The View From 1776

Liberalism and the Harvard Business School

Paradoxically, the B School was born out of the ferment of Progressivism, as today’s liberalism was called at the beginning of the 20th century.

(This piece is written for the forthcoming newsletter of the Republican Voices website.)

To the extent that most people bother to think about it, the Harvard Business School is identified with conservatism and Big Business.  Its origin, however, was in a rather different social and political milieu.

The B School (officially The Harvard Graduate School of Business Administration) was a product of the forces of Progressivism that roiled the political and educational worlds from the 1880s until after World War I. 

Teddy Roosevelt, a Harvard graduate, was President of the United States from 1901 until 1908, the year the B School was founded.  Teddy embodied the Progressive faith that a strong executive could simply overpower Congress and state legislatures to lead the nation toward the scientific, medical, and academic preeminence of Bismarck’s German Empire.

Major educational changes were impelled by the utopian, Progressive vision that human minds controlling the institutions of government and education could perfect humanity, eliminate wars, and bring harmony and material well-being to the world.  Socialist John Dewey began teaching at Columbia University in 1904, as Columbia Teachers College became the country’s leading institution for training young socialist educators.

Harvard, under the leadership of President Charles William Eliot from 1869 to 1909, was in the forefront of the movement for Progressivism in education.  And the B School was one of his final projects, opening its doors in 1908.

As the B School’s 50th anniversary yearbook of 1958 records, “Archibald Cary Coolidge and Abbott Lawrence Lowell, both members of the committee [appointed by President Eliot to study the concept], recognized the increasing need for executives who could, through balanced thinking raise the standards of business enterprise.  They felt that the growing complexity of business and the trend toward larger business units made it difficult for an apprentice to learn the whole process or to see clearly the relationship of his work to the other functions of a business enterprise.”

This sounds unexceptionably commonsensical.  It was, however, a reflection of the social-engineering and bureaucratic impulses of Progressivism and European socialism.

Walter Lippmann graduated from Harvard the year after the B School opened.  At Harvard he had been president of the student socialist club.  He expressed the prevailing ethos in his 1913 “A Preface to Politics,” writing:

“....The power that workingmen generate when they unite ? the demands they will make and the tactics they will pursue ? how they are educating themselves and the nation ? these are genuine issues which bear upon the future.  So with the politics of business men.  Whether financiers are to be sullen and stupid like Archbold, defiant like Morgan, or well-intentioned like Perkins is a question that enters deeply into the industrial issues.  The whole business problem takes on a new complexion if the representatives of capital are to be men with the temper of Louis Brandeis [who favored public ownership of business] or William C. Redfield.  For when business careers are made professional, new motives enter into the situation; it will make a world of difference if the leadership of industry is in the hands of men interested in production as a creative art instead of brute exploitation.  The economic conflicts are at once raised to a plane of research, experiment and honest deliberation….. The subtle fact, ? the change of business motives, the demonstration that industry can be conducted as medicine is, ? may civilize the whole class conflict.”

In genteel fashion, Lippmann was reciting the credo of Henri de Saint-Simon’s socialism, which captured the allegiance of France’s young civil engineers in the 1820s ? the faith that entrepreneurial effort and business management are, not dynamic processes, but static design processes, like a bridge or a road, that can be planned and controlled by social-engineers.  When business management is integrated into political-state-planning, according to theory, business will be rationalized and harmonized with the needs of society.  Socially-undesirable products will be eliminated, production efficiency maximized, and more than enough will be produced to enable every person access to all of society’s goods and services he needs, regardless of his ability to pay.

Why, then, didn’t the Harvard Business School become just another inculcator of socialist doctrine, as did so many other graduate schools in the major universities?

The answer was the case method and Socratic instruction.  Unlike law schools, which train future activist judges to abstract legal principles from philosophical doctrine, the business world has very few fixed principles beyond the do-or-die necessity to generate sufficient cash flow to cover expenditures. 

Beginning in 1919, after the First World War, B School instruction centered on discussion of actual business cases.  Those cases (in 1956-58, and probably still) simply describe a business situation, with no explanations.  The student must first decide what the problem, if any, is; then decide upon an approach to deal with the situation; finally, relate his ideas to the real world in which he will have to confront business competitors and personal rivals within his own company.

Discussions in class rooms are heated, among students who seldom agree completely with each other.  Rather than imparting a philosophical view to the students, the professor usually confines himself to asking penetrating and embarrassing questions after students have aired their views.

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