Why Do Harvard Kids Head to Wall Street?

By James Kwak

That’s the title of a post a couple weeks ago by Ezra Klein, in which he interviewed a friend of his who went to Wall Street after Harvard. Having seen this phenomenon from a couple of different angles, I’d say the interview is right on. This is how Klein summarizes the central theme:

“The impression of the Ivy-to-Wall Street pipeline is that it’s all about the money. You’re saying that it’s actually more that Wall Street has constructed a very intelligent recruiting program that speaks to the anxieties of the students and makes them an offer that there’s almost no reason to refuse.”

When I graduated from college, I had no interest in investment banking or its close cousin, management consulting. But I went to McKinsey for reasons that were only slightly different than those of the typical Ivy League undergrad; after getting a Ph.D. in history, I discovered that I was unlikely to get a good academic job and was pretty much unqualified for anything else, and McKinsey was one of the few places that would hire me into a “good” job with no discernible qualifications (other than academic pedigree). Now that I’m at Yale Law School, where maybe 15% of students (my wild guess) come in wanting to be corporate lawyers but 75% end up at corporate law firms (first job after law school, not counting clerkships), I’m seeing it again.

The typical Harvard undergraduate is someone who: (a) is very good at school; (b) has been very successful by conventional standards for his entire life; (c) has little or no experience of the “real world” outside of school or school-like settings; (d) feels either the ambition or the duty to have a positive impact on the world (not well defined); and (e) is driven more by fear of not being a success than by a concrete desire to do anything in particular. (Yes, I know this is a stereotype; that’s why I said “typical.”) Their (our) decisions are motivated by two main decision rules: (1) close down as few options as possible; and (2) only do things that increase the possibility of future overachievement. Money is far down the list; at this point in their lives, if you asked them, many of these people would probably say that they only need to be middle or upper-middle class, and assume that they will be.

The recruiting processes of Wall Street firms (and consulting firms, and corporate law firms) exploit these (faulty) decision rules perfectly. The primary selling point of Goldman Sachs or McKinsey is that it leaves open the possibility of future greatness. The main pitch is, “Do this for two years, and afterward you can do anything (like be treasury secretary).” The idea is that you will get some kind of generic business training that equips you to do anything (this in a society that assumes the private sector can do no wrong and the public sector can do no right), and that you will get the resume credentials and connections you need to go on and do whatever you want. And to some extent it’s true, because these names look good on your resume, and very few potential future employers will wonder why you decided to go there. (Whether the training is good for much other than being a banker or a consultant is another question.)

The second selling point is that they make it easy. Yes, there is competition for jobs at these firms. But the process is easy. They come to campus and hold receptions with open bars. They tell you when and how to apply. They provide interview coaching. They have nice people who went to your school bond with you over the recruiting period. If you get an offer, they find out what your other options are and have partners call you to explain that those are great options, but Goldman/McKinsey is better, and you can do that other thing later, anyway. For people who don’t know how to get a job in the open economy, and who have ended each phase of their lives by taking the test to do the most prestigious thing possible in the next phase, all of this comes naturally. (Graduate schools, which also have well-defined recruiting processes, are the other big path to take.) The fact that most companies don’t want new college graduates makes it easier to go to one of the few that do.

The third selling point — not the top one, but it’s there — is the money. Or, more accurately, the lifestyle. The glossy brochures never say how much money you can make. But they make it clear that you will be part of the well-dressed, well-fed, jet-setting elite. When people walk into those offices, with fresh flowers and all-glass walls and free food and modern technology everywhere, they get seduced. Last summer one person wrote to my school’s email list about how wonderful his office was, with its view of Central Park. I mentioned this to an old friend who used to work at McKinsey, and he said, “he fell for the office.*

The same factors are also largely true for top law school graduates, although for them the money is understandably more important. Law school costs close to $200,000 for three years, and I believe the average graduate has about $100,000 in debt. So another major inducement is the idea that you will work at a corporate law firm for three or four years, pay off your debt, and then go work for legal aid or the U.S. attorney’s office.

But the other factors are also very important. If you go to a top law school, it is simply easier to get a corporate firm job than any other job. They all come to campus at the beginning of your second year, most people can get a job simply by following the interview process, you work there for one summer, and then you get an offer to come back. Even if you don’t want to work at a firm, it makes rational sense to do it for that summer to get the offer as Plan B.

By contrast, it’s hard to get a public interest job. Most public interest organizations don’t have the money to hire a lot of people, and many don’t want people right out of law school. So the usual route is you have to apply for a competitive fellowship to work at a public interest organization, and then you have to hope they’ll hire you for good after that year. It’s hard. And that’s how Plan B becomes Plan A. And besides, many prominent corporate lawyers have gone on to important positions in Washington, so there is still the possibility of future greatness.

And once you’re in the door, the seduction begins. As Klein’s interviewee says,

“When people leave law school with a lot of debt, they figure they’ll get some good skills and good money at a top-tier firm before going to save the world. But then you have a great apartment, more responsibilities, kids. You start enjoying it. It’s not even all material.

“And I think it’s important to point out, that things happen very quickly. Private equity firms were trying to recruit us in the first year of my two-year training program. There’s this notion of the accidental banker, people who get caught up in that world and get more and more pay and find it harder to justify leaving. But the cultural effect of all of this — and even with regulatory reform, we need to think about that — is that a lot of people decide to sacrifice much more time than they normally would because the money is so good, and then they believe they deserve extremely high pay because they’re giving up so much time. It’s not malicious. But there are a lot of unhappy people who end up in that situation.”

It’s just human nature. Your expenses grow to match your income. As the decades pass and you realize that no, you’re not going to save the world, the money becomes a more and more important part of the justification. And when you have kids, you’re stuck; it’s much easier to deprive yourself of money (and what it buys) than to deprive your children of money.

More importantly, you internalize the rationalizations for the work you are doing. It’s easier to think that underwriting new debt offerings really is saving the world than to think that you are underwriting new debt offerings, because of the money, instead of saving the world. And this goes for many walks of life. It’s easier for college professors to think that, by training the next generation of young minds (or, even more improbably, writing papers on esoteric subjects), they are changing the world than to think that they are teaching and researching instead of changing the world.

Sure, there are self-parodying, economically delusional, psychotherapy-needing, despicable people on Wall Street, like this one. But there are also a lot of people who went there because it was easy and stayed because they decided they couldn’t afford not to and talked themselves into it.

A college student asked me at a book talk what I thought about undergraduates who go work on Wall Street. And individually, I have nothing against them, although I do think they should do their best to keep their expenses down so they will be able to switch careers later. But as a system, it’s a bad thing that a small handful of highly profitable firms are able to invest those profits into skimming off some of the top students at American universities — universities that, even if nominally private, are partially funded by taxpayer money in the form of research grants and federal subsidies for student loans –and absorbing them into the banking-consulting-lawyering Borg.

* By the way, I think that even within the elite there is an inverse correlation between pay and quality of office; the banks make the most money and have the shabbiest offices, although that has been changing recently.

Update: I want to emphasize, if it isn’t clear from the above, that I don’t claim to be any better than people who do go to Wall Street. I worked at McKinsey, which is more or less the moral equivalent thereof (at least from the perspective of a new entrant to the job market), and for basically the same reasons. And I only left McKinsey because I went to an Internet boom-era software company, and I did that because it seemed even more prestigious and exciting (and potentially more lucrative, although that didn’t work out).

137 thoughts on “Why Do Harvard Kids Head to Wall Street?

  1. Dear Mr. Kwak,

    Thank you for this wonderful post. You’ve hit the nail on the head. So how can we get young people excited about doing things of more social value instead of inventing financial weapons of mass destruction? How do we staunch the Wall St. brain drain? And how can young people like me find the balance between doing well and doing good?

