Overall Summary

Andrew J. Hoffman's Business School and the Noble Purpose of the Market: Correcting the Systemic Failures of Shareholder Capitalism argues that business schools have become fundamentally misaligned with the needs of society and the challenges of the 21st century. Published in 2025 by Stanford University Press, the book represents the culmination of Hoffman's four-decade career as a professor at the University of Michigan's Ross School of Business, where he has witnessed firsthand how business education has ossified around neoclassical economic principles that no longer serve society's needs.

Hoffman's central thesis is that today's business schools were designed for a world that no longer exists. They continue teaching ideas formulated in the 1970s as if they were immutable natural laws rather than theoretical constructs created by economists in a specific historical context. The curriculum elevates shareholder profit above all other considerations, views government as an intrusion on free markets rather than an essential arbiter, and promotes unlimited economic growth despite mounting evidence of environmental and social consequences. These teachings, Hoffman argues, are actively making the world worse by producing business leaders who lack the skills, knowledge, and wisdom to address challenges like climate change and income inequality.

The book's title points toward Hoffman's solution: restoring capitalism to its "noble purpose." This isn't a call to abandon capitalism but to reform it. Hoffman acknowledges that the past 150 years of capitalism have produced remarkable human progress: the world economy increased by a factor of 14, global per capita income tripled, average life expectancy increased by almost two-thirds, and the percentage of people living in extreme poverty dropped from 56% in 1920 to 10% today. The market remains the most powerful institution on earth for addressing human needs. But the particular variant of capitalism that emerged in the 1970s and 1980s has lost its way, prioritizing wealth extraction over wealth creation and enriching the few at the expense of the many.

Simply adding sustainability electives to existing curricula won't address these systemic problems. As Hoffman repeatedly emphasizes, you cannot solve a systems breakdown by tinkering around the edges. Business schools must fundamentally rethink their faulty foundations: questioning received wisdom about the purpose of firms, the role of government, the meaning of efficiency, and the limits of growth. They must teach students to be stewards of capitalism itself, recognizing their responsibility to maintain the integrity, stability, and equity of the system in which they operate.

The book addresses three audiences: MBA students seeking education that aligns with their values; faculty and administrators capable of transforming curricula; and business leaders who might support and demand such transformation. For students, Hoffman offers guidance on extracting value from business education while maintaining moral integrity. For faculty, he challenges them to become "elders" who prioritize institutional health over career advancement. For everyone, he provides intellectual frameworks for understanding why current capitalism is failing and what a reformed version might look like.

High-Level Overview: Key Arguments and Goals

Business Schools Are Broken: Current curricula, dominated by neoclassical economics and its fixation on efficiency, profit maximization, and shareholder value, are not preparing future leaders to address planetary challenges like climate change or social challenges like income inequality.

Shareholder Capitalism Is Failing: The variant of capitalism that emerged in the 1970s and 1980s has lost its way, creating systemic failures including climate change and widening inequality that it is unable to address within its current structure.

Reform, Not Revolution: Hoffman calls for amending capitalism rather than abandoning it, recognizing its historical success in raising living standards while insisting on fundamental changes to align it with society's current needs.

Multiple Perspectives on the Firm: The dominant economic view that firms exist to maximize shareholder value should be supplemented by legal, organizational, and environmental perspectives that reveal different and often contradictory purposes.

Government as Essential Partner: Rather than viewing government as an intrusion on free markets, business education must recognize government's essential role as rule-setter, regulator, and arbiter of the market's proper functioning.

Systems Thinking Required: Climate change and inequality aren't externalities or unintended consequences; they're products of the system. Fixing them requires fixing the system, not adding saddlebag electives.

Management as a Calling: Business leaders must see their work as a vocation in service to society, not merely a career for personal gain. Business education should help students find purpose and meaning alongside technical skills.

Today's Students Are Different: Gen Z and Millennial students are increasingly values-driven and disillusioned with shareholder capitalism. They want education that equips them to solve society's challenges through commerce.

