An Education System for the Common Good

By Matthew Taylor

“Education is the most powerful weapon which you can use to change the world”
(Nelson Mandela, 1993)

If we want corporate behaviour to change so that businesses can be profitable but in a way that also helps humans thrive and conserves our planet, then we need to change our Economics and Business Studies education system too.

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Regardless of the stage in life you have reached, take a minute to place yourself back in the classroom or a university tutorial, with its arranged chairs, ageing whiteboard and semi-attentive students. You are studying International Political Economy; the topic is multi-national corporations (MNC) and their labour decisions. Your tutor asks everyone to quieten down and recall a theory called the ‘Stolper-Samuelson’ model, which you covered earlier on in the term; it places the quantities of two economic factors against each other. In this case, factor number one is unskilled (or unqualified) labour and factor number two is capital.

“Consider”, she says, “a country that has an abundance of unskilled labour but very little capital. What should a MNC take into account when addressing whether to relocate manufacturing operations to this country? Please discuss in groups of three.”

Students twist their heads and begin to speak, wavering just above whispering territory. After a few minutes everyone is asked to suggest some ideas and a trend appears: in a country with so much unskilled labour, but no capital to make use of that labour, a MNC can instead use their wealth of capital to build factories and employ the surplus unskilled labour. Because there is such a large supply of unskilled labour and a high demand for employment in the country, MNCs can employ this labour very cheaply, which justifies the expenditure of moving their manufacturing operations abroad. Simple.

But you ponder: “Isn’t this just sweatshop labour we are talking about? An ethically deplorable form of factory labour that violates various human rights and was exposed by activists to be common practice among global brands like Nike, Calvin Klein and Primark. Surely, MNCs should take these issues into account when making their decision.”

 So you ask: “Please can I just confirm; we are talking about sweatshops, right?”

Abruptly, your tutor responds. “Yes, that is true, but it is not relevant”.

This is a genuine account of an economics tutorial at a Russell Group university, one of the UK’s top education institutions. The assumption that considerations other than profit or GDP should not be accounted for in economic or business decisions is rife among education establishments and module syllabuses. An assumption most clearly manifested through the example of an International Business case study on the MNC Monsanto, also conducted at a Russell Group university. One requirement read: ‘there are many ethical questions surrounding this topic. Please ignore them for they are beyond the parameters of this course’.

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“Not relevant”, “beyond the parameters of this course”, “inefficient”, “uneconomic”, “unnecessary complexity”. These are all labels frequently given to questions of justice, morality or environmental conservation when teaching economic and business theory. Unless, of course, the theory is about ‘negative externalities’, but that simply suggests these bad things that happen are external to economic and business decisions. When top economics and business courses operate in this fashion, how can we expect future company directors and executives to think beyond the realms of profit when making their decisions?

This question was inspired by a recent talk at Initiatives for Change given by Charles Wookey, CEO of Blueprint for Better Business. Mr Wookey advocated combining the ‘purpose’ of businesses to maximise ‘legal’ profit with other social purposes, such as providing beneficial products or contributing to the common good. “This is not a matter of mere behaviour change”, he said, “it is a matter of habit”. And habit, as Charles emphasised, requires time and training to alter and nurture into having a long lasting effect.

Education in schools and universities is the most long-term training our society offers. It serves as a platform from which future generations prepare themselves before leaping into the “real world”. If students of Economics and Business Studies courses often operate in an environment free from discussion of the social or environmental impact companies might have, then it is no wonder that companies those students later work for often operate a similar approach.

Even Mechanical Engineering degrees require that Corporate Social Responsibility (CSR) and broader societal impacts are fundamental to project evaluations. Moreover, while entire courses in CSR do exist, students have to choose to take them and by doing so they display an already existing interest in the topic. So Economics and Business Studies courses must change too!

Since the 2008 financial crisis this has been realised by some institutions. For example, the student led Post-Crash Economics Society at the University of Manchester is making progress. Small steps are also being made by several organisations interested in business responsibility and the economy’s contribution to the common good. Christian Felber, founder and writer of the Economy of the Common Good has been speaking at universities across the world, while the Institute of Business Ethics hosts an annual student essay competition.

Nonetheless, much more needs to be done in the Economics and Business Studies education system. This includes campaigning for Economics and Business Studies departments to alter their teaching approaches and module syllabuses so that considerations of human well-being and environmental conservation are encouraged in classrooms and included on mark schemes.

Students of Economics and Business Studies courses target influential positions in the corporate, banking or financial service industries. Often, they are successful. Those students should therefore be required to evaluate economic or business theory in exams and essays by taking into account broader social and environmental impacts, not prevented from doing so. This is the sort of classroom environment and training necessary to achieve Charles Wookey’s ‘better business’. With education as our weapon, we can teach future business leaders to maintain their moral values both inside and outside the office.

Matthew Taylor

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