“Setting the habit of capitalization: the pedagogy of earning power at the Harvard Business School, 1920-1940” is the titled of a PERFORMABUSINESS paper currently prepared by Fabian Muniesa in collaboration with Liliana Doganova. From the abstract:
“The quandaries of business valuation have marked the pedagogy of business administration since early attempts at institutionalizing the managerial discipline. It is however now commonly admitted, at least in legitimate financial and entrepreneurial circles, that the value of a business (that is, the monetary assessment of a functioning enterprise established in a competitive environment) resides primarily in its earning power or, in other words, that what a business is worth equals its capacity to generate a stream of revenues for the investor or investors that provide it with funding. How did this idea take shape and how did it permeate the business mind? An examination of early pedagogical materials at the Harvard Business School (an influential reference for the socialization of the businessperson) and, in particular, of the vagaries of the idea of capitalization and its exercising in the classroom, provides a fine occasion to advance understanding of the meaning of such ideals of business and business value, and of their institutionalization. This empirical study can, in turn, be employed in order to discuss and refine our interpretation of what a convention of economic valuation is and how it operates.”
The research is based in part on an examination of archival materials collected from the Cecil E. Fraser Papers, which are located at the Baker Library, Harvard Business School. An audio file from a presentation on the paper is available here from the Max Planck Institute for the Studies of Societies in Cologne, who kindly invited Fabian Muniesa to give a talk in January 2015 (further files from the conference series are available here).