What might Covid-19 mean for the future of Harvard and Stanford?

Educational economist Miguel Urquiola tells Matthew Reisz about the upsides of inequality and the dangers of ‘unbundling’

April 26, 2020
Harvard University students walk under a damaged umbrella near Harvard Square in Cambridge, MA in April
Source: Getty
Battering of the brand? The rise of online classes could make the added value ‘sold’ by elite universities less attractive

Could the impact of the coronavirus pose a threat to the great American research universities?

Few could be better placed to answer that question than Miguel Urquiola, chair of the department of economics at Columbia University. His new book, Markets, Minds, and Money: Why America Leads the World in University Research (Harvard University Press) goes back to the Reformation and beyond, yet its central argument is that the overwhelming global dominance of American research universities comes from the fact that the US “takes a free market approach to education”. Not only is it relatively easy to set up a new institution, but universities are largely “free to set their own direction” and to put on the range of courses they want (without, for example, having to seek permission from a ministry of education).

Professor Urquiola admitted to Times Higher Education that he “often take[s] a contrarian view” and that a historian had called his book “a little politically incorrect”. It argues, for example, that “inequality may well be tied to the mechanisms that give rise to innovation”. So, although health and education in egalitarian Denmark may be better for most people than in the US, “if the medical advances that help keep Danes healthy originate disproportionately in American universities, then drastically attacking American inequality would affect them too”, Professor Urquiola writes.

Markets, Minds, and Money concludes by surveying (and largely dismissing) possible threats to the elite universities of the US, including “political risks related to inequality”, the rise of online teaching methods and “out of control cost increases”. So, it seemed interesting to ask Professor Urquiola whether he still stood by his cautious optimism in the light of recent upheavals.

He was doubtful, he replied, whether “people who have experienced Zoom classes...would become less willing to engage in campus-based education” in elite institutions. Nor would even a significant economic downturn be likely to put students off paying high fees to attend massively oversubscribed universities such as Harvard or Princeton, he suggested.

Yet there was still a potential problem. In normal times, fees effectively bundle together tuition with access to sports facilities, networking opportunities and so on. “Anything that unbundles stuff is a threat to the top American universities,” explained Professor Urquiola, “and there is an unbundling of sorts going on. [Students might start saying:] ‘If you are no longer selling me the athletics part or having dinner with people who may be good marriage prospects, then I’m going to have to pay for those elsewhere and I want to pay you less.’ With time, if things stay the same way, what elite universities sell will become less attractive, which threatens the whole model.”

On the issue of inequality, Professor Urquiola remained keen to stress its positive as well as negative effects: “The fact that Stanford and Princeton are awash in money means that we also have universities and colleges in the US that are teetering on the edge of survival and are much less well provided for than any German institution of higher learning. But I am claiming we wouldn’t have Stanford without that inequality and, to the extent that it benefits the world, there is some kind of trade-off.

“Stanford could not exist but within an entire system that is highly unequal. It was endowed by someone who was extremely rich and made his money using immigrant labour. It now caters to students who many on the left would say benefit from enormous privilege that has accumulated over generations. It is married to Silicon Valley. It is not an isolated sector; it is part of the entire structure [of inequality]”.

Yet Professor Urquiola also acknowledged that making the case for inequality might become more difficult if, for example, the coronavirus proved particularly damaging to poor and minority communities, and if an economic downturn meant that only the very richest could afford to attend leading universities.

“There are political challenges for universities,” he said, “where the left considers Harvard a repository of privilege and wealth, but the right also feels a lot of animosity towards the elite universities, [partly because] the educated elite tends to be more on the left. These top universities are sometimes left without any friends.”

Nonetheless, Professor Urquiola also pointed to a striking paradox in this area. Much of the support for Democrat presidential candidates such as Elizabeth Warren and “wholesale redistributive policies” came from “highly educated, generally affluent people”. If they started to feel the pinch, their political priorities might change. Furthermore, while often generally supportive of higher taxation, they were also very committed to their children’s education.

“One of the few moments when the Obama administration really misread the public mood,” recalled Professor Urquiola, “was when it wanted to make the tax benefit on college savings accounts less attractive. A mini revolution happened, and they had to walk it back very quickly.”

Despite many threats to the model that underpins elite US institutions, it may yet prove resilient.


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Reader's comments (1)

Prof. Urquila is a very brave man. He made himself a target for the "woke". We shall be watching to see how long he survives in his job....