  2. Heh, the Borg. Vicious. I’m not knowledgeable enough to really say generally, but John Thain kind of refutes your argument a little on offices. And it’s hard for me to imagine investment bankers haven’t had very good offices since the days Milken (1988??) started setting the world on fire at Drexel with his Hebrew bros, but every once in awhile I read stories about some fastgun who has spartan surroundings.

    I think in the end human beings are almost an impossible lot to figure out. I remember reading about Boesky doing spy work or traveling in Iran and thinking in my head how freaking weird that was. When I was like in 8th grade some counselor was already haranguing us about how we needed to take a foreign language or we would be screwed getting into a nice college. But if you look at some very successful people, the way the dots connect is often times odd.

    I think if I was a parent I would introduce my kids to as many different ice cream flavors as possible, and then tell them to follow their natural interests. Maybe that’s naive though.

  3. It sounds different from The Firm only in degree. Now that book/movie looks more like satire, not a crime drama.

    As for these rackets skimming off much of the best human potential, I’ve long compared this black hole to something like the Khmer Rouge. What’s the difference, really? The “talent” is just as lost to humanity.

  4. A college student myself, the issue of finding jobs after schooling is…daunting. Everyone wants someone with experience, so I’ve put off going to grad school for statistics to get work , and I’m focusing on internships instead of extracurriculars. I’m just terrified all my hard work will be for naught if I cant find a job before the grace period on my loans ends.

    Plus, I skrewed up afew times. I know a B.S is standard now, but I wonder if Im wasting my time and parents $$.

    Why WOULD anyone go to law school? I thought it was an open secret there are too many lawyers. Med school is as bad- you’ll pay off those loans when your so old you cant work anymore! My parents got a better deal, heck my siblings too, because they were born decades before me.

    Math/stats is reasonable to me because I can get an MS and a job with little debt incurred. But thats it.

  5. “One time I had a job interview….
    I took a book out and I started reading.
    The guy said ‘What the hell are you doing!?!?’
    I said ‘Let me ask you a question—
    If you were in a vehicle and you were traveling at the speed of light, if you turned your lights on, would they do anything??’,
    He said ‘I don’t know.’
    I said ‘Forget it then, I don’t wanna work for yuh.'”

    —Steven Wright, comedian

  6. Good post, thanks James! Having finished undergrad a few years ago, I was planning on starting law school in the fall. But that chance of ending up in some corporate firm in which I have no interest in sounds miserable.

    So instead, I’ve joined the Peace Corps and plan on leaving this fall/ winter. What better way to get life experience doing good work, and preparing oneself for public interest work! If I want to go to school after, I will be that much more competitive for those cool jobs when I apply for those difficult fellowships. Not to mention, I would say 95% of previous volunteers I’ve met (quite a few in the DC area), are very inspiring, wise, happy people who I respect. I wonder how many of the Ivy’s stuck in their corporate firms hold those same inner qualities?

  7. So sorry guys, but I gotta tell you, I wouldn’t piss on your average harvard grad if she was on fire in the street. The kinds of privileged and sanctimonious worms who weave their way through that swamp of debauchery, treason and delusion have no place as leaders in a free republic. I don’t care how fast their “processors” spin; Garbage in, garbage out. It’s all about the software (AKA Character).

  8. Asada,

    There are too many lawyers, and the debt burden is pretty ridiculous. But if you’re at the top of the class, you can make a lot of money. Plus, liberal arts majors with no skills (hey, I was one) figure law school is better than the dole.

    With med school – I believe a lot of mid-sized and large practices pay off your loans over three or four years.

    Ultimately, math is a great way to go.

  9. I think we had a bubble not just in housing prices, but in the demand for legal and financial professionals. That temporarily created a world where liberal arts grads with no real-world experience or genuine skills could command massive starting salaries by the simple expedient of spending a couple of years in law or business school. The bubble created the easy job track and irresistible offers that James describes.

    The bubble has burst. Large law firms have not just engaged in lay-offs; many of them are eliminating the “non-equity” partnership track altogether, so that very experienced and technically proficient lawyers–often from the best law schools–who have not managed to build their own book of business are finding themselves out on the street and out of luck. I imagine law students and beginning lawyers must be aware of this; the “safe” route of clawing your way up the ladder at a large-law firm is not safe or assured any more. I suspect the end result of the crisis and financial reform will also be far fewer such opportunities on Wall Street.

    This is a long way of saying that I think our misallocation of talent may gradually correct itself. There’ll certainly be a lot of pain in the process.

  10. Ya – BUT – Math & Stats grunt work can be offshored, jobs are going offshore in everytthing these days. Engineering and computers especially.

    You need to sit down and ask yourself, exactly how much money will I make if I get this degree? And what will it cost me to live. And how fast will my salary likely increase. Not easy questions to answer, but try.

    Also, there is room for one more lawyer should you choose to be one. Don’t let people tell you there are too many. There aren’t too many until the grads of your prospective law school aren’t getting hired. Look into what lawyers get paid. Look hard. A friend of mine does corporate litigation and does quite well. He also does some free legal work for homeless and less fortunate which is a great way to help people.

    Being a Doctor is a truly daunting task, and then you have to specialize to make enough money, more time in school. And who knows where Medicare will be in 10 years – but it pays well now.

    Spend a LOT of time researching the pay of your future profession, it will matter to you.

  11. I’m a mechanical engineer and have no experience or knowledge of wall street or law careers, but I found my own experience of being recruited and seduced by the petroleum industry very similar to what you’ve described here, and my own justifying rationalizations very similar for while I was there. I was terrified of leaving the management-track job that was making my life miserable, and kept me a part of a very destructive industry.

    And I am so glad that I ultimately did.

  12. Really interesting post!
    Even if it’s irrelavant for the point you wanted to make, but how would an experienced (non-typical) YLS student, like you at/after Yale, behave? What’s the ideal job for someone, who e.g. was already told how he could do anything after a few years, fell for the shiny lure of McK, and was certainly well paid?
    I’m just interested, not polemicizing.

  13. Great post, but you really are talking about the creme de la creme of American students. YLS only takes 200 students and is already at the top of the heap of American law schools. Harvard (law and undergrad) is only slightly less selective.

  14. Soooo True… software and character. Yes Canadians have our own set of deficit character laden people but by experience and media observations the USA appears to be the home of characterless “innovators” praying at the feet of the Almighty Dollar.

  15. Thank you Henry David Thoreau Qwak. “The mass of men lead lives of quiet desperation. What is called resignation is confirmed desperation.” Let me add that since you/we and the Ivy Leaguers are doomed to experience “quiet desperation,” it is a hell of a lot easier to be desperate and rich, than to be desperate and poor.

  16. The post doesn’t really mention government service. During the Kennedy years and even through Carter, the federal government really did attract a lot of idealistic recent grads. Not only the Peace Corp, but Justice Civil Rights Division, EPA, the FTC, the Consumer Product safety Commission, etc. A big part of the Reagan Revolution was simply to vilify these idealistic people by painting them as irksome meddlers instead of people who actually wanted to serve in the higher interests of the public. As a result, the career civil service became dispirited and increasingly like some sort of clerkship, a place you worked until you could get out in the private sector and do something “useful.” When you look at the recent crisis, especially the way it was handled by agencies like the SEC and to some extent DOJ, you can see just how harmful the Reagan (and later) campaigns against career government service as an honorable profession have been. It’s really a loss to the nation.

  17. Here’s your agency. Worthless without support of agency heads and Chairman of FED

    SEC. 1024. .
    (a) Review of Bureau Regulations- On the petition of a member agency of the Council, the Council may set aside a final regulation prescribed by the Bureau, or any provision thereof, if the Council decides, in accordance with subsection (c), that the regulation or provision would put the safety and soundness of the United States banking system or the stability of the financial system of the United States at risk.

  18. Stephen Wright wrote:

    “My theory of evolution is that Darwin was adopted.”

    “There’s a fine line between fishing and just standing on the shore like an idiot.”

