Improve Yourself

Liberal Education makes not the Christian, not the Catholic, but the gentleman. It is well to be a gentleman, it is well to have a cultivated intellect, a delicate taste, a candid, equitable, dispassionate mind, a noble and courteous bearing in the conduct of life.

— John Henry Cardinal Newman, The Idea of a University

Last week, former Yale professor and current essayist and writer William Deriesiewicz penned a jeremiad against elite higher education in this country which not only excoriated his former employer but also all such cognate institutions of higher learning which aspire to the top of the annual listing of “best” colleges and universities put out by U.S. News & World Report. He has many criticisms to offer, including the fact that colleges like Yale do not in fact teach their students to think, but rather to be timid, anxious careerists following blindly in the well-worn ruts of privilege their parents, peers, and society have picked out for them:

Our system of elite education manufactures young people who are smart and talented and driven, yes, but also anxious, timid, and lost, with little intellectual curiosity and a stunted sense of purpose: trapped in a bubble of privilege, heading meekly in the same direction, great at what they’re doing but with no idea why they’re doing it.

Contrary to their carefully maintained public image and stated mission, Deriesiewicz also denies that these institutions’ educational curricula are as intellectually demanding or their student bodies are as truly diverse as they like to claim. Instead, he blasts them as bastions of existing privilege which train and credentialize a blinkered socioeconomic elite to reproduce itself.

Allowing for some artistic license and the exaggeration natural to a magazine article writer intent on drumming up advance sales of his book, I have to say I cannot materially disagree with Mr. Deriesiewicz. The only question I have is why it has taken him, a college professor with a decade at least in the very belly of the beast, so long to discover what everybody else has known for approximately ever.

* * *

Mr. Deriesiewicz seems shocked, shocked to discover that 250+-year-old institutions charging rack rates north of $60,000 per year to convey some tangled Latin prose on sheepskin to spotty youngsters at the end of four or more years—institutions for which the combined endowments exceed the gross national products of several small countries—should be complicit in the perpetuation and justification of entrenched socioeconomic power structures. Whence, exactly, did Mr. D think these universities’ wealth, status, and prestige come from? Whence the demand for their services? From whom?

From the dimmest reaches of time on, Most Patient and Attractive of Readers, elite educational institutions have been founded, mirabile dictu, to educate the elite: to inculcate and train the ruling class in those arts, preferences, and temperaments which would be conducive to their wielding of power and privilege (q.v. Cardinal Newman supra) and to introduce them to their peers and future colleagues in business, government, and society. In the earliest days, such institutions mostly served as high class finishing schools for the sons [sic] of the rich, as well as training grounds for a limited class of administrators and functionaries the rich relied on to manage their affairs, such as politicians, military officers, and the clergy. Over time, these institutions widened their reach beyond the landed gentry and wealthy merchants to encompass the growing ranks of the striving administrative classes, including, most importantly, the vast numbers of middle class merchants, businessmen, and professionals who would comprise the bulk of the modern market-based economy. Eventually—much later—the doors were opened to women; first as a sop to the daughters of the rich who wished to enrich their unemployed adult lives, and later to those female coequals who began to invade and swell the numbers of the workforce. Along the way, elite institutions began to admit increasing numbers of “outsiders” such as Jews, men and women of color, and other more marginal ethnic, racial, and socioeconomic groups.

But each and every time they added more groups to the circus tent, elite educational institutions remained focused firmly and irrevocably on serving the elite: legitimizing, justifying, and expanding the elite, but serving the elite nonetheless. It’s like The Preppy Handbook joked about Princeton in the 1980s: only 20% of freshmen entered as preppies, but 80% of graduating seniors exited as such. Just so, the Ivy League may admit 12 to 15% of their incoming classes from households where the student is the first person in her family to attend college, but by the time she graduates she will have been anointed—and will have fully internalized her right and privilege to become—a fully fledged member of those citizens credentialed to enter the ruling class. In addition to replenishing their ranks, this suits the elite just fine, since the meritocratic myth that at least a few outsiders can join their ranks via hard work and talent is an excellent way to keep the rest of them docile. Besides, they can always admit a small number of international students who pay full freight in order to subsidize the scholarship kids.

So Mr. Deriesiewicz’s outrage that the Ivy League helps perpetuate the dominance of elites and contributes to socioeconomic inequality seems to miss the point. That is what they have always done. That is their primary purpose.

* * *

Likewise, the ex-professor’s disappointment that so many students at elite universities demonstrate so little interest in the opportunities such institutions offer to expand their minds, take risks, and learn to connect with themselves is misplaced. Surely these are admirable goals for some, but it is the height of presumption to insist they should be the goals of every student who attends college. For in my experience, the diversity which Mr. Deriesiewicz pooh-poohs on the basis of class exists in full force when it comes to the intellectual curiosity, interests, and objectives which students bring to elite colleges. There are future businesspeople, politicians, lawyers, medical doctors, athletes, and the like at Yale and every other similar college. The portion of true scholars, future PhDs or college professors, and restless seekers after knowledge in a top flight university is not much different than that of the general population: small. Many future non-scholars do indeed take the opportunity to stretch themselves here and there, and perhaps a few reconsider their life goals upon encountering Spinoza or Cervantes, but the unfettered life of the mind is a true calling for very few.

Being a former, current, and future paying customer of these institutions, I can personally attest they actually do a reasonably good job exposing their students to opportunities to challenge their assumptions, broaden their knowledge, and get in touch with their inner selves. They do this by requiring students to fulfill distribution requirements across disciplines, offering a staggering breadth of classes to choose from, and enabling them to interact with dozens if not hundreds of professors and other students just as smart or smarter than they are who do not believe or think the same as they do. The colleges Mr. Deriesiewicz derides are often the first places where these talented, driven children have a real opportunity to spread their wings and take the kind of risks he admires. That being said, if a kid attends Princeton with the monomaniacal goal of becoming a Goldman Sachs investment banker for life, there is nothing any university can do to make him drink deep from the font of self- or other-knowledge. This is not Princeton’s problem, either. Cherchez la mère et le père.

* * *

In fact, an alternate reading of the professor’s complaint could leave a perceptive reader with a substantially more sanguine opinion of the state of higher education in America than the one he offers. First, the mere fact that prestige magnets like Harvard and Yale—which attracted 34,295 and 29,610 applications from all over the world for 1,662 and 1,359 spots in the Classes of 2018, respectively—actually do not fill their classes entirely with the moneyed careerist offspring of high-status alumni is a positive thing. The student diversity such colleges actively promote actually means lots more “pointy” (unusually talented, not well-rounded) candidates finally get in than one might otherwise suspect. Sure, this may benefit the technocratic elite and the current socioeconomic power structure as a whole (and usually does), but tell that to Buffy Witherspoon, IV’s parents when she is declined for admission in favor of a low-income genius from Compton who wants to study Catalan poetry and neurochemistry.

Second, the fresh blood which these elite systems suck into the power structure not only legitimizes it via promoting the oversold myth of equal opportunity and meritocracy, it also strengthens it by bringing new perspectives, different backgrounds, and unconventional ambitions to the party. Sure, the ruling class co-opts its potential enemies by making them one of the club, but this is good both for the ruling class and for the revolutionaries it co-opts. This may not make the Marxists in the audience happy, but it enables socioeconomic evolution and change in ways that may, at the end of the day, be significantly more than trivial.

Finally, the staggering rise in the number of kids who go to college in America over the past few decades¹ has not only made admission to the top ranked universities insanely competitive, it has also improved the quality of dozens if not hundreds of second, third, and fourth tier colleges. The colleges where top quality students can get an outstanding education—practical, theoretical, or both—are far more numerous than they used to be, simply because the demand for spaces and the quality of applicants have both risen dramatically. What parents, students, and, yes, critics like William Deriesiewicz have to realize is a bright, ambitious student has far more than seven or eight acceptable colleges to apply to nowadays. And not getting into Yale, Harvard, Stanford, or Princeton is not the life-ending tragedy the neurotically competitive parents of the private school set might think it is.

* * *

Like many academics before him, I fear Professor D has confused the mission, purpose, and legitimacy of our higher education system with the mission, purpose, and legitimacy of the ivory tower. The latter is and always has been servant to the former, not its master. And the former likes the way things are just fine, thank you.

Besides, nobody’s forcing you to apply to Harvard.

Related reading:
William Deriesiewicz, Don’t Send Your Kid to the Ivy League: The nation’s top colleges are turning our kids into zombies (The New Republic, July 21, 2014)
Sovereign Triviality (November 19, 2011)
In the Nation’s Service (December 29, 2011)
The Standard Model (February 18, 2012)
No Country for Young Children (October 21, 2012)

¹ Your Forgetful Bloggist remembers reading not long ago from a source he cannot recall that whereas approximately 48% of the high school graduates eligible for college actually attended college in 1980, by 2010 that percentage had risen to 68%. Combined with general population growth over those decades, that means the college admissions pool has increased in both size and quality spectacularly since YFB graced the leafy groves. I maintain, for what it is worth, that there is no way in hell I could get into the college which accepted me when I was a mere sprout today. Sadly, nobody who knows me personally disagrees when I say this.

