Young people are funneled into fields that don’t reward risk-taking
bloomberg.com
bloomberg.com
If you think more young people should be spending their time doing research and development and less people should be doing management consulting then the answer is simple. Subsidize it.
The alternative is what I do now, building software that probably contributes to the degradation of society in exchange for generous money. I’m ok with that because I am insulated from most of the effects of my work.
> building software that probably contributes to the degradation of society in exchange for generous money
Same.
https://www.amazon.com/Euclids-Elements-Euclid/dp/1888009195
The government / employers simply don't want to put their money where their mouth is.
How acute is this, in general? I'm not from the US and I have no clue about it. From the outside it seems that everything is going well, creativity is abundant and freedom is running wild in the streets. Your comment kinda negates that and I'm a little surprised by it.
There is reasonable concern about some kinds of bureaucratic requirements and government-mandated busywork in certain fields, but for the most part, what holds individuals back in our country is the gross inequality in the system, manifesting in a variety of forms.
One of those forms, of course, is regulatory capture, allowing certain industries to maintain high barriers to entry because the people running the governmental agencies tasked with ensuring those industries are being run safely and for the public benefit are mostly former and/or soon-to-be industry executives and lobbyists.
This makes it much easier for the anti-government "look how horrible things are with regulation" rhetoric, when the actual cause is still overwhelming corporate power.
Indeed, but it also highlights something that may be less obvious, and that is the proper allocation of reward. The deeper question is: why do we systematically undervalue the very fields that contribute the most to society? Careers in education, healthcare, research, and less stable creative ventures should not need subsidies if we acknowledged their inerrant long term value.
See also game programming.
The answer for most of them is simple: oversupply. Being a teacher is generally something a lot of people want to be, and especially for K-12, almost by definition, the intellectual bar is "finished K-12 reasonably well". (If you read curricula for teaching schools, you'll find that while teachers are generally educated maybe a year or two's worth past the high school level in their chosen teaching subjects, that's generally it for the requirements.) Accomplishing the "bullet point" objectives of being a teacher is not a difficult enough bar to filter out enough people.
(I phrase it that way to forstall hiking the goalpost to the sort of astonishing, life changing teacher whose slightest jiggling of their eyebrows inspire students to new heights of knowledge and curiousity. Those may not be all that common, but that's not the bar in question. Most teachers are pretty close to average.)
When you imagine yourself in the role of teacher (the inspiring kind, I'm sure) or researcher (who is, of course, hot on the trail of the cure of cancer, not researching some workaday research question), it's easy to imagine how you should be paid more. But if you put yourself in the position of paying for these things with your money, and you offer $100,000/yr to be an elementary school teacher in some medium-sized town in the country because wouldn't that just be awesome, and you get your first 10,000 applications today with another 10,000 coming tomorrow, it's not long before you start thinking "Hmmm.... maybe I don't have to part with quite $100,000/yr to fill this position.... maybe $90,000 isn't such a bad idea, and I can use that $10,000 to do some other $WORTHY_THING..." (Or... maybe I could use this money to hire two teachers....)
It's easy to imagine how someone else should pay teachers three or four times more... it would be a lot more challenging if you were the one doing it.
I suspect marginal increases in teacher quality just don't matter that much when you make them teach classes of 30+ students. it seems to me that allocating funds to hire more teachers at the same pay would be more effective than just paying more for the same job.
Maybe a better way of phrasing it wouldn't be to say that the job of teacher is "easy" per se, but that it's something built into our genes. Teaching is a thing humans do, like talking or throwing, as a subset of our general human bonding skills. Being a decent teacher is obviously a bit more exclusive than "able to talk", but it's just not that exclusive in our species, it's a widely shared skill that has been selected on for many tens or hundreds of thousands of years. It's hard to imagine a stable economic situation where it isn't something we have an oversupply of.
In this way it’s comparable to cooking, which is also something we just ‘do’.
The bar can be set as high as we want.
Anecdotally, a lot of my friends went into teaching / nursing because it was seen as stable, and pretty easy to get into.