    Frank Lloyd Wright wrote:

    “The truth is more important than the facts.”

    (1869 – 1959)

  19. Character. What you did…took character.
    Thanks for listening to the Greater Part of Yourself. And honoring.
    It makes a difference in the world.

  20. interesting piece.

    My story is a variation on this theme. I never went to an ivy league school. But after graduating with a political science degree (from a decent foreign university) I stumbled into a career in finance, having found it virtually impossible to begin a career in my then preferred fields of journalism, public policy or “saving the world”.

    I managed to get out (at least partially thanks to my move to the US coinciding with a financial sector blow up) but it’s not only the money which makes that difficult. Changing careers is extremely hard in this age of HR professionals and impersonal online application forms (that exclude applications without the requisite keywords)

  21. Jessica, you are not “doomed” to anything.
    Many paths to choose from. And the one you’ve currently chosen…can be “unchosen” at any time.
    Any time.
    Where is your Soul in all of this? You might try and listen, if you are so open…
    Best to you.

  22. I’ve been boots-on-the-ground and in the boardroom. I’ve watched hundreds/thousands of lives traded and extinguished like pieces on a game board for simple monetary gain. The only thing that makes sense anymore is, loyalty to family and friends. Sometimes Darwin is your only friend. Adapt.

  23. The only remotely non-financial company doing recruiting when I graduated from Harvard College in 1991 was Trammel Crow real estate from Houston (or was it Dallas) and who wants to go live in Texas? Everything else was management consulting or I-banking. The people that had their heads on straight (who more often than not had taken a few years between high school and college to travel or work) started their own for- or non-profit companies or used daddy’s money to become angel investors for internet startups. Law school was filled with people who were programmed their whole lives to seek the path of highest prestige, i.e. the white-shoe law firms in Manhattan or their satellite offices in other cities, or possibly clerkships with famous federal judges.

  24. The question isn’t why do so many Harvard grads head to Wall Street.

    The question is: why does Harvard graduate so many who head to Wall Street to wage economic terrorism on the other 98% of America?

    There’s a difference between ‘earning’ money using other people’s money, and doing ‘whatever it takes’ to screw as many people out of as many pennies you can for your own self-enrichment.

    What Harvard ‘teaches’ is that there is nothing ethically wrong with a severe money-addiction, no matter the consequences. And that’s why so many grads head to Wall Street – because it’s the only place where their uber-greedy-is-good education is considered a marketable skill.

  25. “THEY sent A SLAMHOUND on (Whistleblower’s) trail in New Delhi, slotted it to his pheromones and the color of his hair. It caught up with him on a street called Chandni Chauk and came scrambling for his rented BMW through a forest of bare brown legs and pedicab tires. Its core was a kilogram of recrystallized hexogene and flaked TNT.

    He didn’t see it coming. The last he saw of India was the pink stucco facade of a place called the Khush-Oil Hotel.”


    Fortunately I’m still dodging mine. I get by with a little help from my friends. :-)

  26. This clipped from the anonymous Wall St. screed circulating on the ‘Net that James linked to-

    —-So now that we’re going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we’re going to stop buying the new 80k car, we aren’t going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We’re going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours……..

    For some time I have been wondering who corporate America planned to sell their products to when they had lowered the pay scale here to pennies through off-shoring, etc., and we were all reduced to $12000 a year.
    Free rides on THEIR backs??? Interesting that the cowboys have quite a different take on THEIR jobs disappearing. So they are going to do their own landscaping now, huh? Gee, I guess that will send a few Hispanics back where they came from. In most places I’m aware of, people who do the manual jobs are not highly paid, they often get ripped off by their employers. So, Hot Shot, if you want that job, knock yourself out. We still have a few chicken processing plants in NC – want to sign up to cut up your own boneless/skinless chicken? We in the hinterlands have always done our own, but now more than ever, because we have no choice. Cut our own hair, washed our own cars, cooked our own meals. This is how economies spiral down, is it not? It’s not like that trickling down the Wall St. jocks were doing was doing any serious wealth-building on Main St. I doubt they CAN cut their own hair, or even their own grass.
    The pain of this economic storm will be worth bearing if it takes those smug windbags down with it.

  27. Anonymous, if adapting means I have to turn into someone with no compassion, no “milk of human kindness”, I’ll just slit my wrists now, thanks. I not only don’t want to BE one of those soulless creatures, I don’t want to live in a world they create or dominate.

  28. Excellent Mr. Kwak. I have two quotes, articulating invaluable substance too your post._____(Joeseph Conrad /1857-1916) “All ambitions are lawful except those which climb upwards on the miseries or credulities of mankind”._____(T.S. Eliot/1888-1965) “After such knowledge,what forgiveness? Think now – History has many cunning passages ,contrived corridors – And issues ,deceives with whispering ambitions,- Guides us by vanities”. Thankyou :^)

  29. I don’t know, I graduated pretty close to the top of my class from the School of Labor Relations at Cornell not all that long ago and my experience was rather different from the one James describes here. Through the office of career services I managed to speak with recruiters from a wide range of industries, from Goldman Sachs to the SEIU, and hardly ever felt any pressure go work at some high paid corporate office (it probably helped that tuition at the ILR school, being part of the state system, was only $8,000 a semester). After spending some time working abroad I’m teaching in the NYC public school system now and am pretty happy. I think its a mistake to generalize too much from the experiences of a few students. Most career service offices at major universities give students a great many choices of career paths to follow. Availing themselves of the services of career counselors is hardly too difficult a task for most college graduates. In any case, most graduate and even undergraduate programs offer counseling services for free. I can’t see why more students shouldn’t be availing themselves of these options if they are confused about their professional future.

  30. The full story is a good deal more complicated, not least because we’re dealing with people, and if there are 100 people, there are 110 reasons (at least).

    Some facts not considered by James Kwak:

    1. A disproportionately large percentage of Harvard students come out of what I will call (deliberately disparagingly) the cult of money. Harvard students are far more likely to come from wealthy families than are students at most schools. This is true of all students at Harvard, including those of color.

    2. Harvard, more than almost any other university, reproduces the cult of money. The school’s quality most emphatically does not match its endowment, which is far and away the largest. To what end has Harvard, for so many years, so to fatten its endowment? It could arguably eliminate tuition altogether. Why not?

    3. When we talk about Wall Street and the Harvard connection, it would be more accurate or more meaningful to talk of the Harvard Business School connection. However diverse Harvard undergraduates are, the Business School students are overwhelmingly preoccupied with wealth.

    4. There is a broader Harvard (and to a slightly lesser extent, Yale) cult. For example, why is Obama almost exclusively considering Harvard law figures for the Supreme Court nomination? Just as Harvard Business has played a key (and grossly under-reported) role in the financial collapse, so too has Harvard Law played a disproportionate role in the pseudo-justifications for American war crimes and crimes against humanity. (Yale can also take credit on the legal front with the likes of John Yoo, Jack Goldsmith (who has gotten a pass with his not-quite-deathbed conversion), Ruth Wedgwood, et al.)

    A complete explanation should tie these observations together. Power, money and the preservation of power in the hands of the Modern American Oligarchs is at the core of such an explanation.

  31. Bailouts, Bubbles, & Bad Bets

    Bailout bill debates aside, immediate congressional action is necessary to inhibit another financial real property bubble in the future. These actions must include rescinding both the Gramm-Leach-Bliley and Commodity Futures Modernization Acts of 1999 and 2000. Congress should then readopt the 1933 Glass-Stegall Act. Those actions would ring fence financial institutions from engaging in this greed driven activity in out years, nipping their RICO ACT conduct in the bud.

    Next, all existing sub prime mortgages and trust deeds created and securitized on both residential and commercial real properties since 2000 should be converted to the current thirty year fixed interest rate after the properties is appraised. The new note should reflect the current mark to market value of the property as of the date of the new appraisal.