© 2014 The Epicurean Dealmaker. All rights reserved.

The School of Hard Knocks

Power Figure, Kongo Peoples, 19th C.

I am no student (We’re going down to meet
Feel those vibrations) Of ancient culture
(I know a neat excavation)
Before I talk
I should read a book
But there’s one thing
That I do know:
There’s a lot of ruin
In Mesopotamia

— The B-52s, “Mesopotamia”

Megan McArdle penned an impassioned plea last week for the (presumably elite, corporate, Bloomberg-View-reading)¹ employers of America to consider hiring more ex-slackers. Notwithstanding her acknowledged bias as a self-described ex-slacker herself, Ms McArdle argued this made sense for two reasons: first, young slackers do not necessarily stay slackers as they age, and second, hiring the alternative—highly professionalized, directed, ambitious careerists—tends to result in fragile corporate monocultures which are subject to their own risks and flaws, including social and intellectual conformity and groupthink.

I am less persuaded by Ms McArdle’s first rationale. In my experience there are all kinds of slackers, including potentially promising ones who dicked around in their youth because they were restless and bored by the cookie cutter path of adolescence and completely irredeemable ones who dicked around because they were lazy bastards who preferred (and will always prefer) to get high on tasty weed rather than do their homework or take out the garbage. I guess the operative screen is ex-slacker, since someone who actually gets her shit together and tries to make something of herself does deserve a real opportunity. Like Ms McArdle, though, ambitious ex-slackers have a lot of proving to do.

Her second rationale resonates strongly with me, however. Over the course of my more than two-decade long career in investment banking, I have read the job applications and interviewed hundreds of young candidates for entry level Financial Analyst and Associate positions at a number of firms of different size, prestige, and culture. Over that same period, I have seen an increasing convergence in the kinds and qualifications of these candidates: predictably good or stellar grades in unobjectionable mainstream majors like finance, business, or economics, predictably hyperactive extracurricular activities centered around “leadership” building opportunities, and predictably careerist charitable and community service activities which only Scrooge could object to. My typical reaction to such candidates is ably captured by David Brooks:

When you read these résumés, you have two thoughts. First, this applicant is awesome. Second, there’s something completely flavorless here. This person has followed the cookie-cutter formula for what it means to be successful and you actually have no clue what the person is really like except for a high talent for social conformity. Either they have no desire to chart out an original life course or lack the courage to do so.

Now normally this is not these children’s fault. It is what they have been told to desire and groomed to accomplish their entire lives. But, with all due respect to Megan McArdle’s Harvard friends with 4.0 GPAs, my God these people are boring.

Most of them, if they ever had a personality or original thought in their head in the first place, have hammered it down so deep into their subconscious they couldn’t summon it on pain of death. Their résumés, their bearing, and their polished interview patter render them about as distinguishable and interesting to talk to as Brooks Brothers mannequins. Nothing in their conversation or revealed background indicates any appetite for adventure, risk, or enlightenment. Nothing they can relate indicates they have tried something they didn’t know they could succeed at, risked failure for a good reason (or any reason at all), or simply gave themselves up to powers greater than themselves—love, fate, chance—just because. They haven’t lived at all. They’ve followed a career path.

I call them carbon sinks.²

* * *

Now the more charitable among you (as well as the helicopter parents who spawned these pathetic simulacra of humanity) will object I am being too harsh on these special snowflakes. You will remind me they are young, and hence pathetically stupid and naïve about the world and their true opportunities in it. Give them time and space, you plead, and these button-downed zombies will blossom into fulfilled and meaningful personalities. You will scold me for dismissing naturally interesting and unusual individuals because they are too wise (or afraid) to run up their freak flags in an interview with a curmudgeonly old white man at a potential future employer. You will complain that I only seek for such adventurers and renegades because I miss my own long-lost adventuring, and I want to relive my halcyon youth in these eager tyros’ stories for the space of a half an hour.

And you would be right. A tiny, tiny bit. But not much. Because I am experienced and clever enough to know how to winkle most such secrets out of the prepackaged dross of most college and business school graduates, if they exist. But they usually don’t. The polished husk you see is usually all there is. And my youthful gallivanting is not something I need or want to recapture in the glazed eyes of some nervous, dissembling twenty-two year old.

No, I look for evidence of intellectual independence, untrammeled curiosity, and adventuresomeness because these are really, really valuable traits in a professional investment banker. A young person who has deviated from the beaten path, who has taken risks, who has ventured to explore something unknown is far more likely to develop the mental flexibility, toughness, and adaptability that will make him or her a valuable counselor and advisor to his or her clients. Sure, these traits are largely useless in the beginning of any investment banker’s career, when they are and must be suppressed in order to satisfy the pressing demands of intellectual drudgery and unimaginative detail work that investment banks expect of their indentured chattel. But they re-emerge later on, as a young banker increasingly grows into the role of a pure salesman who must earn the respect and trust of his or her clients, colleagues, and peers.

And when you do this, a youth spent stretching the envelope and taking risks comes back to pay dividends all out of proportion to its actual extent. For one thing, you have a lumber room of stories which you can share with your clients and colleagues over dinner and drinks that will make them laugh and look at you admiringly. You will not be boring. For another, you are likely to genuinely appreciate these very clients’ and colleagues’ own youthful peccadilloes, which will only endear you to them as a non-judgmental, non-asshole, which is a sadly rare commodity in my business. Most importantly, taking risks and exploring the unknown—whatever form that may take—will likely increase your store of that deeply unfashionable and socially awkward characteristic: wisdom. As Ms McArdle herself avers,

When the prodigal sons return to the fold, they often bring with them valuable information about the outside world.

Wisdom is nothing to sneer at in a professional advisor, much less in a normal human being.

* * *

So what does this mean for the average ambitious youngster reading these words? Well, it means I heartily recommend taking a flyer or two, mixing it up, and actually trying to explore who you are and what you want out of life other than a prestigious, well-paying job at Stereotype Brothers, LLC. For one thing, you may find out to your chagrin after 22 years of prepping for Goldman Sachs that you really want to be a professional chef. Or a skydiver. Or a paleobotanist. Your whole life is ahead of you. I’ve asked this before: why should you put all your youthful energy, curiosity, and enthusiasm into a basket you’re not sure you want to carry?

Plenty of college students nowadays—perhaps too many, in this old man’s opinion—spend all their time and energy in college acquiring what they believe to be marketable skills, without considering for a minute whether the employment to which they aspire is right for them, will exist in a meaningful form in the future, or even will hold their interest for more than a few years.

But don’t get me wrong, either. Taking risks, avoiding the beaten path, and cultivating adventure is not an easy road. It’s certainly no guarantee of success.³ But is conventional success all you want out of life? Please say no.

It is the brave ones who are not afraid to expose themselves to risk, earn scars, and take hard knocks who make the most interesting humans. And even if you stick to the halls of commerce, I bet you’ll find a lot more risk takers and nonconformists among the ranks of the truly successful than Harvard 4.0s.

Guess who they’d rather talk to over a beer at 3:00 am.

Related reading:
The Standard Model (February 18, 2012)
No Country for Young Children (October 21, 2012)
Curriculum Vitae (March 10, 2013)


¹ As opposed, say, to the vast unwashed non-elite, non-Bloomberg-View-reading firms who have to compete for their employees in less exalted realms.
² As in somewhere a carbon atom goes to wait for 30 to 60 years before it can do something interesting, like get sucked into a supernova. Or become a charcoal briquet.
³ For one thing, if you do decide you want to get into investment banking, you’re going to have to run a gauntlet of dozens of junior bankers who are just as blinkered and one-dimensional as the straw men I have been eviscerating in this post. And very few of them, by definition, will be able to appreciate your non-conformity to the career model and professional values they have staked their entire young lives upon. I can’t tell you how many polite arguments I’ve had in group recruiting meetings with tyros who only want to hire (really smart, really accomplished) cardboard cutouts like themselves. And I don’t always win. Caveat interviewee.

© 2014 The Epicurean Dealmaker. All rights reserved.

No Country for Young Children

“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else — if you ran very fast for a long time, as we’ve been doing.”

“A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place.

If you want to get somewhere else, you must run at least twice as fast as that!”

— Lewis Carroll, Through the Looking Glass

I admire Gillian Tett, I really do. She is a fine, perceptive, and aggressive financial reporter and writer who has contributed a great deal to our understanding of the origins of the recent financial crisis, as well as many other things.

But apparently she needs to stick to her knitting, because this recent piece on the influence of legacy on college admissions in the United States is rubbish.

