SVB Crisis: Why Biz World Should Worry About The Decline Of Liberal Arts

Liberal arts students are in danger of joining the one quarter of species that may be extinct by the end of this century. In the United States, the number of students taking English or history at college has fallen by a third over the past decade. Across the 38 countries in the Organization for Economic Cooperation and Development, four-fifths report that humanities enrollment is falling. From a purely economic point of view, getting a PhD in the humanities these days is only marginally more sensible than taking up smoking crack.

A recent New Yorker article, Nathan Heller’s “The End of the English Major,” is replete with depressing quotes from teachers and students in the liberal arts. “We feel we’re on the Titanic,” a senior professor in the Harvard English department said. (In 2022, only 7% of Harvard freshmen planned to major in the humanities compared with nearly 30% in the 1970s.) “I think that the problem with the humanities is you can feel like you’re not really going anywhere, and that’s very scary,” a student lamented.

Should businesspeople care about this litany of woe? The argument for indifference is self-evident. The world is being transformed by STEM rather than Jane Austen studies. Most academic articles in the humanities don’t attract more than a handful of readers. Humanities scholars have brought many of their problems on themselves by falling for academic fads — announcing the death of the author or rejecting “Western civ” or reducing everything to the tedious trinity of race, sex and class.

The answer is that there are plenty of reasons for caring, starting with the purely utilitarian. Businesspeople spend much of their lives performing in public — making speeches on this or that or delivering pitches to investors or defending their results before critical investors. What better way is there to learn to deliver a speech than putting on plays at college? And what better way is there to learn how to make a succinct pitch — to tell a story with compelling examples but as few words as possible — than to study great writers? Studying (and performing) Shakespeare is a better preparation for the practical demands of business leadership than studying accountancy, as well as an infinitely greater source of wisdom.

Giant media companies are engaged in a fierce competition for “content” — for the next must-watch series that will keep customers paying their monthly subscription (if you’re an incumbent) or which will allow you to attract buzz (if you’re a challenger). Who better to recruit to write stories than people who have spent years studying story-writing? And who better to hire to look for stories than people who have the world’s literature at their fingertips? I’m still amazed that Hollywood hasn’t made more use of Balzac’s vast repertoire of stories since his favorite themes — the competition for success and the price it exacts — have such a contemporary ring. It is like leaving the North Sea unexplored in a time of oil shortage.

But the strongest arguments are about more than just profit-and-loss. The scientific advances that most excite businesspeople — most obviously in artificial intelligence but also in biotechnology and genetics — raise profound questions about what it is to be human. What is the difference between human thinking and machine thinking? What are the reasonable limits to genetic intervention? What is the proper role of calculative reason and what is the proper realm of moral reasoning or trained empathy?

The world’s most advanced businesses are increasingly running up against ethical questions. Manufacturers of driverless cars have to program their machines to make “moral” choices if, in extreme circumstances, they are confronted with a choice between running over a child and an old man. (For what it’s worth, researchers found that responses to this question varied by country: France was most likely to save the child, Taiwan to save the elderly.) Social media companies will have to confront the dangers of their trade or face being regulated out of existence. Genetic scientists will have to weigh the ethical and social implications of allowing rich people to pay for genetic modifications when poor people can’t afford them.

Most companies will have to grapple with the question of establishing the right division of labor between knowledge workers and intelligent machines — making sure that humans focus on things that humans do best (creative work or interacting with people) while machines do what they do best (such as sorting vast amounts of data).

Companies of all kinds are also increasingly rubbing up against politics, whether they like it or not. Geopolitics is transforming the business landscape as autocracies (particularly China) push back against the American-dominated world order and economics is turned into a weapon. Domestic politics is also reaching into ever more intimate corners of life. The semiconductor industry is being reshaped less by changes in Moore’s law than by superpower tensions. Disney’s fate over the past year has been determined more by disputes over the meaning of gender than by improvements in fiber optics. CEOs can buy accountants or logistics experts. But if they are to understand the bombardment of daily news events, they need to have a broad understanding of history and geopolitics

What better way is there to study what it means to be human than to study the humanities? Students of the arts study human creativity at its best. Students of politics study the nature (and dangers) of power. Students of history study the ways that human societies change over time — and also the ways that they stay the same. Philosophers study the nature and limits of human reasoning. The history of money and banking might sound like a fairly arcane area of academia. But it is replete with warnings about the dangers of bank runs and over-generous lending regimes.

The result is a store of examples from the human past that we should always have to hand. Given the pace of advance in genetics, businesses need people around who know about the history of eugenics (which was practiced across Europe and America and not just in Germany). Given the return of autocracy, they also need people around who can talk about both the power of one-person rule and also its ultimate fragility. And given the ubiquity of surveillance devices, they need to keep a copy of George Orwell’s 1984 handy.

The result is also a collection of insights that are just as rich as those of the natural sciences but harder to express in exact models or formulae: that man is both the best and worst of all animals; that power corrupts, and absolute power corrupts absolutely; that civilizations can fall as well as rise; that misinformation can lead to social paroxysms; that some characteristics of human nature remain fixed over time; and that today’s certainties are tomorrow’s absurdities.

The humanities at their best are also perfectly equipped to provide an education in something that has been sadly lacking in recent business history: human judgment. The notion of judgment might sound a bit vague — certainly compared with the profit and loss of the business balance sheet or the ones and zeros of the digital economy — but the difference between a successful leader and a mediocre one does not lie in the amount of information they possess. It lies in the very human ability to process a vast mass of ambiguous information — sales patterns, technological innovations, political threats — and then make a rapid decision under pressure. The importance of judgment is growing as the world becomes more uncertain and trade-offs become more pressing. Who knows? Perhaps this week’s financial turmoil could have been avoided if Greg Becker, the CEO of the just-shuttered Silicon Valley Bank, had studied the humanities at Indiana University instead of majoring in business.

A preference for deceptive certainties over fuzzy truths has arguably been the biggest problem for business in recent years. Businesspeople have grown incomparably rich since the 1980s by embracing the deceptive certainties of business theory while forgetting the great truths of political theory. They have embraced the cult of shareholder value (paying themselves like owners rather than employees) while also providing themselves with golden parachutes and exploiting every accounting trick in the book. But in so doing they have whipped up popular fury that is threatening to overturn business civilization (and will not be placated by a few bromides about diversity and sustainability).

They would have been wiser if they had studied classical political theory along with contemporary economics and business theory. Aristotle argued vigorously for the “golden mean” on the grounds that a prosperous middle class is necessary to long-term stability. Plato insisted that elites inevitably collapse if they give way to their own appetites rather than restraining themselves in the interest of the public good. Surely Plato+Aristotle is a better formula for understanding the state of modern America than any number of business theorists?

Rather than standing by idly while the study of the humanities implodes, businesses should be using their collective might to revitalize them. Business recruiters should recognize that mental depth is a far more valuable resource than superficially marketable skills. Business schools should throw out grappling hooks to the humanities departments and bring in philosophers to teach about the trolley problem, literature professors to teach about creativity and historians to reflect on decline and fall. And CEOs themselves should take what time they can to study the humanities — perhaps setting aside an hour a day to read a serious book or taking the senior leadership team to Donegal for a classical symposium every summer. Better a chapter of Plato than a dozen treatises on supply chain management!