Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance

from NYTs

This is a bittersweet time on campus. Seniors are beginning to find jobs, and while their enthusiasm is infectious, some of their choices give me pause.

Many of the best students are not going to research cancer, teach and inspire the next generation, or embark on careers in public service. Instead, large numbers are becoming traders, brokers and bankers. At Harvard in 2014, nearly one in five students who took a job went to finance. For economics majors, the number was closer to one in two. I can’t help wondering: Is this the best use of talent?

Of course, these are intensely personal choices as young people chase their aspirations and dreams. But if a favorite student of mine comes up to me and says, “I just got an offer at this investment bank and I’m going to take it,” I want to know how should I feel about it. I will be happy for her individually, but still I wonder: Is this a good decision for society as a whole?

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73 Responses to Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance

  1. Logan November 15, 2015 at 4:48 pm #

    I really enjoyed this article. It was nice to see a professor that is interested in the students after they graduate. The way he broke down the personal and social returns is something that I’ve never thought about before.

    I view our society as one that cares about the individual rather than the group collectively. I feel there is always a lot of pressure to be the best and make the most. Helping others and the society is often a second thought. This may be due in part to me being a Millennial, which have been hailed as the “Me Me Me” generation. That being said it was nice to read an article that puts in perspective what power we really have to make a difference to society in the careers of our choice.

  2. Manpreet Swaitch November 15, 2015 at 5:10 pm #

    I don’t think it is anything new that professors want what is best for their students. In the article it states, “So how should I feel about my students going into finance? I hope they realize that they have the potential to do great good and not simply make money. It may not be how the industry is structured now, but idealism and inventiveness are two of the best traits of youth, and finance especially could use them.” The professor is basically saying for one not to use all their potential in making money but to use it to make the world a better place. The professor says to be innovative and for students to use their ideas not to hide fees from consumers but to help banks overcome those type of problems. “I look at it this way: Every profession produces both private returns — the fruits of labor that a person enjoys — and social returns — those that society enjoys.” this kind of puts things in perspective for me. Sometimes when we go into a career we have to not think about how it will benefit us as an individual but how will our ideas help the society as a whole and that is what the professor is trying to encourage.

    • Danielle Gangemi November 1, 2017 at 7:51 pm #

      Many of the smartest students who graduate from Harvard take jobs as traders, brokers, and bankers. Almost one in five students to take a job went for finance and for economics majors it was one in two. This professor doesn’t think that taking a job in finance is the best use of their talents. Every career produces private returns, thins that a person enjoys and social returns, things that society enjoys. Therefore, some professions provide more of a social return rather than a private return and the opposite. For instance, the winners of the 1956 Nobel Prize in Physics did not nearly receive the amount of wealth that their invention would help create. In addition to inventors, teachers and nonprofit workers often have more of a social impact rather than a direct impact on private returns.

      Arbitrageurs in the finance industry create value, but may buy a stock at a higher price than they sell it at and they have to ultimately wait for it to sell. Although correcting mispriced stocks would be a step forward, it is unlikely that it will have a real social benefit. Many jobs in the finance industry take advantage of people’s overconfidence and should not just be a profession to make money. There are countless social problems that finance professionals could solve such as saving for college to prevent the risk of future unemployment. Banks should not find ways to hide fees but to create ways to protect people and help them instead of simply making a profit to keep a roof over their head. Finance is an excellent industry to enter, however, students should take the initiative to add idealism and inventiveness into the finance industry.

      People who graduate from Harvard have the potential to excel is professions that have the opportunity to make an impact on the world. The finance industry effects businesses because some students will always choose to follow a career path in finance regardless of what their professor thinks, therefore, it is certainly a job that is not going away. Although money is a huge factor, people should follow what career path they think they will enjoy doing the most. That being said, students should take a job with more of private return than a social return and should put themselves first and decide how ultimately what they want to achieve in their career. It all depends on the person and their values and what they consider to be their American Dream. The United States finance industry is not as high as other countries, so if people are willing to innovate the industry and make it change for the good they should certainly try.

  3. Cedric Kabore January 22, 2016 at 6:57 pm #

    As a finance major, reading this article really confused me. In fact usually with a finance or an economics degree, graduate students end up working for financial firms or financial institutions like banks. But this Harvard professor is skeptical about this common career path that students take. He basically says that every profession produces both private returns which can be your paycheck and social returns which is the utility for society. For him students must privileged careers that offer bigger returns for the society. He took the example of inventors to show a type of profession that provides a surplus of social returns. He brought up the term rent seekers that refers to talented people who instead of creating wealth, simply transfer it from other to themselves. He pursues by denouncing how banks make money by using hidden fee rather than adding true value. His assertions are really powerful but I don’t think regard the high cost of college education nowadays that many students will look for jobs that don’t provide them enough justify their initial investment in college tuition.
    Students go to college to get a degree than use this degree to get a job that can provide them the necessary income to live. The first thought that a graduate students have is not what he will be able to get for the society. He is actually more concerned about what he will be able to get for himself. I totally understand the idea of this Harvard professor but we must keep in mind that the way financial institutions are selfish is the result of our society of consumption and even of what we learn in business schools. Business schools teach us how to increase profits and improve our businesses. We must also take in count that we live in a capitalistic society so the model that this professor describes doesn’t fit our actual reality.
    On the other hand I understand this idea of seeking greater returns for the society, but in this case the responsibility should be also taken by the government regard financial institutions to protect customers’ investments because these financial institutions are businesses that seek greater profits and I don’t think they will change the way they operate. As this Harvard professor said in the article we should be able to do better. One major idea that he brought up was that banks instead of looking only for profits by hiding fees could elaborate new banking innovations that will make everybody better off.
    Finally I think this article is a reminder that the financial world should not only be focused on making money because the social welfare actually depends a lot on the financial institutions. The 2009 economic crisis is the proof that selfish decisions in the financial world can bring down a whole society. As a finance major this article made me realize how important my future decisions in the financial world can be. It also makes me reflect on how important it is to be altruistic in anything we do in life.

