John D. MacDonald received his MBA from Harvard in 1939, a year before he accepted a commission in the Army. MacDonald was impressed with the education he received, but he obtained the degree to please his father and did not put it to any conventional use. After service in the Far East during World War II, he moved to Florida, began writing pulp fiction, and established a career as a novelist. Most famous for his Travis Magee series, the characters in MacDonald's lesser-known work includes several junior executives, young men of promise, who feel trapped by their corporate careers and the lifestyle they are expected to maintain. These protagonists start down a path of self destruction and find redemption only when they buck the system and quit the jobs that are killing them.
Clearly MacDonald felt that American corporate culture was unhealthy and unsustainable, that it crushed our best and our brightest. To many readers, the finest moments in MacDonald's Travis Magee books come when the protagonist steps out of his role as hero and offers scathing indictments of conformity and the rush toward homogeneity in American culture, or attacks the rapaciousness of real estate developers in his beloved Florida. Magee's deep-thinking sidekick Meyer, MacDonald's tribute to the education he received at Harvard, is a retired economist who brutally dissects the narrow and misguided thinking that plagues business and politics alike and man in general. Meyer's perspective ranges from the biggest of big pictures to the intricate workings of market and societal niches. He is widely considered a stand-in for the author.
Economic orthodoxy in MacDonald's time was largely Keynesian, seeing vital roles for both the public and private sectors. Accordingly, MacDonald's analysis of our economy and related social problems, as voiced by Meyer and other characters, is critical of both business and government alike. He castigates businessmen for their short-sighted avarice and eagerness to corrupt the economic process, and he attacks politicians for their failure to understand economic issues and their willingness to be corrupted. He sees our economic and political systems as far too rewarding of greed, at the detriment of our long term social and economic health.
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Fast forward to the 1980s. Economic orthodoxy has undergone a revolution. Keynes is out and Friedman is in. What is old is new again and laissez-faire capitalism is all the intellectual rage. If unfettered, the "magic of the marketplace" will solve all our ills. Business good, government bad. Where's the hotbed of this sea change in economic thinking? In our premier graduate schools, of course. And as fate would have it, an exotic degree offered by those fine institutions, a graduate educational track seeped in and fostered by the "new" economic thinking, is on the rise and will soon be exotic no more. The MBA has arrived and is taking over American business.
This is where your humble diarist enters the story. In the mid-1980s, I graduated from NYU with a bachelor's degree in economics and was hired into the Corporate Finance Training Program at Morgan Guaranty Trust Company, then the world's premier commercial bank. Morgan Guaranty came into being when J.P.Morgan & Company was split apart by the Glass-Steagall Act, a prime example of the government regulation all the Friedmanistas clamored against.
My training class contained about fifty people, about half of whom had graduate degrees, predominantly MBAs. I quickly noticed a difference between the MBAs and everyone else, an impression I corroborated with other non-MBAs. There were exceptions, of course, but by-and-large the MBAs were more competitive than the other trainees, quicker to anger, apparently under more stress, more rigid and doctrinaire, less open minded and less imaginative, and far less likely to joke around. They also tended to come from less affluent backgrounds, a modest start in these circles being upper middle class and expensively educated. (At the other end of the spectrum, our training class also included a Rockefeller, the son of the chairman of American Express, and some Europeans who had truly old money. I was the interloper, a scholarship kid who got in because he was good with computers.)
The MBAs were also predominantly Friedmanites, having been taught the new orthodoxy in business school. They would espouse laissez-faire, and I would argue that those policies had in the past led to the concentration of wealth and power into fewer and fewer hands, which divided our society, oppressed the poor, hindered the spread of information and ideas, impeded advancement based on merit, and was all around bad for democracy. The MBAs would get mad and say I didn't know what I was talking about, that "the economy had changed". Often the MBA would quote Adam Smith--which seemed odd, going all the way back to the Scottish Enlightenment, given that "the economy had changed"--and I would point out that Smith said the government's role was to maintain a level playing field. Then we would argue about what constituted a level playing field.
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The MBAs began their take over of American business in consulting and finance, and as those fields were conquered, spread out into other industries. At first they were hired away from the consulting and financial firms they started with, going to work for the same corporations that had recently been their customers. As more MBAs entered top management across the economy, these new managers decreed that more MBAs must be hired, and the process reinforced itself. Hiring of MBAs spread out from finance and consulting across the economy as a whole. And how convenient it was for big business to have a new management class steeped in an ideology that made rapaciousness into an uncontestable virtue. Downsizing wasn't much of a moral problem when you looked at every problem though laissez-faire-colored glasses.
