Harvard, Yale, and the other top schools descended from an elitist Puritan tradition are wrecking the great post-World War II democratization of education.
Good arguments! Next, break up the judicial clerkships given to these elites. Require clerkships in law schools by whole classes rotating schools each year. The Clerks have a "Club" by which judges favor former clerks in the courtroom as they represents clients for mega-bucks. Lawyers who did not attend these elite law schools have to compete against this cheating.
And they love that barrier to entry in the form of tuition. Unfortunately that provides a pricing umbrella for Public School making it unaffordable for us amazon robots.
I had to chuckle at the story about the meritocratic subterfuge parents engaged in while undermining competition for Ivy League college admissions. A while back, I was chatting with an estranged childhood playmate from 65 years ago. He volunteered that he was a Trumpie. When I asked why, the screed he shared expressed his opposition to giving people something for nothing when he had worked so long and hard to rise to the top. That alone justified his belief that radical liberal socialists were undermining capitalist democracy and the American Dream.
This was amusing to hear because I knew that his family was wealthy and that his successes were handed him on a sterling platter. He had been bounced out of several colleges for getting “A’s” in Party-hearty 101. Subsequent to finally graduating, he was still dependent on his parent’s “allowance” to maintain his upper-class lifestyle. When his mom remarried, she convinced her new spouse to put him on his payroll, and at stepdad’s retirement, he took over the business, later selling it to retire early when stepdad died. The only hard work he likely ever did was conniving to get admitted to colleges despite failing grades and expulsions.
I have a younger cousin, also from money, who is on that same career path. He and my boyhood friend both share a self-image that their positions in society were earned, yet by any metric, they were gifts. I doubt that they were aware of their self-delusion because, as Haselby described, their parents likewise engaged in the subterfuge that they had “earned” their wealth and social status.
The tax situation the elite universities have is absurd. They pay zero Federal taxes and most of them are able to avoid property taxes too. If you wonder why New Haven is not the nicest city despite being in posh CT with an elite university in town, one of the reasons is that Yale is able to skip out of their property tax bill. Any mid sized city is going to struggle for resources when a campus that takes up a huge part of your city is not paying property taxes. They do make a voluntary contribution in the amount of whatever they feel like each year, but never as much as their property tax bill would be if the property was taxed at the normal rate.
On the larger point, the tax codes at the Federal level and in most states were originally set up to allow "public charities" to avoid taxation. The thinking being that if these organizations are set up to benefit the public, they should not be subject to tax for providing public goods. That has been mutated in any organization that is a "non profit" doesn't get taxed. Being a non profit tells you nothing about whether or not the organization benefits the public. It tells you nothing about how much money the organization is paying to the principals. All you need to do to be a non profit is to pay out all your profits in salaries.... We should have some legal test of public benefit required before these institutions qualify as exempt from taxation so soup kitchens and Yale are not taxed at the same level.
"Former Harvard College Dean Harry Lewis said that it gets to the basic point of the school, which is to advance radical ideas. “It’s almost by definition anti-preservationist because we place such a high value on the creation of new knowledge,” he said." But what if this "knowledge" isn't really knowledge at all? I can poke holes in Critical Race Theory and all these other "woke" concepts because they don't pass the logic test. So that mean we're OK with teaching our kids things that aren't true merely because it makes some people feel good?
Sam Haselby describes the problem in a very incomplete way, and describes no solution.
As my Step Mom (Radcliffe and a former College President) and Brad Delong (Harvard Grad) both note that Harvard's reputation for academic quality at the undergraduate level is largely unjustified. (It's not that it's bad, just hide-bound and ordinary)
The added-value of a Harvard education comes from the social contacts created while there. (As the British note, "Nothing binds like those old school ties.")
Even if one were to tax their outsize endowments, something I very much favor, this does not address the underlying issue, which is that, people go to Ivy league institutions in order to become, "Made Men," not for the educational experience. (paraphrasing various Martin Scorsese movies)
You can improve alternate schools, and defund the Ivys all you want, but people who go to those institutions will still get the court clerk positions, the judicial nominations, and will be aggressively recruited by Wall Street.
The problems start way before university. The real revolution should be at the elementary and high school levels. Those are funded in the US by local property taxes, leading to huge disparities in physical and human resources. If primary and secondary schools did their job, the broad education level of the general public would rise, lessening the need for universities in the first place.
I graduated from an Ivy League institution, Cornell, decades ago. Do not recognize it anymore. And I am a white, straight male, doubt I would even be admitted today. Truly sad.
