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FROM THE DEANCommitted to Ideas That MatterMark JosephUniversity of Chicago president Don M. Randel describes our university as a place where ideasmatter. Saul Levmore, dean of the Law School, says further that ideas matter much more to usthan to alumni of other schools.Perhaps the reason is that, as students, we connected with the maverick quality of the university.We came to agree with Walter Lippmann: Where all think alike, no one thinks very much.From scores of our alumni, I’ve also learned that Chicago traits like curiosity and the willingnessto seek new paths are extraordinarily valuable throughout our graduates’ careers. Examplesabound: Dennis Keller, ’68, recognized the potential in for-profit education. Mary Tolan, ’92(XP-61), wanted to chart a different future for energy markets. Vijay Vashee, ’77, figured out howto make Microsoft’s PowerPoint the world standard for presentation software (see page 54).Chicago alumni dominate the hedge fund industry—a field we knew nothing about 15 years ago.A Chicago GSB education builds a level of comfort in meeting unpredictable challenges.As I’ve gotten to know Andy Alper, A.B. ’80, M.B.A. ’81, working to revitalize New York City, andDavid Vitale, ’76, improving performance in Chicago public schools, I’m struck by their confidenceand grace in the face of problems that others would find daunting.One of the most dramatic manifestations of our value system is in the area of entrepreneurshipand private equity. With stunning quickness, the Michael P. Polsky Center for Entrepreneurshiphas distinguished Chicago in this important arena. Faculty director Steve Kaplan, NeubauerFamily Professor of Entrepreneurship and Finance, and executive director Ellen Rudnick, ’73, clinicalprofessor of entrepreneurship, are developing programs that are providing opportunities forthe next generation of Chicago alumni to create, lead, and transform businesses. World-classentrepreneurs and venture capitalists who participate in such programs as the New VentureChallenge tell me that GSB students are now developing business plans superior to those writtenby students in M.B.A. programs renowned for entrepreneurship. With the terrific supportof Michael Polsky, ’87, we are poised to continue our progress and to gain greater recognition forthe center’s vital programming (see page 32).Meanwhile, GSB faculty continue to generate important ideas. Saving Capitalism from theCapitalists, coauthored by Raghuram Rajan, Joseph L. Gidwitz Professor of Finance and recipientof the inaugural Fischer Black Prize, and Luigi Zingales, Robert C. McCormack Professorof Entrepreneurship and Finance, epitomizes Chicago’s focus on big ideas and connectivitywith the most important issues of our time. Fifteen years after the presumed transitions fromplanned to market-oriented economies began for some three billion people, Raghu and Luigimake it plain that the conditions required to promote capitalism are more exacting than manyrealized (see page 16). In his new role as economic counselor and director of the researchdepartment for the International Monetary Fund, Raghu is the right person at the right timeto strengthen capitalism around the world.In closing, I wish you the best for the new year. I know that I’ll find an occasion or twoto toast the University of Chicago and our commitment to ideas.Edward A. SnyderDean and George Pratt Shultz Professor of EconomicsWinter 2004 Chicago GSB3

LETTERSTo the EditorAn Employer’s Perspective on RaceI don’t at all doubt the accuracy ofMs. Bertrand’s research, methods, orconclusions. I would say this as a businessowner of many years: If I hire awhite person who doesn’t work out,I can let him/her go without a highprobability of conflict. If it’s a black,I will almost certainly be hearing froma lawyer regarding a discriminationsuit and/or offering a substantial settlementproposal to avoid costs of litigation.Bertrand might think aboutthe business person acting in selfdefenseon this issue.J. Ottenheimer, ’70 (XP-26)River Forest, IllinoisIs Affirmative Action to Blame?That naked prejudice still infects thiscountry comes as no surprise, butstill causes a deep sadness and an evendeeper determination to combat itsinsidiousness. Even so, perhaps somethingelse is also afoot. Did companieswith nationally recognized strongdiversity programs (such as FannieMae, for example) or companieswith significant African Americanownership also display a tendencytoward resumé name discrimination?I’m speculating that companies maybe discounting the achievements