As the MBAs came in and took over, their common values gained prominence in our society, particularly veneration for "the magic of the marketplace" and cold disdain for all organizations and individuals who do not share that veneration. Little effort was made to learn from the old ways of doing business, few pains taken to adjust firms slowly to the new methods. It is a cornerstone MBA belief that all businesses are essentially alike and can be improved by the application of rigorous principles. And the quicker you apply the harsh medicine, the better. They saw American business as terminally ill and themselves as the cure.
MBAs are a subculture, and within that subculture the strongest strains emanate from the academic seats of power, the exclusive premier private institutions that educate our ruling class. They are much like any self-selected group, sharing an indoctrination experience (business school = boot camp), not quite as gung ho as the United States Marines, but there is a certain amount of similar pride and zeal and belief in their own infallibility. MBAs are by-and-large conformists, eager to replicate what is familiar and to eliminate what is new. And many of them feel superior to common mortals who don't have their great wisdom about the mysterious and all-important ways of Business. In short, many of them are self-important and lack the ability to think creatively. Which makes them dangerous. And their influence is everywhere.
Let's double-back, not quite to John D. MacDonald himself, but to his industry of employment: the business of publishing fiction. The arrival of the MBAs at the big publishing houses coincided with the rise of the MFAs among fiction writers published by those houses. To the MBA mind, people with credentials are better than people without. Why else would the typical MBA have added those three letters after his name? How to judge who is capable of writing good fiction? Obviously someone with an MFA has to be better than someone without one. Editors at the big publishing houses don't typically have MBAs, but they work for MBAs, and the marketing departments are run by MBAs. And in the publishing business today, marketing has at least as much clout as editorial.
It would be bad enough if the influence of MBA culture was limited to business, but it has extended beyond, into the public sector and our society at large. Long after I left Wall Street, I met people who worked in the library system at a major public university. One day MBA thinking arrived in the form of a new boss, and suddenly the library was supposed to become a profit center. Everything I heard about the new methods and modes at the library were straight out of the MBA handbook. The transformation failed miserably, because public institutions like universities and libraries (and governments--more on that later) cannot and should not be run like businesses. They exist to provide resources to enrich our civilization, not to make a profit on those resources. But although the new boss shortly left, the integrity of the library's holding were already physically compromised. Rare manuscripts were damaged because the budget for preservation was slashed.
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MBA culture is the iceberg beneath the Libertarian ice cube. If Libertarians are the nerdy bookish oddball younger sister that no one wants to date, then MBAs are the brash bossy cheerleader older sister who gets elected homecoming queen, marries the captain of the football team, and has five kids that terrorize their small town. Out in public, the two sisters may pretend not to know each other, but they share the same bloodlines, and they both firebreath about "the magic of the marketplace". And as we all know, it's the cheerleaders who have all the influence. They may be happy to tisk-tisk and shake their heads when little sis gets caught saying something wacko again, but their thinking and behavior comes from the same dark place. And it's their world we're living in.
Which brings us to a former cheerleader who just happens to have a Harvard MBA. But unlike good old John D. MacDonald, this degree was minted in 1975, a year before Friedman received the Nobel, and after his economic sea change had transformed academe. I am of course talking about our president, George W. Bush, the man who once threatened to run the country like a CEO. Given how well those MBA-toting-and-hiring CEOs have been able to destroy major corporations, it looks like George made good on his intentions. From a management perspective, does the Iraq disaster differ greatly from the other grotesque examples of mismanagement that have rocked our nation? Hubris, incompetence, closed ranks against outsiders and nonbelievers, and a dogmatic belief in "the magic of the marketplace"--these qualities unite the great failure in leadership that has betrayed our nation. And our president is part of the picture, not as much an anomaly as he otherwise seems. This is, after all, the president who called for transforming America into an "ownership society," the kind of bland Orwellian phrasing with a subtle negative kick that could have been drafted by a committee of MBAs. The phrase tells us that we have now is less than full ownership, that we've got stuff coming to us--it's marketing that plays implicitly but directly to greed, the most insidious kind. Among the worst of the MBAs I met all those years ago, Bush would have fit right in. From cheerleader, to frat brat, to MBA, to running the country into the ground--it's all of a piece.
So what's my big final concluding point? Dogma is bad. Yeah, that's it, it's that simple. Any subculture or system of belief, be it as fundamentalist religion or MBA enculturation, that encourages adherence to a strict code of thought, that believes significant complex aspects of life can be tamed by simple rules, that discourages imagination, is toxic. Dogma kills. And the dogma swallowed by all those MBA students and pumped down into the veins of corporate America and out into the rest of our society is killing us all.
Fight the dogma!
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