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Cult of CEOs

from David Ruccio

The United States suffers from an obscene cult of CEOs. Whether we’re talking about “Neutron Jack” Welch (who was celebrated for raising GE’s market value while laying off tens of thousands of workers) or Bill Gates (who made Microsoft competitive by engaging in anticompetitive practices) or Lloyd Blankfein (head of the “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”)—they’re routinely feted as being ruthless, “transgressive” leaders who make change happen in the corporate world.

I suppose it comes as no surprise, then, that two business professors—Hamid Bouchikhi and John R. Kimberly [ht: kc]—would extend that celebration to CEOs in the academy, by studying the decision by Dean of Arts and Letters Mark Roche to divide the Department of Economics at the University of Notre Dame.*

Transgressive leaders are those who are expected by members to abide by sacred organizational norms but who deliberately violate them for the sake of what they believe to be the greater good of the organization. . .The model of transgressive leadership we propose emerged in the wake of field work at the University of Notre Dame, where a new Dean of the College of Arts and Letters forced a paradigmatic, organizational, and managerial reorientation of economics after a long period of repeated and failed attempts by others to redirect the department.

What’s bizarre about this study is that the authors make clear that Roche did, in fact, violate many of the “sacred organizational norms” of the academy—and then they go on to celebrate him as a transgressive leader who managed to create a new, exclusively neoclassical department of economics.

What did Roche do to get to the point of forcing a split within the department? According to the authors, he “committed a series of lower intensity transgressive acts,” including expressing his own view of the paradigmatic orientation of the department, producing and publicly sharing numbers about members’ research productivity, and violating “the sacred norm of academic self-governance and democratic decision making in a research university” by appointing an advisory board, vetoing hiring proposals, and recruiting a new outside chair against the formal opposition of the existing departmental faculty. Those, of course, were all in the way—once the department itself didn’t cave to his demands—of preparing for, in 2003, the splitting of the department into two separate and unequal departments.

The department voted (15-6) against the split. So did the College Council (by a tally of 25 to 14). And the decision was challenged by several prominent mainstream economists, including Robert Solow (in a letter to the president of the university):

You should know that I am a mainstream economist, in fact a mainstream mainstream economist. But I am not an uptight mainstream economist. Economics, like any discipline, ought to welcome unorthodox ideas, and deal with them intellectually as best it can. It does pretty well, in fact. To conduct a purge, as you are doing, sounds like a confession of incapacity. I grant that you are not shooting the Trotskyites in the back of the head, but merely sending them to Siberia, That is not much of an improvement.

And Deirdre McCloskey (in an article in the Eastern Economics Journal):

What’s the problem nowadays at Notre Dame? … The Dean of the College of Arts and Letters, one Mark Roche, together with his agent in Economics, Richard Jensen, and with the backing of the Provost, Nathan Hatch, and the apparent entrepreneurship of the Dean of the Graduate School, Jeffrey Kantor, has decided that Notre Dame’s Econ Dept is broke . . . and should become mainstream…The Department has resisted. It’s being punished with appointments imposed on it; its promotions have been turned back. It may be abolished entirely, its distinctive graduate program scrapped, and a new one started that will be drearily Samuelsonian.

But the dean, with the protection of the university administration, ultimately got what he wanted. And, according to the authors, Roche’s transgressions ultimately served the good of his college because he sought to appease the faculty (by opening new communications channels and rewarding faculty members whose work met his criteria), thus leading to a celebratory self-evaluation (in his own private notes):

When I stepped down there was a truly joyful reception, as much like a wedding reception as a retirement party. It may be self-deception, but my sense was that there was more gratitude for what had been accomplished than for my leaving office.

Ultimately, Bouchikhi and Kimberly celebrate the cult of CEOs—who “have a clear vision of what needs to change and accept the collateral human cost, for others and for themselves, if they perceive causing hardship to others as a requirement.” It is a model that is well established in the corporate world and is increasingly becoming the norm in the new corporate university.

