11 ms·

> Economics, conversely, is as popular as beer, topping all majors at Harvard, Dartmouth, Princeton and Penn. In what Deresiewicz calls “a stunning convergence,

by burgers 12y ago

> Economics, conversely, is as popular as beer, topping all majors at Harvard, Dartmouth, Princeton and Penn. In what Deresiewicz calls “a stunning convergence,” it was the top major at 26 of the nation’s top 40 universities and colleges. In a society that sets up severe and aggressive punishments for having less money than someone else, why would anyone go into any other field? Only the masochists and the selfless will be outside the world of finance soon.

melling 12y ago
Well, there will probably still be an abundant number of indie developers willing to make $40k/year. They'll move to Alaska so they can live the dream. I should have kept a list of all the recent podcasts and links. Anyway, here's one from today. http://www.developereconomics.com/indie-app-opportunity-gone/ http://www.developereconomics.com/indie-app-opportunity-gone...
- otakucode 12y ago
  It always amazes me when a future where everyone can make a good living, but where there may be reduced opportunities for insanely extravagant wealth concentration, makes people scoff, but I see it often. Since technology has solved the problem of distribution - the main product that companies were invented to solve - it only seems natural for centralized companies to dissolve entirely. Aside from solving distribution (both of work and of product), everything companies provide can be provided for nearly no cost by software. And companies today have tremendous overhead, doing unwise things like maintaining offices. They do nothing but drain resources and subtract value. Physical co-location of workers is worthless thanks to technology in most every industry. And it always seems to be the people who are most dedicated to economic ideals and capitalism who refuse to see that capitalism dictates that the current system of megacorps will be defeated by capitalism itself because they are radically inefficient when compared to swarms of freelancers coordinated by and through software. Simply because we may never see another 'Goldman Sachs' strangling the wealth out of millions and putting it into the pockets of a handful who did nothing to earn it, they ignore the fact that most people only need $72k/yr to get to a point where more money won't even make them happier.
  - melling 12y ago
    That's less than a first year salary for a first year junior banker. http://www.bloomberg.com/news/2014-08-20/goldman-sachs-said-to-raise-junior-staff-salaries-20-.html http://www.bloomberg.com/news/2014-08-20/goldman-sachs-said-... People with kids need to pay $1000/month for day care in the NYC area. The price for an average 3 bedroom home that's commutable to NYC has to be over $500,000. Yes, $72k/year will go a long way in Alaska.
    - mbrameld 12y ago
      I think you underestimate the cost of living in Alaska. I live in Juneau and it is very expensive. Maybe not NYC or SF expensive, but in 2012 the median value of a single family home was $332,000. Food and gas are also very expensive. Things might be slightly cheaper in Anchorage or Fairbanks. You might be able to find some cheap land somewhere undesirable and build a house or a cabin, but it's going to be very expensive to get building materials shipped there.
      - hudibras 12y ago
        Median household income in Alaska is $61,000/year, so there are definitely lots of Alaskans who can scrimp by on $72k. https://www.census.gov/hhes/www/income/data/statemedian/ https://www.census.gov/hhes/www/income/data/statemedian/
        monknomo 12y ago
        $72k/year is above average in Alaska; it is above average in every state. If you look at the census data you cite, you can see that Alaska is #7 in terms of median household in the US. I doubt that means that Alaskans are significantly richer than average Americans, it probably means that Alaska is more expensive. It looks like melling is using Alaska as an example of a cheap place; somewhere your dollar goes farther. If you look at the "Real Value of $100" maps you see floating around[0] you'll see it is not a particularly cheap state. It might be cheaper than New York City, but I'm not at all sure it's cheaper than New York State. In fact, New York looks like it has a median income of 53k, so plenty of New Yorkers scrimp by on $72k. Based purely on maximizing the difference between