Reading between the lines, Ms Tett recently returned from a clutch of cocktail parties and dinners with American friends whose children were admitted to elite U.S. universities this Fall. From her remarks she seems to have heard the sort of alternately smug, self-serving, paranoid, and neurotic bullshit and misinformation that I have been subjected to for the past several years as the parent of a high schooler recently off to college and one in the chute. In my experience, middle and upper class parents with children of college-bound age in Manhattan and other socioeconomic pressure cookers are the worst sort of frantic, hypercompetitive cynics you can encounter, and they will grasp at the flimsiest and most ridiculous of straws to support their desperate hope little Susy or Billy will get into a top university.

Hence you get nonsense—unsupported in Ms Tett’s piece by any citation or reference (and no doubt made up by some bug-eyed X-ray socialite over Cosmopolitans in a Park Avenue co-op)— that “educational researchers estimate that... having a family link [to the school she is applying to] increases a mid-level student’s chance of entry by about 60 per cent.” Since when? Says who? And how the fuck did they figure out that differential admission statistic? Did they sneak into the Harvard Admissions Office after hours and steal the ULTRA-TOP-SECRET-ON-PAIN-OF-DEATH-NEVER-SHOW-TO-PARENTS-REAL-ADMISSION-CRITERIA folder?

It is just that sort of made-up, silly statistic or “secret” to guaranteeing Bif or Muffy a spot at Yale that I have had thrown at me for the last several years by people convinced of its veracity. The same sort of secret that charlatans use to dupe desperate parents into paying tens of thousands of dollars for “college admissions consulting” services. Let me give you the real scoop: all those secrets are bullshit. How do I know? Easy: nobody has the data to figure it out.

* * *

Annnyhoo. Enough of my ranting.

Of the Holy Trinity of Higher Education in North America—Harvard, Yale, and Princeton, known succinctly as HYP—only Yale is indiscreet enough to make the percentage of its enrolled freshmen from the Class of 2016 who are legacies easy to find: 13%. This aligns neatly with the 15% estimate from the unidentified “educational researchers” Ms Tett cites. One would be surprised if Harvard, Princeton, and other pretenders to the triple throne like Stanford were much different.

But let’s examine just how damning this statistic really is. One measure is that Yale also reveals that 12.1% of its current freshman class are first-generation college students; that is, students who are the first members of their family ever to attend a four-year college or university. You can’t find an antidote to the perpetuation of entrenched elite privilege more effective than this: the sons and daughters of high school graduates (or worse) comprise almost as large a percentage of the anointed New Haven elite as do the scions of Elis past. There’s nothing like an uneducated janitor’s daughter with perfect SAT scores and a 4.0 GPA to rattle the security and worldview of Winthrop P. Witherspoon IV.

A second reassurance can be drawn from the academic records of the students these institutions admit. Ninety-five percent of Yale’s enrolled freshmen were ranked in the top 10% of their high school class; 96% of Princeton’s were. If the Ivy League is admitting the idiot sons and daughters of alumni in preference to striving young geniuses from the wrong side of the tracks, they sure are some smart idiots. Similar conclusions can be drawn from the admission statistics based on board scores and GPAs. In comparison to its overall admit rate of 7.9% last year (2,094 admits out of 26,664 applicants), for example, Princeton offered a spot in its pantheon of privilege to only 10.4% of students who applied with a perfect grade point average and 18.7% of applicants with SAT scores 2300 and higher (out of 2400). On an overall basis, Harvard and Yale were even stingier with their golden tickets: only 5.9% and 6.8%, respectively. Let’s face it: no matter what your qualifications are, your chance of getting into one of these three schools is vanishingly small.

* * *

Ultimately, you must understand that the most elite institutions of higher learning in this country are looking to build and cultivate student bodies that are vibrant and diverse in almost every dimension: background, ethnicity, geography, interests, and extracurricular talents. They do this because they want to—diversity attracts the best students and polishes their institutional reputation—and because they can. Students from all over the world submit almost 90,000 applications for admission to less than 4,400 slots at HYP alone. In this dynamic, superb intellectual and academic ability is simply table stakes. If you don’t have it, you probably won’t even make it past the first round.

Yale makes this very clear on its admission site:

We estimate that over three quarters of the students who apply for admission to Yale are qualified to do the work here. Between two and three hundred students in any year are so strong academically that their admission is scarcely ever in doubt. But here is the thing to know: the great majority of students who are admitted stand out from the rest because a lot of little things, when added up, tip the scale in their favor. So what matters most in your application? Ultimately, everything matters.

Including whether you are a legacy. Perhaps, if you are competing against an otherwise indistinguishable applicant, one with intellectual abilities, ethnicity, and extracurricular interests identical to your own, being a legacy will tip the scale in your favor. But, more often than not, you will likely be competing for a slot with someone who has another set of qualities seductive to the university. Princeton discloses the admissions criteria it uses to the federal government: “Very important” = academic capability, talent, and character; “important” = extracurriculars; “considered” = legacy, first generation student, geography, race/ethnicity, volunteerism, and work experience. Being the child of an alumnus or alumna is in no way a lock.

It is also worth noting that the children of privilege, the elites we are so worried about perpetuating via access to our most hallowed educational institutions, often come from the least “diverse” and hence least attractive racial and ethnic groups to these leading universities. Ceteris paribus, how much does ticking the legacy box weigh against the diversity agenda?

* * *

I have witnessed up close and personal the rank cynicism which Ms Tett has imbibed from her friends. A substantial number of the Manhattan parents I socialize with repeat with absolute conviction the belief that a huge donation is the price of guaranteed admission for their child to an Ivy League school. Stories circulate on the Upper East Side whisper circuit of a $5 million check to one school, a $10 million one to another. Unspoken is whether the children in question were talented and interesting enough to get in on their own merits. For some reason, this seems to be considered beside the point, which is immensely sad in its own right.¹

In some respects, the leading universities’ refusal to be more transparent about their admissions process perpetuates this belief. A cynic might say they prefer it this way. After all, a parent desirous of sending Junior to Harvard cannot change her status as an alumna, but she certainly can change the frequency and amount of money she donates to her alma mater. The trick is there is no explicit quid pro quo. I know several alumni who donated generously to their university only to see their children rejected.

But frankly, the connection between legacy admissions and donations is spurious. Very few alumni can write the sort of check that would retrieve their son or daughter from the reject pile at HYP. Most alumni simply don’t have that much money. Many of them are successful, true, but not all of them are, and very few qualify as truly rich. And the truly rich can write a check to Harvard, Princeton, or Yale for their kid whether they went there or not.

The real issue which Ms Tett does not address—the real way elites perpetuate themselves—is they do whatever they have to to make sure their children are prepared to compete head to head with other children on the primary criteria for college admission. They send their kids to expensive private schools, they hire tutors to buff their performance in school and on standardized tests, and they work their extensive social networks to get internships, enriching extracurricular experiences, and letters of recommendation to bolster their resumés, transcripts, and college applications. This is the true advantage educated elites have in the college admissions game: it’s not so much that they game the system—the system is less gameable than people think—but they spend whatever it takes to win according to the existing rules.

Is this fair? I don’t know. But I will say this: it is far more likely that the children of the elite compete more with each other than they do with applicants from other diversity buckets (ethnic, geographic, extracurricular). In this way, the developmental arms race among elite parents ends up looking more like a sociological version of the Red Queen Effect than it does unfair competition against the weak and underprivileged.

Harvard, Princeton, and Yale can take care of the latter. Nobody helps the elite but ourselves.²

“Do you mean, sir, that these birds are cannibals?”

“That’s an odd question, young Master,” the banker said. “I merely said the birds drink blood. It doesn’t have to be the blood of their own kind, does it?”

“It was not an odd question,” Paul said, and Jessica noted the brittle riposte quality of her training exposed in his voice. “Most educated people know that the worst potential competition for any young organism can come from its own kind.” He deliberately forked a bite of food from his companion’s plate, ate it. “They are eating from the same bowl. They have the same basic requirements.”

— Frank Herbert, Dune

Related reading:
Gillian Tett, The price of admission (Financial Times, October 19, 2012)
The Red Queen Effect (Farnam Street, October 14, 2012)
Et in Arcadia Ego (November 11, 2008)


¹ Not frequently enough discussed in this whole topic is the emotional and psychological cost to our children of such shenanigans. First, the debilitating suspicion that, without Mommy and Daddy’s money, influence, and machinations, the child herself could not accomplish what her parents so desperately expect of her. Second, the loss of childhood freedom, lack of care, and play to relentless careerism and resumé polishing. In my position as a father of teenagers and an interviewer of recent college graduates, I see far too many astonishingly accomplished young people who never seem to have had a childhood.
² This is not a complaint. Simply an observation.