 

*Disclaimer: as regular readers of this blog know, I was a member of the Department of Economics when, in 2003, Roche, with the support of the university administration, decided to divide the department into two (one of which, the Department of Economics and Policy Studies, of which I was also a member, was dissolved by Roche’s successor, in 2010). I didn’t know about this research when it was being conducted but I am cited numerous times in the paper.

  1. Nancy Sutton
    February 5, 2016 at 7:51 pm

    I hope this is a sign of desperation.

  2. Political Economist
    February 6, 2016 at 1:00 am

    Is there a place to find a history of the politics of economics at Notre Dame and what happened to the heterodox economists there?

    • David F. Ruccio
      February 7, 2016 at 7:08 pm

      In a nutshell, heterodox economics was eliminated at Notre Dame. Individual heterodox economists who resisted that elimination (in addition to mainstream economists who opposed the move to eliminate heterodox economics at Notre Dame) were not given a place in the new department of economics but, instead, were forced to find positions elsewhere in the university or at other universities or to retire.

      You’ll find a summary of the history (and a link to other documents) here: https://anticap.wordpress.com/2010/06/30/end-of-economics-and-policy-studies/

      • Political Economist
        February 7, 2016 at 7:56 pm

        Thank you

      • February 8, 2016 at 3:33 am

        Thanks David for the detailed background. My job has involved me in several similar situations, though this is my first encounter with such changes in economics. In the late 80s/early 90s several universities in the south “re-organized” their sociology departments. This mostly involved creating new departments in communications or communications and society to which “verstehen” and linguistics (mostly called “everyday life” sociologists) sociologists were moved. As one dean told me the purpose was to purify the sociology department and keep its grants on track. Irony here is the sociology departments have declined in importance while the communications departments have gained greater importance. In the early 80s several west coast colleges made the very public move of closing their “government” departments and opening “political science” departments. It was the word “science” that was the big attraction and the fact that government professors paled around with history professors. Interestingly, east coast colleges would follow suit several years later. Most interesting for me personally is the History Department at the University of Texas (Austin). In the 1970s it was purged of all faculty who opposed US involvement in Vietnam. These faculty were not “fired” but moved to other departments. Norte Dame’s situation is not unique.

  3. February 6, 2016 at 9:23 am

    Science is often a nasty business. It’s history is filled with feuds and outright killer fights. Scientists have defended their theories and methods with everything from dismissals from positions to the guillotine. This is how what happened at Notre Dame might be characterized. Two prominent business professors saw the science of economics being subverted at the University. How to fix that? Obvious answer, get rid of the subverting elements (people and otherwise). This same process has occurred dozens of times in the physical and social sciences. It can be, as you describe quite brutal. But then science has never been a croquet match. The labor fights my cousin the labor historian writes about were and are brutal. But no more so than science and scientists. In the words of Nobel Prize physicist Leon Lederman i 1999, “You’d think that scientists would have a degree of saintliness that would be almost unbearable. It doesn’t work that way. The competition goes on at all levels — the international, the national, the institutional, and finally the guy across the hall.” I think some Notre Dame economists met the “guy across the hall,” and he kicked their asses. And you might object that this is not moral, not academic, not democratic. And you’d be correct. But where is it written that science or scientists are or should be any of these?

  4. blocke
    February 6, 2016 at 12:41 pm

    “But where is it written that science or scientists are or should be any of these?”

    In a thousand places Ken? A university community is a place that seeks knowledge; it is not a saloon where the fastest gun prevails in a shootout? That’s the American idea of freedom that exists in a society where peaceful citizens are afraid to go out on the streets. Your view amounts to what Jullien Benda called, the betrayal of the intellectual. It transpired at Notre Dame because of the adoption of managerialism in the running of universities. Thorstein Veblen predicted in 1918 that would happen if businessmen took over higher education; University presidents, deans, and administrators do not have the slightest idea about science, so why should their opinions prevail instead of those of the academic community. It’s not a fact of life, but the results of a peculiar organizational culture that has come to dominate academia.

