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Economics as Brainwashing and Careerists Get the Job

The self-regulating market and stylizing all problems as exogenous, not endogenous are fatal myths as shown by Enron, Tepco, Citigroup and all tgax cheat corporations. Is economics out of touch with reality? How can the financial sector be shriveled? Can the real economy survive when financial profits amount to 40 percent of corporate profits? Viva economic learning!

Manager Training

By Annick Eimer

[This article published on: Spiegel online 4/5/2011 is translated from the German on the Internet,  http://www.spiegel.de/karriere/berufsstart/0,1518,748834,00.html.]

With the financial crisis, managers have drawn whole states in the debt whirlpool. What are the consequences in economics? A few hours of ethics. But the problem is not changed. Many economists calculate too much and give too little attention to the social consequences.

After school Katya Borns was in South America for a year. She saw much poverty. Nevertheless she studies economics - against the clichés.

The 36 year old says: "Seeing poverty, one sees that money and the economy are the driving forces in this world." She decided to study economics because she wanted to understand how economies function, why there are countries where everyone is poor and others where people live in superfluity.

Reality at the Free University of Berlin was sobering for her. "I began my study with great questions. But there was no room for them. Actually I only calculated."

Only a few economists grappled with the financial crisis. Two years ago investment bankers with their gambling mentality nearly brought the financial world and whole economies to collapse. One could expect from the guild that they would do everything so this would not happen again and that they would be more modest in view of the disaster they inflicted. Instead there is robust speculation with the kind of toxic securities that triggered the crisis. Bankers pocket enormous bonuses as though nothing happened.

The lack of ethical consciousness is becoming clearer these days to a considerable part of the economic elite. Another type of manager is demanded from all sides, one who tills the land from which he wants to harvest and does not only cut down everything for the short term profit of his enterprise.

The voices that question the training of these managers are multiplying. University economic theory is denounced. What should we do? What would a study of economics look like that produces graduates with a consciousness of social responsibility?

Some universities are reacting. Here and there a seminar on economic ethics creeps into the curriculum.

Apart from this, a glance at the lecture syllabus is sobering: "cost- and benefit calculation, administrative law, macro-economy, micro-economy, financing, mathematics and statistics" are on the study plan of the bachelor's degree.


Lutz von Rosenstiel only smiles wearily at this arrangement. "They cannot entice idealists with ethical consciousness," the scholar says. For many years in countless investigations, the emeritus professor of labor- and organizational psychology at the University of Munich accompanied beginning students in their first years in professional life. In interviews, he asked what drove them, what motives led them to decide for their subject of study and how they chose their employers.

In this way the researcher identified three different anthropological types in the world of work: idealists, the free time oriented who see their job first of all as a source of money and careerists. There are very many in this last type among economists. That has consequences.

"Morality does not play a great role for careerists," von Rosenstiel concludes. "You find morally-thinking persons among idealists. The problem is that they do not first study economics." "A hardened careerist cannot be changed with a few hours of ethics."


Whoever wants to know how they tick should take to heart a few of the stories from the business class of the Swiss bestselling author Martin Suter or simply listen to Rosenstiel's explanations. Power and money are the keywords that determine the life of careerists, the researcher said. They do not know pangs of conscience. They couldn't care less where their businesses earned money. Whether they landed in marketing or in sales wasn't import for them. According to Rosenstiel, they identify with their employers and above all with their goals. For them, terminations are legitimate measures for cost reduction. They regard anyone who doesn't work at least 70 hours a week on his career as a low performer, the counter-model to a careerist.

What the economist loves to do most is develop models to analyze and explain economic structures and processes. People hardly play any role in these models. As a rule, they are reduced to the so-called homo oeconomicus, the theoretical model of a person who never acts irrationally but only in the sense of maximizing his advantages.

"That is simply absurd," Borns says. "One starts from basic assumptions that are totally out of touch with reality, calculates and at the end has a number to make prognoses for the real world."


The economics graduate is not the only one who methodically puts economics in question. For some time, economists have been reproached for infatuation with formulas. They only think in models instead of searching for the connections of the economy, politics and society, the critics say. The Nobel Prize winner Reinhard Selton can be counter among the critics.

As an economist and mathematician, he was involved in the "mathematization of his discipline." Now in interviews he levels increasing criticism of the methodology of his subject: economic theory abandons consideration of the person more and more.

The sociologist Wolfgang Streeck also criticizes the non-existent reference of models to the real world. "Counting, measuring and observing are important enough to constitute methodology," the director of the Bonn Max Planck Institute for Social Research concludes in a down-to-earth way.

Another weak point of critics is neoclassicism or neoliberalism, a theory that flanks research and the teaching of economics above all in Germany. According to this theory, the economy functions best when it is simply left alone. The free market regulates everything. The state should only set the framing conditions so competition arises. This theory is anchored so firmly in so many heads that it is decried by leftist circles as "ideology."

Tanja von Egan-Krieger speaks in an exaggerated way of a "neoclassical doctrine." One studies this and nothing else, the doctoral student in economic ethics at the University of St. Gallen says. She is chairperson of a group with the programmatic name "Study group of Post-Autistic Economy." The criticism of the group is that future economists have a completely one-sided thought pattern in their course of studies, neoclassical model economics.


Wolfgang Streeck formulated this criticism even more sharply. In one study paper, he let this criticism rip. Mono-cultural brainwashing is pursued in the economics course of study, he says. Students must be protected from this.

How can students be protected?

According to Streeck, the standard economy with its machine model of a social world driven by rational egoism of autistic calculation machines must be questioned. "The economy is a social process and economics is a social science." This should be taught.