© 2012 The Epicurean Dealmaker. All rights reserved.

The Standard Model

No, no, no, no, no.

Now poor Ezra Klein has fallen into the instrumentalist trap of higher education. In an opinion piece on Bloomberg, Klein accuses Harvard and other elite institutions of higher education of failing their liberal arts students. He claims they neglect to provide their charges with sufficient opportunities to develop real-world, “marketable” skills. Accordingly, Harvard and its ilk

are producing a large number of very smart, completely confused graduates. Kids who have ample mental horsepower, incredible work ethics and no idea what to do next. So the finance industry takes advantage of that confusion, attracting students who never intended to work in finance but don’t have any better ideas about where to go.

Ay, and there’s the rub. For you see, Ezra is upset that so many poor, confused graduating seniors from Harvard, Princeton, and Yale are taking jobs in the big, bad finance industry, which we all know to be a seething cesspit of moral turpitude. Harvard paints a big, fat “EAT ME” on the backs of its innocent, unsuspecting seniors, and the Wall Street Wolf is only too happy to oblige.

It’s a neat, compelling story, perfectly in tune with the bankster-hating zeitgeist of our times: Evil financial Svengalis corrupting the (almost) virginal sons and daughters of the hardworking parents whose homes they repossessed, all with the tacit complicity of the selfsame institutions we entrusted to educate the flower of our youth.

Too bad it’s full of holes.

* * *

First, however, I must acknowledge that Mr. Klein accurately describes the approach which Wall Street and management consulting—the other major predator¹ raiding the Career Services office of your average Ivy League university; one which typically takes the second largest share of graduates—employ to woo and win their prey:

It begins by mimicking the application process Harvard students have already grown comfortable with. “It’s doing a process that you’ve done a billion times before,” explains Dylan Matthews, a Harvard senior. “Everyone who goes to Harvard went hard on the college application process. Applying to Wall Street is much closer to that than applying anywhere else is. There are a handful of firms you really care about, they all have formal application processes that they walk you through, there’s a season when it all happens, all of them come to you and interview you where you live. Harvard students are really good at formal processes like that, and they’re less good at going on Monster or Craigslist and sorting through thousands of job listings from thousands of companies whose reputations they don’t know. Wall Street and consulting (and Teach for America, too) turn applying to jobs into applying to college, more or less.”

Yet that’s only half of it. A bigger draw, explained a recent Harvard graduate who majored in social science and worked at Goldman Sachs for two years, is how Wall Street sells itself to potential applicants: As a low-risk, high-return opportunity that they can try for a few years and, whether they like it or hate it, use to acquire real skills to build careers.

This is true: I admit it. We dastardly bankers and our evil management consulting cousins make it easy for students at elite colleges to apply for entry level positions. It’s almost like we want to compete for the brightest, most accomplished, hardest-working, most ambitious new entrants to the work force.² Many of us having gone to such institutions ourselves, it can be no surprise that investment bankers and consultants have structured our recruiting efforts to ensnare as many likely candidates as possible from our alma maters. It’s also no surprise our sales pitch resonates with the little bleeders. Wall Street has built its business model to rely upon a steady stream of hard-working, ambitious, intelligent cannon fodder to do the heavy lifting. Is it any wonder we have pitched semi-permanent recruiting tents under the leafy groves of academe? Wall Street and the Ivy League are symbiotic.³

* * *

Having conceded Mr. Klein’s point that bankers are successful at luring many of our best and brightest to perdition, however, it is worth enumerating the reasons why the rest of us should not take the vapors over this enormity. First, hiring anywhere from 17 to 36% of top universities’ graduates into “finance” becomes far less alarming when one realizes we are talking about hundreds of benighted souls, not thousands or tens of thousands.⁴ Furthermore, the proportion of new hires to my industry coming from the highest-ranked schools (HYP, the Ivy League, Oxbridge, or wherever you personally wish to draw the line) is much higher than from the college graduate population in general. We do not hire a third of all college graduates. We just don’t have that many jobs. I suppose, in order to maintain an appropriate level of outrage after acknowledging this arithmetic fact, you must believe this small handful of elite schools has a monopoly or near monopoly on all the most intelligent, ambitious, hard-working, and potentially valuable young contributors to society. Having attended one of these outfits, and having interviewed and hired dozens if not hundreds of their students as well as students from “non-elite” schools over the years, I must strenuously disagree with you. I’ve said it before: Wall Street hires a type from among the best and brightest, but nowhere near all of them.

Second, the investment banking sales pitch is not snake oil: the financial analyst program which we hire new graduates into does indeed last for two years, and two years only. After that, most of the participants leave. In order to stay, you must want to stay, and we must want you to do so. This does not happen very often. Most analysts go off to graduate school, get jobs outside finance, or disappear from our radar entirely. Their indentured servitude is short, and we encourage the vast majority of them to reenter society, where they have every opportunity to serve their fellow man as they see fit. Given the kind of meat grinder we put them through, it is somewhat of a surprise to me that as many try to return after business school as do. The ones who do return must scrabble for a place on the slippery pyramid of Analyst, Associate, Vice President, Director, and Managing Director. Very few of us make it to the top or, once there, stay for long. It is an unadvertised fact about my vocation that few who enter investment banking enjoy what normal people would consider a full career. I have no facts at hand, but I would guess the average tenure in my business for professional positions is less than five years. If we do impress your babies into our despicable crime syndicate, mommies, we won’t hold them for long.

Third, and perhaps most interesting to me, I see fewer of the sort of befuddled, directionless soon-to-be-graduates coming from Ivy League or indeed any universities nowadays than Mr. Klein implies exist. Given what I know about the maturity of twenty-two year olds, and the relatively common realization among college seniors that the all-consuming goal toward which they have been slaving for three-quarters of their young lives—a sheepskin from HarYaleOxCambTon—is nigh upon them, I am surprised so few show up for interviews in a catatonic state. Rather, I see a level of professionalism, independent study, preparation, and sheer careerism among investment bank interviewees that is downright frightening. Even the Brown senior who majored in Medieval French Poetry and minored in Latin American Political Dance comes to the first interview having taken DCF modeling, Corporate Finance accounting, and Advanced Powerpoint Presentation classes from independent training firms who prep candidates for this very purpose. She had better, because the hard-core i-banker wannabes, who majored in Economics, have idolized Warren Buffett since grade school, and sleep in khaki pants and buttondown shirts are so numerous nowadays we just don’t need to hire the well-rounded, intelligent dilettantes. Those days are gone. Sure, some do get in—I wish we got more—but investment banking is no longer one of the leading candidates to hire them.⁵

So, even if we agree that Harvard and its peers are failing to shield liberal arts graduates from the evil banksters of Wall Street, I think we can acquit them of inflicting massive damage to society by it.

* * *

But more to the point, really, I disagree wholeheartedly with Mr. Klein’s premise. Why should a liberal arts education give marketable skills to its graduates? What is the point? There is a very good argument that a liberal arts education is a luxury consumption good in its own right. After striving for years to get into the “right” college, why shouldn’t a young person have the opportunity to explore learning and knowledge for its own sake, without thought for its future marketability? Plenty of college students nowadays—perhaps too many, in this old man’s opinion—spend all their time and energy in college acquiring what they believe to be marketable skills, without considering for a minute whether the employment to which they aspire is right for them, will exist in a meaningful form in the future, or even will hold their interest for more than a few years. How much better that some youngsters have the opportunity to reason undistractedly about history, art, philosophy, politics, and literature for a few, brief years before they have to worry about paying the rent.

From this Writer’s perspective, it’s a downright shame that investment banking cannot employ more liberal arts graduates than it does. Given that no-one else in society seems to be subsidizing this activity, I must admit a little pride that my colleagues and I can do as much as we do. It’s not like we are covering ourselves in glory elsewhere.

The rent will always be due. Jobs, firms, and professions will come and go. Markets, political systems, societies, and nations will flower, bloom, and sink into the sea.

Somebody, somewhere, should be thinking about bigger things.

Related reading:
Ezra Klein, Harvard’s Liberal-Arts Failure Is Wall Street’s Gain (Bloomberg, February 15, 2012)
Catherine Rampell, Out of Harvard, and Into Finance (The New York Times, December 21, 2011)
In the Nation’s Service (December 29, 2011)
Sovereign Triviality (November 19, 2011)


¹ Management consulting? I ask you.
² As measured and preselected for us by the vast social machinery leading up to, surrounding, and including elite undergraduate education at very little expense to us. Of course, bright, accomplished, hard-working, ambitious young people are not limited to soi-disant elite universities, by any means. But collecting so many of them in one place does make our search for new employees so much more efficient, wouldn’t you agree? Plus, investment bankers are not above exploiting the signaling value of an Ivy League education for ourselves, our competitors, and our clients. A lot of us went there, after all. We’ve drunk that Kool-Aid from birth, along with many (most?) of the rest of you.
³ Interestingly enough, however, it is often unclear which of us is the parasite and which the host.
⁴ Dastardly buggers that they are, the top schools do not break down what professions they actually include under the rubric “finance.” Given, however, that it normally includes commercial banking, insurance, buy-side investing, and real estate, you may assume that a much smaller portion of the advertised percentage actually gets to eat baby seal with the rest of us in investment bank cafeterias after graduation. Non-investment bank finance employers are welcome to defend themselves on their own dime, as I have no interest in doing so.
⁵ This is not to even mention the vast number of college graduates—even in the Ivy League—who school themselves in engineering, hard sciences and mathematics, computer science, journalism, business, and other fields with what I presume Mr. Klein would consider hard, marketable skills. Many of these apply for jobs in investment banking and consulting, too, and many get them.

