Nothing Succeeds Like Failure

The Sad History of American Business Schools

Steven Conn

• Publisher: Cornell University Press
• Year: 2019
• ISBN:
  9781501742095
• Topic: Education
• Subtopic: History of Education

Do business schools actually make good on their promises of "innovative, " "outside-the-box" thinking to train business leaders who will put society ahead of money-making? Do they help society by making better business leaders? No, they don't, Steven Conn asserts, and what's more they never have.

In throwing down a gauntlet on the business of business schools, Conn's Nothing Succeeds Like Failure examines the frictions, conflicts, and contradictions at the heart of these enterprises and details the way business schools have failed to resolve them. Beginning with founding of the Wharton School in 1881, Conn measures these schools' aspirations against their actual accomplishments and tells the full and disappointing history of missed opportunities, unmet aspirations, and educational mistakes. Conn then poses a set of crucial questions about the role and function of American business schools. The results aren't pretty.

Posing a set of crucial questions about the function of American business schools, Nothing Succeeds Like Failure is pugnacious and controversial. Deeply researched and fun to read, Nothing Succeeds Like Failure argues that the impressive façades of business school buildings resemble nothing so much as collegiate versions of Oz. Conn pulls back the curtain to reveal a story of failure to meet the expectations of the public, their missions, their graduates, and their own lofty aspirations of producing moral and ethical business leaders.

Chapter 1

THE WORLD BEFORE (AND SHORTLY AFTER) WHARTON

Getting a Business Education in the Nineteenth Century

In the beginning there was Wharton.

Or more properly, the Wharton School of Finance and Economy at the University of Pennsylvania, and when it was founded in 1881 it became the first business school in the United States. All the more than six hundred business schools founded in the nearly century and a half since descend from Wharton. Wharton began and Wharton begat.

The origin story of U.S. business schools is familiar enough and almost folkloric inside that world. Joseph Wharton made a great deal of money in the metals and mining industry in the mid-nineteenth century. (Wharton has been inducted into the Mining Hall of Fame.) In 1881 he made a gift of $100,000 to the University of Pennsylvania to establish a school with his name on it. He called it his “project,” and happily for historians he wrote a detailed rationale to explain what he wanted to do and why.

First, he reviewed the history of higher education as he saw it. “The general conviction that college education did little toward fitting for the actual duties of life any but those who purposed to become lawyers, doctors or clergymen,” he wrote to the university’s trustees, “brought about the creation of many excellent technical and scientific schools.” He went on, “In the matter of Commercial education there was formerly a system of instruction in the counting-houses of old-time merchants which may fairly be compared to the system of apprenticeship to trades.” With the old system of apprenticeships on the wane, Wharton concluded, “the existing great universities, rather than an institution of lower rank or a new independent establishment, should lead in the attempt to supply this important deficiency in our present system of education.”¹

In supplying that deficiency, Joseph Wharton launched U.S. business education. Or so the story goes.

In fact, this foundational tale of American business schools glosses over another chapter in the history of education in the United States. After the Civil War, schools of business (or commerce, the more common term in that era) dotted the American landscape in places large and small, including in Wharton’s own Philadelphia. While it is certainly right to say that the Wharton School was the first business school barnacled to a university, it was hardly the first school to teach business.

Joseph Wharton was well aware of these places, and in his letter to Penn’s trustees he dismissed them out of hand. As he described the demise of the old training system built around apprenticeships, he noted, “Nor is their deficiency made good by the so-called Commercial colleges.” Joseph Wharton had twin goals in mind when he wrote that check for $100,000. He wanted to establish a new experiment in higher education, and he wanted that experiment to supplant those dozens and dozens of schools that already taught business. Founding the Wharton School was both an educational endeavor and an exercise in creating distinctions of prestige, drawing the line between those few who would train for business as part of their university education and the many who learned their business skills at one of those “Commercial colleges.”

So in this chapter we revisit that world of commercial education before the Wharton School was founded, a world that lasted well into the twentieth century.

Business Education as a Proprietary Business

Let’s start with the figure: 269.

