By Jan van Eck, CEO, VanEck
As you may know, this summer I grew frustrated with what was not being taught in colleges—namely, what I think is necessary historical background for a career in finance. To address this gap, I taught a 16 unit course to our summer interns on the history of finance. We have a robust summer internship program, and in what was a challenging year, I felt this was a way to offer further value to our global interns. This fall, I am offering a similar course to anyone interested, with five weekly sessions.
Why history and why these classes?
First, problem-solving is central to most jobs in finance. Many of the problems have been faced before, especially from a policy perspective, so an array of solutions are available to those who know history. Did we ever have a “free” market separate from government influence? Why were we so slow to have a central bank?
Further, while technology is all the rage now, many other eras of our development have been driven by disruptive technologies. It can only be helpful to see how that played out.
Last, a career in business or finance is about predicting the future. Predicting the future is difficult, but articulating potential outcomes and likelihood is a reasonable exercise. History can suggest an array of government policies and economic outcomes that may not be obvious at a point in time. The quintessential insight of VanEck’s founder was that the price of gold, after being fixed to the U.S. dollar since the founding of the country, might de-link. And indeed it did, in the 1970s. Potential scenarios give insights into portfolio construction.
With this in mind, below are the five classes we are offering this fall. These classes are appropriate for anyone, whether you are in financial services or not. Welcome!
How was enough power centralized in the U.S. government, through the Constitution, such that the finances of the U.S. could be brought in order? How was a financial system created that could foster economic growth? And, if we have time, how did Hamilton use the same tools in the 1790s that we used in the global financial crisis?
Technology developments along the chain of the textile industry drove an explosion in cotton demand which was met by the South. What was the structure of the textile industry that led to global trade? How did cotton affect slavery? As we revisit the consequences of slavery and racism today, how was finance involved in slavery? How did textile mills affect people’s work lives, and what were the implications for political values?
This era, I would argue, was when the U.S. became an economic juggernaut and created the basic features of today’s economy—a national market. How did Chicago affect the region, the country and the world economy?
The banking system was shut down when FDR took office. What did he do? Most of the financial reforms enacted then are largely intact today. What were the theories behind them? How do those theories explain why no one was jailed after the global financial crisis of 2008-2009?
The U.S. today has a large amount of debt. Has it ever defaulted? (Spoiler: yes, it has.) What did the Supreme Court decide? What did FDR say about whether he’d honor its decision if it went against him (it did)? How should we think about today’s high debt levels?
There is so much to cover in US history, and this may not be the perfect list, so your comments and input are welcome.
Please share with colleagues or family who you think might be interested.
Registration for the classes is available below:
Please note that Van Eck Securities Corporation (an affiliated broker-dealer of Van Eck Associates Corporation) offer investments products that invest in the asset classes or financial instruments discussed in this commentary.
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