  4. Cedric Kabore January 22, 2016 at 7:04 pm #

    As a finance major reading this article really confused me . In fact usually with a finance or an economics degree, graduate students end up working for financial firms or financial institutions like banks. But this Harvard professor is skeptical about this common career path that students take. He basically says that every profession produces both private returns which can be your paycheck and social returns which is the utility for society. For him students must privileged careers that offers bigger returns for the society. He took the example of inventors to show a type of profession that provides a surplus of social returns. He brought up the term rent seekers that refers to talented people who instead of creating wealth, simply transfer it from others to themselves. He pursues by denouncing how banks make money by using hidden fee rather than adding true value. His assertions are really powerful but I don’t think regard the high cost of college education nowadays that many students will look for jobs that don’t provide them enough justify their initial investment in college tuition.
    Students go to college to get a degree than use this degree to get a job that can provide them the necessary income to live. The first thought that a graduate student have is not what he will be able to get for the society. He is actually more concerned about what he will be able to get for himself. I totally understand the idea of this Harvard professor but we must keep in mind that the way financial institutions are selfish is the result of our society of consumption and even of what we learn in business schools. Business schools teach us how to increase profits and improve our businesses. We must also take in count that we live in a capitalistic society so the model that this professor describes doesn’t fit our actual reality.
    On the other hand I understand this idea of seeking greater returns for the society, but in this case the responsibility should be also taken by the government regard financial institutions to protect customers’ investments because these financial institutions are businesses that seek greater profits and I don’t think they will change the way they operate. As this Harvard professor said in the article we should be able to do better. One major idea that he brought up was that banks instead of looking only for profits by hiding fees could elaborate new banking innovations that will make everybody better off.
    Finally I think this article is a reminder that the financial world must not only focus on making money because the social welfare actually depends a lot on the financial institutions. The 2009 economic crisis is the proof that selfish decisions in the financial world can bring down a whole society. As a finance major this article made me realize how important my future decisions in the financial world can be. It also makes me reflect on the importance of being altruistic in anything we do in life.

  5. Felicia Benjamin January 22, 2016 at 7:21 pm #

    As a student studying Finance, I am ecstatic that I read this article! It is refreshing to see that this professor has a genuine concern about how his students will shape the world and how their efforts will impact society. On one hand he is excited that they are obtaining lucrative high paying occupations, but he is worried that his students will not realize the true potential of the power this occupation possesses. After reading this article, I realized that recent graduates are the most valuable assets to the U.S. economy. I say this because each generation brings new innovations, new developments, and new advancements that shape and shift the everyday norms of business and life. For example, the millennial generate has shaped everyday life and social standards through apps like Facebook, Twitter, Instagram, and Snapchat. The world has become smaller, and now companies can be made overnight through the snap of a picture and an instant upload. Diverse industries can piggyback on the newest trends and can easily advertise with the tap of a screen.

    However, the author introduces a major concern that affects all majors and fields of work, not just finance. Most Americans exhaust a vast amount of resources and energy pursuing degrees in the hopes of earning more income and improving the future quality of their life. These are more self-rewarding pursuits. You rarely hear “I want to study Finance so that I can… (Insert society improving plan here)”, or “I want to study (Lucrative Major) to see (Inequality Reducing Agenda) happen”. Unfortunately after many graduates achieve these lucrative positions they fail to even give back to their community, or a well deserving philanthropy. Once they enter the door, they are driven and focus on how they can advance up the executive ladder, and how they can increase their salaries. This idea can potentially be harmful, if success in linked to salary rather than character, integrity, or overall impact.

    Our society promotes the ideal that America is a land of opportunity where with enough determination, hard work, and luck anyone can become rich. With that said, American culture fails to instill the importance of giving back, and making a difference. Instead many focus on solving problems, rather than advancing the overall quality of life for everyone or preventing problems. Instead of asking what you something can do for you, we need to be asking what we can do for someone else. This is not a “one shoe fits all” epidemic. There are individuals that are striving to impact society in a positive way through innovation and selflessness. With that said, most students like myself aren’t focusing on how we can improve the world with our world with our education. We are focusing on how we will benefit financially from our hard work.

    As a Finance major, I am glad that I read this. I have gained a new outlook on how the decisions I make can potentially impact someone else for the better. After I graduate from Seton Hall, I hope that I will continue to be a Servant Leader, and use my degree to not only “pay the rent” but to make an impact on society. All students studying all majors should realize that they possess the power to shape the world, and that whichever field they plan to pursue can benefit everyone, not just themselves.

