There’s nothing wrong with bright students working in finance
We’d all like to believe that a person can become very wealthy if they have a talent, skill or sell a good or service that others are willing to pay for. This goes for smart college students, who often can earn six figures on their first paychecks after school if they enter the rat race that is the field of finance.
Sendhil Mullainathan — a professor of economics at Harvard — says he is bittersweet when he sees his former students go into the financial sector after they finish their studies, according to the New York Times. He cites George Bailey, the overburdened savings and loan director and main character of the seminal film “It’s A Wonderful Life”, as an example of how people working in banking and other related industries could ethically serve society. Yet, he is unsure how many of his students will go on to complete such moral objectives in their professional lives.
What he doesn’t discuss, though, is how American capitalism — due to its very structure — encourages its participants to sell their skills, ability and talents to the highest bidder, which is, in a sense, how the United States’ labor market works. Since Mullainathan’s students at Harvard are incredibly intelligent, and thus can presumably make a lot of money for whatever firm they end up at, so why not squeeze all the value out of their skill sets if they can get paid handsomely to do so?
Mullainathan makes a point to say he is not totally opposed to talented college graduates in economics pursuing personal, financial gain in their careers, but remains hesitant with an illogically high-standing viewpoint for someone of his academic status. The study of economics is based on the law of supply and demand, which, in its very setup, favors higher pay for workers who bring in more revenue and lower pay for those who do not. In a strictly economic sense, there is no curve to plot brilliant banking whizzes whose only professional goal is to help people in the same way Bailey does with the Depression-stricken people of his hometown.
In Bedford Falls, where Bailey operates the family-owned Bailey Bros. Building and Loan Association, residents are forced to rely on him for handouts in order to save their homes and businesses. In doing this, in conjunction with a run on banks owing to the Great Depression, the Building and Loan goes out of business, pushing Bailey to the brink. However, that compassion and kindness shown by Bailey is what leads to his eventual downfall, while, in real life, such a scenario would never happen. Outside of the realm of movies, any financial executive acting like Bailey did would be fired on the spot.
Granted, Mullainathan is not advocating for the financial industry to simply divest their net worths for the sake of bettering the world. But, his expectation for extremely profitable companies to suddenly shift course into being bastions of public good is an idealistic one. This also goes for his students, who he wants to put the bottom line aside even in a fiscal climate that punishes those who do that. That’s just now high finance works, and the academic Mullainathan, possibly removed from the industry itself to an extent, may not realize that.
Read the article here.