© 2012 The Epicurean Dealmaker. All rights reserved.

In the Nation’s Service

“They all have husbands and wives and children and houses and dogs, and—you know—they’ve all made themselves a part of something, and they can talk about what they do. What am I gonna say? ‘I killed the President of Paraguay with a fork. How’ve you been?’”

— Grosse Pointe Blank

I.

It is a common situation in human society that we often encounter significant moral dilemmas, situations in which we must make a choice between terrible evils in order to advance some agenda. Should we continue an unjust war when immediate cessation could cause worse harm than a temporary continuance? Should we torture a prisoner for the location of a nuclear device primed to incinerate innocent civilians? Should bankers crash the entire global financial system and plunge us into recession simply to ensure a steady stream of material for journalists and pundits to write about? These are difficult choices.

Within larger, more complex societies, we often deal with such regularly recurring dilemmas by establishing and empowering groups of individuals to take care of our dirty work for us. Whether it is Seal Team Six, the United States Congress, or Goldman Sachs, many of us prefer to tut-tut from a safe distance about the naughty things these agents do to advance our interests, while secretly enjoying both the benefits they help provide and the fact we ourselves are able to maintain righteously clean hands while doing so. I leave it to you, O Thoughtful Readers, to reflect on the justice of such moral hypocrisy and, indeed, whether is it truly avoidable in any practical sense.

More to the point, however, is the question whether such groups and individuals actually provide a service to their societies. I say they do. You may not agree with their actions, or even the sociopolitical agenda which engenders such choices, but you cannot deny that society as a whole depends and relies upon such agents to do its dirty work. And there is plenty of dirty work to go around. Some claim, for example, that the entire industry of financial intermediation “is a superposition of fraud and genius” designed to trick the rest of us into taking investment risk, therefore ensuring economic growth instead of collective stasis, even if the price is unequal distribution of risk and loss and the extraction of intermediary rents by financiers. This may well be true. But it is a collective fraud which advanced societies have foisted upon ourselves, and in most instances we enjoy substantial (if not unalloyed) benefits from it. What would you propose in its stead? Lower living standards?

And even if you are skeptical that the financial industry’s actions are the moral equivalent of shooting terrorists in the head or firing remote-controlled missiles into Afghan villages—as I am—you can still acknowledge that perhaps the societal function it performs, while unpleasant, is one of more pedestrian utility, like taking out the garbage or cleaning toilets. Call it the “wrinkled nose” problem. There are lots of those jobs which need to be filled in society. In fact, one might argue that most jobs fall somewhere along the spectrum from mildly disgusting to slightly repellent in moral terms. As a wise man once observed, that’s why they call it work.

So I fear I must take exception when Princeton students exhort their peers to eschew jobs on Wall Street for more noble ones “In the Nation’s Service.” We all work in the nation’s service, children, whether you like it or not: garbagemen, IRS agents, commando assassins.

Even investment bankers.^1,2

II.

There is another, more prominent strain to the critique of Wall Street’s hiring among college students. That is, it is argued that the financial industry is so lucrative and glamorous that it has—at least for the past many years—hoovered up all the “best and brightest” among this nation’s young people, leaving too few for the really important work of innovating, inventing, producing, and addressing the truly pressing problems our society faces. The example typically used to illustrate this argument is the large number of science, math, and engineering graduates Wall Street has hired into sales and trading positions to construct, market, and trade structured products and derivatives.

Put aside, for a moment, the question whether we really face a shortage of technically trained young people in science, math, and engineering roles in this country when we can afford to devote a significant number of them to programming virtual farm animals and glorified online diaries. Put aside the question why the supposedly daunting technical problems we face are not serious enough to have created well-paid jobs for hundreds of otherwise unemployed, highly-educated PhDs in science and engineering. Put aside the fact that many of these wonderfully innovative and productive jobs are either highly risky entrepreneurial positions with no financial security or low-paid internships with charitable organizations or NGOs. Put aside, in other words, the fact that no-one has demonstrated to me that there is any real demand out there in the real economy for these supposedly “productive” positions, or at least any demand that can translate into a living wage sufficient to support a young college graduate without her having to live in her parents’ basement. No, we can address the larger argument directly with several different points.

First, there is the simple matter of demand. Wall Street and finance are currently shrinking rapidly, due to a combination of lousy cyclical market conditions and hostile secular regulatory shifts. Simply stated, Wall Street will continue to shrink over the next several years, because we can no longer make the kind of money structuring, selling, and trading securities and derivatives we did before the financial crisis. We just won’t need to hire as many people as we did in the last decade. Most of the best and brightest will have to look elsewhere for job offers anyway. Problem sorted.

Second, it is not clear that finance ever did monopolize hiring of the best and brightest among our young people, anyway. There are two components to this observation. As Bryan Caplan observes, “elite”—that is, lucrative and socially prestigious—employers like investment banks and management consulting firms tend to recruit new hires from a very narrow and select list of undergraduate and graduate schools, consisting primarily of the Ivy League and cognate institutions. Investment bankers and management consultants tend to look for new employees like themselves, and they tend to be more comfortable recruiting either from the schools they went to or from schools just like them. But, as Megan McArdle points out,

The Ivy League is full of smart, interesting people. But it is not full of all of the smart, interesting people in the country, or even a majority of them. And given the résumés required to get there, it produces a group of people who are narrow in certain predictible ways. (I include myself in this: just because I can see it operating doesn't mean I can escape it.)

The problem is that actually seeking out a wide variety of graduates would be much more expensive and time consuming. Why spend the effort searching for “best” when you can easily access “very, very good”?

This is spot on, as I can attest from my own experience. Over the years, my employers, peers, and I have been completely uninterested in recruiting the “best and brightest” from among the flower of our youth. Instead, we look for bright enough (i.e., very, very bright, but not necessarily the brightest), very hard working, and supremely ambitious. This is entirely due to the requirements of the jobs we hire for: we need young men and women with quick, flexible intellects who can pick up the tricks of the trade in very short, very accelerated apprenticeships; people who are gregarious and fun to be with at 3:00 in the morning after three all-nighters together; and people who are phlegmatic and driven enough to withstand the inhuman punishment we dish out during the early years of their careers. The nature of investment banking—and, dare I say it, management consulting, too—is not one that demands deep thinkers, brilliantly inventive innovators, or even virtuoso synthesizers of disparate intellectual strands. We want smart, fun, dedicated, aggressive youngsters who can work like animals, day-in, day-out, for as long as it takes. As you can tell, this is not a particularly nuanced or diverse set of criteria.

At most you can say that, up until now, investment banks have been aggressive employers of a particular kind of person from among the best and brightest, and they have sought their candidates from among a particular subset of educational institutions which generate them. The intense selectivity of the most elite universities in this country guarantees that there a legions of brilliant, driven, accomplished youngsters stretching their intellects and learning valuable skills outside the penumbra where Wall Street looks for its hires. Furthermore, as Megan McArdle says, the eye of the needle through which young people must pass to gain entrance to the Ivy League and other super-elite universities tends to select for just the sort of highly ambitious, aggressive individuals who make good candidates for investment banking.³ This leaves a tremendous number of highly intelligent, creative, and non-conventional individuals firmly outside the clutches of evil investment banks, whether they like it or not. Those who despair that the cream of our youth are disappearing down the maw of Mammon should take comfort that a very large number of them—probably the majority, and perhaps even the best of the best and brightest, given what we want them for—escapes permanent dissolution into ignominy.

Finally, even those who fall into the gaping gullet of finance are not necessarily lost forever. Students hired out of college are typically employed for two years at most, after which they can leave to go to graduate school or rejoin the productive economy, wiser for their scars and sporting a highly marketable work experience on their résumés. Even among those who go to business school, not all return to my industry. Ones who stay or return with MBAs don’t all stay forever, either. They get fired or laid off; they burn out under the unrelenting strain; they become disgusted with the miserable lifestyle, the continual sacrifices, and/or the moral compromises they feel compelled to make. The ones who manage to make full careers in my business are few in number, even though a “career” in my business normally lasts less than 20 years. Investment banking is a young person’s game, or the calling of an individual like me who has found nothing more exciting and satisfying to do that will actually pay him money. Some—a very few—even manage to come out the other side of the tunnel with their morals intact and the financial security and means to give back to society in a meaningful way. They go into politics, they become philanthropists, they build schools in Bolivia.