  6. Michael W. Alescio January 22, 2016 at 8:46 pm #

    This article immediately grabbed my attention because one, I myself may want to pursue the finance industry, and two because a professor from one of the most prestigious schools thought it was worth his time to write about the topic. A rising issue Sendhill Mullainathan points to is going somewhat unnoticed. It really is a shame that employees in the finance are finding rent seeking ways to make extra money. When I was younger I would go to the bank with one of my parents to make a transaction. Over time I then began to go in and make transactions with my parents. Now that I am at school and more grown up I make my transactions alone. I am not often at the bank, but the few times I am I have noticed the targeting of the youth. Around 50 percent of my times I have gone into make a simple transaction I have been given a sales pitch on the banks newest greatest deal they have for me. Why me? They have never met me before, so why do they make it seem like they are doing me a “favor” every time I get one of these pitches. It is because most of these bankers are very good at overpowering and persuading their customers. The funniest part to me is when I respond with, “I will have to check with my parents” it sets of the red flag in the bankers mind. So they sell more by telling me how the deal only lasts for the next two days, and I really may want to look into this right now. However, when I would go into a bank with a parent, it seemed like I never was getting those same great ideas or great advice. It really is unfortunate that some of the workers in the finance industry use these practices, because I am sure it works on many younger people.
    Mullainathan points to how the good news is these students getting these jobs are very intelligent and can make a change. Maybe his article will reach some younger people in the finance industry and they will push to make that change. Or for any high school and middle school students reading this article, maybe they will want to better society in choosing a different field. I have always thought that it is really a shame to see the real heroes of society which include military members, doctors and educators not making a fraction of what some make in the finance industry. Now so may argue the point that doctors do make a surplus of money, and some do! However, it takes doctors at least an extra four years of schooling and then on top of this, most doctors have to take part in a residency. So while a financial analyst is climbing the ladder, a soon to be doctor may still be in medical school. Doctors and military members save lives. Educators are creating the future. In the United States people pay an absurd amount of money to attend college. In most other parts of the world college is free. So the part I really do not understand is when a university of college brings in millions and sometimes billions of dollars, how are the professors not getting paid more? These three fields are not reimbursed for their true value in society.
    I understand that the military is not for everyone. The military takes a physical and mental toll that some cannot handle. I also understand why others in our society do not want to go down the road of being a doctor or an educator, because I myself am in the business school. Most want to chase the dream of a luxurious lifestyle, but the real heroes should be recognized. Future workers in the finance industry need to take a step back a see how they can better society like these doctors, educators and military do. Maybe if it means they teach as an adjunct once a week. Or they stop taking advantage of other hard working individuals who may be in the military and not know anything about finance. Everyone can look at this article and ask themselves, is there something I can do to better the society I live in?

  7. Parth Parikh January 26, 2016 at 12:40 am #

    This article makes a valid point although the title seems to say otherwise. The title makes the article seem like finance isn’t a major students should enter, which seems harsh not only because growing up, many of us enjoy the sight of money, thus leading us to figure out what money is, how it is spent, where does it go, and how does it dictate the world markets, but the students who have grown up following what money does knows how to manage it and how to better save money in order to make a return on their investment. Students like that should not be dissuaded to find some other line of work and that they should in fact be encouraged to join whatever they like and wherever their interests happen to be. But after reading the article, I noticed that the author makes a good point in proving that some people are going into finance just knowing the pure basics, in terms of stock trading. They simply know how to buy low and sell high and think that they have what it takes to last in the stock market. Although I haven’t been to the stock market and I know only a few acquaintances that work there, I know that you need more than just a “buy low, sell high” mentality and that you need to have a thick skin, be able to see the market’s movement before it happens, and other instinctual aspects to survive. Some people are not ready to be in finance yet there is a surplus of bankers and brokers out there. There are people like Bill Ackman, George Soros and Carl Icahn that have that mind that not many people have and they are the people who deserve to be in finance for having an astute mind. Ackman and Soros know a good stock when they see one and they know what stock has value in it before the stock rises and falls. Their portfolios are filled with promising and worthwhile stocks, which explains why their hedge funds are one of the highest performing funds in the world with millions of dollars invested in them in hopes that they could make a profit. Carl Icahn is an activist-investor who not only invests in stocks, but publically says what a company should do if they want to increase their stock value. It could be whether a company should split up and become smaller companies or whether the company should remove their executive board and bring in new people to run the company, activist-investors like Icahn make public announcements either to make personal gains or for the company to do better because he has faith in them. Being an activist-investor also means you can swing a market at will. Normally, their portfolios and holdings are never announced and leaked, but if they announce they have a stake in a company or a fund in general, the value for that holding goes up tremendously because a renowned investor like Icahn must know what he is doing if he owns a specific holding, so with that trust and belief that he sees something in a company that no one else sees makes investors flock to that holding and brings up the price. But to get to these people’s stages you need a lot of knowledge, and sadly not everyone can have that intelligence.

