Harvard’s True Colors « The Quick and the Ed

Harvard’s True Colors

While I now spend my days immersed in words, for the first six years of my career I was a numbers guy, a public budget and finance analyst in the Indiana state government, first in the executive branch, then the State Senate, then back again as the Assistant State Budget Director, for education. I learned some things about money in those years: that while the process of choosing how to spend resources can be conceived of in various technocratic or theoretical ways, it really comes to down to values.

When funding levels are stable, people are deeply inclined to spend new money much like the old, because they value constancy and reallocation is a negative-sum game. Every dollar you take away from someone creates grief orders of magnitude larger than the happiness you create by giving the dollar to someone else. When it comes to money, people are both insatiable and loss-averse—more is never enough, and every lost penny stings.

When funding levels change, however, up or down, people are forced to makes choices. They’re exposed by those decisions—dollars can be counted with absolute precision, and so become an unavoidable ledger of what matters and what doesn’t. That’s what my new column in the Chronicle of Higher Education, focused on the Harvard endowment, is really all about.

In brief: From 1990 to 2008, the Harvard endowment grew by $30 billion. That’s more money than anyone could possibly have dreamed of. And yet in all that time, the people in charge of spending that money never thought to devote even a dime of it to educating more undergraduates. These seem like warped values for an educational institution.

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