A former World Bank top executive told me last week: "Forty years ago, the smartest 5% went into politics. Today, the dumbest 5% do."
The data is pretty clear:
→ Top talent in finance earns over 300% more than in the public sector
→ Elite graduates entering government: ~5–15% (1970s) to as little as 1–2% today (2023)
→ Median GMAT score required for public admin ~550 | MBAs for Goldman/McKinsey 720+
This isn’t just mission drift—it’s the system working exactly as designed.
For eighty years, the Mont Pelerin Society preached that government is useless. Now extraction pays three times more than building—and the 99% pick up the bill. Mission accomplished!
Sadly, as seen in the US, a society that devalues public service eventually gets exactly the government it deserves.
#PublicService #TalentAllocation #Institutions #Meritocracy #Neoliberalism
School for Moral Ambition
For much more on this topic, please also see Rutger Bregman’s inspirational work here:
PS: A necessary note on GMAT scores
As John Knight pointed out in the conversation about the post, we should not accept GMAT scores as a measure of intelligence. In fact, while GMAT scores might reflect more than just “rational intelligence” (they’re also meant to assess “integrated reasoning”), there’s no robust evidence that they predict long-term leadership effectiveness, entrepreneurial success, or career satisfaction. In reality, non-cognitive factors—like social capital, personality, motivation, and opportunity—quickly outweigh any test-based advantage. So, lower GMAT scores among public sector applicants may simply point to different motivations, opportunity costs, or systemic barriers—not “lesser” talent. These might be highly capable people who choose public service for intrinsic or civic reasons, or who opt out of high-paying sectors for ethical or personal commitments. But that said, there’s also no evidence to suggest that those with lower scores are, by default, more “holistically” talented or better suited.
I guess the key point is that we’ve created a system that not only measures the wrong things, but also steers many talented people into roles that ultimately undermine the common good, rather than build it.
Errata Corrige:
I’m grateful to those in the community who quickly flagged a few challenges to the initial figures cited in the post. While the broader point remains clearly valid—interest in finance and consulting, as well as compensation levels, vastly outweighs public-sector careers—the early estimates for public-sector recruitment in the 1970ies appear too high. After colleagues rightly questioned the numbers, I revisited the sources and found the evidence to be far less clear than expected. I’ve adjusted the ranges in the post - which remain merely illustrative - and added further references below for anyone wishing to explore the issue in more depth.
→ Top talent in finance earns over 300% more than in the public sector
There is consistent evidence across multiple reports and data sources that pay gaps between the public and private sectors—especially at entry level compared to top financial institutions—can easily reach 300%.
Investment Banker First-Year Analyst: Base salary: $100-$125K + bonus = Total Compensation: ~$160-$210K. (A Year 1 Associate might earn total compensation just above $300K in some banks like GS and JPM.)
Federal salary: GS-7 starting: $41,966 (base, without locality) - $54,557 / GS-9 starting: $51,332 (base, without locality) - $66,731
Calculation: 185k (midpoint) / 50k (midpoint) = 370%
However, it should be noted that there is of course enormous variation and also notable exceptions e.g. https://www.businessinsider.com/bankers-salaries-versus-regulators-2014-4.
Sources:
→ Elite graduates entering government: 5-15% (1970s) to as little as 1–2% today (2023)
The data is extremely difficult to source, so the figures are intended purely as illustrative, based on a small set of elite institutions.
Harvard: As of 2022 more than forty percent of working seniors go into either consulting or finance. That number jumps to 58 percent when you add in the technology sector. By comparison, employment in the nonprofit or public service sector sits below four percent.
The percentage of Harvard graduates who go into consulting has increased sevenfold since 1969
According to a study by the sociologist Lauren Rivera, a full 70 percent of Harvard’s senior class submits résumés to Wall Street and consulting firms. Meanwhile, among Harvard seniors who had secured employment last spring, a mere 3.5 percent were headed to government and politics
2018: Eight percent indicated they planned to go work for the government or public institutions
1970: What was amazing was how few of my classmates had gone into the careers chosen by half of new Harvard grads these days -- investment banking (now known to students simply as "banking"), consulting and private equity/hedge funds. Of my classmates reporting, only two were in finance, broadly speaking, while three worked for government and another two worked for nonprofits. Additionally, one classmate reported that he was a former government political appointee while another admitted to being a politician.
Indeed, the big draw, especially in the 1970s, was the law and medical schools.
In the 1970s, only 5% of Harvard graduates who entered the workforce found jobs in the likes of finance or consulting.
Princeton: Take my alma mater, Princeton University, as an example. Out of the 72.2 percent of the class of 2016 that found a job immediately after graduation, only 1.6 percent—21 students—entered a field that could be categorized as directly working in the public sector. By contrast, a third of the graduating class went into jobs in the financial and consulting sectors.
Oxford Said Business School 2023: Government - Armed Forces Government 0.6% + Government - Local / National 1.3% = 1.9%
U.S. Public Policy Schools: 76% took up government careers in 1973-74, down to 49% 20 years later.
There is very little direct data on the share of elite graduates entering public service in the 1970s across different types of institutions. The suggested figure is only an estimate inferred from broader trends: if public service employment today is roughly 4% and the long-term decline reflected in policy schools is broadly consistent, one might assume the share could have been as high as 15% in 1970. However, this is speculative and sadly not supported by direct evidence - most records only speak of much greater interests in law and medicine. Drawing on anecdotal evidence from various reports and articles, I am however assuming that the figure would have been at least 1 in 20 graduates—around 5%.
→ Median GMAT score for top public admin ~540 | MBAs for Goldman/McKinsey 720+
To estimate the GMAT gap, I’m comparing typical entry requirements for MPA/MPP programmes—which often fall in the 500–600 range, with a midpoint around 550—to the GMAT scores cited in recruitment processes for top consulting firms.
Most test takers score between 400 and 600, with the median GMAT score around 540.
Many MPA/MPP programs appear to accept students in the 500–600 range
Example for Master of Public Administration requirements: Georgia College MPA The applicant must have: GRE: A combined score of 290 (verbal and quantitative) or MAT: 395 or GMAT: 450. Another example for low score requirements: American University (n=42): GRE quant: 155 (151-158 middle 50%) / GRE verbal: 160 (156-163 middle 50%) → GMAT approx. 575
Top consulting firms like Bain, BCG, and McKinsey often look at GMAT scores as part of their hiring process. These companies typically prefer candidates to have a score in the 710+ range under the previous GMAT scoring system.
Sources (illustrative):