01 Jun 2016

Imagine an Economy Without Wall Street

Absent finance, most people can’t buy a home or start a business. Look at my family’s experience.


Photography by Bryce Vickmark

In a recent opinion piece in the Wall Street Journal, HBS Dean Nitin Nohria made a strong statement in defense of Wall Street and the financial system.

Recalling his youth in India, Nohria related the story of his father, a successful businessman who wanted to strike out on an entrepreneurial path but was thwarted by the country’s lack of a finance and lending infrastructure. A similar shortcoming in the mortgage and lending industry also delayed his family’s ability to buy a house until his father was nearly 60 years old,

These weaknesses in the realm of finance and capital only serve to stifle economic growth and opportunity, Nohria wrote.

He also took note of critics who point to instances of global financial misdeeds, mistakes, or crises over the past decade and attack Wall Street for its apparent “greed” and self-interest.

“The global financial system has certainly shown excesses in the past decade, and without a doubt some players have behaved irresponsibly,” Nohria wrote. “Nonetheless, Wall Street remains a fundamentally value-creating enterprise. The finance industry is essential to the nation’s economic health and an integral part of what makes the US economy the envy of the world.”

Nohria also defended the track record of business schools, which have been criticized for turning out too many graduates who go into the financial industry. “Despite populist criticisms,” he wrote, “finance remains an honorable profession, and graduates who enter this field should be applauded, not derided.”
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