  8. John Ferry January 26, 2016 at 4:54 pm #

    When I first applied to Seton Hall, I applied as an accounting major. I did not choose that major because I loved it, but because I did not know what I really wanted to do at that time, and accounting seemed like a safe route because I would at least make some money. Over time, I am incredibly grateful to have experienced events that have not only shaped who I am, but have also cleared the path that is meant for me, and the purpose I want to work on behalf of.
    A lot of students are not as fortunate as I am. There are plenty of students who decide on a major or a career strictly on the grounds of stability, or even beyond stability and towards riches. I think it’s a selfish way of thinking, and I also think that Dr. Mullainathan would agree with me. In addition, I think people who pursue careers with that mindset defeat themselves. In order for work to be done well, it has to be done with a purpose. This article gave a very charming example with George Bailey, and how his love for the people of Bedford Falls drove him to be the best banker he could be, despite hating banking. George Bailey’s dad said it better than any of us when he stressed the importance a person places on having a roof over their heads.
    I firmly believe that it is a universal truth that doing something that improves the lives around you is key to happiness, success, and fulfillment. Jim Carrey put it nicely when he said that the impact one has on other people is the most valuable currency there is. Dr. Mullainathan would refer to this as “social returns”. Personal returns gives a person’s life achievement, but social returns give a person’s life fulfillment. It is also important to remember that achievement without fulfillment is the ultimate failure.
    I also think there is another underlying problem with all of Dr. Mullainathan’s students going for finance jobs. Theoretically, if everyone went for finance jobs, then who would become teachers? Journalists? Diplomats? Artists? There are so many different occupations out there that are demanding able workers. Some people might argue that if you major in something along the lines of finance or economics, there is not much else you can do besides work at a bank, or in the finance section of a business. Although there is nothing wrong with that, I would argue back that you can extract crucial information from any major that can most certainly apply to any occupation and lifestyle you can imagine. A business can most certainly benefit from the critical thinking skills of a philosophy major, and a career in music can absolutely benefit from the organizational skills gained by an accounting major. It all depends on the lens that you view things.
    For me, I’m an economics and philosophy major, and I’m not sure what direct relevance those majors will have in my future career. I do know, however, that I can learn a lot from both. Economics teaches me how people think, and how money makes the world go round. Philosophy teaches me to think outside the box, and to question any sort of norm. I also gain knowledge from experiences outside the classroom as a Peer Adviser. I may not know exactly what I want to do for the rest of my life, but I do know for sure that I want to have large amounts of social return.

  9. Cailee Valente January 27, 2016 at 10:04 pm #

    After reading the first two paragraphs I had some realizations. I recently had a thought about how my high school physics teacher urged so many people to go into the STEM (Science, technology, engineering and math) fields. He mentioned how a lot of Americans steer away from this field because it’s too hard and people do not want to challenge themselves too much. There are other scenarios that I thought of one being the fact that maybe most people aren’t left-brained. This means that the average person might not be able to effectively study and perform the STEM subjects. If this type of material does not come naturally to someone, should we really be urging that more students study them? What good is an engineer or scientist who nearly failed all of their classes?
    This generation is also evolving into a narcissistic society where people aim to achieve personal selfish goals rather than helping others. However, both types of people exist and sometimes even a hybrid. Almost every one of my peers that I have talked to wants to be rich when they are older. Money is their goal rather than doing something bigger such as executing any action that contributes to changing the world for the better. Personally, I would like to do both, but I know that the STEM fields are not my strong academic area. When I was younger my dream was to become a doctor, but as I grew older I realized that this career path was not ideal for me. In this scenario you see that I would love to become a doctor, or a scientist that discovers the cure to cancer, but I am not the right person for the job. However, someone else may be equipped for the STEM fields, but might not personally want to purse this career. Whether it be this scenario or the previously mentioned one from the first paragraph, there are vast possibilities for the lack of students entering the STEM field.
    The author brings up a point about whether the career paths that most students are entering, finance and economics, are good for society. This made me think about how whether it is positive or negative for society is irrelevant because we live in a society where we teach our citizens that they can do whatever they want. America is free, we can make our own choices, follow your dreams. This means that college students are going to follow their dreams and do whatever they want whether the opinion of it being bad for society is present or not. A lot of people live in the present and do not think for the future. People act on what makes them happy now, not what will be beneficial or necessary in the future. This is not always true, but many people, especially in the generation that grew up with technology like texting and social media are impulsive. Impulsivity is why people act for what makes them happy in the “now” not for the future.
    I agree with the author when he states “I hope they [students] have realize that they have the potential to do great good and not simply make money,” because it agrees with my point of people making money their main priority. I think the way to change this is to have a mindset change. Society can influence ideas on how people should think and act, but this will not always be effective. People will not always listen to or conform to society and it is difficult and possibly not ethical to try and tell someone to think a certain way or have certain goals. However, I think it is possible to make individuals less selfish and lead them to having bigger aspirations other than just money. Personally, I want to make money and then I feel that I will have the power to change the world. Money can influence people and this can be good if it is used in a positive manner.

  10. Caitlin Koska February 19, 2016 at 1:53 pm #

    “Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance” is a fantastic article that I think everyone working in finance should probably read. The article explains the terrible “rent seeking” behavior that has come to be standard in the world of finance. Most people with financial jobs, for example, stock market traders, create much more private value in their work than they create value for society as a whole. And strangely enough, the people working in finance, are the ones who have the power help fix major problems for the poor, they just don’t. Instead, they take advantage of customers with things like hidden fees and shady practices.

    This article was particularly interesting to me because I am an undecided business student, and finance is obviously a possible option. It worries me after reading this article however that finance might not be right for me. Of course I’m interested in making a good amount of money, but I’m not interested in making it at the expense of other people. As the author of this article said, “I hope they [his students] realize that they have the potential to do great good and not simply make money. It may not be how the industry is structured now, but idealism and inventiveness are too of the best traits of youth, and finance especially could use them” (Mullainathan). Just as a quick side note, it was pretty nice to hear that this professor had chosen to write about the positives of my generation, and our ability to possibly change the way things are headed, instead of the typical argument that “our generation is obsessed with our phones and therefore doomed”. But as for the quote, the author hopes that his students going into finance will do their jobs with the right intentions to help people rather than take advantage of them, but to me, this doesn’t seem too promising. The financial world has been this way for a while now, and the idea of making millions due to the misfortune of others has gained a sort of cool, positive connotation. Just like the movie The Wolf of Wall Street for example. Students entering the financial world will have a hard time breaking free of the already corrupt practices, and will probably fall into the system that has already been created. Not everyone can be a George Bailey.

