Business in capitalist systems is much more dependent on failure than on success. We therefore need a failure-based philosophy that can translate real business experience into teachable moments. A business philosophy that is rooted in the experience of failure, rather than in the ultimately cynical ideal of success.

The idea of combining philosophy with business studies might seem weird at first glance. From Plato onwards there has been a tradition to ban money and business transactions because they blur and lower our minds. Recall how Plato threw out the merchants and consultants earning their living by arguing cases for clients. There was as little room for such sophistry in the Athenian academy as there was space for merchants in the temple according to Jesus. But in our globalized economies where business institutions dominate our lives and existence, we realize that this attitude only fits hermits, retired millionaires or daydreaming bums, and actually, that there are philosophies worth the name for the rest of us who muddle through reality on our everyday treadmill.

Philosophy in a New Business World

In a recent report on rethinking business education, the renowned US-based Carnegie Foundation for the Advancement of Teaching has taken as its task to reflect on business professionals take society into account when performing their everyday jobs. Every profession and every professional Bildung, including not only business but also law and medicine, runs the risk of focusing exclusively on skills and techniques. But whereas once upon a time a merchant needed know only bookkeeping and correspondence, now there is a vast array of management models to be taught and tools with which to become familiar. In the days of Adam Smith, business people had time to mingle with gown and clergy, but today they run like rats in intersecting corporate wheels that spin in the vortex of the world wide web. In this house of mirrors, professionals easily ignore issues that extend beyond purely instrumental, technical operations. Reflection and contemplation are easily pushed out of everyday work life.

But the pressure on professionals is not the only threat. In the twentieth century, large firms and corporations were staffed with in-house experts whose job it was to assist the line managers by giving them guidance and advice. In the past half-century those corporate pyramids have been flattened, and gone are the experts who were paid to provide in-depth knowledge on important issues. By cutting the staff, who often had an advanced academic education, connections to academia were also disrupted. In industry and trade, this contributed to a growing gap between reflection and action. At the same time, the tuition debt bubble grew in the US, and as it swells to the point of bursting, it may erase any links between the worlds of scholarship and business practice. New business philosophers have to face these exceedingly tricky dynamics.

The Old Ideal of Business-philosophical Success

The old task of philosophy can be reduced to “reflection on ideals.” In the context of business, this task often involved exploring “ideal conduct”, “ideal organization” or “ ideal markets” according to philosophical doctrines. In this sense, business studies traditionally latched on to philosophical doctrines that conveniently provided such “ideals,” and thus business economics and the identity of homo economicus developed out of moral philosophies that provided models of rational choice and optimal decision making. In the same manner, traditional ideals of organizing and business organizations grew based on the assumption that it was not only possible but normatively desirable to design firms where reason and rationality could prevail.

In a fascinating book, Nicole Dewandre, a EU bureaucrat, reflects on the practical effect of such ideals. Based on philosophical arguments of a rather different kind that the old ones, she claims that such ideals are not only useless but even harmful. If we approach everyday business action with such ideals in our minds we sooner or later end up as disillusioned cynics, she argues, simply because everything we see and experience fits so badly with the beautiful ideals we were taught! In the end this lack of correspondence makes us forsake not only all our ideals, but also the possibility of truth, and drives us to throw ourselves into the swirling and toxic waters of opportunism. We surrender completely to the harsh reality of market dynamics, and affirm that as the cynical truth of our time.

Toward a new business philosophy

But is there a philosophy suitable for business that does not abdicate from all critical ambitions? Here the Carnegie Foundation report alludes to a way out. Their key idea involves learning not from ideals, but from reality. More specifically, they suggest that we should frame the crises and breakdowns that we experience so often today as “teachable moments.” The authors of the report express surprise that today´s financial and ecological crises do not enter the classroom, but we think that it’s not surprising at all – business studies and education remains completely dominated by the ideal of success.

If we approach business education with the goal of teaching exclusively that which brings business success, we will hardly turn mishaps, shortcomings, and minor crises, much less global financial crises into “teachable moments” (see Shrivastava & Statler, eds., Learning from the Global Financial Crisis: Creatively, Reliably, Sustainably, 2011). And of course, when business bookshelves are crammed with advice for successful managers, leaders, CEO’s, markets, etc., it might be tricky to question the idea of “success” without being considered an ugly party-crasher. Nobody wants to listen to words that call into question the assumptions that undergird a lifetime of patient scholarship, and meanwhile, business students might reasonably demand their money back.

Still, we know from John Dewey and Aristotle, among others, that true learning and reflection are based on experiments and especially their failures. This is a philosophical insight – you get a chance to know who you are and what you are doing when things go wrong. You can only know what health really is if you have experienced illness, and this insight is commonplace for other professions. Jurists learn the law by examining crime, MD’s learn about health by trying to cure diseases.

But one profession remains in denial of this fundamental truth. One profession is so mesmerized by fame and glory that it does all what it can to shy away from the lessons of experience. The worst enemy of the business profession, its worst block to new insight and reflection, is its focus on success.

Failure! Failure! Failure!

We need a failure-based philosophy that can translate real business experience into teachable moments. Failure, once we discover it, appears as a much more common topic in philosophy than success. Failure connects to tragedy, to life crises and to the centre of existential philosophy. This short piece is not the place to set sail across this ocean of reflection, but we can conclude by emphasizing that business in capitalist systems actually is much more dependent on failure than on success. Remember that modern capitalism could never take off and grow without bankruptcy laws, without the development of limited liability structures for ventures and firms. Capitalism is less dependent on secure paths toward success than it is on the various ways and means – legal, social and philosophical – to accept and handle failure. Any truly new business philosophy must therefore be rooted in an understanding of the concept of failure, indeed, in the experience of failure, rather than in the ultimately cynical ideal of success.

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