Should academicians and scientists do finance ? A reply

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I myself am an advocate of students from institutions like IITs to remain
in academics or join the tech industry. Regardless, the following
viewpoint counters the attitude presented in James Mitchell’s letter that
scientifically skilled people are ‘not meant’ for finance industries,
which I believe is not correct.

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The financial markets serve an important purpose of generating capital for
the industries. Many of the innovations and breakthroughs we are talking
about happen at industrial research labs or via industry funded grants to
universities, and companies can continue funding R&D only if they have
enough capital. So, finance sector is not an inappropriate field for
scientifically skilled young people if these people can really help. They
may not be directly taking part in technological innovation, but they are
helping in a very important step of the whole process.

The current financial crisis, and many of the previous ones, have occurred
due to fairly specific reasons and do not, in general, indicate failure of
the way finance sector works. In fact, the current crisis has less to do
with the mathematical models created by these skilled people, and should
be attributed to the ill-fated policy decisions made by governments and
banks, which favoured taking more risks for greater possible returns. And
since finance companies are the first to drown in the floods, it may seem
that this crisis is limited to banks only. But, if the downfall of the
market and the credit crunch continues, many technology companies will
also be hit hard, and may be forced to shut down.

Aman Gupta
5th year Dual Degree student

> I thought this letter to the Editor of The Economist raised an

> interesting question that many of us, especially our students (recent

past and current), may want to think about.

>

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> SIR – Many of the mathematical models used in banking were created by

scientifically skilled young people who were lured into the banking

industry because they could not get those kinds of salaries (and

prestige) in research laboratories. Banks have taken much of the cream

of the scientific talent in America and Europe, and to what end? The

rush to increase profits has come to naught and in many cases led to

financial disaster.

>

> Imagine what those young people could have done if they had chosen

careers in science and medicine. What innovations might have resulted?

What breakthroughs might have been achieved? Instead they were used to

create a false financial system that is ruinous for our countries.

>

> James Mitchell

> Professor of physics

> Université de Rennes I

> Rennes, France

>