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For the love of God, rich people, stop giving Stanford money

Stanford campus.
Stanford campus.
Justin Sullivan/Getty Images

Phil Knight, the founder of Nike and the 35th-richest man in the world, is giving $400 million to Stanford. It'll pay for tuition and living expenses for a yearly crop of 100 "Knight-Hennessy scholars," named after Knight and John Hennessy, the outgoing Stanford president chairing the initiative. Those students — one-third American, two-thirds international — will get three years of graduate funding.

On its face, this is an offensive waste of money. Stanford grad students are already richer than average, smarter than average, and more socially connected than average. They are a hugely privileged group of people who already enjoy the benefit of a $22.2 billion endowment — why give them even more? As elite college critic Malcolm Gladwell told the New York Times's Alessandra Stanley, "If Stanford cut its endowment in half and gave it to other worthy institutions, then the world really would be a better place."

But Stanford and Knight have anticipated this critique, and want you to know that giving $400 million to the fifth-richest university in America is too an act of charity that will make the world a better place. Stanley writes that the 100 scholars will be expected to "address society’s most intractable problems, including poverty and climate change."

Stanford's news service elaborates that the scholars will be "exposed to leadership training and development, residential experiences, immersive educational opportunities, additional degree opportunities focused on public policy and problem-solving at scale. A social startup fund will be created to seed nonprofit startups launched by Knight-Hennessy alumni."

The argument is that the gift, and the other huge gifts that have already been made to fund the program's staggering $750 million endowment, will be made worthwhile by the careers of its alumni. They will be so much better at leading the world than their counterparts in a hypothetical world with no Knight-Hennessy scholars that giving them the money is better than giving it to poor people.

It's a real argument, better than the argument you could give for donating $622.3 million worth of art to Stanford, which also happened recently. But I'm not buying it.

The bar that massive gifts to universities have to clear

givedirectly
Why not just give $700 million to poor people?

GiveDirectly.org

Let's first establish what $750 million could do if redirected away from the Knight-Hennessy program and toward the world's poorest people. Factoring in Stanford's typical endowment returns, this endowment base could expected to produce about $52.5 million in real terms every year.

Imagine if that $52.5 million — or $175,000 for each of the 300 students getting this scholarship at any given time — were instead given out annually as a basic income to a group of desperately poor people in, say, Rwanda. Suppose each Rwandan gets $1,000 — very generous, given that the country's GDP per capita is only $1,660. You could give that cash to 52,500 people a year, indefinitely. You could target the transfer to people in areas that are extremely poor even by Rwandan standards, having an even greater impact.

So for the Knight-Hennessy program to make sense, it needs to do more good for the world than lifting tens of thousands of people out of $2-a-day poverty.

Or imagine if the money were instead spent on insecticidal bed nets. These products, used to prevent malaria, are a very cost-effective way to save lives. GiveWell's rough estimate is that it costs $2,838 to save a life by giving to the Against Malaria Foundation, the top charity that distributes bed nets. The $52.5 million a year could buy enough bed nets to save approximately 18,500 lives.

So Stanford needs an explanation for why helping 100 elite students afford a few years of graduate school is better for the world than saving thousands of lives or helping tens of thousands of people escape poverty.

The plan doesn't even make sense on its own terms

It's a tough question
Should we even want to create more Deng Xiaopings?
XINHUA/AFP/Getty Images

That might sound ridiculous, but you could actually make an argument for it. It'd go something like this. The more than 6 billion people already lifted out of extreme poverty did not get there because of alms. Life expectancies didn't rise by decades because of nonprofit charity–funded health programs. That happened because of huge, society-wide changes, and those changes were pushed by individual leaders.

Deng Xiaoping, the former Chinese dictator, personally lifted more people out of poverty than any charity has by reversing Mao-era economic policy and launching China on its export-based growth path. Norman Borlaug, who introduced high-yield crops to Mexico, Pakistan, and India in what became known as the Green Revolution, is commonly credited with saving hundreds of millions of lives. Viktor Zhdanov, a Soviet virologist, was the leading force behind the international campaign to eradicate smallpox, which used to kill 1.5 to 2 million people every year and now kills none.

