Dean Nitin Nohria offers his perspective on the promise and perils of our market system, touching on the role of corporate and public actors. Tarun Galagali (MBA ’21) sat down with him as a part of an ongoing podcast, Remaking Capitalism, hosted by the Harbus.
Two weeks into RC year at HBS, I wrote an editorial for the Harbus that asked broad questions about how our generation might remake capitalism. Considering the ways in which our market system hadn’t worked for millions in the lower and middle rungs of our society, I was inspired to learn and ask questions. I emailed my article to Dean Nitin Nohria and asked whether he’d be willing to chat with me. He responded quickly and enthusiastically. On November 11, our conversation will be released as part of a podcast called Remaking Capitalism; I wanted to take a moment to summarize what I learnt from my hour with the Dean.
We started off by talking about Dean Nohria’s childhood. I’ve come to believe that the world in which people grow up stays with them forever. And since we shared a common heritage in India, I was doubly curious. He started by telling me about his beloved eighth grade teacher, who had exposed him to the power of literature. He remembers the first book this teacher gifted him, The Good Earth by Pearl Buck. Almost as if he were delivering a book report, he recounted to me what that book taught him. He saw parallels in the plight of farmers from different countries, realizing that laborers in China and laborers in India had more in common than they may have realized. Books had clearly cultivated his capacity for sensitive reflection.
We then covered his journey to America. In spite of being a graduate from the revered Indian Institute of Technology, Nohria felt his opportunities were limited. Two-thirds of his graduating class shared his sentiments, moving abroad to places like America so that they could make the most of their one life. Back in India, Nohria felt much of what happened in one’s life was dictated by what family one came from and how connected one’s family was to the government. In America, it felt like opportunities were endless.
Dean Nohria was quick to add that today, most IIT graduates feel the opposite. Less than 10% leave, and that’s due in large part to the confidence they have in their country’s market. Nohria credits much of this to India’s liberalization and its welcoming of trade and foreign investments. And that comment served as a natural springboard into a conversation about capitalism.
When I asked how he felt about capitalism given the criticism that has emerged about it, the Dean felt his lived and observed experience had shown him that “capitalism at its core is one of the great [human] inventions.” But at the same time, Nohria could see how it was flawed, and a system could both be great and flawed at once.
But, I asked, was this flaw largely a PR issue, one that had become prominent due to the political discourse of the day, or were there substantive problems? The Dean answered my question without hesitation: “It’s very clear today that there are some dimensions in which capitalism needs to improve.” He was specific in pointing out the perils of underfunded public education, crumbling infrastructure, and sustained wage stagnation for the lower and middle classes in our country. He also called out public and private actors who dodged accountability for environmental degradation.
Who should pick up the slack? For decades, many in the business community, particularly those in executive leadership, held suspicions of government. The state had been derided as inherently sluggish and corrupt, leading to a self-fulfilling prophecy where they would be sapped of the resources to prove their efficacy. I wondered where the Dean stood on the role of the public sector.
Although he had grown up in a country that had struggled with public corruption, he held a remarkably open spirit. To be sure, he expressed concern over the growing liabilities the government had committed to; he expressed his aspiration to see an improvement within the “assets” side of their ledger. As a self-identified pragmatist, he felt the state can and should play an active role in supporting our capitalist ecosystem.
And he noted that when they failed, as America had by withdrawing from the Paris Agreement, companies should step up to the plate. They should see that being good doesn’t have to come at odds with being profitable. Similar to how Japanese companies proved that “high-quality products or low-cost production” is a false choice, Nohria felt our society should encourage a spirit of entrepreneurial commitment to solving the world’s problems, and not just their immediate bottom line. Anything short revealed a lack of imagination.
These days, most public companies are citing positive intentions and releasing corporate reports of all the good things they did in their reporting year. Nohria felt this was not enough, noting that “good intention without accountability is not a place where we should end.” While this accountability might come first and foremost from investors who demand that “impact go beyond financial returns,” it should extend into an agency (public or third party) that could set “standards” on self-reported data.
Although he expressed his ideas in ways that sounded entirely sensible to me, I wondered if his positions put him at odds with some of our alumni, our board members, or our faculty. And so I closed by asking how he managed differences. His answer was revealing and instructive at once. Why did appreciating a system require one to be an apologist? To the contrary, he said, “I believe that if you care about something, you should care about the ways in which it isn’t working as much as you care about the ways in which it is working.”
Our conversation ended on this optimistic note. As we both left the recording studio, I told the Dean about my family. I shared the story of my grandfather who had overcome entrenched poverty in India, through his brilliance, but also through a number of powerful benefactors. The Dean shared a similar story about his father, who had blazed a similar trail for their family. And as we chatted in the hallway about the people and places who had made our lives possible, I saw him less as a Dean and more as Nitin—a fellow human who, while navigating complex global challenges, never lost the sense of curiosity and hope that had been born on the other side of the world.
Tarun Galagali (MBA ’21) grew up in Cupertino, California, and earned his undergraduate degree at Dartmouth College, studying both English literature and economics. His career started off with four months at Bridgewater Associates, which was followed by a return back to his hometown to help Ro Khanna get elected to the United States Congress. While serving as Khanna’s Senior Political Advisor, Tarun also pursued a career in business, including consulting at Parthenon and, most recently, product marketing at Google for the last three years. He was working on the Google News Initiative, the team responsible for strengthening quality journalism around the world. While at HBS, he is hoping to build out a service that helps improve the mental health of high school students (www.pass-the-torch.org).