Malcolm Gladwell: belief

Transcript context

…10x and not lower tuition. Look, these guys are in the luxury handbag business. They’re not in the education business. They are interested in sustaining a certain brand equity. And they see expanding the size of their schools as diluting their brand equity in exactly the same manner as Louis Vuitton does. Louis Vuitton is not going to open a Louis Vuitton store across the street right in that building over there, next to the Starbucks. They’re not going to do it even though there may be people right here who want to go and buy a Louis Vuitton bag right now. They’re very conscious of maintaining that aura of exclusivity. That’s all Harvard is doing. If you thought for a moment their primary motivation was in educating as many people as they could as well as they could, then I think you’re living in a dream world. Right? I was walking around — this is a tangent. [laughter] I was in DC this weekend, and I went for a walk with a friend of mine, and we went to Dumbarton Oaks. It’s a gorgeous facility, and it was given to Harvard University in 1940 by Robert Bliss in its entirety. I happen to know for complicated reasons that I shouldn’t go into that the endowment attached to Dumbarton Oaks has many, many zeros. Let’s just say that the endowment attached to Dumbarton Oaks is larger than the endowments of all but a tiny fraction of American colleges. And we all know that on the grounds of Dumbarton Oaks, they have a museum where there’s one of the great collections of Pre-Columbian art in the world. So as I was walking along the grounds of Dumbarton Oaks, I asked myself, “This is a facility owned by a nonprofit institution, which receives enormous tax benefits from the American taxpayer, and which has an astonishing sum of money attached to it. Why can’t I see the art?” And why does no one get upset about this, by the way? I’m allowed to walk around the rose garden. Whoopee! Surely, I should see the art. I am, as an American taxpayer, subsidizing this institution and yet . . . why are there no . . . When was the last time they brought in a busload of high school students to Dumbarton Oaks to walk them through the Pre-Columbian art collection? Has it ever happened? I don’t know. [laughter] One economic puzzle to me is why a university, such as Harvard, has such high endowments. Now you’ve just raised some objections to endowments. But if one is taking a somewhat cynical economic approach to this, you would think actually they would spend more on themselves from the endowment, and they don’t. And that raises the question of what are they really trying to maximize? What’s your theory of endowments and why they’re so high? And why don’t the people at Harvard spend more on themselves? Because they’re not all that rich.…

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