If you move from political or institutional leaders to researchers, there are even more cases like this. Fritz Haber and Carl Bosch figured out a way to produce ammonia at industrial scale, which meant humanity became capable of producing agricultural fertilizer at mass scale. Vaclav Smil has estimated that about 40 percent of the people on Earth wouldn't be alive if not for the process Haber and Bosch invented. Few people have heard of Richard Lewisohn — he doesn't even have an English Wikipedia page — but he invented the blood preservation process that made blood banks possible, saving millions upon millions of lives.

Microbiologist Maurice Hilleman developed the vaccines for measles, mumps, hepatitis A and B, chickenpox, meningitis, pneumonia, and the flu. Those vaccines — developed with the help of countless others including John Enders, Anna Mitus, and Ann Holloway — conservatively save millions of lives every year.

And so on and so forth. So if the Knight-Hennessy fellowship produces even one or two people with that kind of impact, that would probably be a good use of money.

But take a step back and think about how you'd design a program actually intended to produce mass lifesavers like those people. First off, your best bet would probably be to fund scientists, in particular life scientists. Even administrators like Borlaug and Zhdanov typically had scientific backgrounds.

Then you'd want to look to specifically fund people interested in a) implementing large-scale public health programs, b) developing cheap treatments or vaccines for common deadly or debilitating illnesses, or c) developing technologies like CRISPR or optogenetics that will make future cures easier to come by. You'd particularly want to fund scientists doing basic biological research necessary for future breakthroughs, or doing applied research on stuff like eliminating all mosquitoes (and thus all malaria and dengue fever and Zika) using genetic engineering.

Esther Duflo in front of a microphone
MIT economist Esther Duflo, the co-founder and director of J-PAL.
Miguel Riopa/AFP/Getty Images

Limiting yourself to funding life sciences is probably too narrow a focus. You could also fund grad students who do research in development economics in the hopes of discovering new cost-effective interventions.

Knight could fund Innovations for Poverty Action, the anti-poverty research group led by Yale economist Dean Karlan, or the Abdul Latif Jameel Poverty Action Lab (J-PAL) at MIT, both of which do research intended to improve aid to developing countries. He could start a new lab like that at Stanford as well. He could fund applied chemists, like Haber and Bosch, in the hopes of similar breakthroughs.

But Knight is not doing that. Instead, he's creating a program for Americans who weren't good enough to get Rhodes or Marshall scholarships, and those Americans' international counterparts.

Insofar as Knight and Stanford give any detail as to how these people would fix the world, it only serves to make the aspirations of program more comically implausible. Hennessy suggested that the scholars would study past attempts to fix big societal problems to see where they went wrong — like Mark Zuckerberg's injection of $100 million into the Newark school system:

One problem Mr. Hennessy said he might assign to a team is to analyze the $100 million donation that Mark Zuckerberg, the chief executive of Facebook, made to Newark public schools in 2010, and that has not been widely seen as a success. "Nobody understood the real difficulty in making significant change in the public education system," Mr. Hennessy said. His scholars would be asked, he added, " ‘How do you build a structure that will successfully deploy those funds for the benefit of all?’"

If Hennessy is interested in evaluating the effectiveness of the Zuckerberg donation, he might consider calling one of the 115-odd faculty members of the Stanford Graduate School of Education and seeing if they might want to help. Or he could call Raj Chetty and Caroline Hoxby, two Stanford economists who've done widely influential work on education in the past.

What's weird is eschewing those options in favor of having a group of recent college grads tackle these problems solo. Why do we think they'd do a better job than people who've been doing this kind of evaluation their whole careers?

Creating great leaders is hard

University Of Oxford And Its Smith School Of Enterprise And Environment Host ReSource 2012
Bill Clinton speaks at his alma mater, Oxford, in 2012.
Matthew Lloyd/Getty Images for ReSource 2012

Maybe Hennessy thinks the recipients will go on to be great political leaders. And it's true the Rhodes and Marshall programs have produced a fair number of politicians. But have those politicians governed more effectively as a result of their time abroad?