ofAfrican Americans on resumés owingto the effects of affirmative action.That is, companies may be assumingthat the true underlying capabilitiesof two otherwise on-paper-equalindividuals aren’t equal because of thename being tied, by extension, to affirmativeaction programs. The attemptto compensate for this kind of discountingby slightly increasing certainstrengths of African American–namedresumés probably is too minimal tomake a difference (as confirmed bythe study). In any case, to discriminatesolely based on a name (and therefore,by implication, race) is a disgustingand illegal practice. If even pro-diversitycompanies do the same thing, they arejust as guilty (and even more so) butmight be sending us a subtle messageof what happens in the real world’sevaluation of achievements.David Ochroch, ’86Arlington, VirginiaAre Candidates Equally Qualified?Could it be that affirmative actionat universities is partly to blame forthe disparities found in Ms. Bertrand’sstudy? Affirmative action is perceivedto be a system in which weaker candidatesare given preferential treatmentover more qualified candidates tocompensate for socioeconomiccircumstances.If we take candidates with similaracademic credentials, but identify someas potential recipients of affirmativeaction, are they equally qualified?Chris Fama, ’91ChicagoQuestioning the PremisesI am sure Ms. Bertrand was wellintentioned, but the study appears tobe based upon a number of flawedpremises.First, the idea that equivalent educationcredentials and equivalent jobexperience should signal equal skill isprobably not right. Compare the averageSAT scores for black and whitegraduates of the University of Chicago.A Flood of Feedback: Professor Marianne Bertrand’sresearch on race discrimination by employers (“WhyJamal Can’t Get a Job,” Summer/Fall 2003) drew a largeresponse from readers. If you missed the story, read itonline at gsbwww.uchicago.edu/news/gsbchicago.While affirmative action may be laudable,it destroys the signaling value ofcredentials for minorities. Affirmativeaction is just as present in corporateAmerica as in educational institutions,so the signaling value of work experienceand job titles is diminished as well.Employers want to make money andthey want the best employees they canget for the amount of money that theyspend. Create an environment whereblacks can accurately signal their valueto employers and they will get treatedmore fairly. If Bertrand’s premise isright, firms that systematically hiremore blacks should be able to get betteremployees at lower cost and generatehigher profitability. Prove that thatis occurring and you will have resultsworth publishing.Edward E. Maran, ’87Santa Fe, New MexicoA Quantitative Approach?The Bertrand and Mullainathan studypurports to measure racism in businesshiring in general and “how discriminationcontinues to affect thecorporate landscape” in particular.Actually, it does no such thing. Theprofessors could not identify most hir-4Chicago GSB Winter 2004

ing organizations. When they could,they failed to investigate the organization’sdecision-making process. Andthey made no effort to understandand quantify the importance of thewant-ad channel compared to otheremployment channels (employee references,walk-ins, fairs, etc.). Therefore,they cannot conclude that mostwant ads represented corporations.They cannot conclude they understandthe role of race or social backgroundin hiring. They can do nomore than pile on anecdotes offeredby self-interested individuals.The study was qualitative andimpressionistic in the guise of anunbiased quantitative survey. Theremay, in fact, be racial and social backgroundbias in corporate hiring, butthis study does not show it.Craig Elderkin, ’78Park Ridge, IllinoisEditor’s note: Bertrand and Mullainathanwere, in fact, able to identifyseveral of the companies used in thestudy but focused their research onlyon statistics about the firms.What’s in a NameProfessor Bertrand’s research sendsa poignant reminder to us, as parents,that using our children as icons forour causes is fraught with potentialhazards. It is difficult to look into theface of an infant and picture discrimination,but it is clear that many parentaldecisions, e.g., the choice of a name, ora desire to preserve the mother tongue,can cause that same infant, 20 yearslater, to face rejection. However, thisstudy confirms that this discriminationoccurs, and from it we can onlyconclude that a parental focus on providingour children with all the competitiveadvantage we can afford maybe the answer.Perhaps the experience of PolishAmericans