Tuesday, May 17, 2005

Yes, but Don't Spoil the Message!

Hail to the Robber Baron?By Yoshi Tsurumi

Yoshi Tsurumi is a professor of international business at Baruch College, City University of New York. He earned his Doctor of Business Administration from Harvard in 1968, and he taught at Harvard Business School from 1972 to 1976.

Originally published on Wednesday, April 06, 2005 in the Opinion section of The Harvard Crimson (which is the daily newspaper of Harvard University).

Two extracts:

“Thirty years ago, President Bush was my student at Harvard Business School. In my class, he called former president Franklin D. Roosevelt, Class of 1904, a ‘socialist’ and spoke against Social Security, unemployment insurance, the Securities and Exchange Commission, and other New Deal innovations. He refused to understand that capitalism becomes corrupt without democratic civic values and ethical restraints.”


“To justify the robber baron culture, America’s business educators and economists falsely cite their demigod of laissez-faire market economics, Adam Smith. Little do they know that Adam Smith in fact scathingly castigated Bush’s type of government: business collusion and unfair taxes, Wal-Mart’s exploitations of labor and communities, and robber barons’ hubris. Nowhere in his 900-page book, The Wealth of Nations, does Smith even imply that those who knowingly harm others and society in their pursuit of personal greed also benefit their society. He rejects the notion that a corporation exists to make money without ethical constraints.”

The article by Professor Tsurumi is intemperate and unlikely to be persuasive except for readers who dislike Republican Party policies. That is a pity because it makes one or two good points with which I concur, but many more with which I do not.

Unfortunately, supporters of the thesis that Adam Smith’s Lost Legacy has been purloined into service for policies with which he would have been most unlikely to support or be sympathetic with, cannot always choose their allies!

Apart from the ethical question of quoting the alleged remarks of a student years after he graduated, I am not sure that the student (George W. Bush) should be castigated for ‘refusing to understand’ a statement by his Professor about capitalism One can ‘fail’ to understand something, but to ‘refuse to understand’ does not strike me as a crime or a sin. It sounds more like the accuser would prefer to make it both (you have to understand something to refuse to understand it). More than one professor has been as wrong as his or her students on some issues of policy – in my student days all the professors were ‘Keynesians’ (I remember only one lowly lecturer who was a ‘monetarist’).

I should make it clear that I agree with Professor Tsurumi that ‘capitalism becomes corrupt without democratic civic values and ethical constraints’. But I do so voluntarily and without the compulsion implied in Professor Tsurumi’s allegation against his former student and now President of the United States.

However, the second paragraph quoted seems to me to be an accurate appraisal of the state of modern economics. Elsewhere in the article, Professor Tsurumi writes:

“American economics study has increasingly become a pseudoscience of mathematical formula manipulation that is devoid of humanity”

which is a sentiment with which I entirely agree.

My source for Professor Tsurumi’s article is: Kamran Mofid’s interesting web site: www.commongood.info or k.mofid@btopenworld.com


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