The answer of post-autistic economists turns out less radical. They want to see more diversity flourishing and would consider it as great progress if economics would not be exclusively captive to neoliberal theory. Finally, there are many different theories. Post-Keynesianism or ecological economics lived in the shadows in the lecture halls of universities. "That all theories arise from a social context is never taught," Tanja von Egan-Krieger says. Therefore she and her fellow-supporters demand that economic history be taught in academic study.

When Borns studied, she simply sought answers to her questions elsewhere. She escaped from the economics faculty and attended meetings of other disciplines. What she did purely intuitively, the critics of economics would now like to institutionalize.

Birger Priddat, economist and philosopher in Witten-Herdecke, is an example. Together with his student Philip Kovce, he recently attracted attention with a concise twelve thesis paper. To have a future, economics must fundamentally change. The two recommend a radical revolution for teaching at the universities: "The economy can only be studied together with other disciplines. We have to shift from mediating knowledge to understanding, judging and interpreting as abilities to be developed."


The private university like the Zeppelin University in Friedrichshafen is the Enfant terrible in the university landscape. Its motto is we do everything different. "A question that has occupied us from the beginning was: how can one study the economy without studying economics, says Stephen Jansen, president of the university. He criticizes the pure number crunching without critical reflection about drives. As one of his remedies, economics can only be studied combined with cu9lture- or communication disciplines.

In Friedrichshaften, selection procedures prevent one from being a streamlined careerist. No numerous clauses and no multiple choice tests decide over admission but answers to questions that have a philosophical character, as for example: "Is there an idea which is greater than you yourself?" Katja Borns works today part-time for a Green delegate in the Bundestag and freelances for a development assistance organization. Both activities are very compatible with her conscience. What motivated her to study? "I wanted to know how economists think and speak and how their argumentation can be put in question in discussions."


Interview with Lutz von Rosenstiel

Three types populate economics: careerists, free time kings and a handful of idealists. Nearly all students only seek money and success, Lutz von Rosenstiel says. In the interview, the Munich researcher emphasizes the lack of morality among the managers of tomorrow.

[This interview published in: Spiegel, April 6, 2011 is translated from the German on the Internet,  http://www.spiegel.de/karriere/berufsstart/0,1518,749462,00.html.]

Spiegel: When one takes a good look at students in economics, the feeling creeps in that many are developing very early the airs, graces and appearance of unscrupulous complacent managers. Is this impression wrong?

Lutz von Rosenstiel: No, that impression is very correct. In several studies, we interviewed students of different disciplines during their study and at the beginning of their vocational life. It turned out there are three types of persons in the world of work. The idealists who decide for natural science or social courses of study make up the first type. The second type that we identified in these studies is one who attaches great importance to freedom. This type is found in all disciplines. Economics is studied above all by a third type that we call careerists. Two things above all are on the agenda of careerists: being successful and making money. Unlike the idealists, the content of their job doesn't make any difference to them. They identify without problem with the business goals - whether or not they are ethically-morally acceptable.

Spiegel: Since the financial- and economic crisis, managers have been under more scrutiny and pressure than before. Wouldn't a hardened careerist reflect a little when large parts of the population become outraged about excessive bonuses?

Rosenstiel: No, that has hardly any effect. Moral ideas are influenced by the personal environment which is usually very homogeneous for vocational newcomers. Whoever starts out ambitiously in vocational life spends much time in the business and often drinks a beer with colleagues at night. The young banker or manager is hardly bothered when he reads in the press that his vocational class is obsessed with money, greedy for money and immoral.

Spiegel: Do first semester students bring along the predisposition to be careerists or does the study of economics first make them careerists?

Rosenstiel: Both effects occur. The study of economics is interesting for this human type. We call this the selection-effect. On top of that, there is the so-called socialization-effect. When students are taught that the market will sort everything out, that legitimates their career ambitions and strengthens their behavior patterns. Economists say prosperity strengthens well-being. This means conversely: it is legitimate when one does everything to optimize growth and profit. That the assumption is false that prosperity makes persons happy can be proven empirically.

Spiegtel: What characterizes the study of economics?

Rosenstiel: Here one must distinguish between economics and business administration. In economics, thinking in models is taught. Unfortunately the reference to reality disappears more and more. Apart from a few exceptions, whether these models can be measured by reality is hardly examined any more. Business administration study makes persons qualified for their vocation and prepares for a career in big business. Business administration practitioners tend to adopt the models of economists more and more. In both disciplines, the study of social and human components is lacking. Nothing has changed in this since the financial crisis since there are no teachers who can communicate these themes.

Spiegel: If an idealist or utopian embarks on a course of study, can he be generally happy?

Rosensthiel: He will not have it easy. Firstly, he will probably have less joy in the unrealistic model-calculations that arte taught in this discipline. Secondly, he will take an outsider role and needs great strength to hold out.

Spiegel: Should businesses and banks promote more morally integrated and circumspect persons in their board of directors?

Rosensthiel: That is very problematic. Many selection procedures in big businesses pick out the careerists. This is different in some businesses but unfortunately not enough. It doesn't matter when a few unconventional thinkers with a different orientation are hired. The unconventional thinker often does not get the job because a manager who is himself a careerist decides over the hiring at the end. Then he selects a like-minded one, a careerist.

Spiegel: Are there attempts at abandoning this vicious circle where careerists promote careerists who hire new careerists?

Rosenstiel: Yes, definitely but they demand a complete rethinking or change in thinking. For businesses, the proverb is always in effect: "The fish stinks from the head down." This means when management defines profit maximization as the only goal, nothing changes even if many ambitious and idealistic persons work in the business. Businesses can still hire graduates who think differently. To get them, the training must be regormed. With the present courses of study, universities can hardly move unconventional thinkers and idealists to the study of economics.

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