"We have to get past the bizarre resistance from people who suffered under the old system and insist that everyone else endure the same – "I lived with crushing student debt for 40 years, why shouldn't you?" is pure spite." - Doctorow
I just don't want to be competing with people half my age whose net worth is equal to mine for rent. If I could have back all of the money I used to pay off those federal student loans I'd be happy to compete with them for rent. But I've reached an age where I really, really need to be putting some of that money toward retirement.
1. “Meanwhile, as of 2020, the aggregate value of the endowments of the richest 20 U.S. schools rose to over $311 billion, all of which are subsidized by taxpayers through the tax-free treatment we offer nonprofit educational institutions.”
..All donations to endowments are voluntary – just like those to churches, political action committees, Sierra Club, NRA, etc., all of which “we” (aka: American voters) have decided to offer to all non-profit institutions.
2. “The common joke, that Harvard is a hedge fund with an educational arm, is not so far off.”
.. But Harvard, and other top schools, do not enjoy hedge fund tax benefits: “Despite making tons of money every year, the elite hedge fund and private equity sector enjoy generous tax advantages...One tax loophole is the carried interest provision, which allows fund profits to be taxed as capital gain instead of ordinary income...they won’t and never will be taxed as ordinary income.” (https://www.investopedia.com/)
3. “tax-free treatment we offer”: Offered, but not accepted.
(a) The (Princeton) University is the largest property taxpayer in the municipality, paying $9.3 million in taxes in 2019 (not including sewer payments). The $9.3 million includes about $6 million in voluntary tax payments for properties that are eligible for exemption from property taxes.
(b) In 1834, the state of Connecticut amended the Yale charter to exempt the University from local taxes on any property that makes less than $6,000 in income each year. But Yale’s spokespeople have pushed back against new taxes, stating that Yale is one of the largest taxpayers in the city due to the taxes it pays on non-academic properties, like the Yale Bookstore and the Yale-New Haven Hospital. In addition, the University makes annual voluntary contributions of millions of dollars directly to City Hall. In 2018, it contributed just over $11.5 million to the city, according to the Office of New Haven and State Affairs.
(c) Harvard University expects to pay $49.8 million in federal taxes as a result of the tax reform package passed in 2017.
(“How much do HYP pay in taxes?)
4. “The economist Raj Chetty has found that nearly 40 of the country’s elite colleges and universities, including five in the Ivy League, accept more students from families in the top 1% of income earners than from the bottom 60%.
A meaningless statistic, unless we know (a) How many applicants come from the 1% and the 60% and (2) How many comparable from each group are admitted (i.e. 1500 SAT; 4.5 GPA, 1% and 60%: How many of each are admitted?) As Mark Twain ostensibly said, "There are three kinds of lies: lies, damned lies, and statistics."
5. “America’s elite private schools are now one of the last strongholds of the drunken post-Cold War triumphalism that hoarded wealth and privilege to private institutions at the expense of public and democratic ones.
...As previously mentioned, few families are responsible for the total cost of attendance. The Ivy League is known for its generous financial aid. Brown, Columbia, Harvard, Princeton, UPenn, and Yale actually promise to meet 100% of a family’s demonstrated financial need, without using loans in their financial aid packages. Cornell and Dartmouth also have ample financial resources; Dartmouth is no-loan for families making under $100,000 annually, and Cornell guarantees that any family with a total income of less than $60,000, and total assets of less than $100,000, will have no parent contribution and no loans. (collegevine,com)
Brilliant piece, Sam! Really appreciate it, especially because both this author and this reader have been inside -- and arguably benefited from -- the American meritocratic private university. For my part I also saw and lived how broken public universities are in America and India, which only makes this critique of the "Brahmin Left" more poignant. Indian academia is entirely composed of the Brahmin Left (and I don't pretend to be off the hook myself). So even the public university has failed in India. As long as we have a rightwing populist in power in India, who actively disdains higher education and punishes teachers and students in the name of challenging its elite bias and left proclivities, there is really no hope for reform in our system of higher education. ~ Ananya Vajpeyi.
Matt, thanks for the guest writer. The reason for public higher education is not only moral, but practical. Jefferson said it well: “the best geniuses will be raked from the rubbish annually.” It is true in any field: talent is random.