    The idea of rent seeking mentioned in this article is actually a very common practice, even in jobs outside the financial world. Strangely enough, I wrote an essay on this idea last semester in English. For the essay, I had to analyze Joseph Stiglitz’s essay, “Rent Seeking and the Making of an Unequal Society”. He explains how pathetically enough, the people at the top of Forbes list are almost always rent seekers. They are the financiers, monopolists, and lawyers who aren’t making wealth for themselves, but instead taking it from others. Rent seeking might be a terrible way to make money because they are hurting others, but at the same time, it is also a little bit of business genius. People who rent seek have to have precise plans to avoid retaliation from their customers and to make the most money possible. Obviously the method of rent seeking should be looked down upon, but at the same time, it requires a lot of business knowledge and strategy.

  11. Burak Eraslan February 19, 2016 at 7:38 pm #

    The article titled, “Why a Harvard Professor Has Mixed Feelings when students take jobs in Finance” makes a great point in terms of the job placements, and various job descriptions within the real world. The professor makes a statement in regards to the outcome of the job that these students get into. The professor has the idea that the students who enter the workforce need to look not only at the possible benefits for themselves, but also for the common good, or for others. The reasoning behind this is because the professor believes that there should be two returns. There are two returns in the professor’s eyes. The returns are the fruits of labor that a person enjoys, and the social returns. This is especially understandable considering the fact that people should not look to only work to put money into their own pockets, but also affect humans in a positive way. This is crucial because putting someone else’s money into your own pocket only serves you a benefit, and nobody else. While a job that can have fruits for society will not only improve your life, but will also help others in their life, or work life. I think that the professor did well with bringing this up. Considering the fact that most college students are coming out of college to work with these large firms that teach them how to simply take money from people and put it into their own pockets. This provides nothing more than financial happiness to a select few in the company. With the example in the article, you can see that although it is a small business to take photos, it gives others around the business to feel better about themselves.
    So what can we do? I know that in Harvard there is a strong urge for students to go out and create jobs rather than find one. I love this mentality that the university promotes, and am in full agreement with them. With that being said, I think that what the professor stood for was of Harvard culture, and could be seen appropriate for anyone in Harvard. If a professor like that can tell his students that the financial job will not bring you any social return, that means that he is not afraid to voice out what he truly believes. Most universities will tell you that they have high job placements, and such, however, as the professor would agree, it is more than just finding a job, but it is more of how to make the most out of a job that you create, or work with. I am a finance major, and was considering going into an area of work as stated, however, ever since I began college, that dream has been decreasing more and more. The reason being is because I do not want to be the guy that follows orders from his boss to ensure that the company or the top level executives make the most at the end of the day, while I get a pat on the back. Although this is an issue of authority, I believe that people need to understand that there is more to work than just the money that comes out of it.
    Ever since I came to college I’ve told myself that I want to be an entrepreneur. Most people will believe that an entrepreneur is the best way to make money. However, I don’t think people truly understand the meaning of what an entrepreneur truly is. An entrepreneur has much more power than just simply making more money, but the ability to change the world. Maybe this is too dramatic, and most will tell you that a simple man cannot change the world. However, I think that an entrepreneur can get pretty damn close. The reason behind this is because an entrepreneur can do whatever he wants with his or her business. This allows room for change, and progress. When you are working for a large company with a sexy name, all you do it what you are told by your higher ups, that job is mostly different tasks given to you to produce more revenue, and bring in more profit. With an entrepreneur however, your job everyday can be different, and whatever you choose it to be. Now although this does sound much more appealing, the work put behind all of this is much more than that of someone who works the 9-5 job. Entrepreneurs have the ability to change the world, and that comes from dividing what they truly want to do with the company. I am in pursuit of finding something new that will give happiness to people as a whole. This company will be one that not only employs many people, but also help everyone affiliated with it. It’s not about the money that will benefit me as a person, but the social return that comes from the company.

  12. Matthew Marinella September 30, 2016 at 5:27 pm #

    College is the place that we are expected to find ourselves. We are given four years to discover the career path that we will be following for the rest of our lives. That’s an overwhelming task for four years. With each career choices comes different reasoning. Some people want to follow their dreams, whether it includes chasing money or giving back to society. Certain individuals consider following the money to be a wrong option. Following a career path that has a money incentive is in no way a wrong move for anyone that is in college.
    Many people believe that chasing money is a selfish choice. Money has a reputation about it that goes along with greed. The richer you are the more ignorant you become is the stereotype. Even though, finance career usually has a large salary that does not mean that it is selfish .On a personal basis, the reason I am currently a finance major is because of money. When I get older my goal is to be able to financially provide for my family. This way my wife and kids can have a comfortable lifestyle and never have to worry about money. By no means, am I choosing finance for a selfish reason. Do I want good nice things in life? Yes, I think anyone really would like to have that luxury. But, wanting and working for those things does not make you any lower of a person.
    Careers in finance in a lot of senses get the wrong reputation. As soon as you mention finance or business people assume you are a sleazy salesman, trying to take advantage of them. Sadly, some people are guilty of this act but, this shouldn’t be the stereotype of everyone within the field. Careers in finance can be extremely beneficial to the world and that is something that goes unnoticed. I have seen finance do wonders for peoples’ lives first hand. For instance, over the summer I worked at a Wealth Management firm. One career at the firm that I worked at is a financial advisor and what they do is help people allocate and invest their funds so they can do things such as buy a house, send their kids to college, or even retire early. They change lives behind the scenes. Now, people do not have to stress out about money because someone has got them covered and is helping them continue on with their lives.
    A career in business and Finance is not all about the money. Money is moved every day and money is the thing people work for and is something they need in order to survive. Careers in finance ensure that this cycle can continue to happen. The benefit that it brings is enormous and these careers are something we desperately need. I can’t wait until I graduate college and can pursue a career in finance myself. I know I will be doing beneficial for the world every day that I can while I am working. Without finance companies would not be able to operate and manage their business. These business bring with them jobs and all products that we use daily. Finance is a vital career field in our world and will forever be important.