    • February 6, 2016 at 6:58 pm

      But the historical research does not support your statements. You may want or try to build such a set of relationships. But historically the actual actions of scientists shows science as quite frequently a “very nasty affair.”

      • blocke
        February 6, 2016 at 11:36 pm

        You don’t get my point Ken. It is not that scientists do not argue vehemently. That is to be expected. But it has to do with the takeover of universities by a managerial caste. That is the issue at Notre Dame, and elsewhere in the university community, not that scientists argue with each other. This is very important to the development of knowledge. If managers run universities, who do not know anything much about science, science does not develop in them. Managerialism is the nasty business, not the debates that go on in the academic community, which usually work themselves out over time — its called the advancement of knowledge..

      • February 7, 2016 at 2:54 am

        Managerialism is part of the academy. In fact, it developed mostly in academic settings; as a theory of management and field of study. Colleges actually offer degrees in management. So if those graduates believe they are better equipped educationally and practically to manage universities and university departments, what’s your argument in response to that claim?, After all the principles taught in management classes include a belief in the value of professional managers and the concepts and methods they use. Management is also associated with hierarchy, accountability and measurement, and a belief in the importance of tightly managed organizations. Seems like Bouchikhi and Kimberly at Notre Dame followed all these principles. Those who teach management in universities often speak of it as a science. So it seems management is a part of the academy. It is a supposedly a scientific theory of how economic and non-economic organizations should be operated. Its teachers are professors. Some senior professors. What you describe is then an academic struggle. And a scientific struggle. Based on history, those can become brutal and nasty.

      • blocke
        February 7, 2016 at 8:59 am

        “Those who teach management in universities often speak of it as a science. So it seems management is a part of the academy.”

        Management is part of the academy but not managerialism, just like the military way is part of war but not militarism. Militarism destroyed efficiency on the battlefield. Managerialism is about elites who wield power in our society, the cult of the ceo and elite dominance. Good management must oppose managerialism. Goggle managerialism and you’ll find a lot has been written about it in academia.

      • February 7, 2016 at 11:20 am

        According to James Hoopes “mangerialism” (a new corporate social philosophy) had its origins in the 1920s and 1930s at the Harvard Business School. The school’s dean, Wallace Donham, aimed to create a managerial worldview that would be central not only to business but to society at large. His vision now seems to be coming to realization. Witness George Bush, our first president with a master’s degree in business administration, which he
        earned at Harvard. New York Mayor Michael Bloomberg is another businessman become politician with a Harvard MBA. Ditto for Massachusetts Governor Mitt Romney. You can find all this and more about the history of managerialism in Hoopes book, “False Prophets.” So you see “managerialism” is one theory of management (an academic discipline) == that began at Harvard University’s Business School.

      • blocke
        February 8, 2016 at 7:04 am

        Managerialism is part of the academy; the development of the managerial elite and the ideology that went with it arose with the rise of the MBA after 1960. Book’s like Chandler’s Visible Hand traced it. But it is an American phenomenon. The opposite of the positivist claim is the critic of managerialism, in which I and others have been engaged for decades. See, Robert R Locke and J-C Spender, Confronting Managerialism, 1911. The degree to which the world bought into Managerialism in the academy varies greatly; MBA’s never thrived in Germany and Japan, nor has the cult of a managerial elite. Management is not a generic but a derisory term in their organizational world. Good managers let employees participate in the running of firms in these countries, We need to wake up from trying to analyze the world within the mental straight jacket of Anglo-saxonia. Times they are and have been a-changing.

