"Why Business Schools Fail to Teach Ethics"

I've been attending some interesting breakfast and lunch events at the Carnegie Council for Ethics and International Affairs and have read some issues of their online magazine Policy Innovations. Now I have found their blog site, Fairer Globalization. A recent post on this site is "Why Business Schools Fail to Teach Ethics." It includes several paragraphs from a New York Times op-ed by Robert Shiller (author of Irrational Exuberance) in 2005 titled "How Wall Street Learns to Look the Other Way," which puts the responsibility at the feet of business schools for failing to provide enough ethics training.

The op-ed is indeed worth resurrecting, because it critiques not just business schools but a moral philosophy that students sometimes pick up that takes utilitarianism away from an altruistic search for the greatest good of the greatest number and towards a Machiavellian egoism that borders on a rejection of any social obligations at all. Here's the excerpt from what Shiller said:

"[A]s with any situation in which we are puzzled by how a group of people can think in a seemingly odd way, it helps to look back to how they were educated. Education molds not just individuals but also common assumptions and conventional wisdom. And when it comes to the business world, our universities - and especially their graduate business schools - are powerful shapers of the culture.

"That said, the view of the world that one gets in a modern business curriculum can lead to an ethical disconnect. The courses often encourage a view of human nature that does not inspire high-mindedness. Consider financial theory, the cornerstone of modern business education. The mathematical theory that has developed over the decades has proved extremely valuable in general. But when it comes to individuals, the theory runs into some problems. In effect, it portrays people as nothing more than 'maximizers' of their own 'expected utility.' This means that people are expected to be totally selfish, constantly calculating their own advantage, with no thought of others. If the premise is that everyone would steal the silverware if he knew he could get away with it, and if we spend the entire semester developing the implications of this assumption, then it is hard to know where to begin to talk about ethics.

"Ultimately, the problem at the university level is a tendency toward overspecialization. Each professor gains expertise in a certain kind of research skill; that is how subject matter is defined. The specialty of financial theory has largely come to be defined by skills manipulating a narrow class of mathematical models of purely selfish behavior. Business ethics is just another academic specialty, and can seem as remote as microbiology to those studying financial theory."