Robert Schiller, this year’s Nobel laureate in economics, puts forward the idea in his article “The Best, Brightest, and Least Productive” that sending top graduates to jobs in finance might lead them to careers “whose activities may be economically and socially useless, if not harmful.” Boston College, like many other top academic institutions, sends a healthy proportion of its graduates into investment banking and other similar financial service roles, begging the question of why BC students are desperate for jobs and careers that Schiller and many others find potentially useless and harmful.
The types of finance jobs Schiller describes are what BC students commonly dub “investment banking.” They describe a subset of highly competitive and desirable jobs in finance. The jobs themselves can differ widely depending upon the specific division and role within that division, but overall investment bankers work to provide a wide array of financial services to the biggest companies and investors in the world. The biggest employers in this space are the well-known “bulge-bracket” firms, including, among others, JP Morgan, Barclays, Goldman Sachs, and UBS. In the late fall and early spring of every academic year, several of these investment banks send representatives to attract applications and interview for their summer internship positions.
After several months of non-stop networking and interview prepping, even the most successful students, including one who is going to work for Goldman Sachs this summer, would call the internship process an intense, competitive, and emotionally draining activity. And it is those successful students who sign on for a 10-week summer internship where they will be subject to 80-plus hour workweeks, constant scrutiny, and a disturbing lack of control over their daily schedule.
Yet investment banking has a distinct attraction for students, whether they are long-time finance devotees walking the halls of CSOM, the snobbish and “intellectually superior” A&S economics majors, or even the random chemistry major attracted to the world of finance by the glitz and glamor of the latest Wall Street film.
Recently, this question was explored in a book written by financial journalist Kevin Roose entitled Young Money. He contends that students at top colleges are attracted to investment banking because the banks make it easy for the best and brightest to apply, give students a solution to the uncertainty of life after college, and embrace the ultra-competitive ideology students have become accustomed to in university. Most importantly, a job in investment banking is a key step on the “linear path” toward success, and success in this culture that means the opportunity to accumulate vast amounts of money.
BC students who participate in the investment banking recruiting are motivated by similar desires. However, some do tell a slightly different story. For example, one of the juniors I interviewed cited his familial ties to the industry and his genuine interest in the stories of companies as the main motivating factors in pursuing and eventually securing an internship in investment banking. Another spoke of the strong community formed by organizations such as BC Finance Academy and BC Investment Club as not only the main motivating factor for the desire to begin a career in finance but also as a great way to make friends with like-minded individuals.
All of these reasons are valid, extremely well presented, and thoroughly thought out. But one thing is striking-rarely did I hear from all the students I interviewed any concern about the merits of an investment banker’s work toward the greater good of society.
When I challenged BC students that their jobs could be useless and harmful to the greater good, the classic “well, I never concerned myself with that” response was given repeatedly. Even more interesting, many of them weren’t concerned with day-to-day satisfaction, either-they were just concerned with the “exit opportunities” that a job in finance provided.
These students, even before entering the world of finance, have accepted that their role in finance serves one purpose-and it’s not the allocation of capital to spur innovation. It’s to make as much money as humanly possible so they can then escape to the greener pastures of early retirement, or as one student said, “living life on my own terms and without a concern for money.”
I spent the better part of the last two years going through the long and drawn out process of investment banking recruiting, and it worked out quite well for me. However, I think that the way students are approaching their desire to work in investment banking needs to be re-thought. If we want a society that promises a better life for the future, we need to encourage those students planning to work in investment banking to step back and reflect upon two questions-Do I truly gain satisfaction from the work I do, and am I comfortable working in an industry that harms others for the small potential to make vast sums of money?
Kimberly Crowley is off this week.