Many people remember college only through a slightly golden haze: the big game, the all-nighter, the favorite professor. It’s not malice, this refusal to examine the alma mater too closely—it’s just emotionally convenient, especially if you went to a place like Harvard. For all of its glories—the fascinating fellow students, the wonderful classes—it’s hard not to feel uncomfortable with all of what Harvard means. Here’s why: The plural of “privilege” is “establishment,” and if you graduated from Harvard you’re part of one, like it or not. The immediate question is, “How healthy is that establishment?” The answer, I think, is not very.
This occurred to me this past April as I spent part of the week stretched out in a sleeping bag amid the shrubbery in front of Harvard president Drew Gilpin Faust’s office. Hundreds of us—students and faculty, but lots and lots of alumni—were there at some point during Harvard Heat Week to protest the university’s refusal to divest its holdings in fossil fuel companies, even as those companies continue to drive us closer to the edge of catastrophic climate change. We weren’t asking for anything particularly radical: Institutions ranging from Stanford to Hampshire College, and from the United Church of Christ to the Unitarians, had already started down the divestment path. And in the months since our Harvard protest, they’ve been joined by everyone from the Episcopal Church to the largest insurance company in France to Norway’s government pension fund, a.k.a. the largest sovereign wealth fund on Earth.
But Harvard was different. Despite a strong organizing effort by students, who in 2012 convinced nearly three-quarters of their peers to back divestment, the university had issued a quick initial rejection and refused to budge after faculty members petitioned in 2014. Yes, it was very concerned about climate change. No, it would not divest. In fact, it had offered the back of its hand. In the small corner of its portfolio that is visible to the public, Harvard had (around the time that more than 300,000 people marched in New York for climate action and as the World Council of Churches announced plans to divest) increased its investments in fossil fuel companies by a factor of seven.
Its biggest new investment was in a company, Anadarko Petroleum, that illustrated every reason thousands of alumni were joining students and faculty in the divestment demand. Not only had the company paid the largest settlement in the history of American environmental contamination cases, but it was also a big funder of the political campaigns launched by prominent climate deniers. Above all, though, its basic business plan showed what it thought about global warming: Even though scientists have conclusively demonstrated that no more than a third of the coal, oil, and gas reserves can be burned if we wish to keep climate change under control, Anadarko boasted to its investors that it expected to “drill nine to 12 deepwater exploration/appraisal wells focusing on play- opening exploration opportunities in Colombia, Kenya, and the Gulf of Mexico.” That is to say, in a world where by any measure we already have too much carbon, it wanted to find some more. And that’s the business plan Harvard was buying into.
When challenged about it, Harvard maintained a nearly perfect unruffled calm. If students surrounded the president’s office, the president moved her operations to another building. When demonstrators staged a sit-in at the alumni office, alumni officials gave us baseball caps.
This kind of calm—after 2014 set a record for the hottest year ever measured on Earth, a record that 2015 is now obliterating— interested me. It angered me, too, I confess, but above all it interested me. What were they thinking?
Faust—a superb scholar, a fine writer, and by all accounts a good president (not to mention a woman who, in her youth, left school to march in Selma, Alabama)—laid out the university’s reasoning in 2013. Some of her points were sensible: Harvard’s main job is to research and teach, and in those realms it is doing a remarkable job, for an ever-broader swath of students. But her direct response to divestment was risible. Since the university relies on fossil fuels to power its buildings, transportation, computers, and appliances, she said, there was a “troubling inconsistency in the notion” of divestment—arguing that, in effect, Harvard could act on the problem only once it had been solved. And her belief that Harvard would instead address climate change in “more effective ways” was unpersuasive. It’s sweet that the university “has created awards to recognize ‘heroes’ who are helping to make Harvard green,” but compared with dissolving ice caps, it seems somehow insubstantial. And unconvincing: By this point even the former chairman of Shell has called divestment a “rational” response to the “distressing” lack of climate action by the big fossil fuel companies.
No, there was something deeper here. Harvard is many things, all of them arguable but one: It’s the richest university in the world, what some have called a hedge fund with a university attached. That’s too cynical, but there’s something about Harvard’s relationship with money that gets in the way of clear thinking.
Among the highest-paid people at the university, for instance, are its fund managers. In 2013, one of them made $11.5 million, which is $6.1 million more than the University of Alabama shelled out for Nick Saban, the highest-paid college football coach in the country. If you ever groused about the fact that football coaches make more money than professors—well, this one fund manager is paid more than 57 professors. And that’s actually an improvement: Harvard has reined in its compensation from a decade ago, when some managers were making upward of $30 million.