      • February 8, 2016 at 9:21 am

        Robert, I’ve read your work and enjoyed it. Don’t buy all your claims but largely I agree with many of your conclusions. But you miss one really important point about “management science” in the US. Three aspects of US history set the groundwork for that science. First, the protestant and often evangelical history of religion in the US. Second, the liberty focused democratic arrangements that dominated in the US. Third, the pragmatism of US culture that after the Civil War translated into a strong faith in science. Those who controlled (not owned) US businesses were expected to be faith-based overseers, not infringe the liberty of the business or employees by supporting freedom-of-choice, and employ proven techniques and scientific practices in overseeing US businesses. You can see how these foundations could lead to the invention of formal theories and techniques of scientific management, to Taylorism, to MBAs, and to Lloyd Blankfein’s 2009 statement that he is “doing God’s work.” Management science is not amoral or immoral, it’s super-moral. Management science is not anti-democratic, it is super-democratic. Management science is religiously committed to science. A bunch of contradictions? Yes. That’s how lots of societal arrangements are. But the contradictions do matter. As the management practices and theories have to operate in various and complex actual life situations the contradictions have a tendency to become ever more problematic. This is certainly the case with “management science” today.

      • blocke
        February 8, 2016 at 3:33 pm

        Ken, I agree with your resume of the growth of management science in the USA. But remember we are talking about something that happened specific to time and place, which Americans have written into a general theory. What if you had not begun with the American story or paid much attention to it because you had run across the idea of management in another culture. That is what happened to me. I learned about the development of business economics and its relationship with business management in praxis studying Germany. I wrote a book about it before I had the good fortune (I think) of being invited to the European Institute for Advanced Studies in Management (Brussels) for two years, 1982-84, which had been developed totally under the influence of American management science. There, I quickly learned that the German idea of management differed a lot from what was discussed in that institute. For one thing, Germans in academia and in praxis did not believe that management was or could be a science, codified and taught in MBA courses. They believed sciences could be used as Hilfswissenschaften (statistics, accounting, etc.) that could help managers make decisions in their work, but the work itself, management could not be made into a science. When I tried to point this out to people imbued with management and management education, American style, I did not get any further in getting them to understand the specificity of their management science than I am getting with you. Once a catechism is imbibed, it is hard for people to abandon it.

      • February 9, 2016 at 5:51 am

        Robert, thanks for the clarification. You misunderstand what I’m saying. I’m not a believer in American-style management science. But I do understand it. My work with folks who use it every day requires that I understand it. These folks believe in it, use it for everything they do in operating the companies they are responsible for, and as you suggest do not accept criticism of it. I’ve spent a great deal of time and effort to map out this science’s history and the consequences of its use. That’s what my clients hire me to do — to assess why their planning and actions based on this science are not working, are failing. The meetings where I deliver my report are always a real thrill.

  5. Nancy Sutton
    February 6, 2016 at 7:53 pm

    Surely someone muuuuch wiser than I will note that no one expects labor and management to be ‘objective’… but, isn’t that supposed to be the soul of science? And, isn’t economics supposed to be a science, of sorts? Without it’s soul…. what is it? Well, exceeding biased and unscientific, I’m guessing :)

  6. Nancy Sutton
    February 6, 2016 at 7:56 pm

    …. now, if ONLY more of us ‘dummies’ out here were aware of this fact ;) (sorry, hitting ‘Send’, often triggers the best finale ;)

  7. February 7, 2016 at 3:31 am

    In connection with the discussion of nature of science, and scientists, the first two chapters of “Telling the Truth About History” by Appleby,Hunt and Jacob are very illuminating. I quote from the first few paragraphs:

    IN THE EIGHTEENTH CENTURY a small group of determined reformers established science as the new foundation for truth, a granite-like platform upon which all knowledge could rest. The absolute character of their truth mimicked the older Christian truth upon which Westerners since late Roman times had come to rely. They transferred a habit of mind associated with religiosity—the conviction that transcendent and absolute truth could be known—to the new mechanical understanding of the natural world. Eventually they grafted this conviction onto all other inquiries. The study of history became the search for the laws of human development. Understanding the challenge to truth in an age in full revolt against inherited certainties means going back in time to discover how and when science became an absolute model for all knowledge in the West.

