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.