Hi Matt, I was wondering if you came across this story. Seems potentially interesting and right up your ally. https://youtu.be/SrDEtSlqJC4
Apparently, McDonald's stores' ice cream machines are always broken and the reason behind it (surprise, surprise) is a monopoly. This, like many of the other stories you've written in the past, is such a clear example of the perverse incentive for a monopolist to degrade product quality.
"The goal of meritocracy is to produce, or reproduce, an elite. There is nothing necessarily democratic about that".
Quite so, but the Chinese example suggests that the graduate elite can, with moral agreement and under sound leadership, serve democracy very well indeed.
After Switzerland, China is the world's leading democracy, and it is led by a meritocratic elite selected in the same way for 2200 years.
Formally–in shape or appearance–China’s constitution (Article Three: “The State organs of the People’s Republic of China apply the principle of democratic centralism. The National People’s Congress and the local people’s congresses at various levels are constituted through democratic elections. They are responsible to the people and subject to their supervision. All administrative, judicial and procuratorial organs of the State are created by the people’s congresses to which they are responsible and by which they are supervised”.) makes it a democracy. America’s constitution doesn’t. America is a republic founded by democracy-hating slave-owners who never mentioned democracy in the Constitution or anywhere else except to curse it.
Electively, China has bigger, more transparent elections than the USA that are supervised and certified by The Carter Center, which also runs China’s election website.
Popularly, China has a twenty percent higher voter participation than the USA (62% to 52%), suggesting that more Chinese voters think their vote counts.
Procedurally, China uses a public, democratic process to appoint senior officials and approve all legislation. America? Not so much. American presidential candidates are chosen by wealthy backers and appointed by an unelected group of people called the Electoral College which nobody understands.
Operationally, Chinese leaders are subject both to Congress and Party, while American presidents operate like like medieval monarchs. They hire and fire all senior officials and frequently order citizens kidnapped, tortured, imprisoned and assassinated without consulting anyone. They can secretly ban 50,000 people from flying on airlines without explanation and take the country to war at any time, for any reason. No Chinese leader–including Mao–could do any of those things. They have to vote on everything, not only democratically but unanimously.
Substantively, China’s government policies produce democratic outcomes. Ninety-six percent of Chinese voters approve the government’s policies and eighty-three percent say China is being run for their benefit rather than for the benefit of a special group. Only thirty-eight percent of Americans think this.
Good arguments! Next, break up the judicial clerkships given to these elites. Require clerkships in law schools by whole classes rotating schools each year. The Clerks have a "Club" by which judges favor former clerks in the courtroom as they represents clients for mega-bucks. Lawyers who did not attend these elite law schools have to compete against this cheating.
And they love that barrier to entry in the form of tuition. Unfortunately that provides a pricing umbrella for Public School making it unaffordable for us amazon robots.
I had to chuckle at the story about the meritocratic subterfuge parents engaged in while undermining competition for Ivy League college admissions. A while back, I was chatting with an estranged childhood playmate from 65 years ago. He volunteered that he was a Trumpie. When I asked why, the screed he shared expressed his opposition to giving people something for nothing when he had worked so long and hard to rise to the top. That alone justified his belief that radical liberal socialists were undermining capitalist democracy and the American Dream.
This was amusing to hear because I knew that his family was wealthy and that his successes were handed him on a sterling platter. He had been bounced out of several colleges for getting “A’s” in Party-hearty 101. Subsequent to finally graduating, he was still dependent on his parent’s “allowance” to maintain his upper-class lifestyle. When his mom remarried, she convinced her new spouse to put him on his payroll, and at stepdad’s retirement, he took over the business, later selling it to retire early when stepdad died. The only hard work he likely ever did was conniving to get admitted to colleges despite failing grades and expulsions.
I have a younger cousin, also from money, who is on that same career path. He and my boyhood friend both share a self-image that their positions in society were earned, yet by any metric, they were gifts. I doubt that they were aware of their self-delusion because, as Haselby described, their parents likewise engaged in the subterfuge that they had “earned” their wealth and social status.
The tax situation the elite universities have is absurd. They pay zero Federal taxes and most of them are able to avoid property taxes too. If you wonder why New Haven is not the nicest city despite being in posh CT with an elite university in town, one of the reasons is that Yale is able to skip out of their property tax bill. Any mid sized city is going to struggle for resources when a campus that takes up a huge part of your city is not paying property taxes. They do make a voluntary contribution in the amount of whatever they feel like each year, but never as much as their property tax bill would be if the property was taxed at the normal rate.
