In the op-ed pages of The Washington Post today, Elliot Gerson–the American Secretary of the Rhodes Trust–takes a bold stand:
Tonight, 32 young Americans will win Rhodes Scholarships. Their tenures at Oxford are funded by the legacy of the British imperialist Cecil Rhodes, a man whose life would not be honored today were it not for his vision that young people of outstanding intellect, leadership and ambition could make the world a better place.
For more than a century Rhodes scholars have left Oxford with virtually any job available to them. For much of this time, they have overwhelmingly chosen paths in scholarship, teaching, writing, medicine, scientific research, law, the military and public service. They have reached the highest levels in virtually all fields.
In the 1980s, however, the pattern of career choices began to change. Until then, even though business ambitions and management degrees have not been disfavored in our competition, business careers attracted relatively few Rhodes scholars. No one suggested this was an unfit domain; it was simply the rare scholar who went to Wall Street, finance and general business management. Only three American Rhodes scholars in the 1970s (out of 320) went directly into business from Oxford; by the late 1980s the number grew to that many in a year. Recently, more than twice as many went into business in just one year than did in the entire 1970s.
This break in an almost century-old pattern coincided with great increases in occupational earnings differentials, which have continued to grow, seemingly exponentially. It seems quaint, if not unfathomable, that just three decades ago the differentials in earnings — generally two- to fivefold between business leaders and doctors or lawyers, or five- to tenfold with professors, scientists and public servants — were often rationalized by Rhodes scholars as reasonable additional compensation to balance the lower standing of business jobs among their peers.
When differentials could become a hundredfold or far more — and as investment banking and similar firms started to recruit young Rhodes scholars who had degrees in math, physics or even history, English and theology — the yawning prospective wealth chasm understandably became impossible for many to ignore. Even for a few of those most deeply committed to other, more public-spirited pursuits, the lure of such rewards, especially as they are reasonably attainable for people of such high abilities, became much harder to resist.
Many thought a silver lining of last year’s financial crisis — or from the populist rage that flared against Wall Street excess and to profits born not from creativity but from leverage — would be that earnings differentials would return from obscene to merely enormous levels, if not to the very generous multiples that had long been adequate to fuel a vibrant economy. Well, the hyper-bonuses are back — astonishingly having been made even easier to achieve with taxpayers socializing the downside risks. And the crisis? What crisis?
So how many more of America’s young and brightest will ask themselves what kind of chumps they are to give up the chance to earn 100 or 500 times as much as their mentors, their doctors, their favorite professors, their idols and heroes?
It’s not that I even find that there’s much controversial about Gerson’s stance (In the end, who could fundamentally disagree?), but it is significant coming from so high up in the Rhodes Scholarship administration. So, I commend Elliot Gerson for taking such an important public stand.
So many of my colleagues have gone on directly to lucrative jobs in finance (or management consulting). Although I disagree with their choice (especially in light of the greater responsibility that their prestigious scholarship implies), it’s hard to fault them considering the extreme levels of compensation they are offered. Truly this is a sick system that needs to change.
Hat tip to Andy Kim.