Friday, November 25, 2011
Business, economics degrees differ greatly
BY GERALD M. BRADSHAW
Bradshaw College Consulting
Dear Mr. Bradshaw: I am a college sophomore and I need to declare a major. I am thinking about majoring in business and finance or economics. I know that a few colleges like Harvard and Yale do not offer undergraduate degrees in business. Why?
Can you explain the difference between a major in business and one in economics? Is one better than the other in order to get a top-paying job or admission to grad school? I am considering law school at some point in the future. --Student
— As the deadline nears for declaring a major for sophomores, you are right to be concerned about job and grad school prospects and the impact a major has in the job market. The good news is that both business and economics degrees will help you find employment even in a down economy according to recent studies by The Wall Street Journal.
There is a great deal of difference between the study of business and economics as a concentration. This goes to the heart of why Harvard does not offer an undergraduate degree in business.
The law school at Harvard even warns applicants that chances of admission are inversely proportional to the number of business classes taken as an undergraduate. The university considers business courses to be vocational in nature and not fitting their broad definition of a liberal arts education.
Perhaps it is better to explain the difference between economics and business by saying that economics is a social science aimed primarily at understanding the social world.
Economists address a variety of social science questions. Will school vouchers improve the quality of education? Do politicians manipulate the business cycle? What sort of legal system best promotes economic development? Why do cities have impoverished areas? Why do people procrastinate in saving for retirement — or in doing their homework?
Economists say that business classes teach professional skills that are useful for starting and operating companies. They believe that economics and business are related, but that business is professional training aimed at making profits, while economics is a science that pursues an understanding our social world.
Because many top colleges do not offer a business major to undergraduates, some students treat economics as a substitute. This has been proven to be a bad choice. According to studies, there is no evidence to suggest that concentrating in economics helps students to get better jobs after graduation. For these reasons, most economics departments strongly discourage students from majoring in economics as a substitute for something else.
If you select a major with law school in mind I would recommend economics over business because the courses cover a broader subject area touching on many fields of study. I should add that I have several clients who majored in business and went to law school. They tell me they profited a great deal by their study of business as undergraduates.