Plastic Spoons: Why Harvard’s Endowment Matters

“A message to the silver-spoon-spoiled students of Harvard” read the title of a recent article from the New York Post. In it, author Jonathon Trugman attacked Harvard’s “smug, silver-spoon-spoiled students” for reacting to Harvard’s recent $2 billion loss in endowment value. Trugman’s arguments were at best fallacious and at worst blatantly wrong.

Trugman’s first claim is essentially that all Harvard students are wealthy. Although it is indeed a privilege to attend Harvard University, this is not based on the college’s tuition, as the New York Post article suggests. Trugman’s assumption that attending Harvard necessarily implies coming from a wealthy family is fallacious, as Harvard students come from a plurality of socioeconomic backgrounds. Harvard has one of the most generous financial aid programs in the nation; over 20 percent of students do not pay any tuition at Harvard and more than half of students receiving financial aid. Furthermore, nearly 16 percent of the Class of 2020 is made up of first generation students and over two thirds of them come from public secondary schools.

While attending Harvard is a privilege, it is one commonly earned by overcoming challenges and demonstrating competency regardless of financial status. Trugman completely alienates the work and dedication of those from less privileged backgrounds who were admitted to Harvard. It is true that the university is very wealthy, but it is this wealth that affords students of all backgrounds the opportunity to receive a Harvard education. This is why Harvard’s shrinking endowment is so problematic.

Why We Can’t Trust Trugman

Trugman then proceeds to imply that Harvard’s students are worried about their endowment’s performance because it was outperformed by Yale’s endowment this year. He does not substantiate this claim. In fact, the Crimson article he is responding to does not cite Yale or its endowment at all. In this sense, he commits the fallacy of attacking the article by misrepresenting its contents. He also conveniently omits the Crimson Editorial Board’s written objective in the article “to underline the importance of this problem in the minds of [Harvard’s president] and the Corporation.” By doing so, he is simply cherry-picking information, which is fallacious as it does not represent the true message of the article, so as to fit his unfounded presumption. Trugman proceeds to accuse Harvard of being “the benefactor of the biggest tax scams in the civilized world.” Like the vast majority of his article, this claim goes by unsubstantiated. He also adds that Harvard’s endowment is “so large it could buy all of Deutsche Bank twice and still have change.” Not only is this statement completely irrelevant, it is also false: Deutsche Bank reported having $1.629 trillion in total assets for 2015, much larger than Harvard’s $35.7 billion endowment.

Another of Trugman’s unfounded implications is that Harvard’s announcement of N.P. Narvekar as the new head of the Harvard Management Company on September 30 was catalyzed by pressure from the Crimson’s article. The issue with that implication, however, is that the Crimson’s article was published on September 28 and a quick search indicates Narvekar was a top contender at least a week before then.

Trugman concludes with a statement completely incongruous with the rest of his article. He writes, “I just think, with this being an election year, perhaps the Harvard students should be focused on more important matters.” Trugman implies that if Harvard students discuss the two-billion-dollar loss, they will be unable to address “more important matters.” By saying that the discussion of one topic excludes the other, he is committing the black and white fallacy, as it is very possible to discuss both pressing issues, something nearly all students have done. Indeed, Harvard students are extensively discussing the presidential candidates and their platforms while also reflecting on the endowment’s loss.

As Trivial as the GDP of Greenland

The conclusion of the New York Post article does accurately surmise one thing about its body: it trivializes the endowment loss. Such a sizeable loss must indeed be discussed and prevented in the future. A significant portion (approximately 35 percent) of the university’s budget is funded by the endowment. The growth of this vast pool of money correlates to the university’s own growth, which in turn makes it possible to expand Harvard’s many programs and to enable as many students as possible to receive the privilege of a Harvard education.

Currently, for example, Harvard University Dining Service workers are on strike as the university is not in a financial position to meet their demands of higher wages and an even more comprehensive health care plan. This in turn limits the number of dining options and quality for students, making it especially hard for those with dietary restrictions. Dining halls are also now only providing plastic utensils, drastically increasing the amount of waste generated by each student. Had the university had more beneficial endowment returns, however, it could have potentially granted an even more generous proposal to HUDS workers, potentially avoiding their strike.

Indeed, Harvard has, in the past, set the precedent for highest wages and most comprehensive financial aid packages, promoting other universities to be as generous. This was largely due to the university’s sizeable endowment and high returns. In this sense, Harvard’s endowment has enabled it to provide generations of students with the resources to solve some of the world’s most pressing issues and to set new standards for excellence. Managing Harvard’s endowment and a $2 billion loss is no trivial challenge. Trugman’s treatment of it as such, perhaps, is his article’s biggest fallacy.

Image Credit: Pixabay/Barescar90

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