Legendary investor and polymath Charlie Munger, Berkshire Hathaway’s vice-chairman and Warren Buffett’s long-time business partner, has said several times the best way to learn about business is to study the multi-decade financial results of great businesses. Business schools that don’t adopt this method are doing their students a disservice, he said.
“The Harvard Business School, when it started out way early, they started out with a history of business. They 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. And it was a background, which helped everybody,” Munger said Wednesday during the Annual Meeting of Shareholders of the Daily Journal Corporation (DJCO), where he serves as chairman of the board.
The 97-year-old investor said if he were teaching business it would do it the way Harvard once taught it.
“But of course you should start out by studying the history of capitalism, and how it worked, and why before you started 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,” Munger said.
He continued: “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? It’s incredible what’s happened in terms of the destruction. And of course, that history is useful to know.”
Read more from the Daily Journal Meeting: