I have heard this critique for ages, including from Esther Duflo. Aside from the fact that people have agency, and so the whole thing is a bit moot, I have three comments. - One chairperson of the math dept at MIT once told me “the students who join RenTech are not usually the ‘best’ students. They are the more restless ones, who may have trouble to find a PhD topic, or focus on one.” This is to say that I really don’t think that there is a realistic chance that a great scientist would go into quant, and that quants would make great scientists. You’d see at least some former quants being called back to research and doing well. In reality, people self-select. - Everyone loves a little welfare calculation. It’s fun. But let’s not take it too seriously. The Socialist Calculation Debate was settled almost a century ago. Nobody knows anything. Liquidity? Price discovery? Spillovers. Stuff is complicated. - If anything, the real substitution is between quants and entrepreneurs/technologists. Many recent cases of “possible HRT quants” starting unicorns have made the news recently. But even there, I think the market equilibrates. The competition is stronger. More people try the startup route, or join Anthropic. It seems quite all right.
