By Ben Beachy and Jason Rowe
Since the Occupy movement entered the gates of Harvard Yard, too much discussion has focused on the gates themselves, not the responsibility of those of us who study behind them.
One of the gates—Dexter Gate—bears the following inscription: “Enter to grow in wisdom. Depart to better serve thy country and thy kind.” One of our country’s most pressing challenges in the wake of the Great Recession—how to replace runaway inequality with shared prosperity—is precisely the challenge that the Occupy movement addresses. We are thus surprised by arguments that posit the aims of “Occupy Harvard” as antithetical to the stated mission of Harvard.
True, Harvard students present an unwieldy embodiment of the 99%. Our ivy-covered degrees do connote privilege. But doesn’t privilege bring more responsibility, not less? Endowed with many opportunities, we should be particularly compelled to further the interests of the 99%.
How should we fulfill such responsibility while at Harvard? We can start by getting serious about economics, by studying and debating potential responses to the yawning wealth gap. Unfortunately, many of our core economics courses are not so serious.
While the outside world endures the aftershocks of epic market failure, we sit inside Econ 101 classrooms and breeze over such failures as quiet footnotes to the thesis of perfect markets. Under the reassuring assumption that investors are ever-rational machines of utility maximization, we can forget that the subprime housing bubble ever happened, because, theoretically, it didn’t. While behavioral economics could inject a needed dose of reality (and ideas for preventing future crises), such post-1970s thinking unfortunately has not yet entered most mandatory economics curricula.
Now that irrational exuberance has tanked the economy and jettisoned jobs, how do our microeconomic classes teach us to respond? According to our problem sets, the unemployed should lobby for the abolishment of the minimum wage and then wait until wages adjust to get hired.
Not even Newt Gingerich would endorse that plan. But our simple models do. That’s because they externalize the equity gains of real responses (subsidizing clean energy jobs, investing in infrastructure, etc.) and summarize their impact as “deadweight loss.” As satisfying as it is to erase those inefficiency-laden triangles from our graphs, the unemployed probably do not find erasure of their job prospects similarly satisfying. If Harvard is to prepare us to push forward policies in the interests of the majority, we will have to push Harvard’s economics courses to internalize the realities of that majority.
While asking Harvard to better train us as advocates of the 99%, we should ask the university itself to be a better advocate in its employment and investment practices. “Occupy Harvard” did so by imploring Harvard to negotiate a just contract with custodians struggling to pay the bills. Thanks to concerted custodial pressure, Harvard soon complied, handing a landmark victory to those who clean up our mess.
Harvard should now demonstrate similar accountability to the 99% through its investment portfolio. In the name of increasing its $32 billion endowment, Harvard has invested in shady private equity outfits like Emergent Asset Management, a contender in the escalating race to acquire appreciating African land. Field research reveals that such land deals have tended to sacrifice family farmers’ livelihood and food security in exchange for unfulfilled promises of jobs and technology transfer.
Our financial aid need not come on the backs of African farmers. Sound investments do not require unsound ethics. Such is the conclusion of a host of studies showing equivalent performance between responsible and irresponsible investing. Such is the premise for hundreds of Harvard students pursuing careers in social enterprise and microfinance. It’s time that Harvard invest in the 99%.
In sum, Harvard should be a university that directs our minds and money to the interests of the 99%. But it won’t do so unless we ask. With the Occupy movement now behind Dexter Gate, now is the time to ask.