WRFH/Radio Free Hillsdale 101.7 FM - Dr. Doug Johnson: Hillsdale's Center for Commerce and Freedom

Episode Date: May 2, 2025

Dr. Douglas Johnson, Associate Professor of Management at Hillsdale College, joins Nicole Sighiartau on WRFH to discuss Hillsdale's Hutchison Center for Commerce and Freedom. The object of the Center is to advance the study of the crucial role of commerce in human flourishing. Any study of commerce that does not consider freedom a prerequisite to its success is inaccurate and incomplete.From 05/02/25.

You're listening to Radio Free Hillsdale 101.7 FM. I'm Nicole Sigar-Tau, and with me today is Dr. Johnson, a business professor here at Hillsdale College. Previously to joining Hillsdale, he taught at University of Illinois and Purdue. This is the end of his 12th year here. Today, we'll be discussing the Center for Commerce and Freedom and Business Education at Hillsdale. How are you doing today, Dr. Johnson? Very good, Nicole. Thanks for having me. Of course.

So, first of all, what is the Center for Commerce and Freedom and Business? education? The Center for Commerce and Freedom is an organization that got started up almost three years ago now. Myself and Charles Steele in conjunction with President Arne sort of came up with this idea. And it's been very successful so far. We've had a lot of success. One of the main things. The purpose of the center is, it has a number of different purposes. One is to sort of represent a classical liberal approach to business ethics and the economy in general and to share that with stakeholders in Hillsdale help people out in terms of understanding a more classical liberal approach to government regulation, et cetera, and helping out in that

regard. As a part of that effort, we've started a conference every year, which talks about both public policy issues as well as business issues. It's a day-long conference, and again, this was the second year that we've had it. Fantastic. So what are some of the topics, like specific topics that you guys talk about at these conferences? For example, last year we had one section that was about the stakeholder view of the firm, which we believe, which many people suggest is as an alternative to what's referred to as the shareholder view of the firm. We tend to believe that in being classical liberals, we tend to defend the shareholder view as opposed to the stakeholder. We had a number of different parties that came in, both executives and academics, to talk about that issue.

This year, we had one session on resource economics, broadly defined human energy and all. Oh, and natural resources and different regulatory approaches to that. One of the speakers is actually going to come in as a postdoc in conjunction with the center this year. And she is a specialist in resource economics, in particular water rights in the West, and was able to talk about sort of free market approaches to water regulation, which is really a very heated issue in the Western United States. We talk about more practical business issues as well. One of the sessions that we had this year was about outsourcing,

about sourcing of external services for small entrepreneurial organizations, which is actually a pretty big issue. And we talked about approaches to gaining insurance. It was a very nuts and bolts type of session. And that's sort of what we're going for. or in the conference is a combination of both sort of higher level public policy issues, but nuts and bolts issues having to do with helping people improve their businesses and things along those lines.

That's really interesting. So is this mostly Hillsdale college students who are attending or other people as well? I would say a majority of the attendees are actually business people. We've also started to get academics involved from other institutions. We're trying to form a network of people that have a similar. at other business schools that have a similar intellectual orientation to folks here at Hillsdale. We had about, I think it was, three or 400 people attend from outside the college this year. And it's a, I would say it's 90% business people and maybe 10% academics that are coming right now.

And we invite, we get a good, healthy amount of Hillsdale students. And we really suggest that Hillsdale students come to this conference. It's a great way of networking people with people that are supporters of the college. And if you're interested in joining the private sector after you leave Hillsdale, this is a great way of meeting people during your time here. It does sound super resourceful. Are you guys looking to maybe expand this to inviting other college students from other schools? I'm not sure that we would go down that route. One thing that we have talked about in terms of getting other schools involved is when I was at both Purdue and Illinois, I was heavily involved in what's known as a case competition.

And I would take teams from both Purdue and Illinois to these case competitions. And we'd like to build something like that here as well of getting our business students. We think it's a great way of demonstrating to our students how much they know about business, but also, demonstrating to people outside of the college how great our business and economics program is. So as a part of that and part of the CCF, we might eventually host a case competition here at Hillsdale, where we would bring in other schools that would compete against us. And what do these case competitions look like? Is it kind of like mock trial where you're trying to apply your business skills more in a practical sense?

Yeah. What tends to happen is you will get a case at the beginning of the competition. petition. Usually it has to do with something along the lines of a company looking in an acquisition or launching a new business or some internal organizational issue. And the students are usually given a day to prepare their analysis and then the following day they will present to a team of judges. We would intend on getting business people that are associated with the CCF involved in that. We've thought about trying to do this over parents' weekend or in conjunction with the CCF itself, but we're sort of up in the air right now.

