A new front on the great Class Warfare struggle opens up on the New
York Times op-ed page today, with an article
on inequality in the endowments of institutions of higher education.
Says Herbert A. Allen:
America's wealthiest colleges have endowments that are thousands of
times greater than those at the least fortunate schools. The chasm is
far deeper than that in other realms. After all, overpaid chief
executives and investment bankers pay inheritance and income tax, so
their wealth diminishes over time. Heavily endowed colleges and
universities, however, suffer no such setbacks.
Oh no! What perfidy does this loophole allow?
We'll get to that, but first
Mr. Allen makes the obligatory head-fake about merit:
It's certainly true that these academic institutions have worked hard
to be excellent. They deserve to be rich. They should be congratulated.
Right. Reader, can you guess the very next word in Mr. Allen's article?
But should they be allowed to be so protected by the tax code that they
can use their disproportionate wealth to raid poorer colleges and scoop
up the best teachers by offering better pay, benefits and tenure-track
positions? Should they further separate themselves from less fortunate
colleges by taking the best high school students and offering them ever
Mr. Allen apparently expects us to answer with a thunderous "No!" to
these two questions. But if I were in the shoes of those hypothesized
"best teachers" or "best high school students", I think I'd
be thinking: "Actually, that sounds pretty OK to me."
Mr. Allen seemingly feels everyone would be better off if
these teachers and students remained
stuck at poorly-endowed Podunk State U. Because … well, he doesn't
explain why. To a certain mentality, it's blindingly obvious, I guess.
But it turns out there's a perfectly good solution to this ill-defined problem:
What to do? Well, here's one solution: tax the investment income of
the wealthiest colleges (though not their endowments). If the endowments
of all academic institutions were evaluated on a per student basis, a
standard could be set that could begin to allow revenue sharing.
Ah. Sounds like an innovative solution! In fact, it sounds like pretty
much the same
innovative solution offered up more or less daily
by the New York
for every other problem:
coercive redistribution of wealth and income.
Is there nothing it can't do?
Mr. Allen concludes:
I know it won't be easy to convince well-off schools to share their
wealth. But they should. They should see this act as part of a down
payment on their professed mission: to create a stronger, smarter and
ultimately more stable society.
It's nice to see Mr. Allen phrase this in the language of voluntary
sharing for mutual benefit.
But of course, that's bogus: he's proposing a tax
You don't really have to "convince well-off schools" of
anything; you only have to convince a
majority of senators and representatives. Then you just start taking
money from Harvard, Yale, and Princeton, and handing it out to Patrick
Henry Community College and Fayetteville State University;
you don't even have to say thanks.
I must admit, though: there's a certain amount of petard-hoisting fun
to see rich left-skewed institutions targeted by this sort of argument.
Stats on endowments, if you're interested, are here.
Mr. Allen was positioned at number
239 on the most recent Forbes
400 Richest Americans list. I'm not sure what that means other than
Warren Buffet isn't the only rich guy who can sling synthetic populist
Update: You may also want to
read what a Free Exchange blogger
has to say about Mr. Allen's proposal: a "surpassingly silly idea".