Writing to H. G. Wells in 1906, William James lamented “the moral flabbiness born of the exclusive worship of the bitch-goddess SUCCESS.” Alarmed by the devotion this deity elicited from his avid Harvard undergraduates, James diagnosed as “our national disease” the “squalid cash interpretation put on the word success.” Two years later, Harvard Business School opened its doors to its inaugural class of the divinity’s curates.
Duff McDonald is savvier than James about the ways and ruses of the gilded goddess, but he leavens his remarkable history of Harvard Business School (HBS) with a kindred outrage. A contributing editor at the New York Observer and a writer for Fortune, Vanity Fair, the New Yorker, and other periodicals, McDonald is one of the nation’s finest business journalists. In Last Man Standing (2010) he recounted Jamie Dimon’s rise up the corporate escalator at J. P. Morgan Chase; in The Firm (2013), he examined McKinsey, the world’s most prestigious and influential consulting agency. In his sprawling and capacious new book he chronicles the nation’s most prestigious business school—sometimes referred to as “the West Point of capitalism”—with an engagingly ambivalent blend of admiration, effrontery, and cynicism. Tracing HBS from its exalted inception to its unabashedly mercenary present, McDonald provides a gargantuan case study in hubris and self-delusion.
Like other business schools that were established at the time—Wharton at Penn, Tuck at Dartmouth, Sloan at MIT—HBS emerged from the crucible of the corporate reconstruction of American capitalism. As small proprietors were increasingly engulfed or eclipsed by corporations in the decades after the Civil War, economists and capitalists forged a new conception of business activity and education. If the relative simplicity of small proprietorship had required little or nothing in the way of formal instruction, corporate enterprise appeared to entail a managerial class with professional training. In this view, HBS and other business schools taught the sophisticated, even recondite skills required for success in the brave new corporate world. While being transfigured into a “profession,” business also morphed from the “trucking and bartering” described by Adam Smith into a “science” comparable to other bodies of knowledge with disciplinary protocols. At the same time, business leadership assumed a more mandarin, platonic countenance; more than a cadre defined by organizational prowess, it was seen to comprise the philosopher-managers of a prosperous corporate republic. As the school’s first dean, Edwin Gay, explained to trustees in 1909, “we believe there is science in business,” and HBS graduates would be men with “breadth of view and an inclination for learning.”
Harvard’s humanist ancien régime recoiled; business students, they feared, would pollute the groves of academe with their swinish avarice and careerism. As the literary critic John Jay Chapman scolded an HBS audience in 1924, it was “vanity and ignorance” to think that a business school is anything more than “a school where you learn to make money.” But the sanctimonious fantasy of corporate management as the enlightened elite of capitalism persisted. A succession of deans and professors—exemplified by Wallace Brett Donham, who once averred his belief in “elitism, pure and simple”—threw what McDonald calls “a silky veil of humanism” over the managerial and financial curriculum, cloaking a new scholasticism of accumulation in the lexicon of science and public service.
Seeking to drape business in the raiment of professionalism, HBS employed the renowned “case study” method—a compendium, as McDonald characterizes them, of “sanitized versions of corporate heroism” that, in his view, impairs the ability of graduates to adapt quickly and deftly to changes in markets and technologies. (Until the advent of a more globalized capitalism in the 1980s, this deficiency wasn’t too debilitating.) It also assembled a motley faculty of economists, experts in the “sciences” of management and finance, psychologists, and even historians. Personified by Chester Barnard, senior executive at AT&T and a prominent management theorist, HBS instructed its apprentices in the art of sublimating their desires for lucre and power into the fungible ideal of “leadership.” Management skills, Barnard and other instructors insisted, were readily and infinitely transferable; an alumnus could run a government agency as well as administer a private company. As one graduate of the legendary class of ’49 later recalled, “we had no idea what we wanted to manage, all we knew was that we wanted to manage.”
This faith in managerial omnicompetence flourished in the two decades after World War II. Epitomizing what Fortune editor William H. Whyte dubbed “the Organization Man,” the typical HBS grad could be found scaling or ensconced in the upper echelons of the gray-flanneled hierarchy, commanding the machinery of production, finance, and politics that sustained “the golden age of capitalism.” Take Robert McNamara, class of 1939, a prime avatar of technocratic reason. After graduation he worked for Price Waterhouse; returned to HBS as an accounting professor; led the Office of Statistical Control for the U.S. Air Force; joined the “Whiz Kids” who revitalized the Ford Motor Company; and shortly after ascending to the company presidency, became secretary of defense under Presidents John F. Kennedy and Lyndon Johnson.
Alas, during the Vietnam War, the Whiz Kid mutated into an unindicted war criminal. In his seven-year stint at the helm of the war machine, McNamara supervised a carnage that claimed the lives of nearly sixty thousand Americans and millions of Vietnamese, a mass production of death and dispossession facilitated by the methods he learned at HBS. So was there really such a great metamorphosis? In his penetrating chapter on McNamara, McDonald attributes the war’s ferocious futility to the data-driven nescience of “slide-rule commandos.” Oblivious to the elusive or unmeasureable—commitment, tenacity, or intrepidness, especially on the part of the Vietnamese—McNamara and his fellow technocrats of slaughter thought of war as a venture in statistical analysis, not unlike marketing at Ford. McNamara’s career is a chilling portfolio of the prosaic nihilism of managerial rationality, one he tried to make amends for later in life, admitting that the war was “wrong, terribly wrong.”