    These actions will require much legislative vetting and in the process of the hearings reveal the real whiners in the country. They will however, if carried out, relieve taxpayers from being saddled with more massive future debt, precipitated by faulty financial math models, fraud, and racketeering by members of the greedy banking industry. The current conduct responsible for this meltdown was conjured up by folks cast from the Ivan Bosky & Michael Milkin molds whose junk bond schemes were responsible for the domestic financial meltdown of the late 1980’s and early 1990’s.

    While Commercial and Investment Banks, private and public pension funds, insurance companies such as AIG and wealthy individuals will suffer huge losses, they must accept and be held accountable for the reality that investing in these craftily created securities, Derivatives and Credit Default Swaps was and is gambling. Investing in those instruments is no different than tossing down a bet at gambling table in Central City, Colorado.

    Customers slamming back a shot of whiskey at a Bear bar while checking out the local scenery should not be billed for the bad bet by the bumpkins at the blackjack table.

  32. Harvard kids go to Wall Street because Wall Street comes to them. Government agencies generally don’t recruit (when I did Harvard undergrad recruiting only the TSA and the CIA were there). If tiny consulting firms can gather the resources to recruit, it’s obvious that the Department of State, SEC, etc. could as well. Indeed, they should have cleaned house in the most recent years, when financial hiring was depressed. But broadly speaking civic service institutions show no interest in these graduates. The natural thing for students to assume is that they are not particularly wanted in those public service roles.

  33. TK,

    I was taking a full semester of course study at Penn in the early 90’s right from Europe.
    I was 29 years old by then. Kids from Wharton were ruling the campus: arrogant, uncultured and stupid. I would ask them if they knew that going about raw wealth with any social compass would lead them and us to ruin and they would answer: NONE OF YOUR BUSINESS!!

  34. I own my own company producing automotive parts (35 employees) and consider my company to be part of the “Real Economy”. You know, those companies who actually provide added value to this society. I had a bad year but survived because of my own capital and kept all of my employees because I knew I needed them when things went north again.

    Personally I absolutely loathe these fast Wall Cheat guys in pinstriped suits who earn their living on borrowed money and whom I have to bail out when they lose again and again. These predators have nothing to add to this society but mayhem and disorder.

    The Fulds, the Blankfeins, the Greenspans et al are nothing but scum of the Earth and a huge pain in the behind for us who try to make a decent living.

  35. I will add that essential feature of American culture plays no small role. The US values wealth and fame above all other things — certainly above achievement in the arts and sciences, though our culture still measures quality in these realms through the lens of money. Thus it is that Harvard maintains its status in no small part by offering vast sums to “star” academics, even when those academics have already finished with that work that made them famous. (For example, the genuinely brilliant, and very modest, John Rawls wrote much of A Theory of Justice while at Cornell.)

    This is a culture where Michael Bloomberg can be deemed the best candidate for Mayor of New York because he is the wealthiest and ‘therefore’ (note scare quotes) the wisest in matters of management and city finance.


  36. Uh, every top company in the world has the same/similar recruiting practices, not just Goldman, McKinsey, etc.

    How do you square that fact with your thesis? Will you (try to) claim that top banks/consulting co’s/law firms are just THAT much better at it than say top industrial or tech or whatever companies?

    I don’t know what recruiting is like at Yale Law, but my senior year of undergrad I went to at least a dozen if not two recruiting sessions from these top firms (primarily for the free food/drinks, heh)

  37. And still another point: This phenomenon is not isolate to the US. Britain has its Oxbridge (Oxford Cambridge) cult. It suffered a blow in the 60s and 70s with the spy scandals. Any number of loyal Oxbridge boys took the view that “So and so couldn’t possibly have done that…. We were together at….”

    Britain, however, does not share as extreme a case of the Money/Fame cult. Truly great actors, for example, are far more likely in Britain to take on small or low-paid roles for the quality of the work.

    Similarly, Britain has, per capita, far few millionaires and billionaires. On this, the US stands head and shoulders above every other country in the world, with the possible exception of some of the oil monarchies and Russia and, soon, China — not promising comparisons if we are concerned about American democracy.

  38. I’ve lived next to an Ivy League school all my life and I have to say that quite a few of the Ivy Leaguers I’ve known, even if I’ve cared for them dearly, have been a little “compromised” up front. That is, it didn’t take quite as much effort to get them to “sell their soul” as you indicate. In fact one could posit the attraction of “Ivy League” to certain individuals could be an indicator of a certain pre-disposition in many cases.

    Moreover, at least at the Ivy League school I’m near, I don’t know that you can equate going to an Ivy League school as a metric proving intelligence. In many cases I’ve seen more ego, hubris, ambition, and family connections than actual intelligence. Surely I will give they seem wired for success, but not necessarily because they are the “brightest in the room”.

    Yes, certainly probably an above average crowd, but not guaranteeably the geniuses implied. Nor for that matter does genius imply wisdom or morals.

    I’m sorry in the end it’s hard to feel sorry for a bunch of people, the majority of which were probably born on 3rd base already, being the victims of big bad companies here. Sure, some probably are and certainly there are many, many bright and moral Ivy Leagers (for instance, yourself), but for someone from the outside this post seems a bit painfully self-indulgent. Sort of, “the poor little rich boys” whining about the difficulties of choosing the best yacht.

    In general I love your stuff, but this one displays another problem the Ivy League – the belief that they’re better than anyone else. I’m sorry but it’s a bit transparently egotistical if you haven’t drunk the Ivy League cool-aid.

  39. I agree that GS/McK have mastered the art of persuading the young, aimless and gifted that they are a great intermediate option. But at the end of the day, what matters is whether they are right.

    I suspect that they are.

    It’s very hard to analyze this due to the selection bias and anecdotal nature of the evidence, but speaking as somebody who turned down a McKinsey BA position for a job in industry, I for one wish I had gone with the safe option of McKinsey. Things would be easier now. One thing you may not realize, James, is that once you get off the HYPS-GS/McK-YLS/HBS “prestige treadmill,” it’s quite hard to get back on. For better or for worse, there are life paths out there for which a background in places like GS/McK are not only helpful but nigh on mandatory. Sadly, the modern job market is often less a meritocracy than a resumecracy.

    That probably came across as too whiny and self-exculpatory, which is not my intent. I’m just saying there is a lot of truth to the McK/GS recruiting message.

  40. Similar story here, but from the UK. I graduated as a scientist from Cambridge at the end of the 90s. There were basically two paths one could take: academia and some sort of finance, Thatcher having executed most of British industry. I ended up working in the City for an American bank, precisely because it wasn’t clear to me what else I could do and everyone else was getting this sort of job.

    Lucky circumstance of having graduate-student friends in London, who moved at the same time as me, plus a vestigal inteligentsia ethos of not really seeing money as being all that important meant that I ended up not really spending that much, living a lifestyle way beneath my means. This meant two things: not so much of a lifestyle change on quitting and the fact that the misery of the job was not compensated for by the easy availability of consumer goods, expensive girlfriends etc. That’s the only reason why I could seriously consider quitting and why I was pretty much the only one out of my cohort who managed to on their own terms.

    I quit after a few years and went to a US grad school to do science again. I’m still on that career track right now, a few years after my PhD and I love what I do. Most of the time I am happy I did this, nad I will be the first one to admit that I am not free of schadenfreude at what is going on with the banking industry.

    But then, every so often, when faced with the lack of academic job prospects (not money per se, getting any permanent job) and when visited by my millionnaire TARP-funded ex-co-workers who really don’t worry very much about the mundane aspects of life, I wonder whether I should have bit the bullet and gone for the easy life.

  41. Most of this has long since been discussed (and best highlighted) by Philip Delves Broughton in his wonderful book about his two years at Harvard Business School — Ahead of the Curve.

  42. I didn’t say I was doomed…James Kwak implied that he and his Ivy ilk were doomed.. reminded me of that famous Thoreau quote about quiet desperation. Unlike the Wall Streeters, Thoreau was a tax resister and a proponent of small gov’t. BUT, if I were given the choice between being poor and desperate and being rich and desperate, I would surely choose the latter.

