The Adam Smith Professor

James Otteson helps Mendoza students find their moral purpose as leaders.

Although he has taught business ethics for more than a decade, first at Wake Forest University and now as academic director of the Business Honors Program at Mendoza College of Business, James Otteson (ND '90) never expected to be training future leaders.

Yet, it unexpectedly became his life's work and passion.

"I entered university planning to become a doctor or a lawyer because I thought that's what you did if you got into college and needed to make a good living," the John T. Ryan Jr. Professor of Business Ethics said.

Today, Otteson sits in his office on the second floor of Mendoza College of Business, the "wing" that's known around campus as the Business Honors Program (BHP) headquarters for the undergraduate program he helped to build from the ground up.

Although he didn't ultimately become a physician or an attorney, Otteson's life as an academic and author has shaped BHP into a standout leadership experience for more than 250 students — and counting. Together, they've redefined what it means to lead "a good life," from merely succeeding financially and boasting powerful job titles on LinkedIn, to a life firmly anchored in having a moral purpose and the utmost regard for human dignity.

Otteson's life path took some unexpected twists and turns as he developed the philosophy that underlies his research and teaching. Although he possesses multiple academic titles, he is best known in the media as "the Adam Smith professor."

If you Google carefully enough, you'll even turn up a YouTube short in which Otteson, who has written four books and numerous papers on Smith, is depicted as an animated cartoon professor distilling Smith's two classic books into a few key lessons — lessons that remain as relevant today as they were two centuries ago.

 

A Philosopher's Lens on Capitalism

Otteson grew up in Joliet, Illinois — the same small town where iconic defensive end Daniel "Rudy" Ruettiger was raised. "There weren't a lot of books in my house growing up," he said, gesturing to the bookshelves lining his office walls at Mendoza. Raised by a hardworking single mother, Otteson was the first person in his family to have the opportunity to attend college. He was admitted to Notre Dame, his dream school, in 1986.

As an undergraduate, Otteson's joy for learning shone brightest in philosophy and religion classes. At the urging of an advisor, he changed his major to liberal studies. Then, after a transformative study abroad semester in Innsbruck, Austria, he returned with a clear purpose: to pursue graduate work in philosophy and ultimately teach.

Winning the prestigious Otto A. Bird Award in 1990 for best student essay, "Therapeutic Philosophy of Ludwig Wittgenstein," reinforced that calling. Otteson continued his research on the Austrian's philosophy of language while earning his master's degree at the University of Wisconsin-Milwaukee.

During his years as a Ph.D. student in philosophy at the University of Chicago, Otteson accidentally found the thinker whose work would inspire him the most. After a peer had claimed Otteson's first choice of David Hume as a dissertation topic, he spontaneously chose to focus on another 18th-century Scottish philosopher, Adam Smith.

"The main thing Smith was trying to figure out is how we can alleviate the misery of poverty," Otteson said. While many historians call Smith the father of capitalism, Otteson instead refers to him as the father of prosperity.

"A lot of his ideas about trade and how relations between people can be mutually beneficial in a market setting have been empirically vindicated by subsequent decades."

While at Wake Forest University, Otteson received an email that would change the course of his life. The message invited him to develop an ethics course for the business school. He accepted it as a one-time challenge.

To prepare his class, Otteson first pored over business ethics syllabi from other schools and current literature. "All of the case studies I read presented a murderers' row of bad actors — Bernie Madoff, ENRON — all the corrupt people and companies. Taking this same cautionary approach to teaching ethics would be demoralizing to students because it implies that a person has to choose between being moral or going into business.

"Smith argued that real wealth generation only happens when you're engaged in mutually voluntary and beneficial cooperation," he said. "When you have a net increase, I do, too. You're better off, and I'm also better off at the same time."

Otteson's most recent research paper defended Smith in an academic debate with real-world implications for how business leaders should ethically manage workplace governance structures. "Freedom in Business: Elizabeth Anderson, Adam Smith, and the Effects of Dominance in Business," co-authored with Gregory Robson, associate research professor in the Business Ethics and Society Program at Mendoza, responds to Elizabeth Anderson's provocative 2017 book, "Private Government: How Employers Rule Our Lives (and Why We Don't Talk about It)."

