Tag Archives: Wall Street

Why MBA students should study Political Economy

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Green Mountain Socialist senator Bernie Sanders puts it very plainly in a recent CNN interview with Wolf Blitzer: any talk of “free enterprise” or “the market economy” when it comes to the largest Wall Street banks and many other large corporations/industries is empty rhetoric.  In this realm of political-commercial oligarchy, decisions about leadership, investment, products and services, organizational development, etc. are not made under the logic of market competition but instead through complex relational jockeying among top executives and investors aimed at expanding and perpetuating their oligarchy, especially via their influence over politicians, regulatory agencies, and the courts.

They have captured their regulators (in institutional economic terms) and, in the interests of both American democracy and our long-term economic prosperity as a people, need to be busted up and re-regulated.

Thank you, Bernie, for your clear articulation of this.  (Goes to show what remaining independent does for one’s ability to speak honestly and frankly about the affairs of the nation.)

There’s nothing especially noteworthy about this situation – China runs this way, Russia runs this way, the Vatican runs this way, Machiavelli lived and breathed this logic, and so did the senate and consuls in ancient Rome – but America remains committed (last time I checked) to popular, representative democracy as the way to secure the general Welfare and the Blessings of Liberty (preamble to the US Constitution).  As long as this commitment stands, circumstances such as those of the present simply cannot be allowed.  Look at what happens.

Next week, Sanders will be introducing legislation to force a breakup of the six largest banks in the US.

By the way, if the concentration of influence, capture of government, and failure of both markets and democracy is a problem in the financial sector, what about other industries?  On Tuesday, in his coolly received lunchtime keynote at the VBSR conference in Burlington, Vermont, Seventh Generation CEO John Replogle marveled at the fact that Wal-Mart’s economy was now as large as the GDPs of the poorest 161 nations combined.  Um, concentrated much?  Where is that going to lead…?

MBA students of the world, ask yourselves: is it your lot to do the bidding of the few, the influential, and the democratically unaccountable – and hope a few crumbs fall from their table that put you slightly ahead of every other laboring schmuck in the disintegrating middle class – or should you be able to freely take risks and throw your energy, creativity, and skills into the ring with others like you and create the good society and the sustainable prosperity that you and your community deserve?  Think about that question.  Get involved.  Study political economy.  Because Sanders is quite accurate in both his diagnosis and his proposed treatment, and whether he succeeds or not, you need to understand why, for the sake of your own humanity.

Truth or Duh – Why Wall Street Doesn’t Do Climate Science

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Jeremy Grantham of GMO came to our MBA program to speak last week.  The title of his talk was “Irrational Avoidance of the Unpleasant: Perspectives on Investing, Resource Limitations & Global Warming.”  It was a fantastic, well-attended talk by one of the most respected investment advisers in the world today, but he accidentally ended up almost duplicating one of his major criticisms of the mentality of Wall Street: climate change denial or willful ignorance.

He never meant to, of course.  Look at his title!  A point early in his talk was that, while 97% of scientists world-wide agree that human-induced global warming is taking place, the ratio is almost the reverse among Wall Street investment banks, brokers, traders, investors, the financial media, etc.  As an extreme case, consider the Wall Street Journal’s editorial page, with its endless aspersions toward climate science and climate scientists.  What the heck are those monkeys doing?  Idiots.  Hypocrites, too.  Rupert Murdoch and his editors at the “J” have their trembling tongues so deep in the honey pot of the fossil fuel complex that they’ll do anything to keep them sweet.  And then of course go home to their swank estates in Greenwich and Darien fully aware that the climatologists are probably right.  They are not fools.  But their 1% incomes tell them to shut up about global warming and get with Exxon Mobil’s and Peabody Energy’s program.  Which means keeping Wall Street a truth-free zone as far as climate is concerned.  Beware of people who are paid handsomely to give the truth a wide berth.

Jeremy G. is to be forgiven.  Time was limited, and he became so heavily focused on potential food scarcity, peak oil, mined phosphate and potassium depletion, and population growth that he never got to climate.  There’s enough to be worried about anyway.  But in their eager haste to always sound climatologically correct in front of their bribers, and in passing the contagion along to their even more obedient supplicants in Congress, the Wall Street establishment is doing the 99% a vast, ominous disservice, and you can bet your bottom dollar (which is probably all you have left) that the Masters of the Universe will have better means than you or I to adjust to the consequences of climate change.  Country home near Chicoutimi, anyone?  I hear there’s a new Friday evening shuttle leaving from the Midtown Skyport!

Wonder if that MBA Oath is starting to make a difference…  After all, Wall Street probably has the highest MBA density of anywhere in the world (measured in MBAs per cubic centimeter).  Don’t MBA programs these days emphasize realism, accuracy, and truth?!  (Or is that only when there’s a big payoff at the end?)

Promise #5 of the Oath is:

“•  I will protect the right of future generations to advance their standard of living and enjoy a healthy planet.”

