Did anti-capitalist reach Harvard Business School?

At Harvard Business School, in a seminar room littered with button-down shirts and puffy fall jackets, a group of future business executives talked about capitalism. What makes capitalism truly pure capitalism? What are its essential components? Property rights. financial market.

“Maybe it’s too much to put on the board because it’s so basic, but maybe not enough?” Andrew, a sophomore who came to Harvard via the military Gibbs, 32, said. “If people are comfortable, is that capitalism?”

Deborah Spar, who teaches the widely popular course “Capitalism and the State,” turned to Gibbs with an instructor-like glint in her eye, knowing the conversation was heating up. She asked, “Can you go so far as to say that scarcity is a necessary condition of capitalism, and that it promotes inequality?”

Gibbs paused and pondered. “I would say yes.”

Capitalism was written on the blackboard. rarity. inequality.

Each year, approximately 250,000 young people, many leaving consulting and private equity work, attend business school to pursue the skills and credentials that will accelerate their future roles in consulting and private equity. They study accounting and negotiation. They learn his DCF (Discounted Cash Flow) and he the 3 C’s (Company, Customer, Competitor). They show up in one classroom with the ability to pretend to have at least intimate knowledge of the godfather of shareholder supremacy, dubbed “our sidekick Milton Friedman.”

But today’s business school students are also learning about corporate social obligations and how to rethink capitalism. This is a change in curriculum at an elite institution that reflects a shift in corporate culture as a whole. Political leaders left and right are asking business leaders to rethink their social responsibilities. The left argues that business needs to play a role in facing formidable global threats such as a warming planet and fragile democracies. On the right, they accuse executives of distracting themselves from the interests by talking about politics.

The corporate phenomenon of socially responsible investing (ESG) is as controversial as the $40 trillion industry. After the S&P 500 removed Tesla from its Environmental, Social and Governance Index last spring, Elon Musk called it a “fraud.” Former Vice President Mike Pence recently urged the state to “chill” his ESG. BlackRock stifled criticism by essentially pointing out that the investment firm’s focus on the environment did not undermine its core purpose of making money, he issued a letter in September. I tried

Meanwhile, many workers have called for employers to take a stronger stand on social issues such as racial injustice and abortion.

Top business schools are stepping into the political arena. Harvard University last month launched an institute for the study of business in a global society. Nearly half of the Yale School of Business core curriculum is devoted to his ESG. Next fall, the Wharton School at the University of Pennsylvania will launch her MBA major in Diversity, Equity, Inclusion, and the Environmental, Social, and Governance Factors of Business.

What’s happening at Harvard, Wharton, and other elite campuses offers a small glimpse of the changing corporate landscape. At the same time, however, their graduates tend to have a tremendous impact on businesses, shaping the values ​​and policies of the companies they run in the future.

Business schools aren’t generally known for their radicalism, but students and faculty are grappling with rapidly changing expectations of the role of business in society, sometimes in conflicting ways. Most students are upfront about the prestigious jobs they want, with large salaries attached. But now they are faced with sharper questions from their classmates about how they balance their sense of responsibility for the public good with their ambitions.

“We’re at Harvard Business School. It’s the bastion of capitalism,” said Ethan Luhan, who teaches a Rethinking Capitalism class at Harvard. “But looking at the courses offered, the institutions being created, and the speakers invited to campus, I can tell you that there is a huge demand from both faculty and students to rethink the obligations of businesses to society.”

Classroom views on corporate political involvement have widened in recent years, according to people at leading business schools. Assumptions that have long been woven into the syllabus are questionable. The wisdom of maximizing profit, the idea that the American version of capitalism is working properly.

“Should profits be the only thing companies should care about? How should they use their influence?” Studied engineering, worked at Bain & Co., then attended classes at Harvard Business School and Spar 27-year-old Chinedum Egbosimba said earlier.

“The classic idea that companies should only make money is very much alive,” he continued. “But many of my classmates look at the world today and say, ‘There is clearly something in this system that needs to be fixed.'”

At Harvard, in “Capitalism and the State,” colloquially known as CATS, Spare asked students to turn their business cards sideways if they felt that globalization was finally a good system. roamed the classroom floor in cheetah-printed shoes and walked excitedly.

After mumbling and shuffling the papers, about 80% of the students turned up the placards to show their support for globalization. Ebosimba disagreed. Slouching in a back row seat, he tells his classmates to rethink the views that gave rise to the world they know: the International Monetary Fund, his Hyatt hotels around the world, the golden arches of McDonald’s in every airport. I asked you to

Raised in Nigeria, Ebo Simba says, “I come from the Global South, an old colony in the West.” It’s nothing. As a victim, I can say this with confidence.”