Part I: Rethinking the Purpose of Business Education

Business Schools Are Broken

Hoffman opens with a stark assessment: business schools are failing to prepare students for the challenges they will face. The curriculum remains fixated on 50-year-old notions of shareholder primacy and a "greed is good" mentality. Outdated ideas and models have ossified into standard courses that teach students to maximize shareholder wealth as if this were natural law rather than a theory formulated by economists in a specific historical context.

The consequences are visible in two overarching crises: climate change and income inequality. Both are systemic failures resulting from choices in how those in power structured the market. They are not externalities or unintended consequences; they are products of the system. And business schools continue teaching the ideas that created and perpetuate these problems.

Hoffman traces how business schools lost their way. In the late 1950s and early 1960s, the Ford Foundation funded transformation of American business schools from vocational orientation to academically and discipline-based orientation. While an important corrective for its time, the pendulum swung too far. Professors now see themselves as researchers first and teachers second. The metrics for contemporary success lie in publishing A-level academic journal articles where practical relevance is overshadowed by theoretical rigor.

The reward system reinforces these problems. Junior faculty are incentivized to focus on publications rather than transformative teaching. Business schools have become revenue centers, where market demand is based more on perceived status than deep rigorous education. Rankings drive decisions, and rankings reward factors disconnected from whether graduates actually serve society well.

Simply adding electives on climate change or inequality while the core curriculum remains focused on shareholder profit will not address the scale of the challenge. You cannot fix a systems breakdown by tinkering at the margins. Fundamental transformation is required.

The Implications for Students

Today's business students are different from previous generations. They're more values-driven, more concerned about climate change, more skeptical of capitalism as currently practiced. Surveys show that young people, Gen Z and Millennials, are becoming increasingly disenfranchised with capitalism. This isn't hard to understand, Hoffman notes, considering the debt loads they carry and their difficulty getting financially established.

Yet many students find themselves in curricula that stifle discussion of the common good while emphasizing profit maximization as unquestioned. One business student told Hoffman she felt like her values were under attack every time she walked into the building. Rather than cultivating open-minded stewards of the economy, business education teaches students to ignore shareholder capitalism's obvious ethical lapses and avoid systemic analyses.

Hoffman's advice to students is threefold. First, acknowledge that business schools are broken. Second, attend anyway, because the power available within business to make a difference is enormous. Third, take control of your education. Don't accept the curriculum as given. Challenge, question, and interrogate what you're being taught. Sometimes you may decide that what they're teaching is not how you want to live your life, and you'll face a choice.

Students should bring their whole selves to business education. They should advocate for tomorrow's students by pushing for curriculum reform. They should recognize that they're being placed in a resource-rich environment and take advantage of it to make their education what they want and need. This is how they'll develop the power to make a difference in the world.

The Role of Faculty and Administrators

Faculty and administrators must recommit to the reasons they chose academia. The opportunity to shape young minds and contribute to society's knowledge base is a privilege that carries responsibility. When faculty focus exclusively on publications that other academics cite, they abandon that responsibility.

Hoffman challenges senior faculty to become "elders." Elders aren't concerned with their own careers; they're concerned with the institutions in which others will develop. They take risks to improve those institutions even when doing so offers no personal benefit. This is admittedly easier for tenured and chaired professors than for junior faculty navigating career pressures, but someone must lead.

The time is now because students are ready and waiting. They're frustrated that the education they're receiving isn't what they hoped for. They want to address climate change and inequality. They want to find meaning in their careers. Faculty who step forward to meet these needs will find enthusiastic partners.

Part II: Capitalism, Business, and the Market

The Coming End of Shareholder Capitalism

Hoffman provides a brief history of American capitalism to demonstrate that today's shareholder capitalism is neither natural nor inevitable. Before the 1970s, the dominant model was managerial capitalism, which optimized the well-being of customers, employees, shareholders, and the nation. Executives weren't paid exorbitant salaries. Work was structured around community rather than pure individualism.