On the larger point, the tax codes at the Federal level and in most states were originally set up to allow "public charities" to avoid taxation. The thinking being that if these organizations are set up to benefit the public, they should not be subject to tax for providing public goods. That has been mutated in any organization that is a "non profit" doesn't get taxed. Being a non profit tells you nothing about whether or not the organization benefits the public. It tells you nothing about how much money the organization is paying to the principals. All you need to do to be a non profit is to pay out all your profits in salaries.... We should have some legal test of public benefit required before these institutions qualify as exempt from taxation so soup kitchens and Yale are not taxed at the same level.
"Former Harvard College Dean Harry Lewis said that it gets to the basic point of the school, which is to advance radical ideas. “It’s almost by definition anti-preservationist because we place such a high value on the creation of new knowledge,” he said." But what if this "knowledge" isn't really knowledge at all? I can poke holes in Critical Race Theory and all these other "woke" concepts because they don't pass the logic test. So that mean we're OK with teaching our kids things that aren't true merely because it makes some people feel good?
Sam Haselby describes the problem in a very incomplete way, and describes no solution.
As my Step Mom (Radcliffe and a former College President) and Brad Delong (Harvard Grad) both note that Harvard's reputation for academic quality at the undergraduate level is largely unjustified. (It's not that it's bad, just hide-bound and ordinary)
The added-value of a Harvard education comes from the social contacts created while there. (As the British note, "Nothing binds like those old school ties.")
Even if one were to tax their outsize endowments, something I very much favor, this does not address the underlying issue, which is that, people go to Ivy league institutions in order to become, "Made Men," not for the educational experience. (paraphrasing various Martin Scorsese movies)
You can improve alternate schools, and defund the Ivys all you want, but people who go to those institutions will still get the court clerk positions, the judicial nominations, and will be aggressively recruited by Wall Street.
The problems start way before university. The real revolution should be at the elementary and high school levels. Those are funded in the US by local property taxes, leading to huge disparities in physical and human resources. If primary and secondary schools did their job, the broad education level of the general public would rise, lessening the need for universities in the first place.
I graduated from an Ivy League institution, Cornell, decades ago. Do not recognize it anymore. And I am a white, straight male, doubt I would even be admitted today. Truly sad.
"We have to get past the bizarre resistance from people who suffered under the old system and insist that everyone else endure the same – "I lived with crushing student debt for 40 years, why shouldn't you?" is pure spite." - Doctorow
I just don't want to be competing with people half my age whose net worth is equal to mine for rent. If I could have back all of the money I used to pay off those federal student loans I'd be happy to compete with them for rent. But I've reached an age where I really, really need to be putting some of that money toward retirement.
Five observations.
1. “Meanwhile, as of 2020, the aggregate value of the endowments of the richest 20 U.S. schools rose to over $311 billion, all of which are subsidized by taxpayers through the tax-free treatment we offer nonprofit educational institutions.”
..All donations to endowments are voluntary – just like those to churches, political action committees, Sierra Club, NRA, etc., all of which “we” (aka: American voters) have decided to offer to all non-profit institutions.
2. “The common joke, that Harvard is a hedge fund with an educational arm, is not so far off.”
.. But Harvard, and other top schools, do not enjoy hedge fund tax benefits: “Despite making tons of money every year, the elite hedge fund and private equity sector enjoy generous tax advantages...One tax loophole is the carried interest provision, which allows fund profits to be taxed as capital gain instead of ordinary income...they won’t and never will be taxed as ordinary income.” (https://www.investopedia.com/)
3. “tax-free treatment we offer”: Offered, but not accepted.
(a) The (Princeton) University is the largest property taxpayer in the municipality, paying $9.3 million in taxes in 2019 (not including sewer payments). The $9.3 million includes about $6 million in voluntary tax payments for properties that are eligible for exemption from property taxes.
(b) In 1834, the state of Connecticut amended the Yale charter to exempt the University from local taxes on any property that makes less than $6,000 in income each year. But Yale’s spokespeople have pushed back against new taxes, stating that Yale is one of the largest taxpayers in the city due to the taxes it pays on non-academic properties, like the Yale Bookstore and the Yale-New Haven Hospital. In addition, the University makes annual voluntary contributions of millions of dollars directly to City Hall. In 2018, it contributed just over $11.5 million to the city, according to the Office of New Haven and State Affairs.
(c) Harvard University expects to pay $49.8 million in federal taxes as a result of the tax reform package passed in 2017.
(“How much do HYP pay in taxes?)
