If one strained to find a core example of what has driven the widely-lamented rise in premium enrollment costs at America’s prestige universities, there’d be no better source than the rising-revenues chart of this Economist article on the big 3 U.S. management consultancies. This three-cylinder engine generated better than 10-fold nominal growth in the decades from 1990 to 2020, and if anything the rate of increase quickened in the last five of those years. Those billions of bucks, in turn, led to the recruitment of thousands of consultants fresh with degrees from these very universities. Of course, the trio of McKinsey, BCG and Bain are far from the only lucrative salary and bonus draws on elite American graduates–Wall Street and Big Tech are famously hungry for smarts and pedigree as well–but they are symptomatic of a rich-and-richer strain in the economy. The consultancies are getting more frequent scrutiny of their practices, which prompts the (also elite) Economist’s nonetheless sympathetic accounting. These “practices” offer high-priced hand-holding to executives of the world’s biggest outfits, and arguably more: Operating conditions are changing faster than internal managements can handle, the story goes. Distilled intelligence is thus vital. A friend who works at the Big 3 and can laugh at their efforts to demark supposedly novel concepts in charts and lexicon, nevertheless argues that the pandemic shocks really did call for outside help. Maybe, but 2020 was only the last year of this steep fee incline. Who knows how the industrialists of old adjusted, on their own, to electricity and the light bulb when Harvard produced only gentlemen.
Tim W. Ferguson 