Shareholder capitalism replaced managerial capitalism through a combination of economic theory and political power. Milton Friedman's influential 1970 article arguing that businesses' sole responsibility is to maximize profits provided intellectual justification. Deregulation, tax cuts favoring capital over labor, and the decline of unions shifted power toward shareholders and away from other stakeholders.

The results have been dramatic. Profits soared for some at the expense of the majority. The wealth of the median family declined in recent decades. Life expectancy in the United States actually decreased before the pandemic. These aren't side effects; they're direct consequences of choices about how to structure markets.

Hoffman emphasizes that American shareholder capitalism is just one variant among many. Students are often blown away when they learn about Nordic capitalism, which combines market economies with massive social safety nets. Chinese capitalism operates differently still. Understanding these variations reveals that capitalism is a set of human-made institutions. If it doesn't work, we can amend it to serve present-day needs.

The Purpose of the Firm

One of the curriculum's deepest problems is teaching students that the purpose of corporations is to maximize shareholder value. Hoffman asks readers to consider: if you asked any American to finish the sentence "The purpose of corporations is to...," they would answer "make money for shareholders." This view is so pervasive it seems like common sense.

But it's not legally accurate. Shareholders are not principals in any meaningful legal sense. The American Law Institute confirms that companies can be designed for any purpose. When someone tries to sue corporate executives for not maximizing shareholder returns, they must navigate the Business Judgment Rule, which protects decisions made in good faith with loyalty and due care. The idea that executives are legally required to maximize profits stands on shaky ground.

The legal perspective suggests different purposes for firms. So does the organizational perspective, which holds that companies are human-centered organizations where shared purpose, culture, and values matter. The environmental perspective emphasizes that economies are dependent on and subsidiary to the environment, not the other way around.

Business education should teach all these perspectives, not just the economic one. Students should understand the debates about corporate purpose and the arguments for stakeholder rather than shareholder primacy. They should learn that the Business Roundtable and World Economic Forum have tried to redefine corporate purpose to include all stakeholders. They should encounter leaders like Paul Polman, former CEO of Unilever, who argued that businesses must be "net positive," improving well-being for everyone they impact.

The Tyranny of Shareholder Primacy

Hoffman explores how shareholder primacy creates specific pathologies. Short-termism dominates: quarterly earnings and stock price become the prime objectives, crowding out long-term thinking. Executives are incentivized to boost stock prices through buybacks rather than investing in workers, communities, or sustainability.

The curriculum's treatment of efficiency illustrates the problem. Students learn that efficiency is always good. But efficient for whom? Moving manufacturing overseas might be efficient in terms of stock price, but what about the people in towns left behind? Those costs don't appear in the equations business students learn.

Discount rate analysis teaches students to value present returns over future ones. This systematically devalues long-term investments, including those needed to address climate change. When present profits are worth more than future survival, the math itself drives unsustainable decisions.

Growth and consumption receive similar treatment. The curriculum promotes unlimited economic growth despite physical, environmental, and economic limitations. Students learn to see nature as a limitless source of materials and sink for wastes. They're not taught about planetary boundaries or the impossibility of infinite growth on a finite planet.

Part III: The Role of Government in the Marketplace

How Money Corrupts Healthy Government

The dominant curriculum teaches that government is an intrusion on free markets. This framing ignores government's essential role as rule-setter and regulator. Markets don't exist in nature; they're created by laws, institutions, and enforcement mechanisms that governments provide. Without property rights, contract enforcement, and regulatory frameworks, markets couldn't function.

Hoffman traces the history of corporate personhood in American law, culminating in the Citizens United decision. By treating corporations as persons with speech rights, the Supreme Court opened the door to unlimited corporate spending on elections. This has corrupted democratic processes by giving concentrated economic power outsized political influence.

The Founders feared exactly this outcome. They worried about artificial legal entities with perpetual life wielding disproportionate power over democratic institutions. Today's reality would confirm their worst fears.

Business education should teach students about these dynamics rather than treating government as simply an obstacle to profit. Future leaders need to understand their responsibility to support healthy democratic institutions, not undermine them.

