The Rise of Kant, MBA

Aside the embattled global financial system, preeminent MBA programs around the globe have endeavored to rebuild their image and to reconsider putative notions. The Age of Social Entrepreneurship and Enterprise is upon us.

Despite perennial cocktail flurries for finance jobs, some are daring to consider that capital is not the most important factor of production. Even Adam Smith, the patriarch of capitalism, argued that labor was a most important factor of production, and Robert Solow might point to multifactor productivity, or technology—the “perennial gale of creative destruction,” as Joseph Schumpeter described it—as having the highest contribution margin on aggregate output. In short, many would agree that it’s all about innovation.

The truth is that many graduate students have begun to question old notions. Sophists will continue to exist, shouting “might is right” from the pages of Tom Wolfe, the broadcasts of CNBC, and the streets of lower Manhattan. But increasingly often, students in traditional MBA programs are raising eyebrows at the realpolitik notion that the strong rule where they can and the weak suffer what they must. Gordon Gekko, after all, didn’t win any Oscars last year. Face it: Double and triple bottom lines have become sexy.

Thomas Hobbes stated that, “clubs are trumps”—today we call it “dog-eat-dog.” But many have begun to reshape the interactions and to broaden the philosophical teachings of business. Top MBA programs are putting emphasis on Social Entrepreneurship programs, or “doing well by doing good.”

At Columbia Business School, for example, scores of students apply for the Nonprofit Board Leadership Program, allowing them to participate in the advisory of local nonprofit organizations and to gain board experience at a young age. The International Development Club and Pangea Advisors sends students around the globe to perform pro bono consulting for nonprofits—these students author publications with United Nations Development Program Millennium Village initiatives and advise “Missing Middle” venture funds in Central America. The school offers numerous courses in social entrepreneurship, and students are encouraged to create businesses that are as ecumenically noteworthy as they are profitable and sustainable. Compassion and profit can stand together.

Political philosopher Montesquieu claimed that “commerce is the cure for the most destructive prejudices,” and that “peace is the natural effect of trade.” Philosophers Immanuel Kant and Adam Smith echoed the basic notion. And while there are certainly asymmetric impacts across industries and demographics that must be remedied through trade adjustment assistance, the benefits of trade are unequivocal. But more open commerce and capital cannot alone promote peace without developing our own human capacity to provide. Human capital development through social entrepreneurship programs is vital, and MBA programs that have begun to offer social enterprise coursework and guidance are beginning to play an important part.

Most MBA students will continue to embody homo economicus, behaving as “rationalized, individualized, and democratized” individuals, as Austrian economist Joseph Schumpeter once said.  Others, however, may begin to look more like Kantians. These Kantian M.B.As may not seek jobs in Kaliningrad, but they will be moralistic, driven not only by rational self-interest, but also by a new homo philanthropos, a desire to have positive impact. Such action need not be purely charitable but can be driven by a passion to pursue the peace that Montesquieu, Smith, and Kant saw as possible only via commerce.

Today’s MBA programs are providing social enterprise opportunities that, while not new, are enabling students to embrace their Kantian ideals while still building upon the claims of Montesquieu. One can treat others as ends rather than means, embrace Schumpeterian “creative destruction,” and build upon the ties of commerce to foster greater peace. Hearts may yet trump clubs, but if it’s going to happen, it’ll have to be through sustainable models building upon commerce.

Read more stories by Scott Hartley.