  43. As a graduate of a couple of Ivies (one for law school) and a law firm refugee, this commentary is dead on, and speaks to why our country is having so much trouble. There’s never a black and white moral choice presented to you, but time passes and you become able to live a life that would have been unthinkable five years prior, particularly because you’re surrounded by others doing the same thing.

    We need to recapture some of the original ethos of enterprise and risk among our best and brightest. More builders and creators, fewer analysts and allocators and contract writers. Less rent-seeking, more value creation. And I don’t mean banking and consulting.

  44. Offer them tuition forgiveness in exchange for 5 years in service – with the contract signed PRIOR to enrolling in school. Same for medical students.

    In other words, ROTC but without the war. Ever wonder how the military gets top talent?

    You cannot imagine how “top tier” companies would fight this.

  45. Broke! Fixing America’s fiscal crisis

    ‘Bush-ama’ tax cuts: The $2.2 trillion decision

    May 4, 2010: 12:10 PM ET – excerpt

    NEW YORK (CNNMoney.com) — “They’re often called the “Bush” tax cuts. But at this point they might as well be called the Bush-ama tax cuts. That’s because President Obama has embraced the tax relief measures introduced in 2001 and 2003, proposing they be extended indefinitely for most Americans. If lawmakers do nothing, the measures expire Dec. 31. The tax cuts lowered income and investment tax rates, boosted the child credit, reduced the estate tax, and narrowed inequalities affecting married taxpayers.

    Another reason for the new Bush-ama moniker: Like President Bush, President Obama has not called on Congress to pay for the cost of the tax cuts. In fact, the extension of the cuts is exempt from the new “pay-go” rules that Obama signed into law recently.

    Extending the tax cuts for most Americans will increase the federal deficit by an estimated $2.2 trillion over 10 years.”


  46. I graduated from Harvard College almost 25 years ago. I am an “accidental financier”, but by a somewhat unusual path, in that I came to it in middle age after working in government.

    When I graduated from college, it was my observation that the people who went into banking/consulting (and law school) were the ones who assumed that there was a natural “next step” on the rung of prestige. Something that’s very difficult for people graduating from Harvard, as James points out, is that they have lived most of their lives in a context where the pecking order of success was well-defined and they were at the top. Being thrown into the larger world, where nobody can tell you if being a successful comedy writer is a more prestigous career than being a university professor, is terribly anxiety provoking for many Harvard graduates. The banks and consulting firms, like cults, exploit people’s insecurity about their place in the world. They provide reassurance to young people that they are “still on top”, doing the right thing.

    Incidentally, Teach for America and the Peace Corps exploit these same insecurities in elite college graduates. It’s surprising to me that more organizations don’t try to as well.

  47. Andrew wrote:

    “As a graduate of a couple of Ivies….this commentary is dead on…We need to recapture some of the original ethos of enterprise….There’s never a black and white moral choice presented to you, but time passes …”

    “Beauty I’d always missed with these eyes before
    Just what the truth is, I can’t say anymore.”


    Nights In White Satin…Justin Hayward; Notte De Luce

  48. Apparently my friend that’s about to graduate law school from SMU finds herself in a tough situation. The grads before her right now AREN’T getting jobs. Many of them that did manage to are delayed on hiring till 2011 after they graduate this month. The rest are outta luck completely.

    There ARE in fact too many lawyers. We need more people that DO and MAKE stuff, not people that deal with shuffling money around and skimming a percentage. Yes, I see lawyers as not too much different from bankers in that respect. No disrespect meant to Mr. Kwak, but really what does a lawyer actually PRODUCE? I know we need them for some things, but we don’t need as many as we have right now. Much less MORE of them.

  49. It seems to me hard to know if those coming from elite schools are really that great, or those are the ones given the best chances because of the filtering gateway of all the others from the same schools before them.

    If one looks at Obama’s choices one would think that no one of worth comes from say, Northeastern University.

    In any case, I often wonder if the difference between greatness and lack thereof has as much to being raised by similarly achieving parents who made you believe success is your birthright as opposed to people like me from the low end of middle class who were raised to believe that success is for others.

    Without doubt there are many to be proud of from these schools, but I wonder how much of that comes from believing in yourself as much as any real talent? Certainly many posting here seem to implicitly believe in themselves far more than the average people I tend to hang out with even though many of those “average” people are otherwise quite talented.

  50. do what your heart desires, but learn to accept the level of compensation it provides and the lifestyle the remuneration affords.. it’s really that easy..

  51. All is not lost! I know quite a few talented and motivated people who have made careers of government service. Some of them are even Ivy ‘types’.

  52. And do these high achievers recognize they enslave themselves? Did you?

  53. As a recent Stanford Law grad, I’d like to commend James for really nailing it. To those who insist that it is all about the money/prestige/pigs naturally nosing for truffles — well of course you can find examples of that. But what’s more interesting is the process James describes, whereby, almost before they know it, people who had other ideas (or no particular ideas) about their future before gradually find themselves caught up in a gentle and seemingly natural drift that eventually deposits them at the doors of Wall Street or Biglaw.

  54. That probably had something to do with your major. I doubt if GS hunts out any master Artisan types either. I’m not putting it down, I’m just saying you count make a circle peg fit a square hole. Wall Street types aren’t exactly known as being pro-Union. When they see your major I imagine they hear an alarm that sounds similar to the mother-ship in the “Alien” movie when Ripley is wandering around alone at the end. Judging from your current job they would have judged you about right.

  55. On the subject of the good pay, a good economic explanation for the “but the money is so good” excuse is the concept of efficiency wages. The idea is that a manager/employer will pay more than the market-clearing wage for an employee’s labor.

    For example, first year analysts at your typical bulge-bracket investment bank gets paid $70k base + $10k signing bonus + year-end bonus. I find it hard to believe a college grad can truly deliver over $100k of value to the firm right off the bat.

    In return, the analyst feels like he can’t get anything better. He/she works hard, VERY HARD, and is essentially ‘tied’ to his/her job until they finally reach a point where their compensation actually matches their value.

    These banks know what they’re doing here…

  56. As someone who graduated Harvard Business School and went to Wall St (in the 80’s) I can attest that the investment banks and management consulting firms knew how to recruit, and did it early and often. They would work with the professors to figure out who the best and brightest were (alas, not yours truly) and woo them. The corporate recruiting efforts were a shambles in comparison (think the Yankees vs. the Mud Hens). This is not meant to disparage industrial firms, but underscore how difficult it is/was for young kids to resist the siren call.

  57. The world does not need any more people who dislike what they do, although sometimes it takes awhile to figure out what you like.

    People tend to be good at things they enjoy, and more successful for that very reason.

  58. One hinted at factor here is the network effect. LIke it or not, these kinds of job perpetuate the kinds of relationships that often lead to other career opportunities.

  59. Ummm … so where does the University of Missouri rank among the Ivy League :)

  60. Its a two year commitment by one of the best and brightest, who will work 70 to 80 hours a week. On a productivity and value added basis they are worth a more than a lot of Managing Directors.

  61. my God James,…what are you trying to do …, open up intelligent communication across the country. Not one market mentality and a host of serious and honest people desparate to explain their world as they are experienceing it. You desrve a media award! Congratulations! Bruce

  62. Really. Remember what Willie Sutton said, “That’s where the money is.”

  63. Its a two year commitment by someone with few family commitments, who can easily be replaced next year when a new crop washes up. Of course they will work 70 to 80 hours a week, meaning that on a productivity and value added basis they are worth a more than a lot of Managing Directors.

    They’re just easily-replaced kids, just like anyone else coming onto the job market.

    That said, they’re not the ones really making the money the first few years. They’re the ones making the machine run smoothly. And whether that’s really worth 100K is debatable.