their income and their neighbors, the hypothetical indie dev should go to Mississippi. I think looking at the cost of living in a state is a better guide than median income. This cost of living chart[2] says that the cheapest states are Mississippi, Tennessee, Kentucky, Oklahoma, and Indiana, whereas the most expensive states are Hawaii, DC, New York, Alaska (ha!), and New Jersey. Based purely on minimizing their cost of living, the hypothetical indie dev should still go to Mississippi. I am a little surprised to see that the median income of New York is so low compared to its cost of living, so a New Yorker, on average, might be better off moving to Alaska, but not by as much as some other state, I'd wager. My surprise got me thinking, so I did a tiny bit of excel analysis, where I normalized median wages[0] based on the value of a dollar data[1], then sorted states based on normalized median wage / cost of living[2]. Utah, Nebraska, Virginia, Iowa, and Wyoming are the top 5 with that ratio, while Hawaii, New York, DC, California and Oregon (Oregon pips Alaska here, by one rank, but my point stands, Alaska is many things, but cheap isn't one of them) are the bottom 5. I think that maps roughly with my intuition that big coastal places are sort of expensive for their average salaries and that boring, but not poor places are cheap for their salaries. I'm not sure this is relevant to the indie dev who doesn't have an employer, but for those of us who work in the flesh, I guess we should go to Utah? [0] https://www.census.gov/hhes/www/income/data/statemedian/ https://www.census.gov/hhes/www/income/data/statemedian/ [1] http://taxfoundation.org/blog/real-value-100-each-state http://taxfoundation.org/blog/real-value-100-each-state [2] http://www.missourieconomy.org/indicators/cost_of_living/index.stm http://www.missourieconomy.org/indicators/cost_of_living/ind...
- burgers 12y ago
  That's kind of my point. How is forcing that indie developer in live in Alaska, much different from the Soviets shipping someone off to Siberia because they didn't get with the plan? Finance will continue to grow as the preferred choice of those who want to avoid being punished by US society and forced live in Alaska or not have enough to eat or a safe place to live.
  - melling 12y ago
    Do you really need someone to explain this to you? The Endless September: user: burgers created: 8 days ago karma: 91 Have fun. I'm outta here...
  - barry-cotter 12y ago
    >How is forcing that indie developer in live in Alaska, much different from the Soviets shipping someone off to Siberia because they didn't get with the plan? Because one of them involves the choice between the gulag and death and the other involves the choice between being a poverty-stricken artist and anything else you might decide to do once you get over your art and quit.
    - burgers 12y ago
      But maybe people who ended up in the Gulag were because they chose not to go along with what the state wanted them to do? It seems quite obvious that the United States strongly discourages going into any other field outside of economics. That is by far the easiest low risk high income path a person can take in the US. So by becoming an artist, you are going against the framework set up by US society to convince you to go into finance. That's why there are so many punishments and risks involved. Just like the Gulag was set up to convince people to follow the framework set up by the Soviets. 14,000+ people were murdered in the US. Many of those people died simply because they had a low enough ratio of money to others to force them to live in a dangerous place. Not because of any other reason than having less money that others.
      - judk 12y ago
rayiner 12y ago
The majority of the Ivy league comes from one particular demographic: the upper middle class. These families might have an HHI of $100-500k; very comfortable, but not so much that the kids don't have to work for a living. There is a strong risk aversion in this demographic, because falling out of this class has really significant quality of life repercussions. And it's not just the money. For ambitious kids, it's a fear of hitting artificial limits on career progression. Working your way up in a corporation isn't a common career trajectory anymore. Instead, companies hire executives from a particular track, which starts with an Ivy-league school, involves a stint at an investment bank or consulting firm, perhaps an Ivy-league