And you think this would maybe help boost the morale of college students here and, like, showing how much they know. Because I know I'm a business student here, and I feel as if I know I've learned things, but I also feel like I still know nothing. So I think it'd be kind of cool to maybe have this competition experience. I think the business students here know more than they realize. they actually receive a really good education. We have a very good program. And I think that as you get more contact with people outside the institution, you come to learn how much you know.

The combination of a classical liberal education with business is actually a really good combination. That's encouraging. So going back to the conference, did you speak at this past conference? This past conference, I spoke on the stakeholder issue last year. this time I just act as a chair of a panel. Okay. And what did the panel talk about? The issue of helping entrepreneurs with accessing services that might be required to support their business. Okay. I see. In the future, do you have any particular topics that you'd like to talk about these conferences?

To go back and talk a little bit more about what we've done in the past, and that kind of relates to your question. And last year we had one session that was about artificial intelligence and its implications for business. This year we had a discussion of classical liberal approaches to business, which was highly philosophical. Last year, we also had a Nobel Prize winner, Vernon Smith, speak in the evening. And we'll probably continue that kind of thing. There's a lot of high-level academics that we might attract to the conferences. And we tend to put those people in our evening spot at the conference. Okay.

That makes sense. Are there a lot of donors that attend this conference? Because I know we have CCAs at Hillsdale and that's really big with the donors. Does this bring in the same crowd? Yeah. Yeah. And in fact, we've actually received a rather large gift from the Hutchinson family and the center's been named on their behalf.

and they've actually permanently endowed this conference as well as other programs that we're running. One of the programs we're running is called the CCF Fellows and any Hillsdale student can apply for it. You do get a tuition grant. The program lasts for two years and you help to run the conference and participate in other issues associated with that. We and we've also, the Hutchinson's also indebted. out a permanent postdoctoral position. And one of the things that we're sort of targeting there is that we actually have a lot of students that go on and get their PhD in particular in economics.

And we would like to be able to bring those students back. And that's part of what we're doing this year. The econ program has actually been very successful in placing people into graduate programs at Harvard and Arizona State and other. schools. And so this postdoc offers them an opportunity to come back before they permanently go on the market. And the Hutchinson's basically endowed all of that. One program that we're eyeing doing eventually, but we haven't gotten off the ground yet, is what we're, our preliminary idea is to call it the Benjamin Franklin Fellows. And it would be similar to the Winston Churchill

Fellows and the George Washington Fellows at Hillsdale. Winston Churchill Fellows is directed at that want to go into foreign policy. George Washington fellows are people who are thinking about the government. And the Benjamin Franklin fellows are people who want to go into the private sector. And once again, it will be open to not just business majors, but other people as well. And they will go through a year-long program associated with being a fellow. And it will likely culminate in a visit to New York City. That sounds incredible.

I would love to be a part of that if that ever gets going. This is Radio Free Hillsdale 101.7 FM. I'm Nicole Siguritow talking to Dr. Johnson, and we're going to get back to discussing the Center for Commerce and Freedom and Business Education at Hillsdale. So I know with CCA's donors have a little bit of a say and kind of the topics that are discussed. Do they also kind of have an influence in relation to the topics discussed

at the business conferences? Yeah, especially in the practical side. And we, you know, we're very open to input from not just donors, but anyone who's involved in the center. We want to be responsive to the business community and the things that are important to them, et cetera. And we view this also the conference itself as an opportunity for people in different organizations to network with each other. And so we kind of want to become a hub for those people to be able to talk to each other. So their input is very welcome. That makes sense.

Are there any topics in particular that you would like to discuss in the future? I'm very interested in issues. This is going to sound very geeky. But one issue is how firms do capital budgeting about how they place their investments. And there's a lot of new thoughts about how that should go about. And I actually enjoy talking to practitioners at these conferences to try and sort of understand how they're thinking about these issues, and that's what I spend my time doing. That sounds interesting.

Yeah. You know, and I'm interested in a lot of my research is about technology. So last year when we had the session on AI, I talked to a lot of people about how they thought that AI was going to affect their business. Okay. Yeah. I mean, it certainly is very up and coming in today's age. Like, AI is just so prevalent everything now. Yeah.

I know we had a CCA on AI, but I think especially in the business world, like with accounting, for example. I mean, AI is just going to pretty much take over that. And obviously, accountants will still exist, but in much fewer numbers than they do. I think the nature of the profession will change. Yeah, definitely. Knowing why will become more important than knowing what. Yes. Or how to plug in the numbers because you'll just have a computer doing it.

