The amount of human capital that has gone into financial engineering is depressing. Thousands of brilliant minds who are designing complex financial products instead of useful technology.
I once asked an Oxford-educated post-doc, who had worked as a quant, "are you going to go back to finance?" He replied that he simply doesn't know. He wants to do mathematical research, but both academia and industry stifle such ambitions. For the former, unless you're in the literal handful at IAS, you'll have to waste the majority of your time teaching, advising, and writing grant proposals. For the latter, one lacks not only the time, but also resources for research (seminars, journal access, colleagues, etc.).
The critical difference is that working in finance (or any ad factory) provides less stress and much more financial stability. Of the professors I've known, many work obscene hours every day of the week. Society will benefit, but at what personal cost?
It is a deep structural problem.
Because I fell into an edge case, had I moved from my post-doc to a professorship, I would have faced a 20% pay cut. And that's not because my post-doc was well paid; after I factored in the side-costs of the position I was not that far above minimum wage. And this was at an elite European research group where the professor was doing his best to take care of me.
So I moved to industry.
I also feel the same way about most consumer technology being developed today. It's mostly advertising and intellectual property exploitation. Nothing particularly useful, really. Yet the people involved are making ridiculous amounts of money. Actually useful technology brings us closer to a science fiction utopia, not some corporate world cyberpunk dystopia.
doctors provide very valuable services to dozens - hundreds of people (treating disease). youtube/sports celebrities provide a small amount of value to 100k - millions of people (amusement or entertainment).
so the value they get back from society is because of the number of people touched, not the depth of value for each person. If we figure out how to scale disease treatment like we scaled entertainment, then (fewer) doctors would be wayyy richer than entertainment stars.
I used doctors as an example but engineers are also comically undervalued in my country despite their extremely valuable and necessary contributions to society. It's a joke.
> doctors provide very valuable services to dozens - hundreds of people
I think this scale is a bit off. Doctors see thousands of patients per year.
who's to say it wasn't useful? after all, somebody paid for this complex financial products, so objectively speaking, they must have found it useful enough to have paid for it.
Wealthy people pay for this engineering because it helps maintain and increase their wealth. That’s about it. There is zero societal benefit from something like a CDO.
> what “objectively useful” means.
what contradictory beliefs you hold.
You are making a subjective value judgement (your own) on what makes something beneficial to society, and yet claim that the actual objective measure - that of using money to measure value - is not what "objectively useful" means.
Value to society isn't an objective measure. Otherwise, social workers and charity would be rolling in money.
This is obvious if you consider another example. Imagine a marketplace for hitmen. Clearly some people would pay for such a thing. Does that make it useful? Maybe? Does that mean we should think it’s a good thing? Probably not.
[When a rocket scientist is asked why he joined a Wall Street firm.]