The essay below, authored by Jim Otteson and Matthew Phillips, was originally published in the Wake Forest Business magazine.
Capitalism and professional identity
James R. Otteson and Matthew T. Phillips
The business world today is facing an identity crisis. The crisis has two parts.
First, many employees may struggle to feel connected to the work they do in real and meaningful ways. Younger workers in particular feel a need to find a higher purpose, even a calling, in their work—something that connects in a deep way to what they value in their private lives.
Second, there is no shared framework for understanding how business supports and benefits the larger community. Wider society frequently perceives business as inherently bad: contributing to societal maladies ranging from disappearing natural resources to increasing inequality.
Both of these challenges can be addressed by recapturing and reclaiming two truths: businesses are led by professionals, and the primary function of business is to create value in society.
In other words, we need a bold and renewed conception of honorable business as a noble profession.
Businesses create value
Disciples of Milton Friedman will note the importance of making profits, while devotees of Edward Freeman will stress the need for corporate social responsibility and balancing the interests of stakeholders. Yet both visions agree on a deeper point: the proper role of a company in society is to create value.
When the typical business was a corner bakery or a small factory, one could sit on a bench on the opposite side of the street and watch the social impact unfold. Employees finished their work and left to spend their wages caring for their families; customers came in to purchase something they needed but couldn’t produce easily at home; and village crews worked on public projects funded in part by taxes on the business’s profits.
By contrast, today’s businesses seem incredibly large and complex: not particularly connected to the community. The benefits created by these businesses are obscured to the point that we can easily lose sight of the value businesses create.
It is thus now more important than ever to recover the beneficial role of business in society, as well as the importance of institutions and rules that enable business to maximize value for everyone in that society.
On the other side of the coin are the individuals who work in and lead business organizations. Increasingly even these insiders can’t see the connections between their efforts and their communities. As businesses become more global, personal connections have grown more abstract, and loyalty to an employer can seem outdated or irrelevant. When it comes to loyalty, in particular, the employer/employee contract seems to have been torn up and discarded.
The transition today to a working population that hungers for a sense of individual purpose in work has been rough for an American business community that has historically assumed a dividing line between employees’ personal and work lives. Recovering an understanding of business as a noble profession, and of businesspersons as stewards of this noble profession, can provide the crucial link between the individual’s desire for a sense of purpose and business’s goal of creating value in society.
Just as a lawyer works in the context of a legal system, a business professional works in a system of political economy. The professional must not only understand the system in which he or she works but understand how it creates value. A proper sense of professional identity provides the connection between honorable business and society, as well as the framework for personal commitments to integrity, performance, and ultimately to human flourishing.
At Wake Forest, we are building into each academic program opportunities for students to learn about their system of political economy and the responsibilities of business professionals within it. The mission of the BB&T Center for the Study of Capitalism is to help students understand this proper moral context of business. One example is the new “Why Business?” course that will be required of all undergraduate majors. The course guides students through the great literature of political economy to investigate and address the role of business in a humane and just society.
When our students are asked why they study or will dedicate their lives to business, we want to equip them to explain what it means to be a true business professional and how they themselves will, in whatever walk of business life they occupy, play their part in creating genuine value for others and contributing honorably to a flourishing and prospering society. In so doing, we want them to be able to answer the question “Why business?” with justified confidence—even pride.
James R. Otteson is executive director of the BB&T Center for the Study of Capitalism, teaching professor of political economy, and Thomas W. Smith Presidential Chair in Business.
Matthew T. Phillips is director of the BB&T Center for the Study of Capitalism, Hendley Fellow, and associate teaching professor of law and ethics.