The Constructive Role of Business in Policymaking

Despite the problems with money in politics, Hoffman argues that business has a legitimate and necessary role in policy discussions. Businesses possess expertise about their industries that policymakers need. Constructive engagement can improve regulations and help achieve social goals efficiently.

The challenge is distinguishing constructive engagement from corruption. When businesses lobby for rules that benefit everyone, including consumers and the environment, they're contributing to good governance. When they lobby for special advantages that harm the public, they're undermining it.

Hoffman calls for what might be termed "corporate political responsibility": businesses recognizing their obligation to support the integrity of political systems rather than exploiting them for narrow advantage. This requires business leaders to sometimes sacrifice easy profits from exploiting market flaws and instead support healthy institutions that reinforce capitalism's legitimacy.

Part IV: Outdated Business School Principles and Concepts

Technology Alone Will Not Solve Society's Challenges

Many business schools have added climate change to their curricula, but the guiding motivation is typically the business opportunity it presents. Selling climate solutions is an important first step, but it will only slow the velocity at which we're heading toward system collapse if the underlying curriculum remains focused on shareholder profits.

Hoffman challenges the technological optimism prevalent in business circles. Electric cars, renewable energy, and other innovations are necessary but insufficient. They address symptoms without addressing root causes. True sustainability requires changing the system that creates unsustainable outcomes, not just adding green products to existing business models.

Rethinking Efficiency, Value, Prosperity, and Metrics

Hoffman argues for reconceptualizing fundamental business concepts. Efficiency should include social and environmental costs, not just financial ones. Value should encompass benefits to all stakeholders, not just shareholders. Prosperity should be measured by broad well-being, not just GDP growth. Metrics should capture what matters to society, not just what's easy to quantify.

The obsession with narrow metrics creates its own pathologies. When stock price becomes the ultimate measure, anything that increases it seems justified. But stock prices can rise through financial engineering, cost-cutting, and externalization of harms rather than genuine value creation. Business education should help students distinguish real prosperity from mere extraction.

Growth, Consumption, and Limits

The curriculum's promotion of unlimited growth ignores physical reality. You cannot have infinite growth on a finite planet. Perpetual growth is not possible, and its continued pursuit is self-destructive. Climate change is the most visible consequence, but resource depletion, biodiversity loss, and ecosystem collapse follow similar dynamics.

Business students must grapple with these limits. This doesn't necessarily mean accepting lower living standards, but it requires rethinking what prosperity means and how to achieve it within planetary boundaries. Systems thinking becomes essential: understanding how economic activities interact with natural systems and social structures.

A New Kind of Business Curriculum

Hoffman envisions curricula that integrate these concerns throughout rather than relegating them to electives. Core courses in strategy, finance, accounting, operations, and organizational behavior should all address environmental and social dimensions. Students should learn to internalize externalities, value natural capital, and measure success in terms of stakeholder benefit.

This transformation requires more than adding content. It requires changing underlying assumptions about what business is for and what success looks like. Faculty must be willing to question the orthodoxies they were trained in. Administrators must be willing to risk rankings to pursue educational excellence.

Part V: The Noble Calling of Business and Business Education

The Values in Today's Business Schools

Business schools transmit values, often without acknowledging they're doing so. The values embedded in current curricula include: profit is the ultimate measure of success; self-interest drives all behavior; markets are natural and governments are artificial; growth is always good; efficiency justifies any outcome.

These values create specific types of business leaders. Research shows that students who apply to business schools score higher than peers on narcissism, sociopathy, and Machiavellianism. Business schools then enhance appreciation for selfish values. Students graduate narrower than when they entered, focused on maximizing personal gain.

Not all students fit this pattern, and Hoffman sees change happening. A growing number arrive wanting to address climate change and inequality. They see business as a powerful tool for positive change and want education that helps them wield it responsibly. These students are frustrated when curricula steer them toward greed rather than service.

Envisioning New Values

Hoffman proposes alternative values: service rather than extraction; stewardship rather than exploitation; long-term thinking rather than short-term gain; systemic health rather than narrow optimization. Business leaders should see themselves as fiduciaries for the market system itself, responsible for maintaining its integrity for future generations.