Was Bill Clinton a better president because of his years at Oxford? Would Paul Tsongas have been far worse than Clinton because he didn't win the Rhodes? Would Benazir Bhutto have been a less effective leader of Pakistan without her Rhodes? Is Stephen Breyer a better Supreme Court justice than Ruth Bader Ginsburg because he got a Marshall and she didn't?

The fact of the matter is that the world is already run by people educated at elite institutions like Stanford. The president has degrees from Columbia and Harvard. Every single member of the Supreme Court attended Harvard or Yale law school (in fairness, Ginsburg did transfer from Harvard … to Columbia). The secretaries of state and defense went to Yale; the latter was a Rhodes scholar. The secretary of Treasury, attorney general, secretary of commerce, secretary of education, secretary of labor, secretary of health and human services, secretary of housing and urban development, OMB director, trade representative, UN ambassador, and CEA chair all have Harvard degrees. The HUD secretary, energy secretary, and national security adviser all have Stanford degrees.

Real talk: Elites have also perpetrated massive harm

Henry Kissinger And Charlie Rose Mark The 70th Anniversary Of VE Day
Harvard kind of has to take the blame for Henry Kissinger.
Steve Mack/Getty Images

And the track record of elites is not one of unqualified success. The management of the Vietnam War was famously a project of elites. Secretary of Defense Robert McNamara had an MBA from Harvard. National Security Adviser McGeorge Bundy was the dean of faculty at Harvard before joining the White House. His successor, Walt Rostow, was a Rhodes scholar who entered Yale at age 15.

Their elite intellectual backgrounds did not lead to them effectively "addressing society’s most intractable problems." Instead they left a trail of blood, carnage, and misery in their wake. And when Henry Kissinger — a tenured professor at Harvard who earned three degrees there — took over for them, he proceeded to back a vicious bombing campaign in Cambodia that killed hundreds of thousands of people; arm the Pakistani government as it committed genocide in Bangladesh; explicitly give Indonesian President Suharto the go-ahead to invade East Timor and kill hundreds of thousands more; and support the Latin American dictatorships of Augusto Pinochet and Jorge Videla.

"A back-of-the-envelope count would attribute 3, maybe 4 million deaths to Kissinger’s actions, but that number probably undercounts his victims," historian Greg Grandin writes. And this doesn't even delve into the roles of elite grads in Iran-Contra, in the invasion of Iraq, in the creation of the Bush administration's torture regime, and in the financial crisis (an event triggered by Ivy League grads at banks and enabled by their former classmates in government).

My point isn't that everyone who graduated from one of these schools went on to commit great evil. I went to one of these schools, and while opinions may differ I don't think I've left a trail of suffering in my wake.

My point is that the idea of fixing the world by sending smart people to elite institutions and then having them run everything has been tried, and whatever else can be said about it, it didn't end poverty. It didn't end climate change. It very well might have left the world worse off overall. I simply can't think of any empirical basis for Phil Knight and Stanford's faith in the ability of elite education to solve major problems.

Stop counting on elite leaders to fix all of our problems

At root, the problem here is an individualized perspective on fixing systemic problems. None of the people I listed above who saved millions of lives did so because — or solely because — they were the best leaders in the world, the smartest people in the world, or even the most benevolent people in the world. They did so because they identified discrete problems that needed solving and solved them.

And indeed, some of them weren't great people! Deng Xiaoping lifted hundreds of millions out of poverty, but he also crushed the Tiananmen uprising and confined China to tyranny for more than a quarter-century to date. Viktor Zhdanov, the Soviet scientist behind the eradication of smallpox, also developed biological weapons for the USSR; there's speculation this is part of why the country bought in to eradication, since it made smallpox a more potent weapon. Fritz Haber, the man whose fertilizer production process helped feed the world, also helped weaponize chlorine gas, and helped the German military use it in World War I.

Maybe Knight shouldn't be focused on training great men and women to fix the world's problems. Maybe he should just give to people who are working to fix the problems.