The Last Holdouts Are Crumbling

Business-school deans go to Washington for a lesson in ideology.

Business schools may be the last campus holdouts from governmental-ideological intrusion. Yet even they are beginning to surrender to current progressive obsessions with race, climate, and wealth. This capitulation was shown most recently by a pilgrimage to Washington, D.C., by some of the country’s leading business-school deans. There, B-school leaders and Biden administration representatives discussed forms of cooperation that may result in the modification of curricula. While the deans’ general obsequiousness before executive-branch officials is not a new phenomenon, this degree of systematic governmental influence in business classrooms certainly is.

Alone among the “obsessions” listed above, wealth is the province of business schools. Nevertheless, as any honest accounting, microeconomics, finance, or business-strategy professor will tell you, wealth is created by the private sector. The public sector, if smartly managed, can facilitate many aspects of wealth creation—by infrastructure investment, for example, or via intelligent regulation—but that is generally the limit of what public-sector interference can achieve.

Government doesn’t want to see an end of wealth, but it is increasingly interested in who enjoys the spoils.Yet, as economist Thomas Sowell constantly reminds us, wealth has to be created somewhere, somehow, by someone. That is what the American private sector, supported by private-property law, has been extraordinarily effective at doing. Government doesn’t want to see an end of wealth, of course, but it is increasingly interested in who enjoys the spoils.

Business schools are a natural place to develop the process of ideological reorientation where the politics of wealth are concerned. Because universities can easily be coerced through money or via the accreditation cartel, progressive governments can strong-arm them into teaching that socialism is merely another expression of business opportunity. This is an important, emerging story that needs to be told.

But before we get there, some historical perspective may help us appreciate how state ideology is fed into, and through, the larger university system. Few if any colleges are immune, but the nation’s elite institutions generally act as “pathfinders” for others to follow. For example, during the Second World War, the campus of the University of Chicago was effectively taken over by the U.S. Army so that Enrico Fermi and his team could create the world’s first self-sustaining nuclear reaction. Decades later, top universities have developed revolving-door relationships with the executive branch (especially the State Department), the judiciary, and the intelligence services. David Halberstam’s The Best and the Brightest (1972) highlighted the ways in which academic PhDs were thought by government to possess particular insight into problems that were considered beyond the reach of mere mortals.

When I was an undergraduate at the University of Texas in the early 1980s, W.W. (“Walt”) Rostow extended an invitation for me to join his graduate economic-history seminar. Walt was well-known in academic circles but more notorious as the Kennedy and Johnson White House national security advisor who had worked diligently to promote the Vietnam War. After his term ended, Johnson paid him back for his loyalty by facilitating his appointment to the new LBJ School of Public Affairs on campus, where Walt enjoyed three decades as the Rex Baker Professor. His brother Eugene, meanwhile, was dean of Yale Law and a former undersecretary at the State Department.

I bring up this anecdote because it is instructive about the differences between that period and what has emerged today on campus. During the two years I studied with Rostow, he never spoke in our seminar on issues that weren’t strictly economic. As I got to know him personally, he shared more of his particular views on statecraft and foreign policy, but he was speaking then as an individual. He had no ideological agenda in the classroom and certainly wasn’t being influenced or directed by the institution.

The federal government makes an explicit effort to direct university decisionmaking within a larger control apparatus.Compare that to what obtains in 2023. Now, rather than simply supplying academia with talented and experienced professors, the federal government makes an explicit effort to direct university decisionmaking within a larger control apparatus. How does this work? The aforementioned pilgrimage to Washington is one example.

Earlier this year, the dean of the Stanford Graduate School of Business organized a trip to D.C. with several other leaders of “top-tier” business schools, among them Chicago, Northwestern, and Duke. There, the assembled administrators took part in a Biden administration “Come to Jesus” meeting designed to assure government officials of the institutions’ ideological cooperation. (The characterization that follows is from well-placed sources.)

Missing from the agenda was any discussion of policies actually within business schools’ scholarly remit: runaway government spending, uncontrolled regulatory and administrative growth, administrative incapacity, illegal immigration, and the mismanagement of military and other resources. Instead, topics included climate change, with no business-school leader possessing the confidence to point out the “dismal economics” of, say, carbon taxes. (It takes at least $250 of carbon tax to make $1 of carbon benefit.) Nor was the illegal-immigration crisis spoken of as such. Participants were instead asked to think of it as something to be accommodated by “reform.”

Did any discussion of industrial development, in areas such as transportation or infrastructure, take place? It isn’t clear. There was a conversation about AI, but it was predictably bogged down by other priorities, such as equality and equity.

Business schools are not per se public-policy schools. Nevertheless, like law schools, they are letting themselves be drawn under the systematic influence of the government. In many ways, business schools ought to be the “anti-government” institutions of higher education, because they focus on competitive markets. Yet they are losing adherence to this legitimate mission. Why? Weak administrations and the temptations of government largesse. Covid’s distortions of normal financial accounting. Addiction to federal payments that total in the billions. The reasons are widespread.

As for the government’s motives, they are clear enough. Universities are where you go to find eager and compliant students who are susceptible to ideology. It is where you source future government labor, especially for agency, congressional, and judiciary staffing.

Business students are being conditioned to think that “social impact” is to the MBA what “social justice” is to the JD.Indeed, business students are being conditioned to think that “social impact” is to the MBA what “social justice” is to the JD. They are being convinced that merely being a capable operations manager or a competent trade lawyer isn’t enough. The only legitimate focuses of the MBA degree are industrial economics, accounting, and finance, just like a law degree is only legitimately organized around contracts, property law, and civil procedure. So why, then, are these professional degrees so larded with ideological themes? The answer is that graduate professional programs are the perfect place to enforce new norms of thinking and conceptualization, as students learn to feel that they must weigh the tradeoffs of ideological conformity and career advancement.

Business schools and their professors are not always very good at discerning how an actual economy works. In the United States, as in the rest of the world, real businesses run on oil and gas, manual labor, machines and systems, and, most of all, hard work. As Calvin Coolidge reportedly said, “the business of America is business.” That is still the case: at the ground floor, on the factory floor, in the field, and in the sky.

I continue to believe that America has a fine university network. Students simply have to “thread the needle” through today’s ideological distractions. When those distractions become institutionalized, however, more perception and resolve are called for. That is the case in our business schools, today more than ever.

Matthew G. Andersson is a graduate of the University of Chicago, a technology professional, a former CEO, and the author of the forthcoming book Legally Blind, concerning how ideology affects law and policy.