I agree the folks who come innovative ideas and then actually have the skill, and work ethic to translate these ideas into tangible products and service really do deserve the lion share of the wealth. The good news is this generally what happens at the very top, the Gates, Musks, Jobs, Zuckerberg are far richer than even the best paid bankers.
The problem to me is below the very top guys (founders and such) that financial engineers get rewarded far more than real engineers. The engineers in turn get far more than skilled workers actually making the good or providing the service. A real top notch engineer maybe making a few hundred thousand (with a chance in the Silicon Valley especially ) of making millions on stock options. But top bankers routinely make millions and in many cases do so by exploiting loopholes in the system which they often had a hand in creating.
As Angel investor in a fair number of startup, many of them involved with very worthwhile products which will/would have benefited humanity. The founders/cofounders are very smart engineers, doctors and/or scientists. However, the only one that has made any money was founded by former Senior VP at Goldman Sach, he is super smart, very hard working, and one of the more ethical people I’ve met. His company has been very beneficial to the small country it is based and the financial engineer involved extremely clever, never the less the profits he extracts are ridiculously high. I suspect that part of this is the motivation behind each firm. One company (now bankrupt) was developing a better way of jamming IEDs, a couple of the founders were Vets and there motivation more to save lives as it was to make money. The bankers motivation was partly to help the small country but that was clearly priority #4. #1-3 were MAKE A LOT OF MONEY.
This thread needs more people pulling themselves up by their own bootstraps. (I guess the fork lift truck driver just didn’t pull on his mouldy bootstraps hard enough?)
The only thing I’ve ever read on the types of people that work in finance is in Taleb’s Black Swan. And if I remember correctly, he basically says that the types of personality seen in the OP arise due to things like survivorship bias[1] and complete failure to recognise their own non-fatal mistakes[2].
[1] i.e, the current thing you’re doing might be horrifically flawed, but you’ve yet to be unlucky enough to hit the flawed case. Therefore you’re currently consider yourself a success. As you watch the people around you hit their own flaw-cases, you believe that you’re doing something correct, and are therefore a demi-god of finance.
Until you spunk away 10 billion overnight on a bad decision and get fired.
[2] e.g. “Experts” giving advice, without skin-in-the-game, and later that advice is completely wrong. But they continue to give out advice, and it continues to be wrong. But it doesn’t matter, as no one checks. Just make sure you say it confidently and angrily enough so the people around you believe it.
It also talked about a lot of other stuff relating to this topic that I can barely remember. Interesting book – anyone else read it?
