When society wants to encourage something, the government serving it subsidizes that activity. Conversely, when it wishes to discourage an activity, often it taxes it. Thus we have high taxes on cigarettes and alcoholic beverages to help curb lung cancer and alcoholism. And we give subsidies to universities because we think doing so will help produce a better society —higher incomes, more enlightened leaders, greater opportunities for individuals to advance themselves financially and maybe even spiritually, etc. Universities allegedly reek with positive spillover effects.
But then there is Yale University. We give it all sorts of subsidies despite the fact that it is one of the greatest private concentrations of wealth on the planet, with at least $2.5 million dollars of endowment for every student attending providing about $100,000 income annually or roughly $300 daily per student (whether school is in session or not) in investment income to educate each of the 12,000 students enrolled. Donations to the school are tax deductible. The school’s earnings (including capital gains) from the over $30 billion endowment are not taxable as they are for private individuals. To be sure, the U.S. recently imposed an endowment tax on ultra-rich schools like Yale, but still the tax benefits of its university status far exceed the costs.
What sort of oversight is there of this highly favored institution? How transparent is its decision making process? Recent articles by two fine graduates of the Yale Law School (typically rated as the nation’s finest), Lanny Davis (Wall Street Journal) and Glenn Reynolds (New York Post) suggest the governance of Yale probably more closely resembles that of, say, Belarus, than it does of a typical U.S. governmental body or publicly traded U.S. corporation. The Board of Trustees of Yale is elected theoretically at least in part by university alumni, but in reality the only candidates considered for election are selected by the board itself, and candidates are not allowed to campaign or provide alumni with detailed information about their lives or their positions of interest to the Yale community.
Until recently, it was possible for alumni to petition to be on the ballot, and occasionally there would be contested elections, but Yale’s anti-democratic aristocrats have put a stop to that, changing the rules to allow voting only for the two Board-approved candidates who are forbidden to really campaign. And this is at a university that openly allows public inspection of its Board minutes only after 50 years. And one that still has “secret societies” like Skull and Bones for the most elite amongst the elite kids populating the place.