MBA, and from then forward a series of management and executive positions. The tech industry is somewhat of an exception to this rule, but only somewhat. Elon Musk has a bachelors degree in Economics from Penn's Wharton School (in addition to his degree in Physics); Peter Thiel majored in Philosophy at Stanford, and so went to law school like the other English/Philosophy majors, and then did a stint in investment banking. And even in entrepreneurship, you'll spend a lot of your time pitching VC's, and guess what's the easiest way to become a VC: Ivy-league, stint at an investment bank or consulting company, then an MBA. If you as an entrepreneur have that same background, that removes one level of insulation between you and the people you need to fund your company. Considering all of these things, if you're smart enough to get into an Ivy-leaguge school, why wouldn't you major in economics?
- foobarqux 12y ago
  Thiel was a derivatives trader, not an investment banker.
  - deleted 12y ago
    [deleted]
  - rayiner 12y ago
    You're right, and it's relevant to the narrative. Thiel jumped into finance from a legal career, which can be difficult to do unless you capitalize on a market shift (e.g. bankruptcy lawyers jumping to distressed asset funds in the most recent recession). Derivatives was a growing area in the early 1990's, which presumably made it easier for him. Which was fortuitous, because since he didn't come from money, he might not have been in a position to start his first fund without his Wall Street connections. This aspect of finance, the difficulty of getting into the field later on in one's career, is a major reason why so many Ivy-leaugers pursue it right out of school.
j2kun 12y ago
How does this make any sense considering that most people don't choose a career in finance and get by without "severe and aggressive punishments"?
- burgers 12y ago
  You may want to read what I wrote one more time. I did not say that those outside of finance deal with lack of food, safety and health. I stated that if one has less money than someone else, they are much more likely to have to deal with things like being assaulted or killed or going without enough to eat etc. So it just seems obvious that if you don't want to deal with these punishments for finding yourself with less money than 50 to 60 percent of the population, you would go into finance as it gives you the best chances of having more money than most and therefore dealing with less, if any, of the punishments US society hands out for having less money than others.
  - afafsd 12y ago
    >I stated that if one has less money than someone else, they are much more likely to have to deal with things like being assaulted or killed or going without enough to eat etc. So just to clarify, there's a lot of Harvard and Dartmouth graduates (in non-economics) going without enough to eat, are there?
    - burgers 12y ago
      Well, if you read the article, you would have read about two students, 1 went to Dartmouth and the other went to Yale. The former worked at a bar, if I remember correctly and the latter worked at the airport. Neither graduated with economic degrees. ;) All jokes aside, indeed when you live in a country that hands our very severe punishments(just look up the murder rate in less expensive neighborhoods etc) for having less money than someone else. Real estate is directly tied to the amount of money you have compared to others so could explain how that analogy is that far off? If someone lived in New York City, they might have to trade quite a bit of safety in neighborhood for having a less profitable degree than someone who graduated with an economics degree. So indeed US society hands out a weighted lottery about getting murdered based upon how much money you make, even at middle class levels.
shamney 12y ago
the strange thing about this is that economics is a very academic subject with little practical application
josephschmoe 12y ago
Engineers have better outcomes at the start of their career and have better odds of starting their own company successfully. If you're a good economist, you'll go into economics. If you're a great economist, you'll go into engineering.
- watwut 12y ago
  Great economist would optimize the money at the start of their career? I would expect him to optimize lifetime earnings.
eli_gottlieb 12y ago
Get back to us on that when you find some place to live after we automated your trading position. ~~ software industry