It’s not as if they’re irreplaceable financial geniuses, either. To demand a salary like Saban’s, most years you’d need to contend for the national championship, or at least the Cotton Bowl. But Harvard’s returns are middling at best. Up against the 20 comparable (though smaller) endowments in 2012, it came in 18th; over the past five years, 19th; over the past decade, 13th. Those aren’t Crimson Tide numbers; those are Vanderbilt numbers. Oh, and over the past five years Harvard’s returns have trailed, um, index funds. In fact, here’s what’s really interesting: Investors who have divested from fossil fuel companies have outperformed the broader market for the past five years. If Harvard’s managers had paid attention to the students demanding divestment, they’d likely have made the university more money.
But it’s less about the return than the ethos. Earlier this year, for instance, Harvard got its biggest gift ever, $400 million to the School of Engineering and Applied Sciences, from hedge fund manager John Paulson. In a Huffington Post op-ed, economist Jeffrey Sachs argues that Paulson essentially swindled the money from small-scale German investors by convincing Goldman Sachs to set up a designed-to-fail fund he could then bet against. (Paulson was never charged with a crime.) The dean of Harvard Business School called Paulson the “ epitome of a visionary leader,” which in a certain sense is true, I guess, but not perhaps in the sense he meant.
After decades of sending a large number of its graduates to Wall Street, Harvard has actually been good in recent years about expanding the establishment to include people who don’t look like the inbred scions who once dominated it. But the university’s domination by Wall Street seems to have eroded the few valuable things an establishment offers—above all the idea that in a time of crisis it would rise to the occasion, putting aside self-interest for a while. (If you want a visceral sense of what I mean, look at the long list of Harvard’s dead from the world wars whose names are engraved on the walls of Memorial Church.) Look, noblesse oblige ranks far behind justice as a goal. But it ranks far ahead of Ayn Randian individualism, which in the post-Reagan years seems more and more the dominant flavor of our ruling class.
Here’s how Faust put it in her 2013 open letter rejecting divestment: “We should, moreover, be very wary of steps intended to instrumentalize our endowment in ways that would appear to position the University as a political actor rather than an academic institution.” Harvard’s then–$32.7 billion endowment, she decided, was just morally neutral money. It should not be “a lever to exert economic pressure for social purposes,” nor an “ instrument to impel social or political change.”
But in times of crisis, that’s precisely what establishments have done. They’ve used their resources—from their money to their moral authority to their connections—to step up to the great, unavoidable tasks of the day. And some of them are still trying. The Rockefeller Brothers Fund—descended from the original fossil fuel fortune—last fall announced that it would divest its holdings from fossil fuel. In Britain this year, Prince Charles, the University of Oxford, and the Church of England all started down this divestment path. With the exception apparently of Charles, they did so grudgingly and with much grumbling, but they didn’t in the end try to shirk responsibility. Some cord of responsibility, though frayed, still holds there—a cord that may have snapped at Harvard.
Divestment, by the way, is gaining traction. Speaking at a climate conference in Paris in July, an adviser to the German government and Pope Francis called divestment “a moral decision.” Even the head of the World Bank has endorsed it; were Harvard to do the same, its initial reticence would actually add more weight to the decision. It would, in fact, be a powerful political stand. It would say that even here, as we head toward our 400th anniversary, we understand that business as usual is no longer possible. Change has gotta come.
There are all kinds of establishments, of course, and this climate crisis—the greatest conundrum the world has ever wandered into—is testing them all. Pope Francis is plunging the Catholic establishment into the debate, for instance. (So far Georgetown has begun divesting, but Boston College is standing stiff-necked.) I’ve watched climatologists consider whether the time has come to march and go to jail—I’ve gone to jail with some of them—and we’ve seen the divestment debate move up Mass. Ave. to MIT. There, careful, open deliberations have produced a recommendation from a student-faculty committee for partial divestment, and action may come this fall.
It’s still possible that Harvard will shift, I guess—one member of its Board of Overseers, Beneficial State Bank CEO Kat Taylor, used the week of demonstrations and sit-ins last spring to call on the university to do the right thing, so that it could be “the beacon to applicants, students, faculty, and the global community that the world has come to expect.” But so far that’s been it. Harvard—and Princeton and Brown and most of the other eastern liberal arts colleges— represent what’s left of the establishment. In this crucial period of a few years that will decide the climatic future of the one planet we possess, we need its members to pull up their calf-length socks, unclutch their pearls, and show some residual courage. They need to tug the chain on Wall Street instead of the other way around.
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