Why so many of America’s best and brightest college graduates go into management consulting, finance or law school is a perennial question. There are some compelling theories, which I will get to, but first I would like to turn the question around: Why are so many people in top positions, whether in the public or private sector, so old?
I submit that these two trends – and a third, declining productivity growth – are related: Many tasks have become increasingly complex in America, often more complex than people can learn in just a few years. By the time you have experience enough to perform them, you are less interested in taking risks. In your young adventurous years, by contrast, the only jobs you can get are those that don’t reward [or allow] adventure. The result of all this is a less audacious America.
Start with the Ivy Leaguers. I have no rancor against lawyers, financiers or management consultants, but the pursuit of these careers seems like a misallocation of human creativity. Those jobs do not comprise most of the value of the U.S. economy, so why are they such a magnet?
As more and more experience is required … fewer and fewer young people qualify.
After all, there are idiosyncratic, difficult, high-paying and rewarding jobs out there – editor of a major national news organization, for example, or head of a Washington think tank. But school doesn’t necessarily train you for them. Furthermore, you need to know about many aspects of American life to execute them well. The more complicated America’s society and economy become, the more it will be necessary to select people who have many diverse kinds of experience, and that makes it harder for the relatively young.
Instead, the smart graduates of America’s top universities will seek relatively thick, liquid job markets, with high upside but also protection on the downside. Management consulting is perfect. If you are intelligent and hard-working, you can signal that quickly. The entry-level jobs are designed to attract talent, so the consulting companies have an eventual option on promoting the best candidates. The same is true of law and the less quantitative parts of finance.
On net, America is selling its talented young people insurance value – but at the expense of long-term innovation. It might be better for the country if more of these individuals started businesses, tried their hand at chemistry or materials science, or worked in obscure corners of manufacturing in the Midwest. Of course, rates of failure or stagnation are higher in those areas, while glamour is often lower.
The integrated nature of America’s predicament now comes into clearer focus. As more and more experience is required for many of America’s top and most influential jobs, fewer and fewer young people qualify. Those same young people move into low-return, high-stability, establishment-oriented activities. At the same time, the elevation of so many senior individuals may erode risk-taking and creativity, as they fail to bring fresh perspectives to their jobs.
The slower rates of growth in scientific progress are part of this picture. Older scientists are more likely to be in charge, but they also make fewer conceptual breakthroughs. Younger scientists are more temperamentally inclined to be revolutionaries, but that is hard when it may take you until your late 20s just to learn the basics of your field.
The technology sector, I concede, is an exception. That’s because a lot of it is quite new and has been the province of the young, who face no deficit of accumulated experience because no one has any.
In America, then, there are a few sectors with a lot of revolutionaries, while progress is mostly slowing down elsewhere. It may feel safe and stable for a lot of workers, but it’s not ideal for talented young people who want to take risks – the kind of people an innovative economy needs. n
Tyler Cowen is a Bloomberg Opinion columnist.
