Is Wall Street Beneath Business Students' Standards?
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If there actually was a credible alternative, that would be one thing. But what is it? Start-ups? Yeah right. Non-profits. Please. Government? Medicine? Law? Commerce? Entertainment? Education? Research? Who considers any of these ethical? Some fields may have generally nicer people within them, but the people on top (executives, university or hospital administrators, corporate attorneys, investors, whatever) are generally paid way beyond the value they add through capital or labor, and implement many policies or pursue regulatory capture or whatever else to ensure this type of arrangement persists to their benefit.
The only thing that makes sense to me is that it's a problem of mate selection. If by agreeing to work in a certain field you are tainted with a social stigma that prevents you from attracting the type of mate you want, that might motivate you to use some kind of ethics argument as a rationalization for the true behind-the-scenes status argument.
But I have a hard time believing this matters to finance. Money still tends to be a huge factor in mate selection, ethics be damned. Maybe it matters if you're very low-level in a huge bureaucratic bank, so you get all of the social stigma downside but not a lot of the financial upside. But apart from that... I don't see it. No other choice available to you is significantly "more ethical" than just personally being honest and working in a financial corporation whose higher-level scamminess you can't influence or control.
I mean, it's certainly depressing that it's like this... but this is just how it is.
You're not making an argument. You're just dismissing perfectly valid (and widely-held) viewpoints as though they're foregone conclusions.
I have friends in education and research that harm no one, make very little money, and make the world a better place. It's easy to argue that their jobs are ethical. They create more value than they accept. Many scientists are in this category.
Most people in financial jobs also harm no one, and though they accept higher wages, they also create far more value, and there could be endless arguments over whether or not there is trickle-down value, whether managing pension plans adds value, etc.
But what concerns me more is that most employees in any organization exist solely for the short term gain of their bosses (somewhere up the food chain). A fourth-grade teacher exists more to make a principal look good for advancement to superintendent than for endowing society with the value of educated children. The fourth grade teacher has to put up with arbitrary state standards, political fighting between staff, inappropriate parental involvement, turning the other way on some issues they feel strongly they should not turn the other way on. It's a political shitstorm like anything else, where a few people on top of something (no matter how small scale that something may seem by comparison to a huge bank) are applying pressure to make the teacher's job more about subservience and fealty than about efficacious results.
I think that problems get worse and worse as you go up the academic and research food chain. You might be able to make an argument that being a pre-school teacher in a small rural town, or the pastor of a small community's church (modulo one's beliefs about whether promoting religious faith can ever be morally or ethically good), are actually "ethical" jobs, but I'm not totally sold that you can, and I don't believe much beyond this can even enter the discussion.
It's not so much about whether you overtly participate in something wrong. It's about whether the aggregation of all the tiny little microscopic job duties you do to comply with bureaucratic hierarchy ends up summing up to unfair gains mediated towards someone who doesn't economically deserve them, or that the gains end up being wasted.
This is a complicated issue. Are you harming others by investing other people's money into oil companies or weapons manufacturers? Are you harming others if they expect you to make a certain return, and you fail to meet that? (More on that below)
> and though they accept higher wages, they also create far more value
This is actually very, very debatable. While the finance industry is helpful and lubricates all other parts of the economy, it's also rife with abuse. I worked at a financial software company for a while, and you would be blown away by the corruption, greed, and irresponsibility of that industry (among ratings agencies, bulge-bracket banks, and hedge funds). If the general public in the US knew about it, there would probably be mass panic.
Furthermore, a lot of finance involves wealth management, and there's no evidence that wealth managers actually generate any value unless they're actively, illegally gaming prices. I don't have time to get sources right now, but it's pretty easy to Google. Jon Stewart's interview with Jim Cramer is very enlightening in that regard, since he admits to illegally gaming prices because all of the top-tier wealth managers have to do it.
I agree. I just think it's just as debateable for pretty much any other mode of employment.
I too worked in quant finance for several years. Believe me I understand. I quit finance because of the wanton greed and dysfunctional politics. But what I found when moving on to bright-eyed start-ups and education technology companies was that there was just as much wanton greed and dysfunction there (in some cases, even more).
I'm familiar with the literature on mutual funds and active managers. I worked for a team that focused exclusively on the low volatility anomaly in equity pricing, and our team's pitchbook was all about how most active managers lose (and yet, we were an active manager, heh).
The problem is that asset managers don't add value by growing or protecting the value of the assets they manage. That is not what their clients want from them nor what they pay them for, and failure to do those things is also not why they get fired.
What really happens is that someone who sits on the board of directors for a pension fund or some other large retirement fund, like say the association for retired firefighters in some state, is tasked with managing some huge-to-them pile of money from which everyone's retirement money is paid. But that task is daunting to a non-specialist board member, and they need someone to act like a management consultant. If the management consultant is wrong, the board member has plausible deniability (e.g. "How could we have known ... the fancy asset manager seemed great ... we all voted to use them.")
Using asset management companies is just a career cover-you-ass tactic for people embedded within the pension and retirement boards themselves. It's truly, truly not about actually growing the endowment or the plan value.
But who is to say this is bad? The "value" that someone is seeking (the "value" of having a cover-your-ass asset manager you can fire and save face in front of the other board members if things go bad, or milk for kudos if the market turns up) is provided by the asset manager.
