Reading List

A while back I read an excellent book on the financial crisis: Freefall by Joseph Stiglitz. Although it provides a clear and compelling explanation of how the US housing bubble formed, infected banks around the world, and nearly brought then all down, my overriding impression was that Stiglitz was barely restraining himself from just writing, 'YOU BASTARDS, LOOK AT WHAT YOU'VE DONE! LOOK AT WHAT YOU'RE STILL DOING! BASTARDS, BASTARDS, BASTARDS!' I might be projecting slightly there, but Stiglitz is clearly very unhappy about the abject failure of banks to behave responsibly, their apparent inability to admit to any failure whatsoever, and their craven lobbying for their losses to be born by governments. As we all should be, and books like this are very important.

Much of the other literature on the financial crisis that I've read has been too measured. For instance, Gillian Tett's Fool's Gold provides the best explanation I've come across for the toxic financial products that banks invented, with a narrative concerning the team at JPMorgan who came up with many of them. Tett clearly has to tread a fine line - she interviewed these people for her book and presents them as three dimensional characters, so won't fully condemn their behaviour. Nonetheless, the bigger picture cannot be ignored. What should have been technical innovations of interest only to industry specialists spread throughout the financial system like a virus and precipitated the credit crunch, the worst recession for 80 years, and a sudden ballooning of government debts. Stiglitz spells this out clearly, Tett does not.

(As an aside, one of the many ironies of the crisis is that had the US not sold so many of these financial products abroad, as the financial markets are so globalised, their impact would have been much worse in America but the rest of the world's banks would have been relatively unscathed. Thanks for the exports, yanks.)

Neither book addresses the current government debt disaster (crisis seems too gentle a word), as they were both published two years ago. Back then we were worried that banks would not be able to pay their debts. Now it is governments that look doubtful, as the debt burden has been nationalised. The final chapter of this one hasn't even begun yet, but I distinctly doubt it will be pretty.

Meanwhile, my fellow students and I are still spammed by leaflets and emails suggesting we attend recruitment events for investment banks. Naively I assumed that this recruitment hard sell had waned in the past few years; apparently not. These adverts are always very innocuously worded, emphasising words like 'challenge'. It really angers me that quite a few students might swallow this stuff and equate working in The City with succeeding in life. This is what I want to say to them:

You do not have to be a banker.

The careers service assumes that you want to get a job in The City. The big banks are trying to court you with swanky events, free pens, and high starting salaries. They are trying to create an aura of prestige around themselves. But be absolutely clear about what their business is - transferring wealth from the poorly-off to the already wealthy. They aren't creating anything that wasn't already there, just moving worth around and exaggerating the value of investments.

Theirs is an industry that recently experienced systemic, catastrophic failure, and required gigantic bailouts from the public sector. The banks lobbied against any government regulation then systematically failed to manage risk. They have undermined the fundamentals on which the world economy is based and left the mess for others to clear up. Unemployment is high and growing, first world governments are threatening to default on their debt, and there is no way back to business as usual.

Is this really the industry you want to work for? Do you genuinely think your intelligence and skills are best used to make wealth inequalities worse? And the backlash against bankers has hardly begun - do you honestly want to be on the wrong side of it?

It may seem at the moment like banking is the most obvious career option, simply because banking firms make the loudest play for your attention. There are many other things you could do. In my third year as an undergraduate I shared a house with six other women. The seven of us are all ambitious, intelligent, and driven, but not one of us got a job primarily motivated by profit. One teaches English as a second language, one monitors dangerous diseases at the Health Protection Agency. Another is an army officer, yet another works as a civil servant in the Treasury. Amongst out number you will also find a doctor and a Teaching Assistant who writes novels on the side. I myself have worked in Local Government, helping to plan new communities for the past three years. Can you honestly tell me that our various talents and abilities would all be better spent trading collateralised debt obligations?

The world is facing massive challenges - climate change, terrible inequalities between and within states, demographic shifts, not to mention rebuilding our economies to promote well-being rather than endless, impossible growth. Those are real challenges worth confronting, rather than pursuing the pseudo-achievement of pushing up refinancing fees. There are a myriad of career options out there; don't waste your brain and your life on banking.

If you're still tempted, at least go in with open eyes. Read Freefall and Fool's Gold, then try and tell me that Goldman Sachs et al deserve the benefit of the doubt.

Personally, my next career step is to apply for a PhD, as I find myself very much enjoying the life of research. I doubt there will be much of any funding around, but I intend to have a damn good look.