  13. BD November 9, 2016 at 3:34 pm #

    Choosing a career path is one that can be both very exciting and nerve-racking at the same time for an individual. I know myself that graduating high school, deciding on where I wanted to go to college and developing a plan to finance my college journey was all very daunting. In addition to this transition from high school to college, individuals are also faced with choosing a career path that they feel they can succeed in, develop a thirst for knowledge for, and genuinely create financial of societal benefit from. Picking a career path that you feel will allow for all these opportunities is very challenging considering that this decision needs to be made within the first ¼ of your life, usually before you turn 20 as you enter college. In Mullainathan’s article, there are strong points made about economic concepts in which some people graduating from ivy league universities are settling for financial benefit when they have the potential to generate far greater societal benefit with their resources.

    Although I do not agree with all of the theories put forth in Mullainathan’s article, I do feel that there is a certain responsibility that we as human beings have to constantly innovate and learn. As far as people form to ivy league universities settling for careers in the finance industry rather than in medicine, I feel is a bias. This bias may be caused from a slowdown in today’s medicine innovative practices or possibly related to the meltdown experienced from financial greed in the financial sector. I do feel that great societal benefit does not have to come as the cost of personal financial benefit, and that the only path is not in medicine. A favorite example of someone who has created great financial and societal benefits is Elon Musk, with Tesla Motors and Solar City. Musk has managed to force his company, Tesla Motors, into a market with extreme barriers to entry simply because there were many people who believed initially in the societal benefits of the company. Despite having difficulties of turning a reliable profit, Tesla Motors has increased its value to shareholders, produces a superior product compared to the competition and manages to innovate and evolve depending on consumer demands.

  14. Chris Goldfarb March 2, 2018 at 6:21 pm #

    This article raises in issue not with the field of finance but with society as a whole. Often in the article the author will talk about how he feels his students under-utilizing their potential by pursuing jobs that lack any societal benefit. This phenomenon is nothing new and this type of behavior is largely encouraged starting at a very young age. If you ask a small child what they want to be when they grow up often they’ll say they want to be something heroic like a police officer, firefighter, superhero, etc. The point being that the moment in life where we possess the most innocence, when asked what we want to choose for a career we end up choosing something that contributes to a societal benefit. Then at some point we’re told we have to “grow up” and choose something that will make us successful. That moment is the beginning of the end because while a child’s idea of success might be to help others authority figures explain that their previous visions are incorrect and that they must change it. This idea is then further supported though media and advertisements portraying wealth equaling success. So of course when people finally make through college with a degree in their hands and they’re asked to make a choice they make the one they’ve been told to make their whole life.
    When the author’s students make their choice it shouldn’t be held against them because it largely isn’t their fault. There are plenty of philosophy courses throughout high school and college that preach about the dangers about this rationale but by then it’s too late, a couple classes aren’t going to change their mind on something rooted so deep in their psyche. It’s easy for someone to say that they’re wasting their lives from the outside looking in but to them they’re just trying to provide for their family as best they can and no one should be blamed for that. In the mind of a hedge fund manager or stock broker all they know is they can put food on the table and put their kids through college and that’s good enough to justify the choices they’ve made. Yes, maybe if they dedicated their talents to helping non-profits or working to help shatter communities recover financially they could do some good. Though if they choose that root they might not be able to give their kids the advantages they could have gave them and if you happen to be a parent I feel it’s hard to legitimize that decision. I understand where the author is coming from but at the end of the day the student are doing not only what’s best for them and their future families but what they’ve been told to do so if he really cares about them, which it sounds like he does he should rejoice in that fact but work towards trying to organize people to find a solution for this systemic problem.

