Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcast
  • Managing the Future of Work Podcast
  • About Us
  • Book
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Podcasts
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    From Social Control to Financial Economics: The Linked Ecologies of Economics and Business in Twentieth Century America
    04 Mar 2011Working Paper Summaries

    From Social Control to Financial Economics: The Linked Ecologies of Economics and Business in Twentieth Century America

    by Marion Fourcade and Rakesh Khurana
    No transformation looks more consequential for the history of American higher education than the extraordinary rise of business schools and business degrees in the twentieth century. Marion Fourcade (UC Berkeley) and Rakesh Khurana (HBS) analyze the changing place of economics in American business education as reflected in the teaching of three elite business schools over the course of the twentieth century: the Wharton School (1900-1930), the Carnegie Tech Graduate School of Industrial Administration (post World War II), and the Graduate School of Business at the University of Chicago (1960s-present). Key concepts include:
    • Wharton is an illustration of the earliest trends and dilemmas, when business schools found themselves caught between their business connections and their striving for moral legitimacy in higher education.
    • The Carnegie Tech Graduate School of Industrial Administration reflects a new vision, starting in the 1950s, of the contribution of business to society with the rise of "management science"-a new formation that broke from the existing disciplinary system and sought to legitimatize itself through its hard-core technical capabilities.
    • The University of Chicago's Graduate School of Business marks the decisive ascendancy of economics, and particularly financial economics, in business education over the other behavioral disciplines. This transformation helped produce and sustain new understandings of the nature of the firm, with far-reaching consequences for business practices and economic relations in society.
    • Theories from each period provided a new language, and new categories of understanding and action, that not only became naturalized in the teachings of American business schools but also came to sustain and even instigate profound alterations in the nature of American corporations and markets-at least until the next series of tools, concepts, and business recipes came along.
    LinkedIn
    Email

    Author Abstract

    As the main producers of managerial elites, business schools represent strategic research sites for understanding the formation of economic practices and representations. This article draws on historical material to analyze the changing place of economics in American business education over the course of the twentieth century. We use the Wharton School as an illustration of the earliest trends and dilemmas (c. 1900-1930), when business schools found themselves caught between their business connections and their striving for moral legitimacy in higher education. We show how several of the school's leaders were closely involved in progressive reforms and presided over the development of the empirical social sciences to address questions of labor regulation and control within manufacturing industries. Next, we look at the creation of the Carnegie Tech Graduate School of Industrial Administration after World War II. This episode illustrates the increasingly successful claims of social scientists, backed by philanthropic foundations, on business education and the growing appeal of "scientific" approaches to decision making and management. We also show that these transformations were homologically related to changes in the prevailing mode of governance in the American economy: business schools became essential sites for the development of tools and methods (e.g., input-output approaches, linear programming, forecasting) for the management of the new large, diversified conglomerates. Finally, we argue that the rise of the Graduate School of Business at the University of Chicago from the 1960s onwards marks the decisive ascendancy of economics, and particularly financial economics, in business education over the other behavioral disciplines, as well as the decisive ascendancy of business schools as producers of economic knowledge. By following teacher-student networks, we also document the key role of business schools in diffusing "Chicago-style" economic approaches-offering support for anti-regulatory approaches and popularizing narrowly financial understandings of the firm (Fligstein 1990, 2002)-that sociologists have described as characteristic of the modern neo-liberal regime.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: January 2011
    • HBS Working Paper Number: 11-071
    • Faculty Unit(s): Organizational Behavior
      Trending
        • 27 Jan 2023
        • Op-Ed

        Have We Lost Sight of Integrity?

        • 01 Feb 2023
        • What Do You Think?

        Will Hybrid Work Strategies Pull Down Long-Term Performance?

        • 31 Jan 2023
        • Research & Ideas

        It’s Not All About Pay: College Grads Want Jobs That ‘Change the World’

        • 17 Jan 2023
        • In Practice

        8 Trends to Watch in 2023

        • 28 Feb 2018
        • Sharpening Your Skills

        Master the Team Meeting

    Rakesh Khurana
    Rakesh Khurana
    Marvin Bower Professor of Leadership Development
    Contact
    Send an email
    → More Articles
    Find Related Articles
    • Theory
    • History
    • Education
    • North & Central America
    • United States

    Sign up for our weekly newsletter

    Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
    ǁ
    Campus Map
    Harvard Business School Working Knowledge
    Baker Library | Bloomberg Center
    Soldiers Field
    Boston, MA 02163
    Email: Editor-in-Chief
    →Map & Directions
    →More Contact Information
    • Make a Gift
    • Site Map
    • Jobs
    • Harvard University
    • Trademarks
    • Policies
    • Accessibility
    • Digital Accessibility
    Copyright © President & Fellows of Harvard College