  64. I dont remember an email to the wall discussing an office with a “central park view”- and I have archived all of them.
    Sounds like youre lying.

  65. I followed my heart after my freshman year in college, and I’ve done great in a very small pond. Only, now, I spend a fair amount of my time reading blogs like this one about my old classmates who have totally destroyed the economy and who are putting my chosen profession out of business altogether.

    I’ve been happy with my choice for 30 years, so I don’t think I made the wrong choice. I just hope Asada’s classmates are not as greedy and as self-centered as mine have proved to be.

  66. Great post. While I was in college, I saw so many of my fellow students (who had always talked about doing something for the greater good) head into banking or consulting. I couldn’t never quite put my finger on it…but that path just seemed so much…easier. Instead, I waited to look for a job until after graduation, and I think I’m much happier and better off for it. Some of my i-banking and consulting friends like what they’re doing, but others can’t stand it. But many are stuck, because of the lifestyle they’re now used to.

  67. Great post. I think it’s broadly true.

    I myself joined McKinsey from Oxford. I did it mainly because I had become more interested in corporate finance and investment than in the subject of my studies, but their recruitment process and recruiting network definitely helped to reel me in.

    However, once it became obvious to me that I didn’t like it, I left. I then spent 18 months doing hanging out in SE Asia, and that eventually led to me getting into international development. Subsequently I’ve worked in SE Asia, Afghanistan and Latin America. I find that really satisfying and interesting- far better than what I did before, either academically or with McKinsey.

    And I can report that the skills that I learned at McKinsey are actually very useful when working in development- although it took me 3-4 years to figure out how to adapt them, and to learn enough real knowledge to make the communication and problem-solving techniques useful.

    So in some ways I did what the recruiters said you could do.

  68. Well, they generate much more revenue than it costs to hire them in most cases. In many firms the rate that they are billed out at guarantees that.

    The question is only whether these firms could get away with paying less. And the answer is that without collusion, they probably couldn’t- they are all competing for the same pool of people, and they can’t cut their rates without losing out.

  69. You’re right that the federal gov’t could really step up its recruiting. I’m a Yale grad with language skills (Arabic), and I don’t recall anyone from the government ever try to reach out to me — but I did get lots and lots of emails from consulting firms (not banking). I’m in journalism now, and part of my aversion to government work is that the hiring process is incredibly off-putting — it can take up to two years including clearance to get hired at State, and the process is very complicated. I know it sounds silly and stuck-up to say I don’t want to apply for a job because they aren’t rolling out the welcome mat for Arabic-speaking Ivy grads, but if there are companies that make a proactive effect to recruit me (and there are), then clearly I’m going to go work for the companies that seem excited about my working with them.

  70. James, thanks for such an informative post. And also, many thanks for the downloadable blog posts in PDF. Keep up the good work!

  71. Dear James,

    Thanks for the candid exposé, which I believe demonstrates tremendous self insight on your part. I took a very similar path to yours (MIT -> McKinsey -> hot internet startup), and instantly saw myself in your description. I would not have been able to acrticulate it with your clarity, though, so many kudos.

  72. Apparently, “acrticulation” is an even greater problem than I realized ;-)

  73. “A man is rich in proportion to the number of things he can afford to let alone.”

    “That man is the richest whose pleasures are the cheapest.”

    “Rather than love, than money, than fame, give me truth.”

    Henry David Thoreau (1817 – 1862)

  74. Why did the Waffen SS had the most PhD’s amongst their ranks, relative to the other branches in the Wehrmacht?

  75. “The fact that most companies don’t want new college graduates makes it easier to go to one of the few that do. The third selling point — not the top one, but it’s there — is the money. Or, more accurately, the lifestyle.”

    I don’t think it’s at all true that other companies don’t want new grads–they want them alright, but they don’t want to pay them and they certainly aren’t looking to glamorize their lives.

    No question. More and more we see that HR management likes them young and dumb, with no visceral connection to a relatively more ethical business culture that did exist not that long ago.

    This is doubly true in finance–where they’re really flouting ethical conventions– and they have the money to pay for it, pay for necessary silence, etc.

    In the other work environments, they just pound them into submission, which produces uneven results. ie., many leave, thinking it’s that one bad apple, and they make a virtue of job (and career) hopping.

    So, elite grads are doing the logical thing as individuals, but the collective poor results of their decisions are not something we can continue to tolerate as a society.

  76. 200? Every year?

    Not to creme-y, frankly. And factory education, to boot.

  77. Dear Asado, Keep up with your math/stat program!
    It will allow you more freedom than anythning else
    you might choose. _And_ it is fun! (perhaps I as
    a mathematician am prejudiced here.)

    Certainly there are too many lawyers. Anyone who
    has been arrested, as I have been(see http://www.waifllc.org/kensington ), will immediately get
    a barrage of letters from firms near the courthouse,
    soliciting the chance to represent you. It is sort
    of sad.

    Mr(s) M.F. gave you the advice:
    “Ya – BUT – Math & Stats grunt work can be offshored, jobs are going offshore in everytthing these days. Engineering and computers especially.”

    This is in my opinion and experience not at all
    the case. The grunt work is relegated to the
    computer, and to be of any help at all to scientists
    or economomists — as. say, a statistician — means
    being on scene, poking around in labs or helping to
    acquire new data.

    Re money: if it is important to you, pay attention
    to M-F’s last word of advice. But if you value
    intellectual pleasure and adventure more, stick
    with math and statistics. You will _always_ be
    able to make enough to pay for a roof over your
    head, and bread on the table.

    Best wishes and good luck!

    Alan McConnell in Silver Spring MD

  78. Choosing money/job over lifestyle is something I never did and am eternally grateful for.

    Working 60+ hour weeks with no time for friends/ family… don’t care how much they paid I wouldn’t take it.

  79. The students are being rational. When they are asked “Do you prefer money, or virtue?” as a hypothetical question, they say “Virtue”. When it’s a real question, they switch.

    But you are perceptive in noting that ease of transition is hugely important. It’s curious that investment banks/consulting firms have picked up on this for profit while firms with less intelligent managers have not, and instead rely on practical credentials and don’t realize they need to work harder at recruiting.

  80. I’m a recent Harvard law grad who is in the public sector (doing legal aid work). I agree with much of the original post, but want to note a couple of things:

    First, several of the top law schools have extremely generous loan repayment assistance that cover 100% (or close to) of student loan payments. They also come with no strings attached – there’s no term of service required, you can work as a prosecutor for 6 months, get $8000+ in loan payments made on your behalf, and leave for biglaw with no repercussions if you like.

    At least for these graduates, public service is a much more financially viable option. A single person making 40,000 per year (initial going rate for PDs, legal aid, or prosecutors) in just about any American city can do just fine on a salary like that.

    Despite that, a very small percentage actually do this type of work – and I think money and the institutions themselves have just a bit more to do with it than James indicates.

    First, there’s a very sizeable subset of people who come in, as some follow-up posters indicated, already very much focused on the financial aspect.

    For the rest of the persuadables, pretty much every administrative and faculty member goes to great pains to assuage the guilt that some students may feel over going to a big firm – and some go farther and downright encourage it, disparaging public service organizations (private and public) as not worthy of these students.

    As for the rest of the points, I do agree that the idea of “keeping one’s options opens” factors in quite a bit (bizarrely, I might add, as quite a bit of early corporate work is not geared towards skill-building at all), as does ease of access. I wouldn’t quite agree that public service jobs are necessarily harder to get – many of these organizations are just as prestige-hungry as any private firm – but they aren’t able to fly out and do lavish recruiting events.

    On that note, you’d think that some of the wealthier large institutions would be able to fund a yearly public service job fair and fly in organizations that can’t make it on their own for on-campus interviewing.