  15. Lucas Notarianni March 2, 2018 at 10:41 pm #

    I find this article by Sendhil Mullainathan very entertaining because I am a finance major. I understand his concerns whether entering the world of finance “is the best use of talent”. Mullainathan makes good points that finance may not have good benefits for society as a whole, and jobs that help benefit society should be more lucrative, but learning Finance helps individuals learn how to work smart in addition to working hard by using their money wisely, in addition to being the backbone of the economy.
    Mullainathan has a point in trading that investors can be “rent seeking” by buying and selling stocks based on values that are off of companies. At times it seems like transfers of wealth from one hand, taking the other, but Finance has many upsides to society from this. Companies are looked upon based on stockholders’ opinions. When investors buy enough shares they have a say in the company, and how that company influences society.
    One reason people learn finance is to use their money wisely. It is not just about working hard, but also working smart. Having cash sitting under your bed will lose value overtime, and not make the money worthwhile. Understanding how to invest and selling financial services allows people who do not understand Finance, earn interest on their money. Helping others invest puts more money into the market allowing greater circulation and inflation. Bankers also help start-ups and every-day people purchase goods they otherwise could not obtain without a loan. Investors help start-up companies gain capital that hey could not otherwise obtain also by buying stocks and bonds. Yes, people can take advantage of the ones who do not understand, but hopefully ethics take a place in doing good for society. In these ways, Finance is a huge contributor to the economy as a whole.
    In addition to the benefits of Finance, I believe some jobs that are not as lucrative maybe should be more rewarding monetarily. Jobs Mullainathan mentioned such as inventors are good examples. Teachers are as well. They bring great deeds to society that do not get paid in some eyes as much as they deserve. It is unfortunate they are not as represented which is why some of the talent goes into the Finance field. They are smart enough to go to where the money is. From there, they can give back to society how they choose.
    In conclusion, Finance can show some unethical issues, but it is the backbone of business for business to expand, invest, and properly allocate their resources. I may have a different view than most being a Finance major but there are benefits to society, if used ethically. Many people create negative views of brokers and bankers based on history, but there is so much benefits Finance graduates bring to society. I for one want to join the investing world and build a nest egg so I can comfortably live my life and pass on to generations while settling down giving back to society in different ways such as teaching or investing in start-ups or charity. I understand Mullainathan’s concerns for bright minds all going to finance; however, unless situations change, people want to get the most out of their return for college and many see it most fit to go into the Finance world.

  16. Alexa M March 9, 2018 at 9:15 pm #

    I absolutely loved this article about how finance could be about so much more than just making money, but rather solving real world problems. The perspective of Harvard Professor Sedhil Mullainathan is quite intriguing and inspiring. Being a junior in college and approaching graduation as a Finance major, I am not quite sure what career I want to pursue with my degree. I have many other interests I might even be better at than finance but my motivation behind the choice was a guarantee to make a good amount of money; I agree with professor Mullainathan that a lot of very bright students that could be of better use with their talents in other careers choose finance careers on the basis of private returns. When Mullainathan stated that economists termed “rent seekers” as people who don’t create wealth, but instead transfer wealth from other onto themselves and that you wouldn’t be able to tell if someone is a rent seeker by their job title it made me question ethics of certain careers. I didn’t realize how many rent seekers there really are out there and how many careers and industries use this to gain wealth. I liked Mullainathan’s metaphorical comparison of the stock market to a big casino where the skilled traders derive money; I also like how he points out that arbitrage and the stock market actually gets the low prices back up to the right prices. I’ve never thought of arbitrage as helping investors avoid misplacing their investments. I like how he also clarifies even though arbitrage can do good things, it is only helpful to a certain point because it has a “gold rush element” it turns into rent seeking when arbitrageurs are fighting to get to the gold before everyone else. I agree with Mullainathan that banks creating wealth by charging hidden fees to their clients, loan lenders taking advantage of the poor by using business schemes that push high chances of nonpayment, and debt collection agencies using wicked propositions is creating a rent seeking society instead of a society that uses finance to help the world. I believe this article should be presented in front of finance majors so we can be the generation that changes the finance field to be used to do greater good to society and make money.

  17. Dominic L September 14, 2018 at 10:24 pm #

    I enjoyed this article a lot. Being a student, I would never think that there are times where a career was pointless, even detrimental to the world. As a someone who studies finance with hopes of working with stocks, it is a hard pill to swallow. This article gave me a different perspective of how people work the system.

    I do not agree however where the article states that arbitrage is not beneficial to society. As the author states, arbitrage can help raise the value of deserving companies.

    Yes, it is an easy way to get rich quick, but the money made can be used constructively in a few ways. First, the money made can be used to reinvest and continue the cycle of raising stock prices. Second, money made can be used for financing other goods and services, strengthening the economy. It is essentially a variation of “trickle down economics”. The money will find it’s way through the economy to the right hands. Eventually.

  18. Justin T November 2, 2018 at 12:29 am #

    It took only a few sentences for this article to really grab me and standout, not only because I felt that it was interesting but I felt I could relate to what this professor was saying. Having a few friends in the finance industry currently working on wall street I always came up with asking the same question, why? What is so luxurious about working on wall street crunching numbers all day, and I would always get the same answer, money. I feel like in today;s age we have become a little bit lazier, there are many people out there who I feel just maybe go the easier route and go into the finance field because it’s a very quick and easy way of making a lot of money fast right out of college. I feel that these people don’t have the passion that a doctor has everyday when he walks into his practice. What I am trying to say is that I feel many people who may have had that passion of being a doctor or lawyer, look at the finance industry as a quick easy escape to making a lot of money really fast.

    I respect this professor for caring about this kind of situation, I feel that he feels the same way that I am feeling. Every time I speak with someone they talk about how they want to go into finance and then when I ask them want do you want to do, and they always say I am not sure. I wonder how much this is impacting our society as a whole and the return on college students who are going in to different occupations then business. Over the past 10-20 years the idea of studying business has grown, and a lot of it being with the growth of markets and competition. The drive to becoming a doctor or lawyer isn’t a quick or easy one and I think that is what is becoming more appealing to students. As students the more years we are in school it seems the less interested we have, to be able to walk out of college with a starting salary of $90,000 is almost every college kids dream and kids are starting too see that the financial industry can offer that. This professor only wants too see his Harvard students use there absolute potential, and like stated before I respect his honesty and courage to say that he wishes more students wouldn’t come up to him and say ” I got a job offer in investment banking and I am taking it”.