4. “The economist Raj Chetty has found that nearly 40 of the country’s elite colleges and universities, including five in the Ivy League, accept more students from families in the top 1% of income earners than from the bottom 60%.
A meaningless statistic, unless we know (a) How many applicants come from the 1% and the 60% and (2) How many comparable from each group are admitted (i.e. 1500 SAT; 4.5 GPA, 1% and 60%: How many of each are admitted?) As Mark Twain ostensibly said, "There are three kinds of lies: lies, damned lies, and statistics."
5. “America’s elite private schools are now one of the last strongholds of the drunken post-Cold War triumphalism that hoarded wealth and privilege to private institutions at the expense of public and democratic ones.
...As previously mentioned, few families are responsible for the total cost of attendance. The Ivy League is known for its generous financial aid. Brown, Columbia, Harvard, Princeton, UPenn, and Yale actually promise to meet 100% of a family’s demonstrated financial need, without using loans in their financial aid packages. Cornell and Dartmouth also have ample financial resources; Dartmouth is no-loan for families making under $100,000 annually, and Cornell guarantees that any family with a total income of less than $60,000, and total assets of less than $100,000, will have no parent contribution and no loans. (collegevine,com)
Brilliant piece, Sam! Really appreciate it, especially because both this author and this reader have been inside -- and arguably benefited from -- the American meritocratic private university. For my part I also saw and lived how broken public universities are in America and India, which only makes this critique of the "Brahmin Left" more poignant. Indian academia is entirely composed of the Brahmin Left (and I don't pretend to be off the hook myself). So even the public university has failed in India. As long as we have a rightwing populist in power in India, who actively disdains higher education and punishes teachers and students in the name of challenging its elite bias and left proclivities, there is really no hope for reform in our system of higher education. ~ Ananya Vajpeyi.
Matt, thanks for the guest writer. The reason for public higher education is not only moral, but practical. Jefferson said it well: “the best geniuses will be raked from the rubbish annually.” It is true in any field: talent is random.
How do I email you a tip regarding this story? Clicking on the newsletter name brings me to the subscription page.
Need time to digest this one. Terrific writing Matt.
Hi Matt, I was wondering if you came across this story. Seems potentially interesting and right up your ally. https://youtu.be/SrDEtSlqJC4
Apparently, McDonald's stores' ice cream machines are always broken and the reason behind it (surprise, surprise) is a monopoly. This, like many of the other stories you've written in the past, is such a clear example of the perverse incentive for a monopolist to degrade product quality.
"The goal of meritocracy is to produce, or reproduce, an elite. There is nothing necessarily democratic about that".
Quite so, but the Chinese example suggests that the graduate elite can, with moral agreement and under sound leadership, serve democracy very well indeed.
After Switzerland, China is the world's leading democracy, and it is led by a meritocratic elite selected in the same way for 2200 years.
Formally–in shape or appearance–China’s constitution (Article Three: “The State organs of the People’s Republic of China apply the principle of democratic centralism. The National People’s Congress and the local people’s congresses at various levels are constituted through democratic elections. They are responsible to the people and subject to their supervision. All administrative, judicial and procuratorial organs of the State are created by the people’s congresses to which they are responsible and by which they are supervised”.) makes it a democracy. America’s constitution doesn’t. America is a republic founded by democracy-hating slave-owners who never mentioned democracy in the Constitution or anywhere else except to curse it.
Electively, China has bigger, more transparent elections than the USA that are supervised and certified by The Carter Center, which also runs China’s election website.
Popularly, China has a twenty percent higher voter participation than the USA (62% to 52%), suggesting that more Chinese voters think their vote counts.
Procedurally, China uses a public, democratic process to appoint senior officials and approve all legislation. America? Not so much. American presidential candidates are chosen by wealthy backers and appointed by an unelected group of people called the Electoral College which nobody understands.
Operationally, Chinese leaders are subject both to Congress and Party, while American presidents operate like like medieval monarchs. They hire and fire all senior officials and frequently order citizens kidnapped, tortured, imprisoned and assassinated without consulting anyone. They can secretly ban 50,000 people from flying on airlines without explanation and take the country to war at any time, for any reason. No Chinese leader–including Mao–could do any of those things. They have to vote on everything, not only democratically but unanimously.
Substantively, China’s government policies produce democratic outcomes. Ninety-six percent of Chinese voters approve the government’s policies and eighty-three percent say China is being run for their benefit rather than for the benefit of a special group. Only thirty-eight percent of Americans think this.