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Higher Aims and Climate Change

Alumni John McCall MacBain (MBA '84) and Jeff Huggins (MBA '86) discuss the ‘higher aims’ of business education and how they relate to the business community’s responsibilities with regard to climate change. Women and men who apply to Harvard Business School, are accepted, survive the case-work and snow, and make it to Commencement typically have very high aims. And, it’s quite an achievement to graduate from HBS. Congratulations to today’s graduates! We aren’t here to remind you of the high aims you already have: to start and grow a successful company, to establish a social enterprise, to be a great consultant or banker, to make movies, or to become a leader in the public sector. These and other aims are understandable, and laudable. Regarding them, we have nothing to add, except to say that we wish you well! Instead, we would like to offer several additional aims—not only to today’s graduates, but to the entire HBS community. We hope they will help all of us make positive differences in the world no matter what other aims we choose to pursue. To begin with, now that exams are over and summertime beckons, we highly recommend reading Rakesh Khurana’s remarkable book, From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession. For those who may not know, Rakesh is Dean of Harvard College and the Marvin Bower Professor of Leadership Development at HBS. He is also coeditor, with Dean Nohria and Scott Snook, of The Handbook for Teaching Leadership. Higher Aims is a wonderfully informative and thought-provoking book about HBS’s history and evolution and, more broadly, that of American business schools, all in the context of the history of American business since the mid 1800s. Among other things, it describes the high aims with which HBS and other leading business schools were founded—and what’s happened to some of those aims in recent decades. As Dean Khurana explains, a central aim of the educational entrepreneurs and business leaders who established HBS was to make sure that American businesses would be run not only productively and profitably, but also responsibly, in ways consistent with and conducive to the overall wellbeing of society. A great book for any of today’s graduates, family members, alumni, and HBS faculty and staff who haven’t already read it! We would also like to borrow Dean Khurana’s title, as well as the formative higher aims he describes in his book, and apply them to what we see as necessary higher aims in the business world and business education today. To us — Higher aims mean economies that provide ample energy with dramatically lower greenhouse gas emissions, eventually to “net zero.” Higher aims mean understanding and employing our economic system in ways that are compatible with climate stability and health. Whether we call it the market economy, capitalism, or market capitalism, the way we employ our system can only be responsible, justifiable, and sustainable if it preserves climate stability. Higher aims require that we practice our market economy in ways consistent with its own foundational principles. In other words, they imply a responsible degree of integrity between principles and practice. Basic economics tells us that negative externalities are market failures. Especially when substantial, they undermine market efficiency. They also violate the deeper principles involved in the attractiveness of well-functioning markets, including a respect for freedom, responsibly understood. Higher aims involve taking science seriously—not just when it’s profitable, but also when responsibility demands it. Higher aims call for leading business schools to actively engage with the business community, the public, and public leaders to ensure that the principles supposed to justify and govern a market economy are understood responsibly. Something has gone wrong when so many business leaders apparently think that large negative externalities are things to pursue, protect, and profit from, rather than recognize and address. Higher aims call for business educators at top-tier schools to accept significant responsibility for the way business is understood and practiced. As Harvard’s President Drew Faust explained in April, in her introductory comments to the Presidential Panel on Climate Change, the “crucial role” that universities have to play in society includes “our engagement with the wider world.” She added, “What we can achieve depends critically on how we engage with others: policy makers, leaders in industry and civil society, …” Higher aims call for responsible cooperation between business and political leaders to establish effective and efficient policy within which well-functioning markets can do their thing without generating climate-altering negative externalities. Higher aims mean renewing the aims for which HBS was founded. Although HBS, in modern times, has done an excellent job of fulfilling her aims in part, too much of the way business is presently practiced is neither responsible nor good, in particular with respect to the crucial matter of climate change. Many of these aims apply to today’s graduates. Speaking to them: Your futures are in your hands. They also apply to alumni, including us. Many alumni are in positions of substantial “power and influence” today. What sorts of differences will we manage to make in the world? Finally, these aims should also apply to HBS’s faculty and leadership and, we believe, to the institution itself. All things considered, including the history covered in From Higher Aims to Hired Hands, HBS has a responsibility to society to do her best to ensure that our system is understood, and businesses are managed, in ways that are responsible and good—or at least not bad—for society. These are challenging times, but also defining times. HBS, please let your alumni know how we can help. Congratulations again to today’s graduates. Have high aims. We wish you well! John McCall MacBain, MBA '84 & Jeff Huggins, MBA '86

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