That’s the number of U.S. commercial schools and colleges tallied by the Frenchman Eugène Léautey as part of his survey of commercial education around the world. He published this vast tabulation in 1886, just a few years after the Wharton School opened its doors, and he divided that number into two categories: business colleges (165) and commercial colleges (104). The difference, according to Léautey, was that the former taught practique, while the latter included théorique as well.²

In fact, the phenomenon that Léautey documented had been around since before the Civil War and probably dates back to the 1830s (there is some dispute over who founded the first of these schools and where).³ These “colleges”—for example, the Iron City Commercial College in Pittsburgh—were by and large proprietary, founded by an individual or partnership and run for a profit, and they filled a need that became increasingly urgent in the middle decades of the nineteenth century. “We know it is easy to pick flaws in almost any system of education,” a writer conceded in 1844, “but we appeal to all thinking men if the training young boys receive, who intend to follow trade as their occupation, is not necessarily incomplete and shallow?” In calling for more deliberate “mercantile education,” this writer complained that “little care and expense is bestowed upon the lad who is destined for the store, because the parent hopes that his education will some how or other be completed by running of errands, doing up parcels, and going to the post-office.”⁴ Enter the commercial college.

More broadly, these schools responded to the same changes in the U.S. economy that prompted the founding of collegiate business schools by promising to prepare young people for work in the emerging white-collar world of industrial capitalism. “Since so large a proportion of our youth select mercantile occupations, for a livelihood,” a writer for Hunt’s Merchant’s Magazine noted in 1858, “that branch of popular education should possess its halls of learning and practice, its cultivated and experienced professors, its regular courses of instruction, and its diplomas and degrees of dignity.”⁵ They were also of a piece with the dynamics of higher education at that moment as well. Beginning about 1850, many of the smaller denominational colleges tried to modernize by adding coursework in engineering, by opening separate schools of science, by offering training to new teachers, and by adding courses in business to their classical curriculum.⁶

By the 1890s, most of these colleges had given up their experiments with professional training and graduate degrees, but proprietary schools of business continued to thrive. The growth of these educational establishments paralleled almost precisely the growth of the industrial economy as it accelerated after the Civil War. Of the eleven institutions that Léautey counted in Michigan, for example, two predated the war. Many were purely local, like the Archibald Business College in Minneapolis, founded in 1877. But others were what we might call now franchise operations: Bryant & Stratton had locations in many places, as did the Spencerian Business Colleges and the Eastman schools.⁷

Messrs. Bryant and Stratton had both graduated from Folsom Business College in Cleveland, and their successful entrepreneurial venture suggests that they received a pretty effective education there. In fact, by the Civil War there were apparently enough Bryant & Stratton schools that the two men convened a national meeting of their operators in New York in 1863, again in 1864, and in Chicago in 1865. They brought their group together once again in 1866 in Cleveland, and Harper’s, reporting on the convention, called the success of the business college movement “unprecedented.” The magazine continued, “Through individual institutions and admirable text-books the sphere and limit of business education have been as clearly defined as those of law, medical, and theological schools.”⁸ Textbooks, however, don’t seem to have been the primary purpose of these conventions. The goal appears to have been to exert monopoly control over a growing and lucrative market. Bryant and Stratton had grand ambitions of opening one of their schools in every city with ten thousand or more people, and in so doing they hoped to drive out their competitors.

By 1866, however, Bryant and Stratton had overreached. The franchisees, unhappy with the terms of their contracts—and gathered in one place where they could share their frustrations—rebelled and founded their own organization, which they called the National Union of Business Colleges.⁹ Bryant and Stratton never achieved their monopoly dreams, though at one point there were fifty Bryant & Stratton colleges around the country.

Students who enrolled in one of these business or commercial colleges often already had jobs and thus attended classes at night. They studied a curriculum suited to the demands of the late nineteenth-century business world: stenography and shorthand; business writing; bookkeeping; commercial geography, perhaps; and business law. Whether or not they attended a Spencerian College, students undoubtedly learned Spencerian script, the penmanship style that predominated in the United States until at least the 1920s. The style was developed by business college founder Platt Rogers Spencer and disseminated in his Practical Penmanship book. Most of us would recognize it today: the Coca-Cola logo, still ubiquitous around the world, is done in Spencerian script.