He is. Tyler Cowen lead the creation of Emergent Ventures. (https://www.mercatus.org/emergentventures)
From the opening of their application which he shared on his blog:
> "We want to jumpstart high-reward ideas—moonshots in many cases—that advance prosperity, opportunity, liberty, and well-being. We welcome the unusual and the unorthodox.
> Our goal is positive social change, but we do not mind if you make a profit from your project. (Indeed, a quick path to revenue self-sufficiency is a feature not a bug!)
> Projects will either be fellowships or grants: fellowships involve time in residence at the Mercatus Center in Northern Virginia; grants are one-time or slightly staggered payments to support a project.
> We encourage you to think big, but we also will consider very small grants or short fellowships if they might change the trajectory of your life. We encourage applications from all ages and all parts of the world."
Incredibly, they're taking no stake in successful ventures. They're just subsidizing high-reward ideas to encourage them.
If you read The Complacent Class and Stubborn Attachments—both highly recommended, you'll get a better idea of where Tyler is coming from and why this issue of decreasing dynamism is an issue he's so concerned about.
I also get the feeling there's an issue with skills recognition. Everyone has a lot of paper saying they know machine learning or finance, but very few people are confident they can identify someone who actually knows these skills. So we fall back on credentialism, and every job seeker knows that, and acts accordingly.
You can't say "tech" is where innovation happens, that's a tautology. Technos actually means new stuff. If I invent a new horse carriage, I've created new horse carriage tech. What might be more of a question is why software, or why batteries, or why mobile phones.
That said, a high-paying job can pay off your average student loan (~$31000) in 5-7 years without too much grief. What comes next tends to be that people find they like the lifestyle enabled by a low risk high income.
Yeah take risks, sound advice for the young people.
I think the title of this of this piece is poor and doesn't reflect a great question buried in there.
The piece reflects on how many high achieving young people choose finance, management consulting, and law and laments how those positions are low risk, high reward. The author implies it would be better for America in the face of slowing scientific progress to see young, smart individuals employ their skills in fields like chemistry or materials science.
A great question to be had is what can be done to encourage people to undertake high risk, high reward fields? I agree with the authors point that in a prisoners dilemma style way, at any given point in a young smart persons life, they may be inclined to undertake those professions (consulting, law, finance).
An important question to be asked covered by a poor headline
As America makes it harder to immigrate, and other countries are catching up in opportunity and quality of life, there should be fewer foreigners spend many years and sacrifices in pursuit of the green card.
I don't see what the fact that master's and PhD programs are filled with foreign students has to do with whether or not it makes sense to get a higher degree. Most of the brilliant people in North America are immigrants.
It's more competitive, low pay during school and lower odds of a well paying job at the end.
They seem like high risk (of not getting one of the few jobs available) for low reward (the jobs that do exist pay extremely poorly compared to writing webapps).
I think the incentives are very misaligned against the hard sciences. This is coming from someone who loved physics in high school and materials science in college, but switched to computer science for economic reasons (I do really enjoy programming, but my first love was for other sciences).
Is that not the case?
I guess it can be argued that those fields fall under "exploration and risk taking" though...
Hard science majors (especially biology) don't have it so well, unless they go to med school or pharmacy school.
Math is a pretty mixed bag, some math majors get well paying jobs as actuaries, statisticians, modeling, etc, but many (and all I know personally) end up in low paying jobs that you don't need a degree for.
1: You have little to lose, already so low at the bottom that a failure won't make you much worse off. Why not try something that could catapult you from there? Example: students running a startup from a dorm room.
2: You have so much that constantly losing a bit is inconsequential for you, even if the high reward only shows once in 100 tries. Example: a VC financing 100 startups.
But when you are in the middle, you can't afford to lose much. It will immediately make you so much worse off and close so many opportunities that you only want to play safe.
Stay hungry, stay foolish, they said. It's hard to follow such advice when you just stopped to be "hungry" and started to feel competent, and you don't want back.
I agree with your analysis, and would also add that the increasing concentration of good jobs in expensive cities exacerbates this. When the best jobs are all in places where owning a home costs $500k+, it shouldn't be a surprise that people place a higher weight on their salary.
