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05 July 2012

If Businesses Behaved Like Colleges

What would the world be like if businesses were run like colleges? In the wake of the University of Virginia scandal, there has been a lot of talk--including from me--that colleges should not be run as if they were businesses. But, what if we flipped the scenario? What if we lived in a world that held business and financial institutions to the same standards as institutions of higher learning? Let's start with a list of what both sets of institutions do:

Business firms/corporations:
  1. earn profit for owners/stockholders, full stop.
  1. create human capital by educating the citizenry
  2. create knowledge through research, both pure and applied
  3. provide services to the community in line with faculty expertise
Colleges are only (or at least should only be) compelled to grow inasmuch as is necessary to further the three goals listed above. Public universities answer ultimately to the residents of the their respective states via the democratic institutions; colleges are essentially about producing public goods. Businesses answer ultimately (as required by law!) to the profit interest of their stockholders; businesses are foundationally about private goods. In other words, colleges do for everyone (even those who don't go to college), but businesses do for only a few.

What if businesses worked not for the benefit of a few but for the many? Instead of making a decision, for example, to close a factory in a Rust Belt town and move it to Mexico or China where labor is cheaper (i.e. more easily legally exploited) because it would increase shareholder's dividends, what if they considered the local implications of increased unemployment and stress to the social safety net programs? What if instead of whining about the lack of qualified workers available (during high unemployment, no less) they invested in training new hires for the work they needed done--even if it cut into profit margins? What if...?

This should not just be an academic exercise. We should demand this kind of ethical--not even calculus, just arithmetic from the businesses we work for and buy from. If we are going to pretend that corporations are people, we should at least demand they be morally upstanding.

h/t to this tweet that got me thinking.

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