  81. Re: @ Chris____”Amherst College” in Massachusetts was, and still is, the breeding ground for the “CIA”,and most recently brought into the fold is “Middlebury College”,in Vermont. Both are located in little towns that provide great anonymity. Amherst has just great minds,and Middlebury the preeminent avant-garde of “Linquistic’s”,period. PS. Harvard was always a school for the wealthiest,and most connected families to send their “Dumb-Down” children for their faux degrees!

  82. That’s an excellent plan that you won’t regret. I did the same thing (after a couple of years of work). Granted, afterward I went to b-school and am now sitting in an i-bank. HOWEVER, while my colleagues here were working 90-hour weeks as analysts, I was having amazing adventures, surfing, and at least trying to do something good for the world. We ended up in the same place. It also helps you keep perspective and know that you can live on very little money and be happy.

  83. Introduce them to their options, what are ways in which they can make the world a better place, what type of organizations are there that work on human rights or specific causes that they might find valuable and interesting, how do these positions pay, what are the benefits of choosing this path rather than a path of Wall Street. They need to be shown the options so that they seem tangible and possible.

  84. Programs like these already exist. As someone has noted a bit further down the page, most law schools a fairly generous with forgiving loans for people who say they will go into public service up front, requiring a fairly minimal service commitment. For med students, the commitment is a bit more stringent but still less than what you proposed: if they commit beforehand for up to 4 years of service as a primary care physician at a high-needs service area after their residency, they do not have to pay for medical school and even get a stipend to go with it!

    Despite this, few people go into public service law or primary care. Even fewer apply to these aforementioned programs. So, in all honesty, the loans are just an excuse – I think the reasons outlined in Mr. Kwak’s post are far more in line with the reality.

  85. As Ezra Klein points out–it’s not always about the money, it’s often about how easy it is to get a job. The program at UVA law that forgave loans in exchange for working in public service did nothing to help students get a job in public service. It was just a loan forgiveness program.

    I might also add that the UVA program didn’t forgive loans if your income was higher than a certain level (don’t remember the income cut-off but it wasn’t high), even if you worked in government or for a non-profit. So there was no benefit if you got a public service job that paid a nice, middle-class salary.

  86. I am highly skeptical of these “it’s more than money” explanations. Yes, the top investment banks, consultancies and law firms offer more than just money. But if Goldman, McKinsey or Cravath offered public interest salaries, what percentage of their recruits would still sign up? I’m guessing less than 5%.

    I have several friends from undergrad/law school who went on to big law/consulting firms. Literally NONE of them would have gone were it not for the pay.

  87. Wow, this post hit so many nails on the head I can’t even begin to lay them out. Well done.

  88. HI M-F,

    I realize anything that can be digitized can be off shored. I’ve resigned myself to the fact that I may never have a stable job like my parents did.

    Though I have been passively looking for information on all those questions you asked, Its good to see them in black and white.

    My only issue is, I’m too financaill conservative to ever take out so many loans for education. My interests is in finance and its helped me put into perspective the kind of expenses I will be taking on. Plus, I hold a slight grudge because school is so expensive and ppl born just 10 years ahead of me got a better price on their education and a much better job market.

    I know lawyers are payed well, but they have to be keen about finding work and in what fields. Same with doctors. It just isnt going to be the same for me and my generation. When ppl in thier 40’s are getting J.D’s and MBA ( or M.D’s and MBA) you know “edu-inflation” has hit.

  89. Aside from wasting your time writing blog entries and kissing Simon Johnson’s ass, what do you do with your life?

  90. Plenty of really good young people ARE excited about doing things of social value, and are not seduced by Wall Street. That’s why it is so very hard to get those non-profit jobs for terrible pay – far more people want them than can be hired.

  91. Umm, seriously? The lemmings defense.

    Are Ivy League grads that unimaginative?
    Is there a way to short Harvard?

    As far as getting stuck in a career you despise because of a choice you made when you were 21, I would say Whit Stillman summed it up in Metropolitan best:

    Man at Bar: The acid test is whether you take any pleasure in responding to the question “What do you do?” I can’t bear it.

  92. @ Alan McConnell,

    LOL, man I get the bias ;-)

    I will stick with math and stats. I need to feel like I do something importatnt. And if push comes to shove, I will just teach math part-time. Community colleges all seem to want part time math/business ppl.

    Stats is so interesting BECAUSE I will get to do field work and apply it to real life problems. If I could do college over again, I think I would have double majored in Sociology/public policy WITH Statistics/math. Then just gotten my masters in Stats and interned in the socio/PP field.

  93. Totally! I sad it too me so long, but I know I would not be where I am today if it didnt. And I know its gonna change some more. Ugh…

  94. Its also about to burst in Student Loans and Education. I wonder what THATS gonna look like…..
    = (

  95. A thoughtful post but here is my take, more on the comments perhaps than the post. What business is it of anyone else’s what graduates of school X do with their career decisions? Although the post is in part autobiographical, there is a presumptuous busybodyness that underpins the thread, as if the private decisions of strangers (whom many of you seem to sneer at) were matters of your concern. The sense that pervades this thread is: Oh, we wise men and women (seems mostly male I think) have to put our thinking caps on to correct the mistakes these young adults are making with their lives. Or else they will harm us with their choices. Please. Tend to your own choices and leave others out of your presumptuous gaze.

  96. I certainly wish someone had pushed me harder to think about my life and future when I was making these decisions. They’re not necessarily harming US with their choices, but many (most?) young adults are fairly unhappy with their jobs in these fields, and wish they’d had the foresight to pursue something else.

  97. Awesome point mark. We all need to live, buy food, pay the bills, so money IS important. However, some people choose to chase money, and some people don’t. There is a sneering presumptuousness in some of the comments about the “banking-consulting-lawyering Borg”. If Harvard people want to go to Wall Street to make money, then so be it.

    I have a PhD in EE but went into intellectual property consulting. Why? So that I didn’t end up being “typecast” as a hard-core techie when I hit 40, and instead can move around various fields of high-tech rather than being tied down to one specific field. This way I am more diversified and face less risk of getting canned if my field of specialty tanks.

    I suspect a lot of people with PhDs in STEM (Science, Technology, Engineering and Mathematics) went into I-banking, consulting, technical marketing, IP and management. It’s not just the money, it’s also about the career extensibility and diversification.

  98. This is ridiculous. Yes, there’s a lot of factors at play aside from pure cash, but let’s not pretend what’s really driving these career decisions.

    If big law/finance/consulting offered the prestige, job skills, and fancy recruiting, but not the money, would people still flock there? Maybe some, but far fewer.

    If finance paid a non-profit salary, and non-profit work paid what finance/big law/consulting did, I am sure an enormous number of people would be heading to non-profits.

    I’ve been through the big law recruitment process. Sure they make it easy, and we all talk about how we’re looking forward to getting great on the job training, and a prestigious name on our resumes. Clearly though, if not for the cash, very very very few people would still go that route.

    The money is not a minor factor. It is by a wide margin THE biggest factor. This isn’t to judge people who make those career decisions, just pointing out the obvious.

    Plus, the prestige of these jobs is tied to the fact that lots of people want to earn those high incomes, making them very competitive. Even the prestige is largely a by-product of the cash.

  99. Boston is NOT that far from Wall Street. I haven’t researched it but there might be a geographical relationship between school graduates and where they might work, although it might not be temporally based. The
    analogy between flies and their distance from the excrement from which they hatch bears further investigation.


  100. Nice post. You made this point but not strong enough.

    Changing the world is hard work and, worse, to do it you must face the possibility of abject failure.
    Going to finance/law/consulting and living comfortably is, by comparison, easy and safe.

    Risk aversion generally wins out.

  101. All around good post

    But would recommend excluding unsubstantiated data – i.e. 15%/75% corporate lawyers from YLS. There’s no way to tell if it’s true or not, and if it’s not, then it defeats a major point you use to support your argument

  102. I had exactly the opposite response to this thread as a whole.

    I think it’s peculiar that so many people who have followed this developing crisis story in the financial sector and its “innovations” in corporate finance, along with the corporate lawyers who help them flout the law, are suddenly talking about all of this like it’s really a legitimate career option.