My own experience exemplifies this. I'm from the Phoenix area, where housing is relatively cheap. But when I graduated college, the only engineering jobs in the area were at Godaddy, boring old-school internal IT shops, or a couple of small consultancies. None of these seemed like they would make for a very rewarding career, so I applied in SF and NYC and took the first job that took me out of Phoenix. I got a more rewarding career out of it, but also got into a very challenging housing market.
High-risk, high-reward may be more fulfilling as a career, but the cost of failure is forgoing all those personal things.
For those where work is life and life is work, the high-risk, high-reward career makes sense. For the rest of us, there's consulting or building CRUD.
I don't know any management consultants, doctors, lawyers, or investment bankers that do any of those things. At best they have nice things, but they do not have free time. They are low-risk careers, not low effort or low time-commitment careers.
Young people will take high-risk opportunities only when they offer higher reward than otherwise-available low-risk ones.
The key questions, then, are:
1) These "unloved" fields: do they actually create more value than the lower-risk fields the author laments young people choosing? If not, then the author's answer is simple: people are making the right choices. If so, however:
2) What forces are preventing workers in these high-value, high-risk fields from capturing as large a share of their productivity as workers in low-risk, high-reward fields can?
you need slack capacity to take risk. millenials haven't ever had it, and they've repeatedly recieved strong economic signals to carefully hoard any slack they can find rather than risk it to get more.
It's subtle but I think this is an important sentence in the article. The US has gone further and further down a path that signals to every young person that they are on their own. The safety nets are being eroded, and politicians are signaling that they want to erode them more. The young adults are paying into systems like Social Security that they expect to never benefit from, while the older generations keep voting to ensure that they get the benefit and the younger generations can deal with the fallout.
Why would any intelligent young person whose weighing the pros and cons, take a risk that might be a net benefit for the country, when the country wont help them in return?
... because they're the most experienced? When in human history has this not been the case? And what in the world makes you think this isn't the way it should be?
Also see Pareto on foxes and lions.
Found this link:
https://www.eugenewei.com/blog/2017/3/6/paretos-two-types-of...
>Who wants to work on mastering a complex task for 10 or 15 years, with no real guarantee of commercial success?
This means those occupying the "top" jobs have a much, much, much longer tenure than their predecessors.
This is coupled with massive consolidation in industry and politics meaning there is less and less of those jobs in the first place.
Hence much of the dissatisfaction of the younger generation.
"Much, much longer tenure" is a bit of a stretch. This is more about scarsity of certain jobs. We require a lot of 'on the ground' workers, e.g. software developers, and orders of magnitude fewer CEOs, CIOs, directors, etc.
It's similar to someone wanting to get into a management position. Once the position is filled, and the person is doing at the very least "slightly above awful" job, you won't hire a manager for that team for quite some time.
I'll be working well past retirement age, not necessarily because I won't want to retire, but because there's no way I'll be able to afford it.
Nobody ages out and opens up their spot anymore. It's a problem when that means the pipeline gets stalled, and causes a lot of problems when the old guard does finally retire or die off, and there are not enough suitable candidates waiting in the wings to pick up, because they have gotten tired of waiting around.
But come on, is your claim really supported by Tom Brady being 42 and not 38? Or by the falling US life expectancy? Or by social security retirement age changing from 65 to 67?
It seems like tenure would only increase if the "top" positions were staffed with individual of an age consistent with the past.
At face value, I think it is equally plausible that tenure has stayed to same but entry age to the top positions has increased.
At this point Prince Charles is so old that he may well just abdicate his kingship to his son.
Maybe not. But for most purposes he has been eclipsed by his son.
Let me take you on a walk down Soma.
Age and income are inversely correlated.
According to his Wikipedia page, Tyler Cowen is a committed free-market ideologue who still believes in the "meritocracy myth" (also formerly known as the "American Dream").
Got news for Cowen, this country's economy has long moved on since the days back when he earned that Harvard PhD!
As a next semester reading assignment for Cowen, I'd like to suggest Thomas Piketty's book Capital in the Twenty-First Century.
Mr. Cowan's food blog of DC/NoVA restaurants is pretty good though.
This is one of the reasons I read HN daily, most of the time going straight for the comments and not to the article itself.
So thank you all who contribute and pour your hearts out around here!
