Reimagining Capitalism: Business and Big Problems
Course Number 1524
Professor Rebecca Henderson
Professor George Serafeim
Spring; Q3Q4; 3 credits
Free market capitalism is one of the great achievements of mankind, bringing prosperity and economic freedom to billions of people and contributing to a flowering of individual freedom and possibility that would have been unimaginable to our ancestors. Today, however, it faces critical challenges on a wide variety of fronts.
Growing income inequality, poor or declining educational systems, unequal access to affordable health care and the fear of continuing economic distress are putting stress on political systems worldwide and challenging the credibility of business. At the same time there is increasing pressure on the supply of basic commodities, particularly on food, water, energy, and land. Rates of environmental degradation are increasing, sea levels are rising and unchecked emissions of greenhouse gases threaten to destabilize the climate. Moreover we are in the midst of widespread ecosystem degradation and a corresponding mass extinction of bird, plant and animal life. Robust political responses based on strong social support are crucial to meeting these challenges, but action by the private sector will also be critically important.
This course is designed for students who want to explore the idea that at least some of these “big” problems can be effectively addressed by high performing private firms. Historically these kinds of problems have often been considered to be the responsibility of the state. We’ll look at why private firms might be able to play a major role in solving them in today’s world, and we will explore the ways in which accomplishing this may require both changes in how firms and leaders consider their obligations and engage with the issues, as well as changes in the “rules of the game” by which capitalism is structured.
The course differs from a number of excellent offerings that explore related issues in at least three respects. First, we explicitly challenge the boundaries of the current system, asking whether there is a different way to run firms and/or a different way to think about and/or shape the system/institutions in which they are embedded (e.g., the notion that shareholder value comes at the expense of stakeholder satisfaction). Second, we explore the degree to which “purpose driven” leaders that root their actions in their most deeply held values can act as change agents within the larger system, and we examine how and why your own career might help to accelerate change. Finally, we will rely both on readings and on cases drawing from literatures in management, law, psychology, sociology, and economics.