Breaking Bad? The Privatization of Harvard

Breaking Bad? The Privatization of Harvard

Why you should care

If you want to understand the higher education trade in America, it helps to hear the story of the once modest and struggling college on the Charles River that helped orchestrate it.

During its lean colonial years, what is now the richest university in the world was so starved for resources that it was forced to petition colonies across New England for contributions of wheat to sustain its needy scholars. Today, with an endowment estimated at more than $30 billion, Harvard University could afford to purchase America’s entire annual domestic production of wheat … twice.

For the first two centuries of its existence, Harvard was a publicly funded and run institution …

As confirmed by U.S. News & World Report’s latest batch of college rankings, unveiled earlier this week, Harvard remains at the pinnacle (or at least No. 2) of global higher education, the epitome of the private university model with its prodigious endowment, dedicated alumni, wealthy donors and world-class faculty and students.

Few realize, though, that during its first two centuries in existence, Harvard was a publicly funded and run institution, and the “college corn” (as the English colonists referred to the wheat) it received in its early years is but a fraction of the public assistance it benefitted from during its lengthy rise to prominence. Harvard was once both deeply rooted in its local Cambridge community and dependent upon that community, and its sparkling transformation from “the college of Massachusetts” to a global institution explains a lot about the broader trajectory of the business of higher education in America.

America’s First Public College

John Harvard

John Harvard

Source Getty

John Harvard may have bequeathed half of his estate to the College of Cambridge, which changed its name in his honor, but it was the Commonwealth of Massachusetts that chartered the country’s oldest college back in 1636, providing the bulk of its operating income during its early years and assuming a major role in governing the college.

Not only did Harvard receive direct funds from the state and enjoy tax-exempt status, but it also benefited from generous land grants, the rents from those properties and state-sponsored lotteries that underwrote major capital expenditures. The colony’s governor and other state officials sat on Harvard’s Board of Overseers and were instrumental in rustling up private donations from wealthy alumni and landowners. For its part, the college was expected to educate the commonwealth’s best and brightest while also acting as a town “proprietor” entrusted with broad civic duties within the community.

Evidence of Harvard’s public origins can still be seen today: The university — the largest landowner in Cambridge — pays no property taxes (only voluntary payments); the historic and appropriately named Massachusetts Hall, where current President Drew Gilpin Faust has her office, was built in 1720 thanks to commonwealth funds; and, if you look closely, Stoughton Hall, a freshman dormitory in Harvard Yard, displays a plaque declaring that its construction in 1805 was “aided by a state lottery.”

Spiting the Hand That Feeds You

Not long after Stoughton was built, Harvard’s financial struggles worsened. Government officials were becoming less receptive to its pleas for money, many questioning whether the college, with its notably affluent student body and monopoly over the state’s higher education sector, was really serving the best interests of the commonwealth.

Set adrift from its public moorings, Harvard embraced the newfound freedom that being a private, not-for-profit body entailed.

Over the next few decades, Massachusetts ceased providing direct funds to the college, state officials were removed from Harvard’s governing board, and by 1865 all formal ties between Harvard and the commonwealth had been officially severed.

Set adrift from its public moorings, Harvard and its then-president, Charles Eliot, embraced the newfound freedom that being a private, not-for-profit body entailed. The university recruited students from across the Northeast and the nation, shifted its educational focus from teaching students to the German research university model and, most critically, began raising private donations — by the fistful — from wealthy alumni and prominent individuals.

Harvard’s successful second marriage with private enterprise, including Eliot’s cozy relationship with tycoons like J.P. Morgan and John D. Rockefeller, attracted its share of critics. The growing intimacy that Harvard and other elite schools enjoyed with the private sector prompted the (Yale-educated) economist Thorstein Veblen to observe in 1918 that in America, Plato’s vision of philosopher-kings governing political and commercial affairs had been “turned on its head; the men of affairs have taken over the direction of the pursuit of knowledge.”

Why Harvard’s Transformation Matters

Institutions, especially one as old as Harvard, are forced to adapt and reinvent themselves to suit new contexts. So why does Harvard’s transformation from public steward to private corporation matter in the grand scheme of things?

BW portrait of John D. Rockefeller

John D. Rockefeller

Because Harvard — as the college rankings and its alumni will happily attest — is no ordinary university. As Harvard goes, so goes U.S. higher education. The university’s transition from public funding to private institution, and its mandate to tap private revenue sources and grow its endowment fund, has influenced countless other American colleges desperate to keep up.

And from its advocacy for more uniform college entrance requirements in the late 1800s and its championing of the SAT as the major college “aptitude” test in the mid-20th century, Harvard has also played an oversized role in shaping the ground rules on which the competitive college “meritocracy” operates in the U.S.

Many of the recurring complaints about college rankings, costs, admissions and the commercialization of higher education spring from Harvard’s bumpy journey beyond Cambridge’s friendly confines. And although Harvard remains a nonprofit entity broadly committed to serving the public good, and uses its financial largesse to, among other things, ensure that the poorest 20 percent of its students pay nothing to attend, there can be no question that its diminished relationship with the community outside its fabled Yard has altered its overall democratic accountability.

Despite their public-oriented mission statements, Harvard and many other prestigious colleges operate much more as credentializers of well-connected, reasonably affluent individuals in the “meritocracy” they helped create than as workshops of democracy in the communities they were chartered to serve and promote.

Like Walter White, the public school chemistry teacher turned commercial drug producer on TV’s Breaking Bad, Harvard’s transformation is as remarkable as it is somewhat understandable given the circumstances. But you can’t help wondering, amid the towering stacks of cash, where it all went sideways and whether something nobler and more enduring has been left behind.

Comment
PART OF A SPECIAL SERIES FROM OZY
statesof thenation

OZYFlashback

Football, basketball, soccer. Cricket, rugby, the X-games. And anything else you can dream up to make you sweat.