A Harvard economic professor ponders the career choices that are being made by 20% of Harvard graduates. They are attracted by the prestige and financial rewards of a career in finance. He hopes that they will use their talent to make the world a more wonderful place. However, he is concerned about the fact that much of the work done in the finance industry is rent seeking. It transfers value from society to those who work in finance. A nation that rewards its most talented young people for rent seeking is on the wrong track. Society prospers when it produces scientists who create knowledge, and when that knowledge is used to invent things like semiconductors which add value to many of the products that we enjoy today. It also prospers when its most talented individuals who enter into other professions choose to transfer value to society instead of extracting through rent seeking.
The outsized financial rewards available from a career in finance are only one of the determinants of career choices made by talented graduates. Career choices also reflect cultural forces. Youthful idealism has lost ground in a culture that places financial success above other values. The Harvard graduates who choose a career in finance reflect deeper changes in our culture.