Organizations and Markets

| Steve Phelan |

Further to my comments on the best and brightest entering the finance industry, David Wessell at the WSJ reports that 15% of male Harvard graduates from 1990 work in the finance industry compared with only 5% of 1970 graduates. Furthermore, those Harvard grads in the finance industry were earning 195% of the salary of those in other industries. The article later goes on to state that “some of the brainpower drawn to Wall Street would have been more productively employed elsewhere in the economy.” The question is whether all this is a free market outcome or is some sort of distortion misallocating resources?