by burgers 12y ago

melling 12y ago

Well, there will probably still be an abundant number of indie developers willing to make $40k/year. They'll move to Alaska so they can live the dream. I should have kept a list of all the recent podcasts and links. Anyway, here's one from today. http://www.developereconomics.com/indie-app-opportunity-gone/ http://www.developereconomics.com/indie-app-opportunity-gone...

otakucode 12y ago
It always amazes me when a future where everyone can make a good living, but where there may be reduced opportunities for insanely extravagant wealth concentration, makes people scoff, but I see it often. Since technology has solved the problem of distribution - the main product that companies were invented to solve - it only seems natural for centralized companies to dissolve entirely. Aside from solving distribution (both of work and of product), everything companies provide can be provided for nearly no cost by software. And companies today have tremendous overhead, doing unwise things like maintaining offices. They do nothing but drain resources and subtract value. Physical co-location of workers is worthless thanks to technology in most every industry. And it always seems to be the people who are most dedicated to economic ideals and capitalism who refuse to see that capitalism dictates that the current system of megacorps will be defeated by capitalism itself because they are radically inefficient when compared to swarms of freelancers coordinated by and through software. Simply because we may never see another 'Goldman Sachs' strangling the wealth out of millions and putting it into the pockets of a handful who did nothing to earn it, they ignore the fact that most people only need $72k/yr to get to a point where more money won't even make them happier.
- melling 12y ago
  That's less than a first year salary for a first year junior banker. http://www.bloomberg.com/news/2014-08-20/goldman-sachs-said-to-raise-junior-staff-salaries-20-.html http://www.bloomberg.com/news/2014-08-20/goldman-sachs-said-... People with kids need to pay $1000/month for day care in the NYC area. The price for an average 3 bedroom home that's commutable to NYC has to be over $500,000. Yes, $72k/year will go a long way in Alaska.
  - mbrameld 12y ago
    I think you underestimate the cost of living in Alaska. I live in Juneau and it is very expensive. Maybe not NYC or SF expensive, but in 2012 the median value of a single family home was $332,000. Food and gas are also very expensive. Things might be slightly cheaper in Anchorage or Fairbanks. You might be able to find some cheap land somewhere undesirable and build a house or a cabin, but it's going to be very expensive to get building materials shipped there.
    - hudibras 12y ago
      Median household income in Alaska is $61,000/year, so there are definitely lots of Alaskans who can scrimp by on $72k. https://www.census.gov/hhes/www/income/data/statemedian/ https://www.census.gov/hhes/www/income/data/statemedian/
      - monknomo 12y ago
        $72k/year is above average in Alaska; it is above average in every state. If you look at the census data you cite, you can see that Alaska is #7 in terms of median household in the US. I doubt that means that Alaskans are significantly richer than average Americans, it probably means that Alaska is more expensive. It looks like melling is using Alaska as an example of a cheap place; somewhere your dollar goes farther. If you look at the "Real Value of $100" maps you see floating around[0] you'll see it is not a particularly cheap state. It might be cheaper than New York City, but I'm not at all sure it's cheaper than New York State. In fact, New York looks like it has a median income of 53k, so plenty of New Yorkers scrimp by on $72k. Based purely on maximizing the difference between their income and their neighbors, the hypothetical indie dev should go to Mississippi. I think looking at the cost of living in a state is a better guide than median income. This cost of living chart[2] says that the cheapest states are Mississippi, Tennessee, Kentucky, Oklahoma, and Indiana, whereas the most expensive states are Hawaii, DC, New York, Alaska (ha!), and New Jersey. Based purely on minimizing their cost of living, the hypothetical indie dev should still go to Mississippi. I am a little surprised to see that the median income of New York is so low compared to its cost of living, so a New Yorker, on average, might be better off moving to Alaska, but not by as much as some other state, I'd wager. My surprise got me thinking, so I did a tiny bit of excel analysis, where I normalized median wages[0] based on the value of a dollar data[1], then sorted states based on normalized median wage / cost of living[2]. Utah, Nebraska, Virginia, Iowa, and Wyoming are the top 5 with that ratio, while Hawaii, New York, DC, California and Oregon (Oregon pips Alaska here, by one rank, but my point stands, Alaska is many things, but cheap isn't one of them) are the bottom 5. I think that maps roughly with my intuition that big coastal places are sort of expensive for their average salaries and that boring, but not poor places are cheap for their salaries. I'm not sure this is relevant to the indie dev who doesn't have an employer, but for those of us who work in the flesh, I guess we should go to Utah? [0] https://www.census.gov/hhes/www/income/data/statemedian/ https://www.census.gov/hhes/www/income/data/statemedian/ [1] http://taxfoundation.org/blog/real-value-100-each-state http://taxfoundation.org/blog/real-value-100-each-state [2] http://www.missourieconomy.org/indicators/cost_of_living/index.stm http://www.missourieconomy.org/indicators/cost_of_living/ind...
burgers 12y ago
That's kind of my point. How is forcing that indie developer in live in Alaska, much different from the Soviets shipping someone off to Siberia because they didn't get with the plan? Finance will continue to grow as the preferred choice of those who want to avoid being punished by US society and forced live in Alaska or not have enough to eat or a safe place to live.
- melling 12y ago
  Do you really need someone to explain this to you? The Endless September: user: burgers created: 8 days ago karma: 91 Have fun. I'm outta here...
- barry-cotter 12y ago
  >How is forcing that indie developer in live in Alaska, much different from the Soviets shipping someone off to Siberia because they didn't get with the plan? Because one of them involves the choice between the gulag and death and the other involves the choice between being a poverty-stricken artist and anything else you might decide to do once you get over your art and quit.
  - burgers 12y ago
    But maybe people who ended up in the Gulag were because they chose not to go along with what the state wanted them to do? It seems quite obvious that the United States strongly discourages going into any other field outside of economics. That is by far the easiest low risk high income path a person can take in the US. So by becoming an artist, you are going against the framework set up by US society to convince you to go into finance. That's why there are so many punishments and risks involved. Just like the Gulag was set up to convince people to follow the framework set up by the Soviets. 14,000+ people were murdered in the US. Many of those people died simply because they had a low enough ratio of money to others to force them to live in a dangerous place. Not because of any other reason than having less money that others.
    - judk 12y ago

