and then find out that they don't really love science the way they thought they would, but you would also attract those students who already understand that they're not really sure about science and hence value the freedom to explore. Why is that freedom such a bad thing? I believe that greater choice is a good thing.</p>

[sakky]

<p>
[quote]
I'm sorry you can't understand why larger endowments have higher returns, which is why I provided the link. It shows clearly that larger endowments do have higher returns.

[/quote]
</p>

<p>This claim is statistically unsupported. There seems to be no positive correlation between the size of an endowment and its growth. By far the fastest -growing fund (in terms of per-annum exponential growth rate) of the last 20 years has been the fund of the University of Michigan, which has grown from miniscule to being the 9th largest in the country. Harvard, which has the biggest university endowment in the world, has actually seen a lower growth rate than smaller endowments at Yale, Stanford, Princeton, and MIT. </p>

<p>List</a> of U.S. colleges and universities by endowment - Wikipedia, the free encyclopedia</p>

<p>Hence, the notion that Caltech needs to husband its endowment in order to accelerate its growth rate is clearly unfounded. Schools like Michigan, Duke, Notre Dame, USC, and Virginia have managed to grow tiny endowments into huge ones. </p>

<p>Furthermore, and more importantly, Caltech still has one of the largest endowments per capita of any school in the nation, clearly more than MIT does. Hence, Caltech could easily afford to build new programs and still have plenty left over.</p>

<p>So, it's not a matter of money. Then what it is it then? Probably organizational change. I can agree that probably few people currently at Caltech want new programs. But that's obviously the wrong way to look at it, for that's just a recipe to never make any changes. Organizational insiders never want to change anything because that would threaten their current political position within the organization. What you have to consider are the new people who would be part of your organization after you make the change. </p>

<p>For example, I'm quite certain that in the 1990's, most employees at Microsoft didn't want to start the Xbox division. They would obviously prefer that Microsoft continue to invest in whatever projects (i.e. Windows and MSOffice) that those employees were working on. But Bill Gates wanted Xbox. That of course attracted new employees who cared about gaming. Similarly, I'm sure that existing students and faculty at Caltech probably resisted the founding of HSS. Heck, the same could be said about the Geological and Planetary Sciences division. It's widely regarded as the best Earth Sciences program in the country, yet it did not exist when Caltech was founded, but was launched only later. I'm sure that when it was launched, existing people at Caltech were probably resistant. Any organizational change will encounter resistance from those who are wedded to the status quo. But does that mean that Caltech should never change?</p>

[RacinReaver]

<p>lizzardfire, sorry for the late reply, but I suppose I should say I've found my engineering classes to be much better than the classes I've had in APh, Ph, or Math. While I'd say without a doubt I've learned new things in those classes, and certainly some of the skills I've gained I don't know I would have gotten if I had chosen to attend a different graduate school, I feel as though the value I get for the time I put in on my classes here is significantly less than what I got during my undergrad at CMU. I've had a lot more homework sessions with friends that ended with us going "Well, I guess that's close enough" since none of us ever gained the mastery of material we all felt we were able to get at our respective undergrad schools. I know I'm going to learn all of this material eventually (since I need to for candidacy), but it's a little frustrating to feel most of my graduate degree is going to be self-taught since the classes felt so out of touch with what I'm actually taking them for.</p>