Anderson has long argued that American business culture is typified by corner office bosses with dictator-like qualities, who, lacking accountability, deprive workers of their freedom. Otteson and Robinson push further still, suggesting that despite workers' ability to quit a job according to their free will, the average American worker sacrifices thousands of hours to their work annually, and as Smith argued in "The Wealth of Nations," this intense exposure to business can stifle a worker's capacity for independent judgment, rendering them "unfree."

With a philosopher's lens, the paper explores whether society or the workplace is at greater fault in stripping people of their freedoms and ultimately advocates for a culture of business in which institutions are developed to better address and safeguard workers' dignity and welfare.

 

Defining Human Dignity

The practice of conducting business with respect for a client or customer is at the heart of Otteson's latest research, "Human Dignity: Surprising Implications of Taking a Key Idea Seriously," a forthcoming book that examines the concept of human dignity.

"The notion of treating all parties with human dignity is a North Star in business ethics," he said. Yet, though this term is thrown around everywhere, it doesn't have one clear definition. In fact, some of the ways in which it is defined are mutually inconsistent.

"What that means to me as a philosopher is that if people are applying one concept but they come up with conflicting implications, then there must be something wrong. They are using different notions of what that concept really entails."

The book attempts to define a single coherent definition of human dignity and how it can be practically applied in multiple circumstances from business ethics to international development.

Ultimately, Otteson argues that human dignity is universal to all people. "Honorable business is about respecting people's dignity," he said.

"When I ask my students how to do that, when we start conversations that answer these hard questions, their eyes light up because they really and truly care about leading lives of purpose in business."

Helping students at his own alma mater determine exactly what that is — that's Otteson's personal North Star.

 

Building a Life of Purpose

Last summer, a class of rising high school seniors began thinking through the purpose and role of business in Otteson's Leadership Seminar, "Business: What is it Good For?" offered as part of Notre Dame's pre-college program. The academically talented students were selected from a competitive pool of applicants to spend 10 days on campus and experience University life. To remove all barriers to participation, Notre Dame covered all costs for those accepted into the program.

"I couldn't believe how these bright pre-college students were able to focus so intensively for hours each day on this course during their school vacations," Otteson reflected.

By the end of the summer, they understood the key features of a market economy. They could also express their positions on the relationship between business and the common good and how their lived Catholicism enters the picture.

Otteson believes Notre Dame has a responsibility as a Catholic institution to teach students to exemplify Mendoza's motto: Grow the Good in Business. That begins with not only educating students' minds but also their spiritual selves.

Otteson observed that while older generations learned in business school to keep their private lives, hobbies and friendships separate from their work lives, aspiring leaders in Gen Z are serious about wanting every facet of their days to seamlessly connect with one overarching purpose.

Every fall, Otteson watches his undergrad students file into Mendoza room 203 for the first class meeting of his seminar: Economic Sins.

Like clockwork, as they go around in a circle introducing themselves, Otteson said the students "half-apologize" for wanting to succeed in business. The implication? Wanting to make money in the private sector is greedy.

"Greed is one of the seven deadly sins and certainly human nature, but not every business leader is inherently greedy," Otteson explains to them.

The class syllabus asks provocatively, "Is it possible to be fully virtuous and at the same time fully engaged in business in a market economy? Are trade-offs required?"

Taught seminar-style, the course challenges students to develop unique answers to complex questions. For Otteson, the most gratifying part of his role as a faculty member is helping students think through their individualized responses.

"My students crave discussions about how to lead moral lives," Otteson said. "I tell them that if they can't find a way to do that in business, they shouldn't go into the field in the first place."

In this class and all of his others, Otteson prepares students to practice what he's dubbed "honorable business."

"It's about orienting yourself toward what you think of as worthwhile, virtuous activity that benefits other people as well as yourself," he said. "If you make money doing it, then great."

Over the semester, Economic Sins examines how market-based economies encourage virtues or exacerbate vices and exposes common errors in economic thinking.

"This sets the stage for students to set the right intentions for using their careers in business to create genuine value in the world," Otteson said.

 

Photos by Matt Cashore.