rayiner 12y ago

The majority of the Ivy league comes from one particular demographic: the upper middle class. These families might have an HHI of $100-500k; very comfortable, but not so much that the kids don't have to work for a living. There is a strong risk aversion in this demographic, because falling out of this class has really significant quality of life repercussions. And it's not just the money. For ambitious kids, it's a fear of hitting artificial limits on career progression. Working your way up in a corporation isn't a common career trajectory anymore. Instead, companies hire executives from a particular track, which starts with an Ivy-league school, involves a stint at an investment bank or consulting firm, perhaps an Ivy-league MBA, and from then forward a series of management and executive positions. The tech industry is somewhat of an exception to this rule, but only somewhat. Elon Musk has a bachelors degree in Economics from Penn's Wharton School (in addition to his degree in Physics); Peter Thiel majored in Philosophy at Stanford, and so went to law school like the other English/Philosophy majors, and then did a stint in investment banking. And even in entrepreneurship, you'll spend a lot of your time pitching VC's, and guess what's the easiest way to become a VC: Ivy-league, stint at an investment bank or consulting company, then an MBA. If you as an entrepreneur have that same background, that removes one level of insulation between you and the people you need to fund your company. Considering all of these things, if you're smart enough to get into an Ivy-leaguge school, why wouldn't you major in economics?

foobarqux 12y ago
Thiel was a derivatives trader, not an investment banker.
- deleted 12y ago
  [deleted]
- rayiner 12y ago
  You're right, and it's relevant to the narrative. Thiel jumped into finance from a legal career, which can be difficult to do unless you capitalize on a market shift (e.g. bankruptcy lawyers jumping to distressed asset funds in the most recent recession). Derivatives was a growing area in the early 1990's, which presumably made it easier for him. Which was fortuitous, because since he didn't come from money, he might not have been in a position to start his first fund without his Wall Street connections. This aspect of finance, the difficulty of getting into the field later on in one's career, is a major reason why so many Ivy-leaugers pursue it right out of school.

j2kun 12y ago

How does this make any sense considering that most people don't choose a career in finance and get by without "severe and aggressive punishments"?

burgers 12y ago
You may want to read what I wrote one more time. I did not say that those outside of finance deal with lack of food, safety and health. I stated that if one has less money than someone else, they are much more likely to have to deal with things like being assaulted or killed or going without enough to eat etc. So it just seems obvious that if you don't want to deal with these punishments for finding yourself with less money than 50 to 60 percent of the population, you would go into finance as it gives you the best chances of having more money than most and therefore dealing with less, if any, of the punishments US society hands out for having less money than others.
- afafsd 12y ago
  >I stated that if one has less money than someone else, they are much more likely to have to deal with things like being assaulted or killed or going without enough to eat etc. So just to clarify, there's a lot of Harvard and Dartmouth graduates (in non-economics) going without enough to eat, are there?
  - burgers 12y ago
    Well, if you read the article, you would have read about two students, 1 went to Dartmouth and the other went to Yale. The former worked at a bar, if I remember correctly and the latter worked at the airport. Neither graduated with economic degrees. ;) All jokes aside, indeed when you live in a country that hands our very severe punishments(just look up the murder rate in less expensive neighborhoods etc) for having less money than someone else. Real estate is directly tied to the amount of money you have compared to others so could explain how that analogy is that far off? If someone lived in New York City, they might have to trade quite a bit of safety in neighborhood for having a less profitable degree than someone who graduated with an economics degree. So indeed US society hands out a weighted lottery about getting murdered based upon how much money you make, even at middle class levels.

shamney 12y ago

the strange thing about this is that economics is a very academic subject with little practical application

josephschmoe 12y ago

Engineers have better outcomes at the start of their career and have better odds of starting their own company successfully. If you're a good economist, you'll go into economics. If you're a great economist, you'll go into engineering.

watwut 12y ago
Great economist would optimize the money at the start of their career? I would expect him to optimize lifetime earnings.

eli_gottlieb 12y ago

Get back to us on that when you find some place to live after we automated your trading position. ~~ software industry