Malcolm Gladwell, the bestselling author of books like The Tipping Point and Outliers, has made a name for himself as of late as the unofficial spokesman of "effective altruism." According to Gladwell, giving gifts to rich universities like Princeton or Stanford is a "moral injustice."
After John Paulson gave $400 million to Harvard in 2015, Gladwell tweeted, "It came down to helping the poor or giving the world's richest university $400 mil (sic) it doesn't need. Wise choice John!"
Now, Gladwell has struck again. In a series of mid-February Tweets, he excoriated Stanford for soliciting donations to help support student financial aid. "If Stanford, with $22 billion in the bank, still has needy undergraduates, how are they spending the billions they ALREADY have?" he asked.
Ah, where to begin?
Well, for starters, let's stress that Gladwell is on the right track in some ways. We've argued often that donors should do more to force universities to rein in escalating tuition costs as opposed to providing more fuel for a runaway train. Scholarships are nice, but such gifts only kick the can further down the road. As I've written,
If the money keeps flowing, what's the problem? University coffers get replenished, gleaming buildings get erected, and lenders keep handing out student loans; meanwhile, as of late 2015, tuition has risen across the board, even though government reports suggest that there has been no inflation in the rest of the economy over the previous 12 months.
Instinctively, I want to side with Gladwell, although it would have been nice to mention how Stanford expanded student aid back in 2015, stipulating that no parents with an annual income and typical assets of less than $125,000 will have to pay a single cent toward tuition. (The threshold for this aid was previously $100,000.)
But Gladwell loses me when he expands his argument, noting that "Stanford has $22.4 billion in the bank, tax free."
"Why should I send them money if I'm already subsidizing them?" he asked before proclaiming, "You might as well send your check to the Sultan of Brunei."
Really? Has the Sultan of Brunei developed a technique for producing functional antibodies, enabling treatments for such conditions as autoimmune diseases and cancer? Did he invent the optical fiber amplifier, which enabled the bandwidth explosion in optical communications and telecommunications essential to the internet?
The answer to each of these question is "No, he did not." The inventors of these and many other innovations hailed from Stanford research labs.
A 2012 study estimated that companies formed by Stanford entrepreneurs generate world revenues of $2.7 trillion annually and have created 5.4 million jobs since the 1930s. Stanford alumni and faculty have created 39,900 companies since the 1930s, which, if gathered collectively into an independent nation, would constitute the world’s 10th largest economy.
Again, this isn't to say I don't acknowledge Gladwell's point that as a nonprofit institution, Stanford doesn't pay taxes on its multibillion-dollar endowment. But tax policy notwithstanding, these institutions are all-important engines of American progress in both science and ideas, undertaking research and development that benefits us all. Surely, he can agree with that.
Maybe not. By failing to acknowledge this return on investment, his line of reasoning resembles that of a childless libertarian complaining about his property taxes or a woman who never drives on the federal interstate system. "Why should I subsidize these things I don't use?" they ask, ignoring the fact that citizens benefit from living in a society with educated individuals and the free flow of commerce.
One other point. As I've hopefully illustrated thus far, tweets—spoiler alert!—are an inherently reductive mode of dialogue. They rarely acknowledge the context attached to any one issue. Just as Gladwell's tweets fail to disentangle the various forces at play across the higher education space, Vox columnist Dylan Matthews, who, in the aftermath of John Paulson's Harvard gift, wrote, "There is a special plaque in philanthropist hell for John Paulson," conveniently ignored that fact that the money was earmarked for the School of Engineering and Applied Sciences (SEAS).
Applied science involves translating basic science breakthroughs into new inventions that can people's lives. For fun, I Googled SEAS and discovered a January 2017 article announcing how Harvard researchers helped to develop a customizable robot that "fits around the heart and helps it beat, potentially opening new treatment options for people suffering from heart failure." If this invention pans out, it may itself be worth the hefty price the U.S. Treasury will pay to subsidize Paulson's gift to Harvard.
Speaking of federal expenditures, the U.S. government sent $30.7 billion in research funds to universities in 2014, many with large endowments. Harvard and Stanford alone collected over a half-billion dollars each. Do Matthews and Gladwell have a problem with these taxpayer-funded "subsidies" as well, which, unlike alumni donations, are involuntary?
My own guess is that Matthews and Gladwell are among the many observers wringing their hands right now as the Trump administration gears up to cut government investment in basic research. It's worth noting that such cuts already enacted over recent years—which have hit scientists hard in many top research universities—has been a motivation for some donors to step forward with larger gifts, as we've reported. It doesn't make sense to decry both the public cuts and the private gifts.
Again, I understand the philosophical core of Gladwell's arguments, particularly in terms of the unconscionable way we intentionally cripple kids with a lifetime of student debt. But we mustn't throw out the baby with the bathwater. The nation's student loan crisis is one thing, and shameful one at that. And donors have been known to make dubious higher ed gifts that don't pass the utilitarian smell test. (Matthews has rightly nailed David Geffen and Phil Knight for such gifts.)
But it's important to keep in mind the immense return on investment generated by our nation's top research institutions. People who write checks to these places should not be automatically suspect.