They might even write a blog.

III.

So, don’t despair. The deluded and confused flower of our youth will have broader, more socially constructive paths available to them than investment banking, whether they want them or not. Investment banks’ demand for cannon fodder is plummeting almost as fast as their social prestige, and pay is likely to follow. Eventually, unless current trends reverse, investment banking will return to what it was not so long ago: an obscure, thinly peopled backwater too mysterious for most trend-following college kids to even contemplate, and too abhorrent in polite society for their parents to recommend. The hard-core wanna-be bankers—high-functioning autistics, budding psychopaths, etc.—will always beat a path to our doors, however, as they always have done. And we will welcome them with open arms. Perhaps even motivated, intelligent candidates from non-Ivy schools will have a chance to break in, too, after the Ivy Leaguers have moved on to the next hot employment trend. That would be a good thing, since they tend to be better candidates for the long run anyway.

We don’t need or want all the best and brightest. Just the best and brightest investment bankers. Not much has changed in that regard over the past 20 years I have been in the saddle. But one thing has changed for good, and for the better. No longer can a privileged dilettante get a job at Salomon Brothers simply because Mummy knows the Queen of England. Sorry, Michael Lewis.

Related reading:
Steve Randy Waldman, Why is finance so complex? (Interfluidity, December 26, 2011)
Kevin Roose, An Orange and Black Eye for 2 Banks (DealBook, December 9, 2011)
A Hard Rain’s Gonna Fall (September 30, 2011)
Bryan Caplan, How Elite Firms Hire: The Inside Story (EconLog, November 18, 2011)
Megan McArdle, Elite Firms Fishing in a Very Small Hiring Pool (The Atlantic, November 18, 2011)
If the Phone Don’t Ring, You’ll Know It’s Me (October 1, 2011)


¹ Which is not to say, of course, that we must allow the people who do our dirty work to do whatever they want or abuse their legal and extralegal powers for their own benefit and the detriment of the greater good. After all, we empowered them. They work for us. So it is up to us to direct and monitor what they do and are allowed to do. In the case of the financial system, this means regulation and oversight. I have consistently advocated close, stringent regulation of the financial sector, for the very reason that a malfunctioning, overly self-interested financial system can cause all kinds of nasty problems. As I think we all can attest.
² Furthermore, when students such as these talk about jobs in the nation’s service, they most often mean civil service, bureaucratic, and political positions. Oftentimes, these are the very individuals who commission society’s dirty work in the first place. Who is more culpable, the commando who shoots the terrorist in his bed, or the National Security Advisor who authorized the raid? The structured products banker who sold toxic securities, or the stream of regulators and politicians who loosened the rules enough for him to get away with it? Hmm...
³ The most select schools make heroic attempts to enroll diverse student bodies, and they certainly have the numbers of applicants to make that possible. However, the center of the bell curve at any Ivy League university remains squarely in the sights of my industry, and it is arguable that pressures both within and after school tend to push everyone toward the middle. There was a humor book in the 1980s, The Preppy Handbook, which joked that 20% of each entering class at Princeton were preppies, but 80% of graduates were. One might say the same thing about students who want jobs in investment banking and consulting nowadays.

© 2011 The Epicurean Dealmaker. All rights reserved.

Sovereign Triviality

Above all else, the mentat must be a generalist, not a specialist. It is wise to have decisions of great moment monitored by generalists. Experts and specialists lead you quickly into chaos. They are a source of useless nit-picking, the ferocious quibble over a comma. The mentat-generalist, on the other hand, should bring to decision-making a healthy common sense. He must not cut himself off from the broad sweep of what is happening in his universe. He must remain capable of saying: “There’s no real mystery about this at the moment. This is what we want now. It may prove wrong later, but we’ll correct that when we come to it.” The mentat-generalist must understand that anything which we can identify as our universe is merely a part of larger phenomena. But the expert looks backward; he looks into the narrow standards of his own specialty. The generalist looks outward; he looks for living principles, knowing full well that such principles change, that they develop. It is to the characteristics of change itself that the mentat-generalist must look. There can be no permanent catalogue of such change, no handbook or manual. You must look at it with as few preconceptions as possible, asking yourself: “Now what is this thing doing?”

— Frank Herbert, “The Mentat Handbook,” Children of Dune

While I do my best to suppress such realizations, Dear Readers, I have found it increasingly difficult to deny that we live in an age of Engineering and Science triumphalism. Signs abound for all to see, from technology’s relentless conquest and absorption of everyday human interaction, to the increasingly strident complaints that my own industry has hobbled the march of civilization by luring innocent youth away from test tubes and argon lasers and perverting them to the “socially useless” worship of Mammon. It is perhaps no stronger evidence that Science with a Capital S has consumed the heart of our common narrative that so many of the culturally and intellectually dispossessed have been fighting so fierce a rearguard action in denial of its most basic claims. Flat Earthers are never more strident or dangerous than when they feel their very relevance to society is threatened.

Within the mainstream conversation, however, there seems to be a general consensus that as a country we neither possess nor produce enough scientists and engineers to meet our current and projected challenges, so many of which are asserted to be scientific or technical in nature. Climate change, pollution, adequate energy, population pressures, poverty—all these and more are asserted to be in some form or fashion reducible to technical problems. Problems which, many seem to assume, can be solved if we simply graduate more scientists and engineers to fix them (and make sure they don’t go to Wall Street). Let us birth more Steve Jobs and Mark Zuckerbergs, the argument goes, and all will be well.

Accompanying this narrative, of course, is a general wailing and gnashing of teeth that we devote too many resources within higher education to the teaching of the liberal arts and humanities, resources which could be better allocated to training the technicians, engineers, and scientists we really need. Now, as a fierce devotee of the liberal arts and humanities in my own right—and, in full disclosure, a graduate with a degree in a traditional “soft” social science—I am understandably partial to arguments which refute such heresy. Sadly, the few examples I have seen so far¹ have done little to press what I consider the strongest arguments in favor of maintaining broad and robust humanities programs in higher education.

The weakest are of a kind: arguing the instrumentalist case that liberal arts disciplines can be functionally useful to society, either in their own right or as producers of the junior partners—translators, communicators, panegyrists, and apologists—for the scientists and engineers who do the “real” work. But this will not do. That way lies intellectual stepchildren like “Applied Philosophy” and “Science Journalism,” fine professions no doubt, but hardly compelling enough societal amanuenses to justify $200,000 bachelor degrees and ongoing taxpayer subsidies.

Writing in The Economist, Will Wilkinson supplies stronger arguments. He points out that college, for most, is now a major consumption good, which students exploit because they can. He flips Alex Tabarrok’s argument of education in the service of economic growth on its head:

What is economic growth for, anyway? It’s for expanding our choices and making life better. Is it really so surprising that, as we grow wealthier as a society, more and more of our young people, when the amazing resources of the modern university are put at their disposal, choose to use them learning something satisfying and enriching and not for anything except cherishing the rest of their lives? Is it really so surprising that taxpayers are not in revolt over the existence of poetry professors?

He also makes the more germane instrumentalist point that, as Western society gets richer, we expend more and more leisure time consuming the products of artists, writers, and other creative folk. Who else but Film Studies and Comparative Literature majors will produce these entertainments, anyway? Physicists? Mechanical Engineers? Please.

* * *

But all these counterattacks miss the three most important reasons I believe broadly available liberal arts education will remain critical to our society and polity for the indefinite future. First, there is the point which Frank Herbert makes so artistically and metaphorically in my epigraph above. As the body of scientific and technical knowledge swells exponentially, scientists and engineers by definition simply must become narrowly focused specialists. You cannot be effective as a scientist or engineer nowadays if your knowledge spans too broad a field. Our collective scientific knowledge is simply too deep. But this introduces the dilemma of the expert, who literally cannot see the forest for the trees or, more aptly, for the respirative pores on the bottom of leaf #6,972 on branch #473 of tree #1,204. Who will aggregate and balance the competing viewpoints, suggestions, and research programs of all these specialists in highly complex microdomains? Who else but someone who has been rigorously educated in the general discipline of how to think, of how to evaluate competing claims and conflicting evidence under conditions of extreme uncertainty? Who has been taught not only how to analyze and synthesize disparate, incompatible, and even conflicting data but also how to judge?²

The second point to realize is that the usual suspect scientific and technical conundrums which the techdysiasts would have us address are defined and constrained far more by their social and political dimensions than by the hard science issues at their core. Fixing climate change, poverty, or even global financial regulation is not merely a problem of finding the correct solution to a thorny technical problem. These big issues are big because they entail questions of philosophy, ideology, justice, the proper form of society, and even culture. The underlying science is almost trivial compared to the value questions at stake.³ Here, again, we find that the study of liberal arts and humanities prepares a student far better to come to grips with the thorny issues at hand than, say, one prerequisite bioethics course for a pre-med major. Do we really want to turn the keys to our global future over to a bunch of narrowly-educated, really smart, culturally and historically naive technocrats? I sure don’t. Give me someone who has read Herodotus, analyzed Shakespeare, or argued over Rawls instead.