Students might have learned bookkeeping from the popular and widely distributed Modern Bookkeeping written by David Lillibridge. Born in Connecticut in 1839, Lillibridge served with the Eleventh Rhode Island Infantry during the Civil War. After the war he made his way to Lincoln, Nebraska, where he operated the Lincoln Business College and Institute of Penmanship, Shorthand, and Typewriting. The National Union of Business Colleges adopted his Modern Bookkeeping as their recommended textbook, and in turn Lillibridge became president of that organization.¹⁰

When Léautey divided his count of business schools between those that taught only the practical and those that added theory, he might well have been thinking of the Theoretical Department of the U.S. College of Business and Finance or the Theoretical Department at the Eastman National Business College in Poughkeepsie. As the “Student’s Guide” to the former explained, students would “gain a thorough knowledge of the principles of Bookkeeping and an appreciation of the duties of an Accountant, which must form the basis of all further advance in the ACTUAL BUSINESS DEPARTMENTS.” The explanation was much the same in Poughkeepsie: “In this THEORETICAL DEPARTMENT, you will lay the foundation for your more extended and practical course of study in actual business.”¹¹ Nelson’s Business College in Cincinnati promised even more of that “practical” education inasmuch as “one of the advantages which it enjoys [is] the privilege of having its students allowed on the floors of the Chamber of Commerce and other trade bodies. Regular transactions are carried on by the students exactly as in the ordinary channels of business.” Nelson’s wanted to make it clear that theirs “is the only business college in the United States enjoying this privilege.”¹²

These schools were quite proud that they offered a practical education. They provided “a technical but not a liberal education,” as James Hodges put it in 1887, and that was seen as all to the good, especially when compared to the education on offer in America’s colleges in the mid-nineteenth century. Hodges described the contrast in a way that sounds entirely familiar to any student telling his parents he’s going to major in English: “A youth comes from college with a good record and enters a counting-house. His classics, his higher mathematics, his philosophy and history, which he has learned so zealously, seem to be of no use to him at all, and of that which he needs he knows next to nothing.”¹³

They also prided themselves on their democratic access. Stressing its egalitarianism, a promotional brochure of the Eastman School in Poughkeepsie from the 1880s claimed, “Students enter any week-day in the year with equal advantage. There are no examinations at commencement. No particular qualifications are required on entering.… Few who apply themselves will be longer than three months and many who have had previous experience will complete it in less time.” The same brochure declared, “Eastman college does just what it claims to do, and we defy any one to show to the contrary.” Education for the aspirational masses, and by 1886 Eastman claimed to have taught 25,000 students.¹⁴

In this sense, we can see the rise of these business colleges as a tacit indictment of what passed for higher education in the United States in the mid-nineteenth century. Far fewer students attended those institutions of higher education, and what they learned had remained largely unchanged since the eighteenth century or, indeed, since the Middle Ages: classics and classical languages; ancient philosophy; and theology, often of a denominationally specific variety. Moribund in the eyes of some, irrelevant in the eyes of more. “The university of the past,” according to General R. D. Mussey, “was for the thinker; the college of today is for the actor.”¹⁵ He was speaking to the graduates of the Washington Business College on June 18, 1873, and he made it clear that actors, not thinkers, were what the world needed.

No one drew the distinction between business colleges and higher learning more sharply or critically than James Garfield. Garfield had been in attendance at that gathering of Bryant & Stratton operators in Chicago in 1865. Four years later the future president, a sitting member of the House of Representatives from Ohio, delivered a commencement address to the graduates of the Bryant & Stratton College in Washington, D.C. He called his talk “Elements of Success,” and in it Garfield sounded remarkably like many contemporary critics of education. “Business Colleges my fellow-citizens,” he told the crowd gathered in June 29, 1869, “originated in this country as a protest against the insufficiency of our system of education.” Warming to the topic, he went on, “As a protest against the failure, the absolute failure, of our American schools and colleges to fit young men and women for the business of life.” Garfield wanted “every college president in the United States” to hear him when he charged, “Take the great classes graduating from the leading colleges of the country … how many, or rather, how few, of their members are fitted to go into the practical business of life?” And just to make sure the point was not lost on those assembled, Garfield railed, “These Business Colleges furnish their graduates with a better education for practical purposes than either Princeton, Harvard or Yale.”¹⁶ (For his part, Garfield graduated from Williams College in 1856 and seems to have done all right.)

Others also recognized the need to draw a distinction between the education provided by business colleges and the education young men received at U.S. colle...