    I also think young people need to take a good hard look at their own legal culpability when they involve themselves in systematic, collusive fraud.

    It’s really not 2006. If you graduate Harvard today and enter the financial sector, you go knowing you are involving yourself with organized crime, and when push comes to shove, you’re there to get tossed under the rig like Fab.

    I don’t care if they get tossed under the rig. I do care what their bosses are doing to the US and global economy and to the credibility of the US government, which just took another nosedive.

  103. Agreeing with Dee. Student loan forgiveness is a myth. Even the best ones (e.g. YLS) require one to earn near-poverty level income (for major market cities) for 10 years, with the majority of repayment happening in years 5-10. While it makes it possible for one to pursue a public interest job they cannot do without, even for a couple years, most people are much, much better off earning the $160k+ bonus annual salary for 2-3 years, paying down their loans to reasonable amount (if not in full) at the end. Of course, those who find they are not so passionate about public service work find the big salaries hard to leave.

  104. Your debt estimate is off. 100K is on the low end for a law school graduate’s debt. Monthly payments on that kind of debt are usually around 1.5-2K a month. This type of debt is not dischargeable in bankruptcy.

    So it’s an economic pressure that’s real.

    But let’s also not pretend that government service and non-profits are the only places that do “good.” I’m a libertarian capitalist. My idea of public service is not lobbying Congress for even more regulation and even more government, nor is it working in a lot of these regulatory behemoths. Some departments are more appealing than others. Seems like this perspective is automatically excluded from your argument.

  105. bikini wrote:

    ” a law school graduate’s debt….an economic pressure that’s real.”

    My dad never finished school, he had no debt but he had no shoes.

  106. This is interesting but not very surprising or unexpected. What I find interesting is that many people in these firms, who have one kind of intelligence, assume that that will carry them. They have lived life on a cushion of privilege not only (for the most part) in their day to day lives and academic towers, but also in their minds. Losing the cushion would be the true test of their ability to survive, be creative, resourceful and productive. Ask them if they want to do that.

  107. everyone can opine even if conceitedly (including you). Your reasoning is kind of recursive and applies to you equally well.

  108. This blog seems to suggest that one must “like” what one chooses as a first career step. Did you like it when you had to do your school homework? Did you “like” it when you had to appear for the road test for getting your driving license? The first career step can be a “learning” phase. I-banks and consulting firms teach a lot – it’s not just about money. You can apply those skills in other fields very productively (like the above post).

  109. “Best and brightest” is an annoying phrase that contains it’s own unfounded arrogance, especially as its been thrown around recently from Wall St. What is actually meant is “greatest cleverness in this only-important field”. But there is great intelligence in arts, education, digital, physics, medicine, research, sports, math, etc, etc. There are sophisticated complex people in the trades, too.

    In my opinion, “best and brightest” can only be applied to those who are wise. How many ivy-league grads can be considered on their way to wisdom? How many old grads, in their “genius” jobs, have even obtained even a modicum? We’ve been drowning in corrupt foolishness everywhere that the phrase “best and brightest” has been floated.

  110. Mr. Kwak,

    I think you make great points. As someone who chose not to pursue ibanking/consulting upon graduation but is now headed back to b-school, I’m a little disheartened with the advice I’ve been given from many alum. There seems to be an overwhelming desire from good organizations/foundations to hire i-bankers and management consultants. They’re using Goldman/Mckinsey as indicators of quality and I think this adds to the pressure to pursue employment at a select group of organizations. I feel if I don’t choose to join an organization of that ranking I wont be taken seriously.

  111. I think many of the best colleges elimiated loans from financial aid packages.

    Is that wrong, only for undergrad, or something else?

  112. Considering how the lack of regulation pretty much wrecked the economy, I wouldn’t consider your idea of public service “doing good.” Oh, wait, I forgot, libertardianism isn’t a philosophy but a religion. Must Grovel To Invisible Hand!!

  113. Up until the part about the money, you could insert “Teach for America” where you write “Goldman/McKinsey”.

  114. My take is that the problem stems from the MBA course itself. Core industries – banking, manufacturing, logistics, retail, pharma, media etc. – need people with deep skills in finance, supply chain, life sciences, journalism, etc. An MBA course doesn’t offer deep enough skills to make a candidate really worthy of a job in these areas. Instead, such core business operation jobs go to those who join at the lower rank and file and rise through the corporate ladder by gathering practical experience in their chosen field. I feel, the newer model being followed in US graduate schools, where business courses like finance and marketing are offered as electives with core engineering/science courses is the optimal way forward. This way a mechanical engineer has enough exposure to finance and other areas, so that he has an appreciation for the business aspects of his job and can grow into management position in years to come.

  115. Many of the anti-business posts on this site are downright stupid.

    Have you considered that working at McKinsey/Goldman is both more profitable and more interesting than most alternate fields of employment?

    Do you expect kids at harvard (or anywhere else) to defy the logic of obtaining a job which is the “best” by the objective standards 99% of society uses to judge their work?

    How many of you really choose your line of work primarily because of your contribution to society? Why would expect anyone as intelligent and hard-working as these people to take jobs (social worker, teacher) that are so much less demanding and mentally stimulating – just b/c you use some totally subjective standard of contribution to society.

    Grow up.

  116. I conceive it my duty to speak up for the Downright
    Stupid crowd here, being an examplar of such. I
    for one — doubtless there are others — would go
    nuts working at McKinsey/Goldman. Math, real math,
    not applications of computation to finance, is much
    more fun. I remark that playing the violin is also
    much more fun.

    I chose the various things I do and have done by
    picking those which seem to have entertainment
    potential. I want and wanted to enjoy what I do.

    Lemme also speak up for teaching, which Mr
    Reelogic feels is not demanding or stimulating.
    I taught for twenty years, had a wonderful time,
    was almost unbearable stimulated, and I flatter
    myself that I at least did very little harm.

    Regarding Mr Reelogic’s last adjuration, “Grow up”,
    I have passed the 3/4 century mark and I can only
    reply, “Please Sir, I’m doing my best, maybe in a
    few more years . . . .”

    Stupid Alan from Silver Spring MD

  117. Terrific post — it’s a challenge to tell the public interest job story given the competing narratives about what the “best” post-Harvard options are. I agree that many are driven by those two decision rules: close down as few options as possible; and only do things that increase the possibility of future (over)achievement.

    At Harvard one of the ways we’re showing alternatives to the well-represented finance/consulting industries is to surface the alumni activities in public service via http://onthemap.harvard.edu. Our alums (and current students!) are involved at a variety of ways: careers in government, education, NGOs, direct service, etc. Exposing their activities, and letting current students know that there are many successful, engaged grads pursuing those options is a first step.

    Last year’s Crimson survey found that 12.5% of students would, absent financial concerns, choose a career in public service. http://www.thecrimson.com/article/2009/6/1/surveying-the-class-the-number-of/
    For all those considering public service careers, we’re exploring online efforts as part of the solution to show students the breadth of what’s out there — without limiting their options for the future.

  118. Give me a break, it’s ALL about the money. I went to a top-tier undergrad and grad school, and all you have to do is ask the person next to you to understand his/her true motivations. Wall St and banking/trading are 2 jobs where a very large % of the people entering them out of college don’t REALLY know what they’re about to do (much less why it’s even important). But consistent is the fact that the paycheck from it will be 2x the next best alternative. That they understand fully well.

  119. Give me a break, it’s ALL about the money. I went to a top-tier undergrad and grad school, and all you have to do is ask the person next to you to understand his/her true motivations. Mgmt consulting and banking/trading are 2 jobs where a very large % of the people entering them out of college don’t REALLY know what they’re about to do (much less why it’s even important). But consistent is the fact that the paycheck from it will be 2x the next best alternative. That they understand fully well.

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