This reframing connects to older traditions. Before shareholder capitalism, many business leaders saw themselves as community members with obligations beyond profit. The concept of management as a calling draws on religious traditions where vocation means service to something larger than oneself.

Helping Students Find Purpose

Hoffman's course "Management as a Calling" takes MBA students into the woods for a retreat focused on purpose and vocation. Away from phones and computers, students work through exercises exploring what they want from their careers and how business can serve society. The goal is helping them bring their whole selves to business education and find work that aligns with their deepest values.

Finding a calling produces positive outcomes: greater job satisfaction, higher performance, and stronger sense of meaning. Students who see management as a calling rather than merely a career are more likely to make decisions that serve stakeholders beyond shareholders.

The Positive Outcomes of Finding a Calling

When business leaders view their work as a calling, they think differently about decisions. They're more likely to consider impacts on employees, communities, and the environment. They're more willing to sacrifice short-term profits for long-term sustainability. They find greater satisfaction in their work because it connects to something meaningful.

This isn't merely idealism. Purpose-driven companies often outperform competitors over the long term. Employees are more engaged when they believe their work matters. Customers prefer companies that share their values. The business case for purpose is strong, even within traditional metrics.

Making Purpose the Norm

Hoffman concludes by calling for purpose to become central to business education rather than marginal. Business schools should help every student articulate their calling, not just those who seek it out. The curriculum should reinforce rather than undermine students' desire to make a positive difference.

This requires courage from everyone involved. Students must resist pressure to abandon their values for high salaries. Faculty must risk career advancement to teach what matters. Administrators must risk rankings to pursue transformation. Business leaders must support schools that produce ethical graduates even if they're less focused on traditional metrics.

The stakes are too high for timidity. Climate change threatens civilization. Inequality threatens democracy. Business, as the most powerful institution in society, must be part of the solution. Business schools, as the institutions that train future leaders, must prepare them for this responsibility.

Conclusion: A New Kind of Business School

Business School and the Noble Purpose of the Market ultimately calls for nothing less than transformation of how society prepares business leaders. The current model, Hoffman argues, is producing graduates who make problems worse rather than better. Only fundamental change in curriculum, pedagogy, values, and purpose can redirect business toward its proper role serving society.

Hoffman acknowledges the obstacles. Ranking systems reward the wrong things. Faculty incentives favor research over teaching. Alumni and donors expect traditional education. Students themselves arrive with mixed motivations, some seeking service and others seeking wealth. Change will be difficult.

But he sees reasons for hope. Students are changing, arriving more values-driven than previous generations. Business leaders are questioning shareholder primacy, as evidenced by Business Roundtable statements and the rise of ESG investing. Climate change is making the costs of business-as-usual impossible to ignore. The conversation is shifting, even if curricula lag behind.

The book provides intellectual foundation for this transformation: analysis of how capitalism evolved, why current forms are failing, what alternatives exist, and how business education might change. It offers practical guidance for students navigating broken systems, for faculty seeking to become elders, and for administrators brave enough to lead.

What it doesn't provide is a complete blueprint. Hoffman explicitly acknowledges that his prescriptions are starting points rather than finished plans. The larger ecosystem of actors including business leaders, corporate recruiters, accreditation bodies, and rankers must also change. Reform at this scale requires coordination across institutions and sustained effort over years.

But someone must start. Hoffman sees business schools as leverage points where transformation can begin. Change one school, and others notice. Produce graduates who think differently, and they carry new ideas into organizations. Build proof points that alternative approaches work, and resistance weakens.

The title's phrase "noble purpose" captures what's at stake. Business at its best serves human needs, creates prosperity, and improves lives. For 150 years, capitalism accomplished remarkable things. The challenge now is restoring that noble purpose after decades of distortion by shareholder primacy. Business schools, Hoffman argues, must lead this restoration by producing leaders capable of guiding capitalism toward a future worthy of its potential.