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August 2000
Volume 18, Number 8

Anticapitalism at Business School
by James Sheehan

After attending a leading business school for the last year, I have been witness to capitalist bashing that rivals that of high schools and colleges. The chilling part is that these schools are training future business managers working in a free-enterprise system.

In fact, the business schools that produce an annual crop of MBAs for industry are becoming as hostile to freedom as the rest of the state-dominated educational system. They are training graduate students to hate business, to worship the state, and to enforce politically-correct attitudes into their businesses at all times. 

The political indoctrination began on the first day. Each student was ordered to stand up before hundreds of classmates and complain about all the "unfair stereotypes" his own racial or geographic group was subject to. The other students were supposed to feel sympathy for these oppressed people, who have had such trouble getting through life knowing that others do not have uniformly positive attitudes towards them. 

From listening to all the whining, one would think that all ethnicities were discriminated against rather equally, but the clear purpose of the exercise was to make white males feel guilty for the alleged victimhood of racial minorities. It did not end with racial victimology, however. Several white students, perhaps unable to conjure up any unfair stereotypes about their ethnic origin, decided to take a different route. They defined themselves in terms of their pro-abortion views. In harsh tones, they cautioned their classmates not to discriminate against their abortionist philosophy. Presumably, this meant not stating antiabortion views in public. 

The next exercise was to confess the shortcomings of one's own ethnic group. After hearing what not to say about other groups, particularly blacks and homosexuals, this exercise would cause whites not to think of themselves as superior to anyone. But at this point an unusual thing happened. Some blacks listed several negative qualities about their group, such as "violent," "abusive," and "irresponsible." Just minutes before, these were the very adjectives that constituted "unfair stereotypes" about blacks. From this contradiction I can only conclude that one is supposed to hold negative views only about one's own ethnic group, and to attribute strictly positive qualities to everyone else's. 

If opening day propaganda did not fully convince the students not to engage in sexism, racism, or able-ism, a later course in managerial communication drove these points home. Specific words are to be stricken from any business manager's vocabulary during presentations and meetings. For instance, Asians must not be referred to as "industrious." Nor is Jesse Jackson to be called a "black politician." These are ethnic slurs. Likewise, sexist terms "man-made," "man-hour," and "businessman" must be avoided because they aren't inclusive. Wherever the generic "he" is used, one must say "she" instead. For $20,000 or more in annual tuition, these are some of the political lessons one may learn in business school, though they seem more appropriate for a make-work job in a government agency than for a career in management. 

If a modern-day business manager is intelligent enough to master all the intricacies of sensitivity training, there is still no guarantee that he (oops, she) won't become an evil polluter. For this, a course in environmental sustainability will provide the requisite brainwashing. The course begins with a documentation of all the ecological destruction that capitalism has caused. Most of it is phrased in the future tense, as in "global warming will wreak untold havoc." 

One of the authorities cited is the notorious doomsayer Paul Ehrlich, who predicted in the 1970s that population growth in the US would cause a devastating environmental breakdown by the 1990s. We would run out of oil, create a giant desert covering the Midwest, and starve masses of people to death. Today his baseless predictions are the basis for teaching tomorrow's business managers about the need for more government regulation of industry. 

With the end of life on earth assumed, my sustainability class was divided up into teams and assigned to special consulting projects for real-life corporate clients. My team's task: recommend to the client ways to stop global warming, a phenomenon that may or may not exist, which may or may not be beneficial, and which may or may not be affected by human beings. 

The solution was given in advance-use less energy and do so "at a profit." In normal courses on finance, a project must be shown to have a positive Net Present Value before being undertaken. In order to win accolades from Greenpeace, however, rigorous financial analysis must be jettisoned. If all businesses just assumed that phasing out the use of their core product was profitable, they would lose money, and losing money seems to be the essence of environmental sustainability. 

All the political correctness that has been imported into the management curriculum has not stopped the handwringing over "social responsibility" and "ethics" in business schools. Antibusiness think-tanks, such as the World Resources Institute, are proposing that business schools fold even more social and environmental perspectives into their core curriculum. WRI has even started to publish a "ranking" of business schools based on their adoption of leftist environmentalism. And some esteemed institutions of management education are starting to fall for it. 

The terms "social, ethical, and environmental responsibility" in the context of management education have nothing to do with a fair-minded empirical analysis of business and society. Rather, these terms are code words for antibusiness propaganda, junk science and anti-technology bias. The purpose of such courses is to undermine the moral legitimacy of business and to persuade future business managers of the urgent need for more regulatory restrictions on economic freedom. 

Besides misrepresenting the social and economic record of business, "socially responsible business" diverts from the main purpose of business school, which is to teach aspiring managers how to make money. If these students wanted to commune with nature and become social activists, they would have chosen a degree program in political science, peace studies, or ecology. 

What should business school actually be teaching about the philosophy of business? Capitalism and economic freedom are overwhelmingly positive for society. Private business creates millions of jobs that improve the livelihoods of vast numbers of people, and creates the wealth that is essential for nearly all of the societal standards that leftists wish for. 

Competitive enterprises seek to earn profits by solving important societal problems and saving much time and money for consumers everywhere. The same competitive forces in the marketplace also cause businesses to enhance environmental quality. Cost cutting leads to reduced waste and greater efficiency, as firms gradually use less energy per unit of output. No natural resource that is privately owned and managed has ever been depleted. 

Private businesses take scarce resources and apply technological innovations to make them cheaper and more abundant for everyone in society. The prices of all scarce commodities have declined precipitously over time. The process of identifying promising investment opportunities and calculating Net Present Value estimates ensures that resource use is sustainable and that future generations will be able to enjoy greater prosperity than previous generations. Socially, business also has an excellent track record, breaking down barriers between cultures and democratizing leisure activities formerly accessible only to the rich. Air travel, the automobile and telecommunications are examples of how business universalized formerly elite conveniences. At one time, only the privileged few enjoyed protection against accidents and natural calamities. Today, business allocates financial resources using ultra-sophisticated techniques for managing risks, minimizing unforeseen losses for all of society. 

Insurance services have expanded protection from hurricanes, fires, and earthquakes, enhancing society's overall resilience. Business has created so much wealth for broader society that lower-income people can now afford high-calorie diets, widespread health care and modern medical treatments. Consequently, infant mortality has plummeted and life expectancy has risen dramatically for all income and racial groups. Could economic planners and wealth redistributors have accomplished any of these feats on society's behalf over the last century? 

Business schools that adopt the "social responsibility" agenda are doing their customers a real disservice, as true management training is being steadily diluted. MBAs brainwashed to be "socially responsible" will be more prone to tolerate government intervention in their businesses, but less likely to boost shareholder and societal values. In the end, however, at least I have the satisfaction of knowing that the market will punish anyone who actually tries to practice the PC ethics taught in business school. 


James Sheehan works for the Competitive Enterprise Institute. 



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