Sometimes clients benefit from the knowledge of the senior partners, backed up by detailed analysis the Ivy league grads did in the back room under the partners’ direction. Having a different perspective from outside can be helpful.

But all too often, consultants are hired simply to provide cover for an unpopular decision that company management has already made, especially when layoffs will result. Or, many companies have an inferiority complex regarding their own people, so they hire consultants that end up telling them exactly the same thing that the middle managers and senior professionals in the company were saying.

Yes, it is rational to go to an Ivy League to reliably identify smart, young prospects, but those schools also filter for a very specific type of student–one who enjoyed lots of early support, a focused but potentially unimaginative personality and, typically, access to wealth. Employers may find that immediately useful, but society should be a little concerned that this narrow subset of individuals too easily rises to the top.

I don’t imagine Yale worries too much that its students are tapped for such work, but, again, we should wonder as a society about so many young elites lacking the imagination to do anything but jump into a conventional wealth trajectory.

Finally, I fully acknowledge that the knowledge economy is important and growing, but I argue these people are not part of it. They are learning how to manipulate financial transactions and swim in an elite business environment. Such skills remain marginal to innovating new, more efficient (and wealth generating) technologies and production systems.

After proving your worth with a few years’ of service, the company then keeps the employees who have proven themselves by promoting them and getting rid of the rest.

Top law firms work the same way with Ivy League law graduates. The point is not that Ivy League graduates know so much or have applicable real world skills. The point is that they have high IQs and so firms test out entry-level hires from these places, monitor them closely for a few years and then keep the ones they like.

2) I suspect that the reason that elite schools have such a disproportionate share of the jobs in consulting has to do more with social capital than innate intelligence or even hard work. Even if you’re extremely intelligent and hardworking at an average State U, you aren’t going to pick up the same understanding of the wheels of power that you would hanging around your classmates at an Ivy League or comparable university.

3) Joe, the way the gig works is this. New students come out of college and get paid a ton of money to go to consulting or finance. After a few years there, most of them leave to go to business school. Their former companies will pay for their business school tuition on the condition that they come back and work for a few more years there. By the end of this, you have a significant number of 30-year olds who are very immersed in that corporate atmosphere and stick with the company for several decades more. Clients pay a lot to consulting teams and financial institutions for (theoretically) the expertise that the partners and senior managers have accumulated. The 23-25 year olds earn a lot more than they contribute, but they’ll come back eventually as senior managers and partners. That’s the price a client has to pay to keep the whole system going.

So, really, it’s not the education that is valuable, it is simply the gateway into the chance to get the education that is the real value.

Smart, hard working people who didn’t have the right parents, proper education and sufficient vision when they were 14 or 15 years old to get into an Ivy League are effectively locked out of this gravy train.

It sure sounds to me like a system whereby you have to spend lots of money going through an elaborate educational system to get into the apprentice program where the real job training starts certainly undermines the ideals of meritocracy and equality of opportunity.

The question, of course, being “what can be done about it?”

1) These grads are jumping into “industries” that don’t create anything except information that allows a limited elite to plow wealth into their already large coffers.

It seems to me that America was always founded on checks and balances – and that excess is the path to ruin. (I can’t think of a single situation where this isn’t true – nor a single virtue that does not turn into a vice in excess).

So the real problem IMO is that we have a situation where the system itself is contributing to income disparity.

While OWS looks for a scapegoat, the real solution must lie within the rules of the system itself: if we do not find a way to check the processes that are creating bad outcomes, the system will become unstable.

1) These grads are jumping into “industries” that don’t create anything except information that allows a limited elite to plow wealth into their already large coffers. The fact of growing income inequality makes this seem even more crass.

2) Smart, hard working people who didn’t have the right parents, proper education and sufficient vision when they were 14 or 15 years old to get into an Ivy League are effectively locked out of this gravy train. Ironically, I suspect businesses suffer because they end up lacking real diversity of intellect and personality.

Grad programs, for instance, are packed with smart, creative people who got ambitious too late and lack the entree to elite business that an Ivy Leaguer enjoys. They end up warring with one another for a slim set of relatively low-paying jobs in academia, the government and the non-profit sector.

When we hire junior people we’re looking for smarts (especially quantitative smarts), attitude and work ethic, and enough maturity and polish to talk to clients. We recruit heavily at Ivy League schools because the “hit rate” on those three criteria is high (though nowhere near 100% – more like 10-20% among the folks we interview).

We also draw people from “less prestigious” schools, though in general we tend to have a lower hit rate on interviews. We’d be more than happy to hire everyone we need from The University of Illinois, but in practice to get the kinds of traits we need we have to recruit heavily at the “prestige” places.

With Ivy League liberal arts grads, the biggest gaps tend to be quantitative skills. Even economics majors often aren’t comfortable enough with numbers to do the work we need our junior people to do.

With business administration or engineering students at big state schools, the gaps tend to be around polish and communication skills. They are plenty smart enough to do the work, but come across as nervous and inarticulate, which is a big problem in a client serving business.

We focus on raw abilities rather than specific skills because we need for people to be very flexible and to learn on the job in what is, effectively, an apprecticeship environment. Executives don’t pay our fees to “take advice” from 23 year old Yale grads. They pay our fees to take advice from 50 year old Partners with 20-25 years of experience in the business. But the advice of those Partners is dependent on having lots of facts and good, rigorous analysis of those facts. And that’s what the 23 year old’s work centers on providing.