The NY Times has an interesting article in its Business section discussing a recent paper that concludes, a big, booming financial/banking sector results in a drop in national productivity. When times are good and money is flowing in, the authors contend, banks prefer to lend to collateral-rich areas like real estate and construction.
But these industries are also among the least productive, and that leaves fewer dollars for more promising research-and-development start-ups that may have only intangibles, such as knowledge and ideas, to offer a banker as collateral. Even though such start-ups have far more potential than projects backed by tangible collateral, they don’t attract the financing they need.
I’d never thought of that aspect of the negative effects of Big Finance, but I’ve long thought, from an educational standpoint, that the big money in finance-based professions creates a societal brain drain, luring some of our top minds away from productive businesses that thrive on brilliance and innovation.
People love to moan about how our higher education system isn’t turning out the great, innovative minds we need to compete and thrive in the global market. I agree, it would be to the country’s advantage to turn out more first rate mathematicians, scientists, computer engineers and the like. Is the problem that our colleges and universities are doing a lousy job educating our young adults? Is it because American kids today are so spoiled and lazy, they’re not willing to put the necessary effort into their educations? Both of those are possible, but here’s a third possibility I find more compelling. So many students with dollar signs in their eyes are choosing to be business majors, it’s robbing other fields of much-needed talent.
More students graduated with undergraduate degrees in business in 2010-11 than any other major. When it came to masters degrees, MBAs topped the list. It’s not hard to understand why so many students sign up to learn the business of business. As bank robber Willie Sutton said when asked why he robbed banks, “That’s where the money is.” [Note: Sutton may not have said the quote he’s most famous for, but we owe thanks to whoever made it up.] Banking and other investment careers are where the money is. They almost seem like a license to steal—and all too often, they are. If students hope to make a quick buck, where else would they go?
Back when subprime mortgages were king (see: “License to steal” in the previous paragraph), banks hired top mathematicians at enormous salaries to create the complex formulae that allowed banks to chop worthless loans into little slices, combine the slices into securities, pretend they had value and sell them off for huge profits. No question, those fine mathematical minds could have done something of more value to society, if not to their wallets, with their time. Many other fine minds — future rocket scientists, medical researchers, inventors — are lured by the siren song of high finance before they even embark on college educations which would benefit society far more than playing with money.
Yes, we need people in finance. Yes, we need people who understand the business of business, many of whom go into non-banking professions. But do we need this many? A mind is a terrible thing to waste, they say. It’s also a waste to have so many minds concentrating on making piles of money.
FUN FACT: After business, the second largest graduate major is a masters in education.
This article appears in Feb 26 – Mar 4, 2015.
The NYT also had a great article on how Hillary Rodham Client hid all of her emails during her tenure as Secretary of State, and therefore the US Government has very little documentation of the last four years for that cabinet position.
The NYT is preparing to turn on their political allies in an attempt to save their dying newspaper.
David W, I’m tempted to remove your comment, not because of the content per se, but because it doesn’t have a damn thing to do with the post. Stick to the topic, please.
Sorry, David: I suspect you’re not going to like this comment, though it will be on topic.
Whether students major in business, science, math, or basket weaving, I’d rather see them do so in an institution where they are receiving explicit and systematic instruction in ethics — preferably ethics grounded in a time-tested and enduring value system. Having that kind of grounding helps them choose fields of study — and vocations — that are oriented towards serving the common good rather than towards the pursuit of self-interest.
Where, in the supposedly “value neutral” environment of our contemporary public schools — where curricula are often influenced by business interests and market forces more than by any unified, well thought out understanding of education and its goals — do you expect students to get the orientation towards serving others rather than serving themselves? If families and / or religious communities do not provide this to public school students outside of school hours, who does? From what I can tell by looking at the instruction one of my children receives in a supposedly “academically excelling” publicly funded high school, I would have to say the answer would be: NO ONE. There is no values-oriented direction provided whatsoever, other than to score high on AP exams and maximize your college admissions and scholarship offers. Do you see a relationship between this kind of secondary ed public school “numbers game” and the attitude students take into college and beyond?
The Catholic high school my younger student attends, on the other hand, is doing an excellent job both with academics and with explicitly teaching compassion and concern for the common good. But, though this school will produce students with more of an orientation towards public service than the “public” school with which we are familiar, we wouldn’t want any public funds to go towards subsidizing the financial aid programs at a “religious school,” would we? Or would we….? Which one serves the common good more? It’s an interesting question, and not by any means a simple one.
Chill out pal. Your first statement is “The NY Times had an interesting article…
That’s the same subject of my post. Does the Times punish opinions?
It seems your agenda is causing you some internal grief.
David Safier, not sure I totally agree with your ultimate conclusion. However, another related point that supports your hypothesis is the number of math and computer majors following the money to Wall Street, creating and writing algorithms for high speed trading, rather than putting those skills to other productive use.
Interesting article, as usual, David. I, personally, am a Civil Engineer with a disdain for the Harvard MBA types who repeatedly try to commoditize our creative and high risk profession. It amazes me when the banker or insurance or finance types that don’t, by themselves, create a better world continually gain respect, seemingly have the ear of government but we engineers who design and build our roads, bridges, send rockets to the moon, develop new software and solve the worlds problems are just not listened to. I suppose the same could be said about teachers which is a real shame. Let’s keep beating the education drum.
Still waiting for an answer to the question of how you propose our public school system should transmit the values you favor, David.
You are concerned that too many graduates of our K-12 school system choose to pursue fields that in your opinion, have less to contribute to the common good but promise more financial reward. How do you propose to change, through the medium of the only school system in which you believe it is right for taxpayer dollars to be invested — the mainline district public school system — the values you are concerned about? Is it feasible, for example, to think of teaching students in the public school system in any systematic way that their facility with math should be applied in a university teaching and research position or in a tech start up rather than in finance? Is it feasible to teach that life decisions should be made with this question in mind: what potential contribution could I make to the common good through my work in this field?, rather than with this question: what will the net effect on my bank account be if I choose to work in this field?
I’ll answer my own question: it is not feasible to believe the American public school system, as currently constituted, can effectively transmit the values you favor. Its inability to do so raises interesting questions about the potential PUBLIC value of educational settings that promote service to the common good and teach students to take ETHICS into account in how they choose vocations and conduct their professional lives. There are other countries (Belgium and Canada, to name a couple) where religiously affiliated school systems operate parallel to the secular state system and get the same per pupil funding as the secular schools. Parents choose which system they prefer and the state funding follows the child. Unlike our publicly subsidized private schools and charters in Arizona, the religiously affiliated school systems in the countries I mention are properly regulated and have to meet certain standards for the professional credentialing of their teachers and the soundness of their academic instruction and curricula.
When you propose, as you often do, that no public dollars should be going to private schools, please keep in mind that you are proposing cutting off potential funding (and hence access for some students) to many institutions that do a better job promoting concepts like “the common good” than the public system that you insist our taxpayer dollars belong to.
I been saying the same thing since I went to the U over 20 years ago. It’s bloody obvious. People aren’t stupid or lazy; they are greedy. Greed is the ultimate moral value, I’ve been led to believe. Everything else works more efficiently when we maximize it.
The business major is not “a brain drain,” attracting the “best” students, but rather a major for drained-brains and for draining brains, as it attracts and panders to some of the least capable, lazy students, whose main focus is employability, not attaining a quality education. And I say this from experience, having taught students of all majors in freshman writing courses at UA for over a decade while earning a PhD.