might provide some rayof encouragement. Earlier in the 20thcentury, many of these families Anglicizedtheir names in an effort to escapethe Back of the Yards neighborhoodsof Upton Sinclair’s time. We are nowseeing a resurgence of people of Polishancestry reclaiming their names in alater era when discrimination againstPolish Americans decreased dramatically.Possibly, the acceptance of nameslike Jamal or Aisha must simply awaitthe passage of time and continued erosionof the discrimination that makesemployers discard their resumés.Fred C. Grunwald, ’98Prairie Village, KansasNo Irish Need ApplyI found it somewhat amusing—andcertainly indicative of the way timeschange—that eight of the nine“white last names” were Irish, orat least Celtic in origin. Indeed, thesesurnames abundantly populate thealumni lists of Notre Dame, Fordham,Boston College, and other Catholicuniversities in the United States whereour “ethnic” progenitors received theirundergraduate degrees. I would remindauthor Bertrand that there was a timein which “No Irish Need Apply” signswere displayed in employment officesthroughout the eastern United States,a time in which Irish immigrants werecaricatured by no less an artist thanThomas Nast as the “simian lout,”and that nativists were allowedto burn churches.Fortunately, the way up the economicstrata for the Irish and theirsimilarly situated brethren was pavedby a love of education, politics, family,and religion—traits which have beenfollowed by so many successful immigrantpeoples to the United States. Ina way, the University of Chicago is theoutstanding example in which thingsthat must be changed are changed.Jack Walton, ’74Short Hills, New JerseyWhat do you think? Keep the conversationgoing with a letter to the editor. Send itto editor@gsb.uchicago.edu or Editor,Chicago GSB, 6030 South Ellis Avenue,Room 236, Chicago, Illinois 60637.Did you miss last issue’sletters? Read them onlineat gsbwww.uchicago.edu/news/gsbchicago/gsbchicago.letters.html.CorrectionIn “Dean’s Trip to Europe, AsiaRaises GSB’s International Profile,”(Summer/Fall 2003), we misspelledGeneralitat de Catalunya, an autonomousgovernment whose thenpresident, Jordi Pujol, met withdean Edward A. Snyder last year.Chicago GSB regrets the error.Winter 2004 Chicago GSB5

FROM THE CHAIRSGenerous Gifts Give GSB MomentumMatthew GilsonCapital campaign co-chairsDennis Keller, ’68, (left) andAndrew Alper, A.B. ’80, M.B.A. ’81In any fundraising campaign, the real keyto success is sustaining your momentum.Despite recent economic challenges, GSBalumni and friends continue to support thecampaign in many ways. While we hadreached more than $161 million by December1, 2003—well beyond the midpoint of thecampaign’s $250 million goal—there is still agreat deal each of us can do, and we look forwardto working with you to meet our target.Elizabeth K. Cochran made a gift of$1 million to establish the permanent RobertGreenwell Knight Scholarship in memory ofher father, Robert Greenwell Knight, Ph.B. ’25, oneof the first executives at Walgreens. Merrick“Rick” Elfman, ’83, and Terri L. Wareham, ’82,contributed $500,000 to establish the MerrickM. Elfman and Therese L. Wareham PrivateEquity Lab Endowment to support the PrivateEquity Labs at the Michael P. Polsky Centerfor Entrepreneurship. And H. Brooks Dexter Jr.,A.B. ’79, M.B.A. ’84, made a $60,000 pledge tothe campaign, $50,000 of it for unrestrictedendowment and the remaining $10,000 tothe Chicago GSB Fund.Dinner with the DeanMembers of the GSB Campaign steeringcommittee hosted two gatherings last spring,generating support coast to coast. Alumni andfriends of the school who attended a dinnerwith dean Ted Snyder at the New York homeof Andy Alper, A.B. ’80, M.B.A. ’81, and his wife,Sharon Sadow Alper, A.B. ’80, J.D. ’84, includedCheri and Steve Friedman, A.B. ’76, M.B.A. ’77; BobKiernan, ’87; Venetia Kontogouris, ’77, and ZoranDjokic, ’77; and Jeanette and Jack Walton, ’74.An Evening in Los AngelesThose who attended a dinner at the LosAngeles home of David Booth, ’71, with thedean and his wife, Kim Snyder, were BarbaraAbercrombie and Bob Adams, ’61; Rosemaryand Wally Booth, A.B. ’48, M.B.A. ’48; PatriceDaniels, ’84; Faye and Bob Davidson, ’69; JohnMutch, ’97 (IXP-2); and Kim Pfeiffer, ’97 (IXP-2).We look forward to engaging more alumniat small events like these.To learn more about the GSB Campaignand how you can help, go togsbwww.uchicago.edu/campaign/home.htm.$161,162,177 and countingGifts as of December 1, 2003to date $161,162,177goal $250 million$62.5 million$125 million $187.5 million $250 millionWinter 2004 Chicago GSB7