Can B-schools help us reimagine capitalism?

Over the last few years, student interest in the social impact of business has soared. Even before the pandemic, business schools were offering programme concentrations in line with investors’ growing interest in “environmental, social, governmental” considerations
Can B-schools help us reimagine capitalism?
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By: MOLLY WORTHEN

If you want to be a leader confident in your deepest values and your role in the universe, go to business school. At least, that’s what business schools say. In recent years, they have branded themselves as places where students learn to stay “true to your mission” and undertake a “truly life-changing experience” that values “health, happiness, and purpose” as well as “authenticity and renewed passion.”

Marketing teams across higher education are fond of quasi-spiritual tag lines, so it might be unfair to pick on business schools. But in the M.B.A. world, the latest, breathless versions of these slogans signal more than the generic American vocation to make money and live your best life now. What is remarkable is this: After decades of emphasis on financial markets and shareholder returns, business schools are trying to take on deeper philosophical problems — including, maybe, tentative questions about the means and ends of capitalism itself.

Over the last few years, student interest in the social impact of business has soared. Even before the pandemic, business schools were offering initiatives and programme concentrations with names like “Conscientious Capitalism” and “Sustainable Business,” in line with investors’ growing interest in “environmental, social, governmental” considerations. “There’s been a little tempering of the fervour for laissez-faire capitalism. There’s healthy conversation about that,” said Brian Lowery, a professor at the Stanford Graduate School of Business, where he recently taught a course on “Reimagining Work Post-Covid.”

Such conversations reflect a longstanding ambivalence about what, exactly, business schools are for. Is their purpose to train general managers as a professional class with a shared body of knowledge, like lawyers or doctors? Or should they provide targeted programmes that offer technical skills? Are they a kind of divinity school for secular capitalists, where students discern their true vocation? Today’s business schools try to fulfill all these aims at once — but it is hard to teach narrow, applied skills and also encourage students to wrestle with giant, ambiguous questions about ultimate values and hierarchies of power.

The current surge of interest in deeper questions is not new, but rather a return to the original aims of the first modern business schools. The goal of the Tuck School of Business, founded in 1900 at Dartmouth College, was to educate “the man first and the businessman afterwards.” At the dedication of Harvard Business School’s new campus in 1927, one speaker declared “that the ministers of our business, like the ministers of our churches, should appreciate their responsibility.” He stressed the need for businessmen to have a wide-ranging education, to become “men who have not only a broad outlook in history, politics, and economics — but men who have also that moral and religious training which tends to develop character.”

Then, as now, these grand declarations reflected a mix of sincere conviction and a desire to persuade skeptics that training students to make more money can also be a genuine intellectual enterprise.

Historians of business education have traced the rise and fall of this ideal of “the C.E.O. as enlightened corporate statesman,” as the Harvard sociologist Rakesh Khurana put it in his book “From Higher Aims to Hired Hands.” Faith that managers could — and should — have long-range vision and a sense of public responsibility crumbled in the economic crises of the 1970s. The corporate models that emerged from the wreckage recast executives — and aspiring managers at business schools — primarily as agents of shareholders, indentured to serve the stock market price or valuation of private shares before all else.

This mind-set has pushed business schools to train managers to maximise shareholder value on quarterly returns, in the same way a NASCAR crew chief trains to manage a pit crew to get the car back on the track as quickly and efficiently as possible. This has left little room for that older ambition to cultivate character or wide-ranging intellectual curiosity — although business schools papered over the void by embracing the language of positive psychology and an amorphous idea of “leadership.”

Plenty of critics inside business schools have noted this reluctance to ask big-picture questions, despite the fad for genuflecting to environmental, social and governance concerns. Some note that schools are adept at defanging detractors, cordoning them off in their own professional journals and conferences and keeping them on payroll.

“I’ve been rewarded for being as cheeky as possible,” Martin Parker, who teaches at the University of Bristol’s School of Management, told me. When his current employers hired him, they knew he was about to publish a book called “Shut Down the Business School,” but they didn’t mind. “That doesn’t say they were particularly brave, but that my critique doesn’t matter very much,” Dr. Parker told me. “It’s not particularly threatening. I’m being petted by the emperor.” Diversity initiatives and attention to environmental and social impact, he said, “amount to a green-washing, or ethics-washing, and conceal the major epistemological and structural issues that business schools assume, and glosses them with a particular kind of website fluff. It’s liberal fairy dust. Others don’t see it that way. They think capitalism just needs to become quite a bit nicer, that we need to orient corporations toward more benign investment strategies and less toxic relations with workers. That would be good — I’m not against small steps — but that diagnosis doesn’t reflect the nature of the problem we have.”

Even professors who push the envelope in their research pull back from challenging the instrumentalism of business schools, the focus on supposedly neutral tools and skills. Professor Lowery of Stanford, whom I mentioned earlier, is a social psychologist who studies the intersection of race and class. But he keeps normative questions out of the classroom. “Most of what I teach is designed to be as neutral as possible in terms of the explicit morality of what you should do,” he said. “I say this explicitly to students: The content is amoral. You can use it to achieve any sort of goal. It just helps you understand how people operate in social environments. It’s a set of tools.”

Dr. Lowery has taught Stanford’s most popular elective, a decades-old course called “Interpersonal Dynamics” (nicknamed the “Touchy Feely” course) in which students exchange candid feedback in intense sessions that many compare to group therapy. Students rave about the experience, which is based on the psychologist Kurt Lewin’s “training group” sessions in the 1940s, a precursor of modern workplace sensitivity programs. This sounds like a welcome break from a curriculum full of financial instruments and quantitative modeling, although the course is perhaps not all that different: Students are simply studying the efficient management and transfer of emotions.

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