  19. Luke Tyler February 8, 2019 at 7:46 pm #

    While browsing the blog my attention was immediately grabbed the title: “Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance.” Of course most people would guess that it’s because I’m a finance major and while that does somewhat contribute to my interest, I was mainly struck by the stance that Mullainathan presents. At first, I started to side with his general view that students who take finance jobs are mostly enticed by the large paychecks and commissions rather then helping a common good. Like most of society I thought back to the financial crisis in 2008 as a prime example of corporate greed. While I grit my teeth thinking about the situation, I also think of the thousands who worked in the industry and genuinely thought that they were providing a good to many Americans. Even though these events happened, I still stand strongly being a finance and IT major because I think that I can still provide a service to others both directly and indirectly. One person who really influenced my decision was my parent’s financial advisor because from a young age he taught me the value of money and was able to create retirement funds for those who never thought it would be possible. To me I think that his position was one of the noblest causes because your personal contact with someone has the ability to effect the rest of their life. Also for my future, I don’t even see myself working at a big bank because I would rather work face to face with clients. Working as an advisor for a small business or non-for-profit would be even more of an impact because I can help expand a project that could potentially create hundreds of jobs.
    Overall it depends on the angle you take when looking at these jobs that have these stereotypes. A marketing job could be taken to the same effect because a misleading message may result in an adverse effect. What if I told you about someone who markets for a cigarette company and whose source of income is from people that buy cancer causing products? Most likely you would associate a negative connotation with the person. And I think the problem is that people are focusing on the macro view of the economy instead of realizing that every position in a company allows the economy to work more efficiently. Taxes are still taken out of paychecks and there is still consumer spending. Overall if the velocity of money does not slow then, then overall economy can benefit from these activities.

  20. David Torres April 5, 2019 at 1:32 pm #

    In the article, “Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance” demonstrates a one-sided view in the work field. The prestigious title of a Harvard professor gives this man the power to influence many people that are reading this article. Even though, the brilliant minds at Harvard University are capable of being much more successful than working at an investment bank as a banker, or an equity researcher, but everyone’s story will be different. There is nothing wrong with working a fulltime job from 9 to 5 for the first few years after graduation. The reasoning for this is to build up principle in order to start your career as an investor. Becoming an employee will also give you a huge learning experience on what it’s like to be a slave to the money, or working for money every day. Once you stop working, the money will stop coming in. However, there are many ways to manipulate money, by making it work for you rather than you working for the money. After building up your foundation of capital, you can then start your life as an investor, or a business owner. It’s clear that this Harvard professor dislikes the idea of being an employee and essentially staying in the “Rat Race” of working long hours for money every day. The most lucrative occupation that is known in the world is investing in real-estate. Of course, many will fail when attempting to enter this industry, that’s the nature of the game, but the ones that do come out on top will leave everyone in the dust. There’s a reason why most millionaires achieved their status from entering the real estate market. Although the real estate industry seems as if it’s the best option for people looking to become truly wealthy, there are many other options out there. Investing in the stock market, and buying and selling futures or options are great to build wealth. Many people assume that the financial markets are just a big casino. However, that is not the case if you are well informed with what moves the market, and how to manage your portfolio.

  21. Mark Heath June 11, 2019 at 10:49 am #

    What an excellent article on the issues with the industry in finance. This issue is not only relative to the finance industry though, but you can also see evidence of this mindset throughout any career field. Doctors, lawyers, and engineers are all pursuing the highest paying jobs available. Public service positions are harder to fill than ever before. Look at the average salary of an attorney who is working as a public defender, then compare this salary to an attorney working for a large corporate office. The corporate attorney’s salary will be multiplied many times over the public defenders. This issue results from a change in society’s view in addition to the inability for public service positions to offer an acceptable salary.

    The need for highly skilled personnel in finance and other positions is increasing. Increasing even faster is the tuition rate need to pay for these skills. Comparing the rate of inflation over the past 20 years to the rate of increase in college tuition is just depressing. Universities are allowing students to become further in debt with student loan bills than ever before in history. With such large financial burdens on them, students are naturally going to seek the highest paying opportunity that they are offered. For finance majors, an investment banker is going to offer a substantially higher starting salary for talented candidates, as opposed to a financial coach or planner. The coaching/planning positions have a greater personal connection or social reward than the other, but choosing this path puts the individual in a position of holding student debt longer. We have to find ways to incentivize talented candidates to take these needed positions other than salary. If not done through salaries, there are other options available. The student loan forgiveness program is one that offers an avenue for people who wish to serve in public positions, but as we have found out many of people who thought they were eligible to have been told that even though they served in these positions for the required years, certain hidden requirements have limited the ones who actually received it. With knowledge of this now, this is a deterrence for many candidates to seek these public positions.

    While I do believe the rising debt for graduates is something to consider when seeking employment, I believe the author of this article is right expressing the need for societal gains. For people to chase a career field that gives back to society rather than only relying on their personal gains. Trying to find that perfect balance of these gains with the appropriate compensation can be tough. As mentioned, the salary benefits of the investment banker heavily outweigh the alternative, it should be stated the investment banker’s hours worked, the stress associated with the job, and personal enjoyment are much worse than the other. Yet, they are still a more attractive option for many finance professionals.

    Finance is a unique industry though. Many people can make huge salaries by taking advantage of the desire for their clients to make money. This is just a small part of this huge career field though. Many jobs in finance not only help individuals manage and grow their wealth but assist companies in ensuring sufficient capital is available to continue growth. These jobs in finance offer great social rewards by ensuring employment rates, and company revenue which trickles down to greater income for the workers.

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