    Pure, elegant, simple, and clear when summarized by its laws, natural science with its experimental method came in the eighteenth century to be seen as the measure of all human truth. Imitate mechanical science, follow its methods, seek laws for everything from human biology to the art of governing—that was the advice bequeathed to the Western world by the Enlightenment. We call this model of science heroic, because it made scientific geniuses into cultural heroes. Until quite recently, heroic science reigned supreme. The heroic model equated science with reason: disinterested, impartial, and, if followed closely, a guarantee of progress in this world. Science took its character from nature itself, which was presumed to be composed solely of matter in motion and hence to be “neutral.” In the words of a true believer, a sociologist of the 1940s, “The stars have no sentiments, the atoms no anxieties which have to be taken into account. Observation is objective with little effort on the part of the scientist to make it so.”1 Now it is possible to put heroic science in a historical context and assess the way it has molded Western thinking. Its hubris, its accomplishments, its absolutist claims are all part of our story.

    =======

    As the authors write, until recently, the HEROIC model of science reigned supreme. Many comments show that many RWER bloggers still subscribe to this model. For them especially, reading Appleby, Hunt and Jacobs, Chapters 1 & 2, is strongly recommended. The “full revolt against certainties” cannot be carried out without the knowledge of this history

    • February 7, 2016 at 6:05 am

      I agree with your conclusions. Although the actual details of the shift away from “Heroic” and “Flawless” science is somewhat more complex than Appleby, Hunt and Jacobs make it appear in this book. On that note what Appleby, Hunt and Jacobs say just before the quote you cite is enlightening I think. “Such a democratic practice of history—one in which an ever-growing chorus of voices is heard—will depend upon objectivity, defined anew as a commitment to honest investigation, open processes of research, and engaged public discussions of the meaning of historical facts. These offer the best chance of making sense of the world. There is every reason for democratic citizens to expand their commitment to pluralistic education and continue their appraisal of the accounts that define them as a nation. National histories will still be necessary; so too will be faith in the ultimate goal of an education: the rigorous search for truth usable by all peoples.” This statement emphasizes three factors that I believe are essential to deal with the current crisis not just in economics the discipline and the economic arrangements currently dominant but also the crises of finding and putting in place a sustainable future for humankind on this planet. These three are: 1) the practice of history (and economics too I think) must be democratic; 2) objectivity is not about neutrality but rather open, democratic, and public investigations of history (and economics); 3) faith in these commitments and to an open process of research is essential for history (and economics) to provide a sense of time and place (framework) for human’s to build collective ways of life.

      Appleby, Joyce; Hunt, Lynn; Jacob, Margaret (2011-02-14). Telling the Truth about History (Norton Paperback) (Kindle Locations 190-195). W. W. Norton & Company. Kindle Edition.

    • blocke
      February 7, 2016 at 8:39 am

      As an historian who taught the history of Western Civiilization, World Civilization after 1500, and specialized in 19th-20th century comparative French and German history with forays into Japanese and US history in my publications Appleby, Hunt and Jacobs characterization bare very little resemblance to what I taught and researched for forty years. It is pure Anglo-centric and was not the mainstream of thought until the Americans dominated the world after WWII. If you focus your work in this way and ignore comparisons in time and space that do not mirror Appley etc. nothing forward looking will come out of the project in my opinion. The era of Anglo-American centric dominance is over in this world, but it will not come to an end in the study of economics with a project formulated almost entirely in its terms by people who are apparently unable to make the really great effort to step out of that tradition and found something different. That is not happening in this blog. So I fear, despite all the good attentions, that the great opportunity to change the study of economics will be squandered because of the Anglo-centric mental jail in which the bloggers live.

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