Lastly, there is the larger issue that, for all their power and demonstrable success, science and technology simply do not, cannot, will not address a host of questions and problems which are natural to the human condition. Here is Richard Feynman:

The next reason that you might think you do not understand what I am telling you is, while I am describing to you how Nature works, you won’t understand why Nature works that way. But you see, nobody understands that. I can’t explain why Nature behaves in this peculiar way.⁴

But this is simply not good enough. It may be futile, unscientific, even a cognitive mistake to ask big questions about the nature of reality (the “whys”), the proper form of relations to other human beings in society, our rights and duties to ourselves and others, and the very reasons for belief in our own knowledge (including, of course, science itself), but it is natural and ineluctable. Science will never address these questions. It doesn’t have the tools. Art, social science, literature, cultural studies, history, psychology, and soft sciences like economics do. For this reason alone we cannot, must not, will not abandon them.

To do so would be to forswear the very nature of what it means to be human.

The verifiability, the falsifiability of the sciences, their triumphant progress from hypothesis to application, constitute the prestige and the increasing domination they exercise in our culture. But in another sense, these also make up their sovereign triviality. Science cannot give an answer to the quintessential questions which possess or ought to possess the human spirit. Wittgenstein noted that point insistently. It can only deny their legitimacy. To inquire about the nanosecond prior to the Big Bang is, we are didactically assured, an absurdity. Yet we are so created that we do inquire, and may find St. Augustine’s conjecture far more persuasive than that of string-theory.⁵

* * *

I suspect Harvard’s Philosophy Department will be able to order that new laser printer next year, after all.


Related reading:
Alex Tabarrok, College has been oversold (Marginal Revolution, November 2, 2011)
First, Let’s Shoot All the Philosophers (April 22 2011)
Mary Crane and Thomas Chiles, Why the Liberal Arts Need the Sciences (and Vice Versa) (The Chronicle, November 13, 2011)
Why we subsidise arts majors (The Economist, November 3, 2011)
Eugene Wigner, “The Unreasonable Effectiveness of Mathematics in the Natural Sciences” (February 1960; accessed November 19, 2011)


¹ A sample which I freely acknowledge, for the benefit of my more scientifically inclined friends, to be neither comprehensive nor statistically significant.
² I speak, naturally, of the best of liberal arts education. Expecting a specialist in 15th Century Catalan poetry to be able to make such judgments is heroic, at the least (but perhaps not impossible, even then). But there are many disciplines under the rubric of the humanities which teach such skills. I do not wish to oversell this point, but it is clear—at least to me—that in an age of increasing specialization, someone should be paying attention to the forest.
³ If only, we presume, because it may admit of a clear solution we all agree to. Questions of value do not.
⁴ Richard P. Feynman, QED: The Strange Theory of Light and Matter, Princeton, New Jersey, 1985, p. 10.
⁵ George Steiner, “Ten (Possible) Reasons for the Sadness of Thought”, Salmagundi, Nos. 146, Spring 2005, pp. 3–32.


© 2011 The Epicurean Dealmaker. All rights reserved.

If the Phone Don’t Ring, You’ll Know It’s Me

As a dashing, handsome, witty, and debonair man-about-town, you might well imagine, Dear Readers, that I receive copious quantities of correspondence begging a minute of my precious time to address some issue or other. Often, it is some tyro who has read my work here, soaking up the reflected glory and excitement of the world of high finance while simultaneously eliding the irony, sarcasm, and disgust which naturally comingle therein. Said tyro is almost always looking to “break into” my industry, after having read my semi-ironic paean to investment banking (but missing the irony) or talking with his shell-shocked peers who already cling tenuously to 100-hour-a-week waterboarding slots at überbanks.

Notwithstanding its own not-insignificant challenges and the social opprobrium currently attached to investment banking by society at large, it’s hard to blame the poor dears:

Unlike, say, 99.6% of all other jobs available to a wet-behind-the-ears idiot in proud possession of little more than an expensive college degree, becoming an investment banker fresh out of college is a huge rush. Depending on what role they perform, new entrants just weeks into the job can participate in billion dollar underwritings, multi-billion dollar mergers, complicated cross-border restructurings, or devilishly complex trading programs, all the while possessing a level of experience formally known in the industry as “jack shit.”

In what other industry, I ask you, can a 22-year-old who just stopped wetting the bed three weeks ago participate in a deal which runs for weeks on the cover of The Wall Street Journal or the Financial Times? To be sure, he is probably doing little more than making copies, getting coffee, and trying not to look as stupid and lost as he feels, but at least he is in the room. Contrast this, if you will, with a fresh McKinsey recruit tasked with interviewing shop floor supervisors to develop a human resources inventory for a ball bearing manufacturer in East Bumfuck, Illinois. Or a pre-law student who spends 80 hours a week in a windowless basement cross-checking sale-leaseback contracts for a patent dispute in Moldavia. On average, young investment bankers spend less time traveling that management consultants and more time sleeping than corporate attorneys. Plus, they get to tell their friends and family that they carried Bruce Wasserstein’s bags. What could be better?

Unfortunately, from their perspective, many of the youngsters who contact me fear they do not possess the “right” degree from the “right” school which they believe will magically open the secret door into this wonderland of fun. Often they have tried and failed to pursue the standard on-campus recruiting paths or have come up short with the fearsome Human Resources harridans who guard the gates to Analyst or Associate recruiting. And so they reach out to Yours Truly, pleading for fifteen minutes of my time on the telephone or in person to give them the key to investment banking Valhalla.

For the avoidance of doubt, and for the benefit of the 20 hapless supplicants feverishly typing emails to me in response to this post, let me make this perfectly clear:

No. Nope. Unh-unh. HELL NO.

I don’t do phone calls or meetings. Haven’t any of you seen Enemy of the State?

* * *

By the same token, it is a waste of electrons to send me your resumé. To whom would you suggest I send it? “Oh, uh, hi, Jerry at Goldman Sachs. I, uh, just happened to find this fascinating resumé lying on the fax machine. Would you mind taking a hard look at it? Wait. What do you mean? No, I don’t know anybody named ‘TED’. Why do you ask?” Consider my carefully defended pseudonymity an impermeable barrier to contact, referrals, or recommendations in the real world. Sorry, but that’s just the way it is.

However, as partial recompense for your pains, and to show I am not a completely heartless bastard, I am happy to share with you here the same advice I give aspiring applicants to my industry under my own identity.

First of all, having a degree in finance or economics from a top-ranked college or business school is not a sine qua non to get hired into investment banking. But I’ll not kid you: it helps. Especially now, when the industry is under severe pressure to retrench. Why? Because it acts as an easy screen for harried recruiters to winnow down the hundreds if not thousands of job applications they receive to a more manageable horde. Taken separately, a degree from a top school shows that other demanding institutions have deemed you worthy in the past, and a degree in finance, economics, or accounting shows you have an understanding of (and possibly a love for) the basic tools and concepts of our trade. Beyond that, they tell us almost nothing about whether you have the drive, passion, and capacity for our business. The only way we can find that out is by throwing you into the fire itself.

For I have seen dozens of top-ranked Ivy League graduates flame out (or worse, fizzle) over the years, mostly due to lack of energy, drive, or commitment to do what has to be done. Not because they weren’t smart enough; no, they were just too lazy or too entitled to get down in the mud and wrestle with the alligators, which is why we hire young cannon fodder like you in the first place. Survive the alligators, and you have a chance to rise into the haughty position of power, influence, and respect you feel you deserve. Don’t survive, and we’ll toss your mangled corpse out the back door onto a trash heap like a used Kleenex.

Did I mention investment bankers are heartless bastards?

* * *

What does it take to succeed in my business? You have to be really smart (don’t kid yourself on this one: it’s a high hurdle), determined, aggressive, and indefatigable. You have to be quick on your feet, too, because change is ever present in investment banking, and you have to be able to adapt to wildly different situations and volatile personalities. You have to learn how to work with financial statements, accounting concepts, and spreadsheets. You have to be good with people. You have to be a quick learner, because no school can teach you what you need to know and how to do it: investment banking is and always will be an apprenticeship business. And you have to (learn to) love the business. If you don’t, you’ll burn out: it’s just too hard and demanding.