Young people are not rich. No shit they aren't taking risks because they either have no capital / opportunity to do so... or they are busy turning the gears for minimal payment without any promise real career advancement.
If you're not rich, that also means you don't have much to lose. Whereas, if you've got a personal empire to maintain, with a husband/wife, kids, a home, 2 cards, etc., you're less inclined to do anything to upset the balance of that system.
But if you have no kids and you aren't rich, the worst thing that can usually happen is having to sleep on a friend's couch for a while and eat lots of ramen noodles, which may not be far off from the lifestyle you're used to.
The last generation to know freedom from planned activities during their school years.
Then again, I grew up in rural Iowa, and I've heard cultural trends take a decade or so to make their way from the coast all the way inland.
But I think some of it is also just a matter of what you are focusing on. I'd guess there are plenty of kids growing up similarly unsupervised as in the past, they are just more out of sight than before.
Ask yourself how you'd allocate money as the sum available becomes less and less. The answers are obvious.
Pretty simple: the US is all about rent seeking these days. It's in the sciences as well; most people gravitate to fashionable woo which isn't particularly reproducible, and may fall entirely outside of the class of falsifiable science. Look at all the noodle theorists, cosmologists and other such wankers in physics departments. Look at the travesty that is the F35, or the laughable efforts of the center of the tech world taking billions of dollars to build a mile of freaking subway.
Just getting into some Ivy League hole like Harvard; there's a huge industry of ding dongs who will set up non-profits, fake admission essays, and either tutor or fake test results; allowing sons and daughters of the ambitious to appear competent and useful citizens rather than parasites. This sort of travesty doesn't select for "creative," it just breeds an "elite" of rent-seeking sociopathic scammers.
The last 20 years of Silicon Valley/Bay Area development are effectively rent seeking. Google and company blew up newspaper advertising while cannibalizing newspaper content. Uber, AirBnB, etc, all the same. Really the big winners in the Bay Area were the goddamned landlords; turning Boomer retirement dollars invested in "new technologies" into huge returns on real estate.
There are entire books of historical philosophy and economics on this sort of thing: Brooks Adams recognized rent seeking as deadly to civilizations. Georgists were a similar intellectual current. I don't see it as even being recognized as a problem. Cowen at least notes that progress has slowed; an idea which meets with screeches of terrified denial from the "muh ipotato" crowd. At its core, though, is a problem with rent seeking.
What do you think rent seeking is? How is quoted sentence #2 an example?
Most monopolies fit the definition of rent seeking blood suckers, but Google really does. The Bell System provided a useful telephone network at least, as well as inventing the future with their research lab.
That's exactly what I think of people who destroy the value of useful words by misusing them. However, it's not rent seeking.
Consider all the commercials about how safety is job #1, and so forth.
Or the fact that "drive safely" and "have a safe trip" seem to be pretty much the default conversation closers.
I'd much rather that people wish me a rich, fulfilling experience than curse me with boring safety.
I hate that line. To me it implies that the trip is dangerous. How about "Enjoy your trip"?
My impression is that the United States is remarkably good in being able to manage risky technologies.
One example would be the development of the liquid metal fast breeder reactor.
We built the first one, it suffered a meltdown, it was small, really no big deal. (e.g. if you have liquid sodium around, radioactive iodine is going to react with it and the NaI dissolves in the Na or forms non-volatile molten salt droplets.)
We build a demonstration plant at Detroit, it had a partial meltdown, they fixed it, got it running again, decided it wasn't worth the trouble a few years.
After that we ran EBR II which had very little trouble, and we ran the FFTF which only got in the news because somehow Karen Silkwood died mysteriously making fuel for it. No nukes never talk about those two because there was no drama.
France built SuperPhenix and it was a screw-up from beginning to end. They couldn't even build a good roof for the turbine building.
Japan was the world leader in nuclear accidents in the 1990-2010 time frame with the criticality accident at Tokaimura and multiple problems at the Monju reactor. There was the time that a sodium fire burned for a long time before they noticed it, when they finally got it running again after a few years they dropped the refueling machine on top of the reactor, took a year to pick it up, and then lost their permit to move fuel around it.