ALLISON SCHRAGER: How US business masters are losing their faith in capitalism

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Students at US business schools are sceptical out of concern for inequality and market power, but do not support socialism

ou might expect to find sceptics of capitalism in sociology or anthropology departments — and let’s be honest, capitalism does not have so many fans lately. But you would think the basis for the great US economic system could at least count on the endorsement of business students.

It could be the changing profile of the average student. Business schools are accepting more women and more international students from left-leaning countries. Top business schools used to be populated with people who worked in finance and consulting, but now the student body includes people with less traditional backgrounds who have worked at nonprofits and in government.

Traditionally, management consulting firms were unapologetic that their objective was to help companies become more profitable. Now, they help companies implement stakeholder capitalism, where profits are sometimes secondary. At the very least, the capitalism sceptics are concerned about inequality. I was struck by all the talk about market power and inequality, but with no discussion of the trade-offs that might come with changing the system. For instance, more equality could also mean less growth and higher taxes. One professor told me that when he has raised that point, some students think less growth may be a good thing. They believe growth necessarily degrades the environment.

Elon Musk and Jeff Bezos got super-rich, but they also built things that made us all better off. And that sustainable growth comes from gains in productivity, so we get more output from using fewer resources and that productivity also includes greener, better technology. But the students I spoke with equated Musk-level success with less competition and more corruption.

But maybe they are also just acting like good capitalists. Rejecting capitalism can be a good career decision for them. There are more jobs today that pay well to define and implement stakeholder models in consulting and financial firms. Also, if you are in such a job, and can claim your value is not limited to increasing your company’s bottom line, your job performance is harder to evaluate.

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