You and me both probably don't think that sort of "value" matters, but it does matter to somebody, and they're OK paying a lot for it, and most everyday people don't seem to care enough to do something like boycott their company's 401(k) in order to invest directly in low fee index funds themselves. So by what standard do we judge this somewhat scammy thing as certainly worse than all the other kinds of scammy things in all sorts of industries that go on all the time?
I'm not trying to be cheeky when I ask. I'm really asking. What's the "ethics metric" we're supposed to use. When I just think about this stuff from a sort of common sense "be good to people, try to add value, don't be wasteful" perspective, finance looks a little worse than other fields, but not that much worse. Maybe defense and government spying and torture looks significantly worse than all the other things, but beyond that the rest of it all just looks like one big pile of more or less equivalent scamminess.
I still remember some of my grade school teachers. They had a profound, and I would argue, very positive impact on me. Was it unethical for them to become teachers?
So the choice to you is: since I can personally behave ethically in my job each day, in which role will the aggregation of my labor output up through the organizational hierarchy end up least enabling unethical higher-ups to carry out larger-scale unethical agendas?
My feeling, which is certainly debatable, is that this doesn't work out significantly differently whether you work for an NGO, Volkswagen, Nickelodian, or Goldman Sachs. Unless you try hard to actually be one of the unethical higher-ups carrying out bad larger-scale agendas, then in virtually any mode of employment, you'll be acting equally as ethically, in terms of your own personal daily actions.
But I do think that part of an individual's duty to act ethically involves accounting for whatever others might do with the output of your labor. If I write software and don't do anything unethical all day, but I know that my boss will use it to cheat on emissions testing, then every time I don't quit my job or blow a whistle, I am being unethical, directly.
I doubt this applies to many people in their day to day jobs though, since they are not aware of how their labor products are being aggregated for less ethical purposes. So whatever job those folks are doing, whether it's performing free dental work to orphans in a third-world slum, or writing some code for a big bank, the degree to which those individuals are "being ethical" is about the same, certainly not different enough to make some big hand wavy guffaw about how bad banking or finance is compared to the rest of industry.
Maybe there can be outliers, like someone who not only donates labor to the third world, but also thinks about it in an effective altruism way to make sure that the by-product of that donated labor doesn't end up contributing to something bad in some counter-intuitive microeconomic way that is hard to think about when we're all consumed with the warm fuzzies of thinking about third-world labor donation. Or a pre-school teacher that is not tied into really any management hierarchy that could possibly be extracting anything from the teacher's labor output for some other, unethical purpose.
But I think we'd all agree that these modes of employment are exceptionally rare. Clearly even if every single labor market participant wanted such a job, only a small fraction could physically get them. We'd still need people doing all kinds of ethical-for-them-in-the-day-to-day-but-unethical-in-terms-of-its-aggregated-affect-on-society jobs.
I don't know who you are talking to but you've just listed a huge number of very ethical professions and said "who considers any of these ethical?": the answer is literally everyone. Everyone considers at least one of those fields ethical.
Ethical doesn't mean you sacrifice your life to help starving children in Africa. Ethical means you don't do things that are evil. The surprising thing is that bright business students are now deciding finance doesn't satisfy that criteria.
I mean if you want to pretend it's all about some evolutionary psychology mate selection criteria that's fine but the cause and effect work the other way. Nobody wants to mate with an unethical person; if they're willing to commit unethical acts and screw over others for money how could you ever trust them with a family or not to cheat?
Yes, nothing you do is going to absolutely harm no one else; No job is going to be absolutely "good" from a ethical perspective. Life is messy, and perhaps more to the point, ethics are messy.
However... this doesn't mean that some things aren't better than other things.
Most people would agree that, say, the way you are usually expected to act as a surgeon, when working for, say, an organization like doctors without borders is more ethical than the way you are expected to act when working in sales or finance, say, for a company like Enron, even if you are expected or required (to keep the job) to do some things we might agree are unethical as a surgeon.
>If there actually was a credible alternative, that would be one thing. But what is it? Start-ups? Yeah right. Non-profits. Please. Government? Medicine? Law? Commerce? Entertainment? Education? Research? Who considers any of these ethical?
Maybe they are not ethical, but what, exactly, is unethical about them? Unless you work for a company that exists to game the system and/or exploit people/resources you are adding value to the world and making it a more efficient and better place for other humans.
I don't disagree that organizations, over time, have improved life and added value. Financial organizations have done this as much as most other genres of organization in the past few hundred years. But I'm not sure that the moral accounting works out in the black for any marginal employee in any modern mode of employment.
Hasn't this always been the case? You go in to it for the money, for the thrill, because that's what you're in to. Or you go in to it for any number of reasons. Maybe you consider yourself highly ethical and go in to finance because you think you can make a difference.
Christine Lagarde ... said ... one of her sons had told her he might not talk to her if she were to work for a large investment bank.
Right. And one of her daughters told her she wouldn't speak to her if she bought that dress. So what?
WTF is she saying?
All the conspiracy theory stuff aside, there are several references to the G7 in this video. The G7 was officially still the G8 at the time of this speech. http://en.wikipedia.org/wiki/G8- "(Russia)-was excluded from the forum by the other members on March 24, 2014" and the Crimea incident didn't begin until February 23, 2014 http://en.wikipedia.org/wiki/2014_Crimea_crisis#Timeline"