The single most important thing that Williams could do to ensure the College’s success 100 years from now is to create a finance major. Since creating the major will take some time, we should add some key courses in accounting and investments right now, at small expense. But before examining the case for a finance major specifically, we should review the (unwritten) rules about new majors in general.
New majors should be in fields that a) are taught at a Ph.D.-level at research universities, b) would be popular, enrolling at least 25 students in each class and c) do not require significant investments from the College, either in facilities or staff. Most candidate majors fail at least one of these criteria. Sanskrit is taught at universities but would not be popular enough at Williams. Sports management would (alas?) be popular but is not a serious academic field. Engineering is a Ph.D. field and might enroll many students (see its success at places like Swarthmore and Tufts), but would require too much spending.
A finance major, on the other hand, easily clears all three hurdles. Universities like Stanford grant Ph.D.s in finance; dozens of students at Williams would major in finance if it were offered, thereby also decreasing enrollment in the economics and mathematics majors to more reasonable sizes; and because most of the building blocks of a finance major are already in the course catalog, very few, if any, additional faculty hires would be required.
The best analog to a proposed finance major is the current major in political economy. Imagine that Williams did not have the poli-ec major. The arguments for creating it – Ph.D.-level topic, popular with students, inexpensive to add – apply to finance as well. Moreover, the many virtues of poli-ec today are the yet-unseen benefits of adding finance tomorrow. Poli-ec brings together a community of Ephs – students, faculty and alumni – who are interested in the intersection of politics and economics and who would otherwise be scattered and disconnected. A finance major would do the same.
However, the major benefit of a finance major is that it would increase the size (in both absolute and relative terms) of the College’s endowment in 2115. Cut the Williams endowment by 90 percent and we would be Connecticut College with some lovely mountains. On a 100-year horizon, wealth matters most.
First, a finance major would attract higher quality applicants. Currently, virtually no high school senior interested in Wall Street chooses Williams over Harvard, Yale or Princeton. A finance major and the alumni network it would coalesce and nurture would make Williams more desirable. (Note that this is not a plea to increase the number of Wall Street “gunners” on campus. Fix that number where it currently is, or even lower it. I just want better gunners.)
Second, Williams does a poor job in preparing students interested in finance as a career. Alas, at this stage in the argument, many of my faculty friends will complain that career preparation is not part of what the College does or should do. We should ignore such voices just as we ignored the similar voices 100 years ago who complained when the College added majors in chemistry and physics, going beyond the then-accepted notion of the liberal arts. Williams students get fewer internships and jobs in finance than similarly talented students from places like Duke and the University of Pennsylvania because we fail to teach those students things they need to know. Fortunately, a finance major, and a couple of the courses that would come along with it, would make that problem go away.
Third, better and smarter incoming students interested in finance, along with the better courses that would come along with a finance major and the natural inclinations of Ephs to help each other would lead inexorably to a Williams Finance Mafia ready to rival the famous Art History Mafia of years gone by.
John Sawyer ’39 was the most famous and respected Williams president of the 20th century, not because he did what other college presidents were doing, only better, but because he did what few were willing to do: eliminate fraternities. Adding a finance major would, like banning fraternities, entail short terms costs in exchange for long term benefits, benefits all the larger because few to no elite liberal arts colleges would follow our lead anytime soon. Even just a handful of accounting and investment courses offered every year would be a major help, especially for students from less privileged backgrounds who lack the cultural capital or connections to compete with better trained students from other schools.
Does Williams already produce graduates that go on to success in finance? Of course we do, as the upcoming Capital Campaign will make clear. But we need more of them, making more money for their clients (and themselves) and donating ever larger gifts to the College, thereby ensuring our future as the premier liberal arts college 100 years from now.
David Kane ’88 is teaching ECON 20: Quantitative Equity Analysis this Winter Study. He works as a portfolio manager and has hired 18 students from the College as interns over the last decade.