As of today, 6,426 MBAs have sworn their fealty.  Hm.  That’s about 6% of all MBA enrollments in the US, annually.  Considering the Oath has been around for 3 years, and that there are non-US signers, we can guess that perhaps 1% of annual MBA grads stake their self-respect, reputations, and honor before God and (wo)man upon dutifully carrying out Promise Number 5 above, which they are of course doing.  The other 99% (a different 99%, please note) thus continue to swindle and shill, rogues of the hydrocarbon bosses, unannointed and unprotected by the goodness of the Fellowship of the Oath.

We have to save them, so they do us right!  Let the truth prevail.  Let them ALL swear the Oath, dedicate themselves to scientific truth and a healthy planet, and stand with the 97% (of climate scientists), so that people like Jeremy Grantham don’t have to continue revealing such a pathetic, pathologically criminal state of affairs.

That should be enough, right?

OccupyMBA!

 

 

 

Oaths and Trust in MBA Land

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[Adapted from a talk I gave to the New England Board of Higher Education in 2010.]

Oaths & Trust: What do you believe in?

In 2001, after the tech bust, I was at a meeting of the Northern Virginia Tech Council.  People were glum.  An entrepreneur said:  “Six months ago, if I had gone to a potential investor and said, I’m over 40, my company’s been in business for ten years, and every year sales have grown by 10-15%, I would have been laughed out of the room.  Today, when I say, I’m over 40, we’ve been in business for ten years, and every year sales have grown by 10-15%, they say, ‘How much do you want?’

By 2003, investors might have swung to the former attitude of scorn.  Today, you would be more likely to hear the latter again.  Business performance and managerial skill, in the conventional sense, can look good or bad, depending on one’s vantage point, and one’s vantage point has a lot to do with how fast those around you are getting richer or poorer, especially if it’s through little effort of their own.  Fear and greed!

Attitudes change as conditions change.  Many of us become highly motivated by the possibility of short-term gains or losses.

What is the purpose of graduate business education?  Is it about preparing practitioners to accelerate their careers with the upswings, reign triumphant at the peaks, dodge the falling masonry during the downturns, and cope during the slumps?  To privatize the gains and socialize the losses?

Despite some exceptional persons and programs, conventional business education is dominated by opportunism and the short-term.  It invokes justifications with moral overtones: rational markets, creative destruction, the Invisible Hand.

In this view, market actors and asset managers must be focused on the profitable exploitation of usually short-term opportunities.  Maximization of shareholder value in high-velocity markets has increasingly been the sole focus of managerial expertise in recent decades.

“Greed, for lack of a better word, is good, “ said Gordon Gekko in the 1987 movie Wall Street (the year I started my MBA):

Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms–greed for life, for money, for love, knowledge–has marked the upward surge of mankind. And greed–you mark my words–will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

Has the most recent cycle of fear and greed affected the culture of MBA programs, source of the new lifeblood of so many larger corporations?  Are they ready to embrace sustainability – the possibility that life for humans and other living things can flourish on Earth forever?

The business school students have started swearing a morality oath.  Thunderbird students launched one in 2006.  Harvard Business School MBA students launched one year ago.  As of a moment ago, 6406 MBA students from around the world had sworn. Here’s an excerpt:

•  I will manage my enterprise with loyalty and care, and will not advance my personal interests at the expense of my enterprise or society.

•  I will refrain from corruption, unfair competition, or business practices harmful to society.

•  I will protect the right of future generations to advance their standard of living and enjoy a healthy planet.

•  I will invest in developing myself and others, helping the management profession continue to advance and create sustainable and inclusive prosperity

This oath I make freely, and upon my honor

Well, it’s about time.

If the business schools will not transform themselves to truly embody these principles, at least the students can simply choose to live them.

“Just do the right thing.”

Although, how can the management profession continue to advance and create sustainable and inclusive prosperity?  Doesn’t it need to start, first?

Anyway, what use is an oath?

Said Brutus,

…[B]ut do not stain the even virtue of our enterprise, nor th’insuppressive mettle of our spirits, to think that – or our cause – or our performance – did need an oath.

But let’s assume it will make some difference.

Are the new sustainability-oriented and “green” MBA programs we’re now seeing across the country redundant, now that high-octane MBA grads are repentant, swearing oaths?

Many of these innovative programs are start-ups, newcomers to business education, without the history, corporate support, heavy research capacity, or powerful brand names:

-       Bainbridge Graduate Institute’s MBA in Sustainable Enterprise

-       Presidio Graduate School’s MBA in Sustainable Management

-       Dominican University’s Green MBA

-       Antioch University New England’s Green MBA

-       The Brandeis Global Green MBA

-       Clark University’s MBA in Social Change

These are some of the attempts to fundamentally redesign and re-orient MBA education that have emerged since 2002, when pioneer Bainbridge was founded.

There is understandably skepticism about what we stand for, or at least, about our claims to be engaged in a distinct form of graduate management education.  (Skepticism is healthy, to be sure!  Having just marveled openly about the MBA Student Oath, am I mistaken in thinking that the claims of the “green” MBA programs are any more genuine?)

Ask: Whom do you trust most?

I trust what I have seen of the open, questioning intentionality of our kind of MBA program.

I trust the deep commitment to building authentic, inclusive, caring community, and to always being present as a whole individual.

