Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America

by Andrew Yang

We have reached the evolutionary stage of our economy at which a number of things are happening that have never happened before. Thanks to the institutions and individuals that have preceded us (and lately, some loose Federal Reserve policy), mountains of capital are now available, as well as a massive industry dedicated to managing and allocating this capital. This industry can pay better than any other. Corporate complexity has given rise to a similarly massive management consulting industry. Economic rationality is driving both firms and individuals toward certain outcomes that threaten our long-term growth. A Kauffman Foundation study published in 2011 concluded that because financial instruments have become more complex, “the [financial] industry now focuses its recruiting on new master’s- and doctoral-level graduates of science, engineering, math and physics, and pays them starting wages that are five times or more what they would have earned had they remained in their own fields. Because these new hires are often the very individuals who otherwise would have comprised the most robust pool of prospective founders of high-growth companies, the financial services industry’s steady rise has had a cannibalizing effect on entrepreneurship in the U.S. economy.”9 Translation: finance is now recruiting and throwing money at the very smart technical people who would have been among the most likely to start businesses, reducing the number of startups over time.