One of Harvard’s gates has stood proudly since 1889 as a daily reminder to Harvard students of their duty to “Depart to serve better thy country and thy kind.” Every year, professors, administrators, and students encourage Harvard students to enter public service and make a positive difference in society.
But every year, hundreds of Harvard graduates persist in pursuing the socially useless and even destructive career of investment banking. If we truly want to serve Americans, Harvard administrators and students must work to change our pervasive I-banking culture.
In the class of 2009, over 20 percent of Harvard graduates chose careers in finance, the greatest percentage of any field. For some, the lucrative profession promises a way to pay off college debts or establish financial independence. For others, it simply seems like a continuation of the competitive and rewarding game Harvard students have played since first applying to college. Some graduates have suggested that it’s simply reassuring to follow the well-travelled path from internships to expensive dinners with recruiters to interviews.
However, many people, including some investment bankers, acknowledge that the industry is of little social significance. For example, the Epicurean Dealmaker, an investment banker who anonymously blogs critiques of his industry, asks his coworkers: “You mean to tell me your work as [a banker] is worth more to society than a firefighter? An elementary school teacher? A combat infantryman in Afghanistan? A priest? Good luck with that.”
Unfortunately, finance is not a zero-sum game, and the damage does not end at simply not doing good. In fact, the social injustice inherent to investment banking is rampant and well documented.
Investment banking is frequently destructive to normal, non-risk-taking Americans. The recent financial crisis and scandals involving huge bonuses for bank executives exemplify the danger of entrusting a lot of economic power to a few people. And in a profession pursued primarily for the sake of the salaries it pays, there is little incentive to act in a socially just manner.
Of course, the financial industry does provide needed capital to companies, allowing them to hire and innovate. However, investment banks spend most of their energy trading in securities, which have no social impact whatsoever—in fact, large banks like Morgan Stanley and Goldman Sachs often gain less than 15 percent of their revenues from investing in companies. And even Federal Reserve Chairman Ben Bernanke noted that financial innovations increase risk or can be used “to take unfair advantage rather than create a more efficient market.”
Benjamin M. Freidman ’66, a Harvard economics professor, bemoans the fact that so many graduates “go into activities that are not economically productive for the country, for society.” He cites a skewed rewards system as an explanation for why so many Harvard graduates pursue investment banking as a career.
Luckily, there is a way to remedy this. Top-tier schools have begun experimenting with incentivizing careers in public service rather than finance. For example, Harvard Law School recently created a program providing grants to third year law students interesting in pursuing careers in public service. This replaced the “Public Service Initiative,” a previous trial program granting a year of free tuition to law students who promised to do public service work, like taking jobs at nonprofits. Yale Law School has followed suit. These grants send hundreds of students each year to fulfill Harvard’s vision of social responsibility.
Harvard College should consider establishing a similar program incentivizing public service work for its graduates, either providing grant money or waiving a year of tuition to those interested in working towards the betterment of society. Programs like the Peace Corps and Teach for America, while certainly not perfect, have begun to catalyze the kind of culture change desperately needed by Harvard’s undergraduate population.
If they truly wish to fulfill Harvard’s imperative for social responsibility, students must consider the social implications of their long-term as well as short-term career goals. It is downright shameful that, even with such a diverse student body, Harvard’s graduates disproportionately flock to investment banks.
It is vital that students question the ubiquitous pre-finance culture that pervades Harvard and dedicate themselves to truly serving their fellow human beings—not creating more wrongs.
Sandra Y. L. Korn ‘14, a Crimson editorial writer, lives in Mathews Hall.