Even if many top young minds pursuing finance was a real problem, we couldn't fix it if we tried
When people speak about the joys that innovation can bring to an economy, they no longer mean to include financial innovation. Since the crisis of 2008, mathematical wizards designing complicated derivatives or other new securities have been seen as foils of economic prosperity, not heroes. So that so many college graduates from top universities flow into Wall Street after graduation has some people distressed. Why aren't they instead choosing other paths that would make the economy better off, like engineering or entrepreneurship? Even if this alternative reality would be preferable, we have no path to get there.
This issue has been recognized before. It was paid some attention back in early 2010. Perhaps due to the Occupy Wall Street Protests, it has been resurrected this month. Last week, the New York Times DealBook ran an op-ed by a Yale English major who Wall Street was trying (unsuccessfully) to woo. This week, Amanda Terkel at the Huffington Post writes a sprawling condemnation of the well-trodden path from top school to finance. For the reasons described above, Terkel imagines how wonderful it would be if things were different:
But what if top students didn't go to Wall Street? What if, rather than creating complex financial products that collapsed the global economy, they were building bridges and creating new technologies instead?
As America struggles to create jobs and get back on its feet after the recession -- caused largely by the financial industry's recklessness -- the country is in desperate need of more entrepreneurs, inventors, scientists and other professionals, a complaint regularly made by non-Wall Street business leaders and members of both major political parties.
Let's let it slide for a moment that the assertion that Wall Street caused the recession is highly controversial and assume, just for argument's sake, that the economy would be better off if its top young minds weren't so concentrated in finance. Is this really as big of a problem as these articles claim?