Nowhere in that litany, you will notice, did I say you need a finance degree or an Ivy League diploma. Those help getting in the door, but they tell us little about whether you will be a good hire. So, what do you do if you don’t have the kind of credentials which almost guarantee you will get a first round interview? You have to be creative in your approach, flexible and clever in your campaign, and you have to convincingly demonstrate the traits of successful investment bankers I have enumerated above when you get in the door.

Reach out to people you know, ask for recommendations to senior bankers from your friends and family, request informational interviews with these bankers (but not unreliable, curmudgeonly pseudonymous bloggers), and go show them you have what it takes. Don’t give up. It will be very hard. But if you can get in the door, you will have proved to yourself and your employer that you have all the tools you need to make a positive impact.

And maybe one day, if you are smart, hard-working, and very, very lucky, you’ll be kicking some prissy Princeton prima donna the HR geeks sent you to interview out on his ass because you can’t trust him to bring back your coffee order from Starbucks correctly.

Good luck, campers.

* * *

(Oh, and one more thing. If you really want to stand out, it helps to be a girl. Just sayin’.)


© 2011 The Epicurean Dealmaker. All rights reserved.

School for Scandal

"Give up, just quit, because in this life, you can't win. Yeah, you can try, but in the end you're just gonna lose, big time, because the world is run by the Man. The Man... Oh, you don't know the Man? He's everywhere. In the White House... down the hall... Ms Mullins, she's the Man. And the Man ruined the ozone, he's burning down the Amazon, and he kidnapped Shamu and put her in a chlorine tank! And there used to be a way to stick it to the Man. It was called rock 'n roll, but guess what, oh no, the Man ruined that, too, with a little thing called MTV! So don't waste your time trying to make anything cool or pure or awesome 'cause the Man is just gonna call you a fat washed up loser and crush your soul. So do yourselves a favor and just GIVE UP!"

— The School of Rock

Dartmouth College senior Andrew Lohse kicked up a bit of a stink earlier this week, with a column in the school rag bemoaning the pervasiveness and corrupting influence of corporate and financial recruiting on his campus. I will not quibble with Mr. Lohse's characterization of my industry, although based on this aperçu—

what is essentially a vulgar and extortionate system of lending and predatory capitalism which is increasingly underwritten by what remains of the public’s coffers, as large banks and investment groups fail left and right

—his perception strikes me in equal parts as supercilious ("vulgar"? Really?), fact-free ("extortionate"), and dated. Really, I cannot be too harsh, because one should not expect a mere 21- or 22-year-old whose sheltered perception of the global finance industry has probably been limited to jeremiads in Rolling Stone and The New York Times to know what the hell he is talking about. Nevertheless, this incident only confirms my conviction that Intellectual Humility and Defense Against the Hubristic Arts remain firmly off the core curriculum at Hogwart's Ivy League Schools of Arrogance and Sophistry.

No, more to the point, I was brought up short reading his tirade when I encountered this:

We came to this school to probe big questions about why the world is the way it is — not to conform to a withering ideal of wealth and virtual power that we have been manufactured to hold dear.

There are a few paradoxes about Dartmouth culture that I have always found deeply troubling, chief among them the cognitive dissonance between the brilliance of my peers and their complete lack of intellectual curiosity. Most of them are ambivalent at best, and at worst antagonistic, to the very concept of posing the hard questions about power, equality and history that we should be examining as undergraduates of a liberal arts college. They seem aware that doing so will not help them land a prestigious 16-hour-a-day job at some faceless hedge fund, where they’ll learn about manipulating capital instead of imagining a freer and more just world. To think about inequalities would be a distraction from their manufactured task of perpetuating, rather than questioning, class-based systems of power and dominance. Is this what it means to be ambitious in our culture? Should this be the goal of the valedictorians of Ivy League institutions? No matter how hard I try, I cannot think of more pathetic ambitions.

There are so many things wrong with this statement, that I hesitate to even know where to begin.

* * *

I know. Let me propose my own mini-curriculum for the edification and clarification of Mr. Lohse and his fellow discontents in the rapidly waning days of their academic sinecures. You may call it a Minor in Disillusionment, or perhaps a Certificate in Learning How the World Really Works. Grading will be pass-fail, and these cross-disciplinary courses will show up on your résumé. (In the interest of not prejudicing future non-professional graduate school applications, however, you may elect to exclude them from your undergraduate transcript.)

• History 324 / Sociology 339: The Role of Higher Education in Society – Mr. Lohse mentions twice how he and his peers have been "manufactured" to "perpetuate" and "hold dear" wealth- and "class-based systems of power and dominance." This course will evaluate the history of higher education in America, with a special emphasis on how this system has been designed at its core to justify, perpetuate, and staff the dominant existing power structures of a society which both supports it financially and fetishizes it as the pinnacle of socioeconomic achievement. If time permits, the class will review the peculiar features of secondary education systems and supporting social and economic structures which have been designed for no other purpose than to get students such as Mr. Lohse and his classmates accepted at elite institutions of higher learning such as Dartmouth, no matter the cost.
• Psychology 201: Other Minds – Mr. Lohse expresses surprise and dismay that so many of his brilliant classmates display i) a lack of intellectual curiosity about and ii) a hostility toward the issues and ideals of socioeconomic justice which he holds dear. The class will discuss, in roundtable seminar form, how and why seemingly smart, articulate, and well-meaning individuals who come from similar or even identical socioeconomic backgrounds can reasonably and intelligently disagree on fundamental issues of fairness, efficiency, and equality in society, and demonstrate by example that it is a fool who thinks anyone who disagrees with him or her is a fool. Part two of the course will investigate the varied motivations of students for undertaking a rigorous undergraduate education at a prestigious university, using the example of the students enrolled in the course. Special attention will be paid to analyzing in an even-handed and non-judgmental manner the opinions of students who consciously view and value such an undertaking as advanced vocational training (q.v., History 324 / Sociology 339, above).
• Political Science 278 / History 499 / Ethics 202: The Tyranny of Ideologues – The class will study the tyranny and authoritarian behavior of true believers when they attain a position of power, with particular focus on numerous examples from revolutionary periods in history, as well as the pedagogical program proposed by Mr. Lohse, who believes "the hard questions about power, equality and history" should be the principal focus of a university. For their required term paper, students are free to argue either for or against Mr. Lohse's implied premise that his program is superior—morally? intellectually? aesthetically?—to any of Anthropology, Comparative Literature, Biophysics, Applied Mathematics, Classical Philosophy, or Remedial Basketweaving. If time permits, the class will evaluate the utopian claim that "imagining a freer and more just world" constitutes a valid and self-supporting alternative to gainful employment.
• Independent Study – Each student is encouraged to develop an individually tailored program, in conjunction with a faculty advisor and registered therapist, which is designed to counteract psychological, intellectual, and emotional shortcomings which will prove to be deleterious to his or her productive insertion into society post graduation. Popular programs of study include How Not to Be a Hubristic Ass, How to Respect the Opinions and Choices of Others, and How Not to Bite the Hand that Feeds You. In the case of Mr. Lohse, the faculty would like to draw special attention to a newly-offered course, No-one Wants to Hear My Poorly-Thought-Out, Half-Assed Opinions Over a Beer at the Student Union on Saturday Night. It has been recommended for him by a number of his classmates and peers.

* * *

I mean really, Andrew, I remember being appalled by the staggering disinterest most of my classmates displayed toward the issues and ideas nearest and dearest to my heart, too, when I first got to college. But eventually I got over it, in part because I developed enough maturity to accept the well-reasoned choices of others even if I disagreed with them, and in part because I developed enough empathy to understand that I didn't give a shit about what most of them cared about, either. Chacun à son goût, you know.

Look, if you don't like how powerful the evil forces of finance have become in our society—and you are not alone in this regard; I think my industry has become too big, too—I might suggest a fruitful line of inquiry for your admirable reformist energies would be to discover exactly how this situation came about. I don't think anyone has done full justice to the problem, and I agree with many that it is a problem worth understanding (and solving, if we can). Surely there is no oversupply of intelligent minds working on the problem to make it difficult for you to find a position.

And that's another thing. How can you, a product of one of the most competitive secondary and higher education systems on the planet, be unhappy that your competitors and presumed equals in brilliance are being siphoned off to dead-end, 16-hour-a-day jobs typing Powerpoint presentations and pushing electronic ledger entries around the globe? Doesn't it occur to you that that leaves the field of social and economic justice wide open to you and those few noble souls who choose to join you? It will be much easier for you to make a mark, a real contribution there, without hundreds of brilliant Darmouth and Princeton grads all jostling for a slice of social reformist glory.

Who knows, if you hit on something really revolutionary, you might even drive the real wages for do-gooding up. After all, you're probably gonna have a mortgage and childrens' college tuition to pay one day, too.


© 2011 The Epicurean Dealmaker. All rights reserved.