Earlier this week, Bloomberg ran a quirky business story about a losing investment by Harvard’s endowment fund. Pulling back from this story will allow you to take in virtually every fucked up aspect of American power today.
The Bloomberg story details how an investment manager working for Harvard’s endowment took a $200 million loss on an investment in Brazilian farmland. “Even for Harvard, which has a $39 billion endowment, that’s a steep sum,” Bloomberg writes, “about as much as the Ivy League school spends annually on undergraduate financial aid.”
This information might make the average person ask a few questions.
Why did Harvard University, which is a university, that presumably is in the business of education and books and whatnot, invest more than $200 million in Brazilian farmland? Well, it’s because Harvard has an endowment of nearly $40 billion—that means a lot of investments! You have to diversify!
And why does Harvard University, a school, have nearly forty freaking billion dollars? How many damn books do you need? Well, it’s because Harvard is, in essence, a large hedge fund with a school on top of it. Rich people give Harvard tons of money, and Harvard has its in-house hedge fund invest that money, and next thing you know Harvard has nearly $40 billion, and some guy that works for them is wandering around Brazil buying farmland.
And why do so many rich people give so much money to Harvard, which already has nearly $40 billion, rather than to, for example, poor people? Well, it’s because those rich people are grateful to Harvard for providing them entree into the social circles that allowed them to become rich. And it’s because rich people want the haughty, respectable, elite, intellectual imprimatur of Harvard University to gloss over the various moral crimes they committed to become rich.
And why does Harvard continue to manically seek out exotic investments and cultivate wealthy donors even though it’s already sitting on nearly forty freaking billion dollars? Well, it’s because Harvard and its peers in the extreme upper crust of private higher education operate indistinguishably from corporations, which are programmed for economic growth above all else.
And has Harvard’s enormous endowment divested from fossil fuels, like the University of California just did? No.
But does Harvard act as though it has some claim on morality even though it is in essence a ruthless hedge fund that uses its profits to turn out rich people who will then give money back to Harvard, and who will be hands-down the most unbearable people you will ever meet in any of your future workplaces or, god forbid, your personal life? Yes, Harvard does that.
But could you pay a year’s tuition for half of the public college and university students in America by liquidating Harvard’s endowment? Yes.
But wouldn’t this bolster public higher education across the country while causing Harvard itself to collapse? Yes.
So it’s a good idea? Yes.
“The Socratic method”—learn about it at North Dakota State!