Somehow after years of complaining about financial services hiring all our promising mathematicians and physicist, this comment tickles me and puts me in my place at the same time. Sadly, I fear this was not intended as a joke
It would be nice if we could economically rearrange society to amply reward careers in research, teaching, government, public-interest law, community organizing and development, providing social services, and so on (not to mention just regular jobs in factories, agriculture, retail, food preparation, etc.), so that doing work that benefited society was more attractive vis-à-vis zero-sum financial hocus pocus, predatory legal engineering, aggressive marketing/propaganda, internet surveillance, quasi-legal fraud, etc.
[My recommendation would be to dramatically increase taxes on land, inheritances, long-term capital gains, and carbon emissions, and redistribute the proceeds evenly to all citizens. And also to return anti-trust law to its roots and aggressively break apart monopolies and monopsonies, separate different types of financial activities to reduce conflicts of interest, and to dramatically increase funding for government regulatory agencies which are currently infinitely outclassed by industry.]
But that doesn’t seem to be in the cards, in our current society. I’m not sure what can be done to help e.g. the kind of business school grads who have already decided that personal success is more important than general social welfare.
Maslow's Hammer rears its head https://en.m.wikipedia.org/wiki/Law_of_the_instrument
The idea that "very little" of it can be replaced with software seems like it might need more support than a bare assertion.
"Market share[edit] US[edit] As of 2004 the financial services industry (finance industry) represented 20% of the market capitalization of the S&P 500 in the United States.[citation needed]" - https://en.wikipedia.org/wiki/Financial_services
As Warren Buffet once said: "It has always been a fantasy of mine that a boatload of 25 brokers would be shipwrecked and struggle to an island from which there could be no rescue. Faced with developing an economy that would maximize their consumption and pleasure, would they, I wonder, assign 20 of their number to produce food, clothing, shelter, etc., while setting five to trading endlessly on the future output of the 20?" -Warren Buffet
How would you decide what benefited society and what didn't? Centrally planned economies have been tried and failed - the economy is too complex for any single organization to understand, just as the Internet would grind to a halt if a central facility had to decide which way all the packets were routed. The Soviet Union in its early years had some incredibly innovative work in psychology and biology - that no-one followed up because the central planners didn't think it was valuable. In its later years it's estimated that some factories had negative productivity - they were taking valuable raw materials and turning them into products that had made sense in the '30s but no-one now wanted.
We can go into the specifics, but I feel like a lot of the careers in your first list are things that people assume must be valuable because they're public service and/or low-paid. Whereas often these things are low-paid because, when push comes to shove, people don't really put a lot of value on them. Everyone is happy to talk about spending more of other people's money on teachers, community organizers or the like, but when you ask how much they personally would be willing to spend on them, suddenly the answer changes.
(FWIW a lot of finance creates a lot of value through efficient allocation of resources - I won't deny that there are zero-sum aspects (particularly tax avoidance schemes) but the main way these businesses make money is by providing valuable services. Not that I expect you to agree with me. More generally look at e.g. the contributions of private for-profit schools and businesses to the UN development goals for Africa, and compare that to how much well-meaning NGOs and the like have achieved)
> [My recommendation would be to dramatically increase taxes on land, inheritances, long-term capital gains, and carbon emissions, and redistribute the proceeds evenly to all citizens. And also to return anti-trust law to its roots and aggressively break apart monopolies and monopsonies, separate different types of financial activities to reduce conflicts of interest, and to dramatically increase funding for government regulatory agencies which are currently infinitely outclassed by industry.]
First, good on you for giving concrete proposals.
Land tax: completely agreed. Direct money transfers to citizens rather than organized public services: also agreed, but what's your approach to people who e.g. spend all their money at the start of the month and then can't buy food? Or to things like healthcare where it's enormous occasional costs rather than small regular costs? Inheritances: not convinced; it punishes people whose parents die young, and seems impossible to police fairly. Capital gains: I would argue for just taxing it like income, we don't want to discourage investment but nor do we want to disproportionately encourage it. Carbon emissions: disagree with distributing the proceeds, we should be taxing emissions at what it costs to clean them up, and spending the money on doing that. Anti-trust laws: agreed. Financial activities: if you split them up you're going to force more bankruptcies (or more bailouts) - a bank's whole purpose is to be large and diversified so that people can keep their deposits there with confidence. I see that as a much bigger issue than conflicts of interest. Regulatory agencies: maybe. Better to ensure that the regulations are such that it's easy to detect violations, IMO.
Because if it isn't the same guy, then what are you talking about?
Even so, assuming Harvard MBAs are a valuable national resource cracks me up. I've dealt with a few