Graphic by EJ Chong | Mercury Staff.
It’s
hard to imagine, but banking in America was once a relatively boring
profession. In the wake of the Great Depression, when 9,000 banks failed,
strict government regulation and a more restrained financial culture
transformed finance into a sober workaday profession. Financiers made safe,
moderate investments and took home good salaries. For decades, the financial
industry fulfilled its purpose — to grease the wheels of the real economy — and
contributed to American growth and prosperity.
Flash
forward to 2019. By and large, modern Americans distrust both Wall Street and
the regulators responsible for keeping it in check. It’s easy to see why:
Decades of deregulation have transformed finance from a prudent trade into a
sexy, glamorous industry. Enormous frauds such as the Enron scandal and the
mortgage-backed securities crisis can be blamed on irresponsible financiers. In
popular culture, lurid movies such as “The Wolf of Wall Street” and “The Big
Short” depict the financial sector as predatory and unrestrained, rife with
fraudsters and charlatans. As Greg Smith famously proclaimed in his New York
Times op-ed,
“Why I Am Leaving Goldman Sachs,” the culture of major banking and investment
firms has become “as toxic and destructive as I have ever seen it.” The
financial industry has become both unrestrained and unethical.
Although the many drivers of
this cultural shift are difficult to quantify, it is clear that the way we
educate business students is partly to blame. An overemphasis on case studies
that lack social, cultural or ethical context renders many business and finance
students, for lack of a better word, heartless. When we take the human element
out of business education, we teach students to value profit over people, even
though their decisions can deeply impact the real economy — the one that you
and I live and work in.
Luckily, college curriculums
are relatively easy to change. Since the Great Recession, the financial
industry has undergone a lot of soul searching, and business schools are
increasingly requiring students to study ethics. They’re not silver bullets,
but classes such as “Business Ethics” and “Professional Responsibility” are
instrumental in building a more moral and reflective financial culture.
Although financial crises and scandals aren’t solely due to a lack of ethics
classes, making them mandatory could have a big impact. Teaching ethics can
make students more open-minded and honest because it encourages them to
question their own beliefs and values.
Yet, despite the obvious
benefit of a mandatory ethics class for finance and business students, JSOM
students still aren’t required to take one. Considering that finance and
business administration are two of the most popular undergraduate majors, this
is a glaring omission. Just one compulsory class in ethics could go a long way
towards producing more responsible, compassionate and moral students, and if
JSOM added one to the core curriculum, it would be following in the path of
prestigious programs such as Harvard
Business School and Wharton. The university has a responsibility to its
students and the public at large to teach the difference between right and
wrong. There’s no doubt that JSOM produces great investors, but it should also
ensure it produces principled ones.
Thomas
Hobohm is an economics sophomore from Dallas.