What to Do About the Bane of Inequality, A First Step

Are you worried about inequality? I am not. You are not supposed to say it, but inequality is an important motor of progress, as James Piereson has shown in The Inequality Hoax. But if the thought of inequality keeps you up at night, you should get behind Glenn Reynolds’ suggestion that we abolish the Ivy League. Really, is there a greater engine for the perpetuation of inequality than those bastions of wealth and (mostly white) privilege?

But perhaps outright abolishing Yale, Harvard, Princeton, and the other top colleges is a step too far. Maybe, as Glenn has also suggested, we should just address the issue by a little redistributive justice. For any college or university with an endowment of more than, say, $1 billion we 1) stop all federal subsidies and 2) require that they send, say, 10% – 15% of their endowment to a college that caters primarily to poor students.

The exact numbers are not critical. Maybe the threshold should be a $500 million endowment. Maybe the required transfer should be set to the current personal income tax floor, which I believe is 28%. The exact numbers are negotiable, but the principle should be obvious. If we’re against inequality, here is a concrete step we can take not only to make a statement but also make a difference. Make a Statement! Make a Difference!  It has a nice ring to it, don’t you think? Yale’s endowment, for example, is about $25 billion. I reckon Howard College could do quite a lot with $4 or $5 billion.

Yep, the more I think about it, the more I like the idea. Henceforth, contributions to the Ivy League and other top schools will not be tax deductible (that’s a subsidy). Moreover, such institutions will get no federal grant money. Finally,  every year around tax time they will need to file with the IRS and send a check equal to some agreed upon proportion of the market value of their endowment for redistribution to some deserving poorer institutions. So you see, not only will this scheme have a pleasing redistributive effect, it will also create an entirely new federal bureaucracy.  If you are in favor of redistributive justice, you are probably also in favor of creating huge, wasteful, incompetent government bureaucracies. I can more or less guarantee this will be a doozy.

In order to get the ball rolling, students at Harvard, Yale, etc., should organize and protest the elite status of their institutions. They should stage sit-ins at the chief sites of oppressions in the their university: the President’s Office, say. They should also erect little tent cities on public quads demanding the divestiture of some portion of their institution’s endowment. We’re only a couple months away from spring, traditionally the time when most college protests really get going. This spring, students at the Ivies ought to band together and strike a blow against the blatant inequality their privileged institutions embody. Make a Statement! Make a Difference!