As the American economy begins to enter into what looks by all indications to be a rather painful period, economic populism is creeping back onto the political agenda in bits and pieces. And, as it gets more and more difficult to be in the middle or bottom of America, it gets increasingly presumptuous to be at the top. So it goes with the recent proposal in the Massachusetts House to tax endowments of over $1 billion: the target is obviously Harvard, and it’s being targeted because it happens to be obscenely wealthy while much of the state is slipping backwards.

To the sensible liberals, generally amenable to a little bit of progressive taxation, this is apocalypse. The Globe suggested the proposal was nothing more than a invocation “to strangle an economy”; the Crimson suggests that it is a social negative, crippling institutions which turn out citizens who are “educated and ready to make a difference”. Greg Mankiw peevishly suggests Harvard should move south. The general consensus is that Harvard and other wealthy private schools have enough of a net positive on the communities they live in that they deserve to remain untaxed.

But do they? Brad DeLong, Harvard graduate and fairly center-left econ blogger, makes the case otherwise. His argument rests on the idea that Harvard is simply too unwieldy and stagnant to expand enough to make significant social contributions. His commenters, however, do a better job at getting to the center of the issue. One writes:

(a) Harvard is not interested in more students because the goal of Harvard is positional. Five times as many students means fives times as much education, but it means one-fifth as much value attached to the Harvard networking brand and
(b) It seems rather less obvious why it is wrong for MA to tax Harvard. Personally I’d rather do the taxing more directly (tax the successful on their wealth and income, not the engine that got them there) but the US political system being what it is, that ain’t gonna happen, so I’m not going to lose any sleep over this second-best option. Sure it’s not ideal in that taxing Harvard is taxing a bundle of goods, some of which we want to encourage, but, as I say, the facts are the facts — Harvard appears to exist primarily to hook up future movers and shakers, not to educate the world or even to perform leading edge research.

Writes another:

The weakest section of the Internal Revenue Code is the not-for-profit section, where a Cub Scout pack and Harvard are afforded much the same treatment.

And it’s true: to label Harvard as some sort of saintly social laboratory turning out nothing but good for the community is intellectually incoherent and factually incorrect. Undoubtedly, Harvard does an enormous amount of good both Cambridge, Massachusetts, and the United States, both in its immediate programs and in the ripple effect of some of its graduates. Moreover, its role as the first-rate aspirational good in the education market has, I think, a significant positive effect in educational behavior amongst high-schoolers.

But when it comes down to it, those are all filial considerations. Harvard’s first concern (and I don’t fault them for this) is to look out for Harvard, and to produce wealthy and powerful graduates. A vast share of Harvard’s endowment is marshaled towards the end of bolstering Harvard’s prestige and reproducing the position of the American power élite.

Note that I’m not criticizing Harvard on that account. What I’m criticizing it on is its duplicitousness—that is, its cynical ability to be self-interested but play at charity for the purposes of what amounts to tax evasion. This is horribly disingenuous. Corporations and wealthy individuals also yield benefits to society. But they get taxed quite consistently, and only real right-wingers seem to have a problem with this. Why should Harvard be any different?