Editorial: Private gains and social returns not mutually exclusive

The career that a student chooses to pursue following college should, of course, be a personal choice. 

However, economics professor Sendhil Mullainathan feels uncomfortable when his students choose to seek finance positions, according to a recent article in The New York Times’ “The Upshot.”

We agree with Mullainathan’s reasoning and believe that students should take social returns into consideration and enter a profession for which they are best suited, in terms of both talent and passion, rather than opting for the most profitable route.

At Harvard, a considerable number of students pursue careers in finance. In 2014, about 20 percent of students overall and 50 percent of economics majors went into finance. 

But students should realize that profit and social good can coincide. They can pursue professions they are passionate about, have lucrative careers and still have a significant impact on society.

Mullainathan reasoned that finance may not be the best use of an individual’s personal talents, going on to describe the discrepancy between private and social returns. 

He writes, “Every profession produces both private returns — the fruits of labor that a person enjoys — and social returns — those that society enjoys.”

Students should seek careers out of passion and talent. When this is the case, they can leverage their work to bolster societal growth, rather than simply accumulating private wealth. 

An individual who goes into finance, or a similar career for monetary pursuits, may incur a great deal of private gains but does not necessarily produce a great societal output. 

Mullainathan cites a paper written by economists Kevin M. Murphy and Robert W. Vishny, of the University of Chicago Booth School of Business, and Andrei Shleifer at Harvard University, that describes the negative effects of a phenomenon they term “rent-seeking” have on economic growth.

Rent-seeking occurs when individuals simply transfer wealth, as opposed to making a concerted effort to create wealth.

This tends to occur when students pursue careers simply out of monetary desires. 

Mullainathan sums up his discomfort toward his students’ career choices with this statement: “I hope they realize that they have the potential to do great good and not simply make money.”

It’s a realization that we, as students, should keep in mind when considering our post-college careers.