Yeah. So why should students? want to learn about business, especially at a liberal arts college. I'm a business major, and I hear from many people that I talk to kind of like criticism almost saying, you're here at Hillsdale, why aren't you pursuing liberal arts, or are you studying business? Part of Hillsdale's mission statement is pursuing truth and beauty. And I guess they don't really see that in the business side of things. So what's your response to that? Well, I would say, you know, there's a traditional view of business that it is just about teaching technique that what business

students do is they learn about debits and credits and about how to maintain a ledger and things along those lines. And there is some of that at the beginning of a business education, but that's almost like critiquing someone majoring in French for learning French vocabulary, right? It's a necessary evil that you have to go through in order to be able to get to the more important topics. And our attitude is that business is an incredible. important social institution, right? It's the vehicle that sort of helps to maintain a free and open society. And business people play an important role in our society and how we choose to organize it. So, you know, the types of things that business people need to worry about are things like,

how do I structure this organization or to deliver and capture value from customers? And that can get to be a fairly complex topic trying to understand that. What we know is the modern corporation came about at the beginning of the 1800s and it dramatically changed the world. You know, it's important that markets developed,

but it's also important that businesses that were able to leverage the power of technology to create wealth, how and why did those kinds of organizations come about? And we think that that is just, in some ways, is an extension of trying to understand what it means to be a good citizen, which we also think is a part of a liberal, classical liberal education. Would you say that this question is as polarizing at other colleges, like when you taught in the past?

I, no, it's not as polarizing, but I will say this, that we place much more attention on the relationship of business to society. The people that critique business education is being just about learning a series of techniques. That may not be an unfair criticism of how business is taught at other places. It's not taught in a way that connects it to a broader perspective, which I think does occur here. And we place it as a department, we place a premium on trying to link the business education with the liberal education that takes place at Hillsdale. I know at Hillsdale Economics is considered the major that's most closely tied to the liberal arts out of the business majors here. Would you say that, I know you mentioned this a little bit about like how you have to learn the practice. side of it as well. But would you say that accounting, finance, marketing, that those also work

in elements? Yeah. I mean, you know, you think about finance, right? You know, we've got a society where people raise capital in public financial markets. How does that process work? How do those markets work? How do financial markets work to efficiently allocate capital to the needs of society? How do firms decide how they're going to actually structure, financially structure the firm? Are they going to finance things with debt versus equity versus stock? And from an academic standpoint, the reason why those capital structure issues are important are that it affects the incentives of the various stakeholders in the firm, the employees, the shareholders, the management team, etc. And one big question that happens when you make decisions about capital structure is,

are we structuring the underlying financial structure of the firm in a way that causes everyone to try to make the pie bigger for everyone? And those are pretty broad issues that involve. not just an understanding of economics, but also broader social issues as well. Do you think that there's another college out there that kind of mimics Hillsdale's strategy when it comes to approaching business majors? I don't think that there is another school right now that is so explicitly trying to do it as we are. Okay.

And why would you suggest that students come to Hillsdale to learn about business as opposed to to other colleges that might be more prestigious in other ways in regards to like the business side of things. Well, you know, there is this, if you go to other schools, if you go to Michigan State or you go to Michigan, you may end up taking 70 hours of your 124 hours of college education in the business school. And some people would argue that, well, doesn't that lead to greater depth in those in finance and accounting, etc. And having taught at institutions like that, I can tell you that there's nothing that they learn that you don't learn here. They may have more hours, but there's not a single topic that doesn't get covered in our business program. So there's not really any loss there. But I think that we view businesses being a positive contributor to society.

but we also believe that the values of management need to be informed by the good, the true, and the beautiful. And I don't think that other institutions, you're not going to see that kind of a link between business education and this broader education the way you would hear. And we think that that's important, that that's important for people who are going to be effective stewards of the institutions that they're going to lead, the organizations they're going to lead, but also if you're going to have, a satisfying life. Business is a very, a very challenging and intellectually engaging activity. And you can live a very fulfilling life that's mentally and emotionally fulfilling by going down that path. Absolutely.

Besides the Benjamin Franklin Fellows program that you guys like to start, is there anything else that the foundation is looking towards starting? Well, we want to be able to produce research in addition to white papers that will be of use to the broader community. And that's one thing that we're trying to get underway. Myself and Ron Rivas have produced one paper that's out there, but there are more to come. We'd like to be also a vessel for people at other institutions that if they are looking for a place to present, their work, that this will be a place that they can come. We would, you know, this is, I'm talking a little bit out of school here, but I think that

we'd eventually like to have our own journal. We'd like a journal that bridges the liberal arts and business, that it would be a vehicle for people in other areas of other faculty outside to bring their expertise to bear and talk about it, how history or English literature relates to a professional career, but also present informative pieces about current issues of interest to the business public. Sort of the idea that we've talked about is that it's a combination of the Cato Journal, which is a libertarian think tank, the Sloan Management Review, which is MIT's Business Journal. And, And a liberal arts journal.

So, but that's sort of our blue sky idea. That sounds really, really incredible. Sounds awesome. Thank you so much for joining me today, Dr. Johnson. Our guest has been Dr. Johnson, and I'm Nicole Segaritao on Radio Free Hillsdale, 101.7 FM.