The Merchant's Function

 An opinion piece in the New York Times yesterday argues that business schools ought to be abolished. Whereas every other professional school in a university teaches students to pursue some identifiable public good—the author argues—MBA programs only teach people how to make money for themselves and the shareholders. 

As the author, a Cambridge business school professor himself, puts it: "A medical school’s core justification is health, and a law school's is justice — undisputed public goods. Business schools are organized explicitly around a private good: the pursuit of profit." 

The piece therefore concludes by suggesting that business programs ought to be reorganized as schools of coordination, which balance the traditional focus on for-profit business enterprises with a consideration of lessons to be learned from other collective endeavors, such as unions, non-profits, and schools that have never been profit-driven. 

The author here sounds a great deal like John Ruskin, who makes a similar point in his essay "Unto This Last." Except that Ruskin drew a slightly finer point around the fact that the problem is not that universities emphasize business too much. It's that we've allowed a confusion to enter our minds in the first place that business only exists to make money. 

In his classic essay on political economy, Ruskin argues that every society has "five great intellectual professions," as he calls them, each of which exists to promote what our New York Times writer would call an "undisputed public good." 

For Ruskin, the soldier exists to "defend" society; the preacher "to teach it"; the physician "to keep it in health"; the lawyer "to enforce justice in it"; and the merchant "to provide for it." 

Ruskin calls our attention to the crucial point a few lines later: "Observe, the merchant's function (or manufacturer's[)...] is to provide for the nation. It is no more his function to get profit for himself out of that provision than it is a clergyman's function to get his stipend"—or the "physician" his "fee."

This is the sort of point that seems elementary as soon as someone points it out, but which is almost entirely overlooked in existing university curricula. The problem is not that we have schools of business. The problem is that we have forgotten that business exists to meet the needs of the public, just as much as law and medicine do. 

To be sure, lawyers and doctors make money incidentally to their profession. The prospect of outsized financial rewards is even what motivates many people to pursue these roles. But we would be aghast at a university program that devoted its course of study primarily to teaching strategies for how to maximize fees and billable hours, instead of how to make legal arguments or cure disease. 

So too, many people make money incidentally to running a business. But making profit for private individuals has never been the societal justification for having private enterprise in the first place. The role of business, as Ruskin points out, is to produce the material objects we need to satisfy our daily wants and needs. 

The answer, therefore, isn't necessarily to abolish business schools, in my view, so much as to reform them so as to restore the focus on the true social purpose of business: which is to supply the public and provide for people's material needs. 

It's no more impossible to imagine a business school whose course of study focuses primarily on how to meet consumers' needs (rather than how to maximize shareholder value) than it is to imagine a law school that focuses primarily on how to secure a just outcome in court—even though we all know that many students in the program will be there with frankly mercenary motives in mind. 

We might not be able to cure human nature from wanting private advantage. "So he will be, though law be clear as crystal," as Vachel Lindsay wrote of the creature homo sapiens. But professional schools can at least try to orient people toward higher and more external goods, rather than simply encouraging them to lean into their basest appetites and motivations. 

If we expect this of the doctor and the lawyer in our society—why not ask it of the businessperson too?