The University of Chicago Graduate School of Business
Celebrates 100 Years of Intellectual Revolution
Throughout the past century, professors at the University of Chicago
Graduate School of Business have been tireless in generating the knowledge
and practical insights that have shaped the way business is conducted
today. This year, the University of Chicago Graduate School of Business – which
has fostered more Nobel Prize-winning professors than any other business
school in the world – celebrates its long history of intellectual innovation.
The tradition began in 1894, when Chicago political economy Professor
J. Laurence Laughlin approached the University of Chicago Senate and
proposed that the university offer instruction in practical business
and economics. Laughlin, who valued above all "independent thinkers
and the logic of common thought," believed strongly in the need
for rigorous professional education for those who intended to go into
business. Passionate about fusing disciplined thought with worldly activity,
Laughlin achieved his goal in 1898 with the opening of the College of
Commerce and Politics, predecessor of the University of Chicago Graduate
School of Business.
In a move that would help define Chicago's business school environment,
Laughlin gathered together a faculty whose views were often at variance
with his and with one another. Laughlin recruited, and often argued
with, leading economists such as Thorstein Veblen, Robert Hoxie, Herbert
J. Davenport, Wesley Clair Mitchell and Harold G. Mouton. These early
faculty members helped shape the independent and iconoclastic spirit
of the business school, and infused the curriculum with a strong economics
orientation that persists today.
The contrast between Chicago and other universities is most obvious
in its faculty workshops – the forums that focus the white-hot
spotlight of many great minds on one individual's current research.
A tradition at the Graduate School of Business for more than 30 years,
these workshops give graduate students, visiting professors, and Chicago
faculty members a chance to have their research carefully scrutinized
by peers from many academic disciplines. Other business schools hold
similar workshops, which usually involve polite exchanges of information
and little confrontation. But at Chicago, listeners forego politeness
to offer brutally honest opinions.
This could be an intimidating – even crushing – experience. At Chicago,
it's also exhilarating and illuminating for both presenter and audience.
Widely divergent views are not only tolerated but often encouraged and
serve to test and refine ideas. As stated in a feature in the Economist
magazine, "some of the school's greatest achievements have been nourished
by its ability to digest the ideas of those whom it devours."
Researchers around the world agree that few other academic institutions
can match Chicago in the sheer number of workshops, the multidisciplinary
attendance, and the rigor of the debate.
"We cultivate a climate where outdated truths are challenged," says
Dean Robert S. Hamada. "Our professors have the freedom to follow unorthodox
paths and to risk the far-out shots."
- First business school to offer a doctoral program in
business education.
- Chicago student Ursula Batchelder Stone becomes the
first woman in the U.S. to receive a doctorate in business.
- First school in the world to offer an executive M.B.A.
program.
- Dean W. Allen Wallis and Associate Dean James H. Lorie
formulate the revolutionary Chicago Approach to Business Education,
which emphasizes teaching underlying scientific knowledge and procedures
as a basis for solving business problems.
- The Center for Research in Security Prices (CRSP),
founded by Chicago business Professors James Lorie and Lawrence Fisher,
is the first to develop a comprehensive database of information about
every stock traded on the New York Stock Exchange since 1926.
- The random walk theory of stock prices is developed
by Chicago's Eugene Fama and leads to his efficient market hypothesis.
- Fischer Black (then a Chicago faculty member) and
Myron Scholes (who joined the faculty in 1976) publish the Black-Scholes
pricing model for valuing options, the foundation for nearly all derivative
securities.
- First woman's MBA organization is founded at Chicago.
- George J. Stigler, professor at the Graduate School
of Business, wins the Nobel Prize in economics for inventing the economic
field of inquiry now called industrial organization – the detailed
and scientific study of a capital market. Also wins for his seminal
studies of functioning markets and the causes and effects of public
regulation. Stigler is the first business school professor to win
a Nobel.
- Merton Miller, member of the Chicago business faculty
since 1961 and co-author of the Miller-Modigliani (M&M) theorems,
wins the Nobel Prize in economics for pioneering work in the theory
of financial economics and for his fundamental contributions to corporate
finance.
- Ronald H. Coase, professor at the Chicago law school
and former professor at the Graduate School of Business, earns the
Nobel Prize in economics for his discovery and clarification of the
significance of transaction costs and property rights for the institutional
structure and function of the economy.
- Robert W. Fogel, professor at the Graduate School
of Business, wins the Nobel Prize in economics for having renewed
research in economic history by applying economic theory and quantitative
methods in order to explain economic and institutional change.
- First business school to launch an international executive
MBA program in Europe (Barcelona, Spain) that offers the same rigorous
training and faculty found at Chicago.
- Myron Scholes, former professor at the Graduate School
of Business and double alumnus of the school, wins the Nobel Prize
in economics for developing a pioneering formula for the valuation
of stock options, an important mechanism for managing risk in financial
markets.
- For his research on the causes of growing wage inequality
in the US, Chicago Professor Kevin Murphy earns the prestigious John
Bates Clark Medal, given once every two years to the most outstanding
American economist under the age of 40.
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