Saturday, November 19, 2011

Bias in MBA questions: Community Service

One of the schools I am applying to, which shall remain unnamed, asks the question of how I shall give back to the community, as charitable service is one of the values they highly esteem. I believe this question is loaded with bias and misunderstanding:

1) It assumes that the only way of giving back to the community is through charity, ignoring the value accruing to society through individuals specializing and taking advantage of comparative advantage through free trade:

I.e. I specialize in medicine and you specialize in growing food; rather than both of us doing this, resulting in more medical services and more food available for society through each of us utilizing our talents and trading with others for goods it makes more sense for them to produce for us, as we produce a service for them.

2) It fails to acknowledge the consumer preferences of the individual - perhaps no matter the mix of activities in his daily life, an hour of charity does not add value for him on the margin, meaning that "charity" performed by him would only occur if someone abrogated his liberty;

3) It fails to consider the opportunity cost to society of an hour given to charity by the individual versus spent on activities where he has a comparative advantage:

For example, what if he is an entrepreneur adding value through new products, services, or research? And what if, on the margin, an hour expended by him on those adds more value to society than an hour expended at the soup kitchen. Wouldn't it make more sense for him to spend his time on the former? Wouldn't that truly be giving back to the community, since he is adding value that otherwise would not have been created?

I find this question sad, because it seems to indicate the university's preference for non-value added service over value-added voluntary trade among individuals, the latter which has caused the wealth of nations. Hence, this university is lower on my preferred school list.

No comments:

Post a Comment