Classmate Alan Shi, 28, agreed. “The mistrust of the elite that leads to capitalism undermines the whole globalization project,” he said. “We actually brought in illiberalism as a result of getting the good stuff.”

Yet most of their classmates remained supportive of a globalized economy. Spar summarized their arguments succinctly. There are nice things,” she said. “done.”

“It worked,” said 29-year-old Rachel Orrol, who sat in the front row.

A committed anti-capitalist might feel just as comfortable at Harvard Business School as professing an atheist in a seminary. Yet business professors have found that their students are demanding lessons beyond accounting more than in previous decades. They want to discuss the role of business in society, how it has created social ills, and how it can help solve them.

Harvard’s Rouen said classes on social impact and ESG were in such high demand that these themes are incorporated into nearly all introductory courses, including accounting. Curtis Welling, a professor at Dartmouth’s School of Business, asks students every year if capitalism needs to be reformed. Ten years ago, about a third said yes. This year, two-thirds said yes.

“The biggest trend in management education over the last 15 years is looking at social contracts,” says Welling.

In a class called “Responsibility in Business” at Wharton School, students debate whether cryptocurrency company Coinbase made a mistake in telling employees in 2020 that they can’t discuss politics in the workplace. Did. Yuta Kato, 29, who used to work as a trader, suggested that Coinbase could assess the merits of its decision by examining the past impact of similar policies on stock prices.

“Why is that the correct answer?” Wharton Professor Kevin Werbach asked.

“Because the company is indebted to its shareholders,” Kato said. “clearly.”

The class laughed at this idea. Kato later explained that he volunteered for this Milton Friedman gospel because he thought no one else would. He explained that it was triggered by following various scandals. Elizabeth Holmes was at Theranos, a now-defunct blood-testing startup, and Martin Shkreli was convicted of securities fraud.

“Five years ago, I never thought this was the core part of a business school,” Kato said. “Learning how to think about ethical problem solving is just as important as learning about strategic problem solving.”

This is not the first time business schools have faced a serious cultural overhaul. In 1959, he published a report for the Ford Foundation that concluded that “the gap between what society needs and what business schools are offering has become so large as to be obvious to all.” did. Business schools began to expand their focus on ethics and society.

The early months of the pandemic served as the driving force for another existential crisis.

In the summer of 2020, when Spar was isolating at home, Harvard administrators told faculty that a new course would attract hordes of restless students who might be doing their MBA online from their bedrooms. asked to consider. Spar has been watching the news – markets are in turmoil, companies are making statements on Black Lives Matter, pharmaceutical companies are rushing to develop vaccines – and she’s putting together a class to answer her own most poignant questions. I decided. Capitalism under attack? How effective were those attacks?”

She thought students might be deterred by the massive syllabus she had amassed, including Adam Smith, John Locke, Karl Marx, and Friedrich Hayek. Instead, she ended up asking her to add Thomas Hobbes, Vladimir Lenin, and Friedrich Engels.

Spur wanted to limit the number of students to 30 this year, but was able to reach 35 due to too many applicants. Mostly abandoning the traditional business case of her school and her study methods, she oversees lively debates, partly due to her 1971 Coca-Cola advertisement (“I’d Like to Teach the World to Sing”) and Grateful Her Dead song (“Tuckin'”).

But Spar is the first to admit that the questions that fuel her class are still beyond business school standards. After all, managers tend to listen less to the demands of young progressives than to the interests of employers looking to hire new graduates.

Jim O’Toole, former executive vice president of the Aspen Institute think tank, said: “Business school rankings are reflected in who hires students. In their view, most companies are not looking to hire enlightened students.”

Business school leaders likely know their donors are listening, but their new courses and focus are responding to the demands of political discourse in the corporate world. He emphasizes that he is not trying to impose a progressive view.

“It’s not because we’ve woken up, it’s not because we’re pushing an ideological agenda,” said Witold Henisz, Wharton’s Associate Dean and Faculty Head of ESG Initiatives. “Because it’s economics.”

And for many students taking a course on Challenging Capitalism, the big problem in the classroom can’t get past their initial aspirations in business school.

“Basically, once a day, I have conversations with people trying to persuade them to quit consulting or banking,” says Aaron Sabin, a 27-year-old Harvard Business School student working on climate technology. said. “It usually doesn’t work.”

Spare told the students to conclude the class by thinking about problems much larger than a single difficult business.

“This is the question I would have finished if I hadn’t cut so much time,” Spur said. “What will the story be like 100 years from now, teaching globalization at Harvard Business School? ‘That was a disaster’? “

The students started packing their bags. On the blackboard remained notes of their extensive debate. Read the “winner” corner. “Western Elite”

This article was originally new york times. Did anti-capitalist reach Harvard Business School?

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