I trust the turning away from impersonal, objectifying, manipulative corporate behavior, and toward the socially responsible businesses and social enterprises where the lessons are about health, about aligning with right values, and about honoring the dignity of all human beings.

I trust the interest in replacing extractive, exploitive industries with regeneration and resilience.

I trust the faith in the genius of place, and of the enthusiasm for local businesses and the relocalization of economies.

I trust the questioning of unconstrained corporate personhood, and the interest in for example beneficial corporations, employee ownership, and co-ops.

I trust the skepticism of hyperinstitutionalized academia, of the dominance of disciplines, of the rarified culture of academic publication.

I trust learning that thoroughly exercises the more immediate, practical skills of business while giving the momentous facts of our times the attention they deserve:

-       climate change,

-       peaking fossil fuel supplies

-       human domination of the biosphere

-       the crisis of our health and in our health care system

-       the corruption among elected officials

-       the concentration of wealth

-       the erosion of the middle class

-       our uncertain democracy.

I trust the hunger for deep ecological literacy and systems wisdom.

I trust the strong desire to learn from Nature as mentor.

I trust the absence of oaths.  (Thank God that the General Assemblies have not yet introduced an “Occupation Oath” that all occupationists must swear!  Hope that’s not coming down the pike…)

If we are not managing for sustainability, then what are we managing for?  Less unsustainability?  Opportunistic gains?  Domination?  A share of what’s left?

OccupyMBA.

Narcissism, fragmentation, loneliness, and death

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The culture of the Master of Business Administration is the culture of narcissism, fragmentation, loneliness, and death… unless it’s tethered by an active, caring commitment to community, to stakeholders, and to a reverence for the great natural and human systems in which we all live.  To say anything less harsh is to succumb to moral passivity, to write yourself a ticket to stand by and not do enough, whatever good you’re doing.

Less unsustainability is not more sustainability, and modern business is starting from a pretty deep level of “un-“, despite a few bright green lights here and there.

It took me three long weeks to summon the clarity and resolve to write the above (after knowing for more than a quarter-century that it had to be written).

Why the tortured hesitation?  All I had done was put out “OccupyMBA” in the warm Occupy Wall Street spirit of early November, with a clever teaser about the arch pokes I would soon be making at conventional MBA programs.  The next move was supposed to be easy.  Directing an MBA program is my job, and ours is a deliberate breakaway from the conventional.  We’re actually doing caring, committed, reverent B-school in an authentic fashion on a routine basis now, four years after our launch.  It’s never perfect, but it’s getting better and better, and it’s no scam.

Where the torture lay was in the hideous emergence of the oppressive whole from a set of seemingly innocuous parts.  There’s no doubt that the dominant global MBA paradigm is fully aligned with the swollen financial sector, each new financial bubble, corporatism, money-tainted politics, consumerism, climate change denial, neocolonialism, and other strands of the rope strangling our world.

Do you see B-school deans out sleeping with the occupationists, or their students getting pepper-sprayed as they protest the future-debasing nature of discounted cash flow analysis?  I haven’t.

Yet, charge a business school academic with the perpetuation of unsustainability and one is likely to hear the defiant scoff that business administration consists of concepts, tools, and practices that are value-neutral, to be evaluated based on how they are used, by whom, to what ends.  One person might put their finance to work developing derivatives that understate risk and cheat investors out of millions.  A classmate might use the same knowledge to build microcredit programs for poor communities.  We’re just honest vendors of neutral knowledge, say the conventional B-schools – research-based “best” practices – and what the world does with it is as diverse and morally ambiguous as the world itself.  Throwing in an ethics course might bias graduates toward the right choices, come to think of it!  Or even an MBA Oath!

That’s nonsense.  It’s worse than that.  It’s evil.

A perceptual challenge with dominant paradigms is that they truly are synergistic and emergent, and vanish from detection at the level of their parts, which are usually human beings and small groups, with their human personalities, warmth, humor, sympathetic non-verbal communication, apparent decency, vulnerability, mortality, and (usually) naïve unawareness of their role in the reproduction and maintenance of the paradigm.  Look too closely, and you see nothing.  When I visit my alma MBA-mater, Wharton, I see comfortable study spaces, friendly faces, stimulating conversations, and nice nooks for a coffee and laptop session under a leafy ficus tree.  I don’t see a system of oppression slowly grinding down the Earth’s life-support systems and moving wealth across the planet from the many poor to the few very rich.  But let’s face it: that’s exactly what’s happening, and Wharton is one of many places where they/we train.

That’s the truth we need to hold on tight to, and speak to power.  There are solutions.  Just because truths vanish upon close inspection doesn’t mean that they will not re-emerge when we pull back.  That is one of the most joyous, heart-rending, tragic, awfully righteous contributions of the OWS movement.  The macro-obvious lack of economic justice and economic democracy is pointed out, transcending all the traps that would suck you down below the level where you know or care.  OWS is a drumbeat now.  I hope it doesn’t falter, because we need to stay aware of the larger truth, even as we devote ourselves to practical change in the local and the micro and the immediate.

OccupyMBA.