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The University of Chicago Graduate School of Business
Celebrates 100 Years of Intellectual Revolution

When the call came in from Sweden at 5:30 a.m. Chicago time, University of Chicago Graduate School of Business Professor Robert Fogel was not jolted awake. In fact, when the the Nobel Prize committee phoned to inform him that he was the recipient of the 1993 Nobel Prize in economics, Fogel was already up, as usual, and had been working on his research for over an hour.

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.

Full-contact Academics

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."

A Chronology
  1. First business school to offer a doctoral program in business education.

  2. Chicago student Ursula Batchelder Stone becomes the first woman in the U.S. to receive a doctorate in business.

  3. First school in the world to offer an executive M.B.A. program.

  4. 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.

  5. 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.

  6. The random walk theory of stock prices is developed by Chicago's Eugene Fama and leads to his efficient market hypothesis.

  7. 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.

  8. First woman's MBA organization is founded at Chicago.

  9. 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.

  10. 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.

  11. 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.

  12. 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.

  13. 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.

  14. 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.

  15. 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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