Cryptocurrency markets have deflated over the past four months. Bitcoin, the granddaddy of the digital-currency industry, has shed more than half of its value. That in itself has caused significant problems, such as the probable default of El Salvador, a nation whose leader unwisely tethered its currency to bitcoin. But key pieces of the ecosystem, such as the TerraUST/Luna “stablecoin,” have it even worse. TerraUST/Luna unraveled entirely, dropping to near zero from $60 billion in total nominal value.

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In 1776, Adam Smith made perhaps the most famous statement linking monopoly power to labor. “Masters,” he wrote in The Wealth of Nations, “are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labor above their actual rate.” Today, however, rather than taking Smith’s maxim as a warning, most lawyers and judges have come to treat it as a guidebook.

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Democracy requires something more than a handful of super-rich universities.

in the U.S. flows through the gates of the Ivy League and a very small tier of other top universities. These institutions set and sanction the boundaries of knowledge, including what kinds of political and social views are welcomed in prestige cultural spaces. This has long been the case. In 1805, for example, Unitarianism won a real degree of respectability when Harvard, then a Calvinist institution, appointed the Unitarian Henry Ware to the Hollis chair, long the most prestigious endowed chair in the country. Last year, in a 21st-century version of the Ware affair, conservatives won when Harvard’s president and provost overruled the faculty and turned away the economist Gabriel Zucman, whose renown rests in large part on his empirical work substantiating the democratic benefits of a wealth tax. Lawrence H. Summers, who once said that “inequality has … gone up in our society” because “people are being treated closer to the way they’re supposed to be treated,” supported the hire but nevertheless explained, shortly thereafter, that raising taxes on the rich is a bad idea.

One of the great puzzles of American society is the position of the Ivy League. It is a bastion of privilege and power, and yet full of left-leaning professors who one might imagine would favor the redistribution of wealth. According to the Harvard Crimson, 77.6 percent of Harvard professors define themselves as left-leaning, and just 2.9 percent as conservative. What explains this dynamic? Harry R. Lewis, a former dean of Harvard College, said that such anti-conservatism gets to the basic point of the school, which is to advance radical ideas: “It’s almost by definition anti-preservationist because we place such a high value on the creation of new knowledge.”

A wildly different explanation is apparent from watching Netflix’s Operation Varsity Blues: The College Admissions Scandal, about a highly publicized fiasco in which wealthy parents used bribery to get their kids into top colleges. What is most interesting about this episode wasn’t the corruption, but a poignant feature of normal American meritocracy. Even in the midst of acts of bribery, many of the parents were beset with fear that their children might find out about the crooked machinations to win their admission to elite schools. They took desperate steps to shield their kids from facing questions of deservedness. Of course, most involved in our supposed meritocracy don’t use bribery, but a tremendous amount of energy now goes into preserving similar basic fictions about the nature of elite private education and its role in the United States.

We most often hear about inequality in terms of super-rich corporations and individuals or families. But the same gulf between haves and have-nots has opened in U.S. colleges and universities. Since the pandemic began, 570,000 jobs have disappeared in American academic institutions. More than 75 percent of college faculty in the U.S. are contingent workers or not on the tenure track. Meanwhile, as of 2020, the aggregate value of the endowments of the richest 20 U.S. colleges rose to over $311 billion, all of which are subsidized by taxpayers through the tax-free treatment we offer nonprofit educational institutions. The joke that Harvard is a hedge fund with an educational arm is not so far off.

According to the International Monetary Fund, the value of these endowment funds is greater than the GDP of New Zealand, Finland, or Chile. In the last five years, the U.S. has fallen in the United Nations’ Human Development Index, but its elite universities have risen in the world rankings — and gotten richer. America’s richest colleges and universities, in effect, exist in a country of their own (though paid for in part with the public’s money).

This inequity reflects a restructuring of political power toward an aristocracy. In historical perspective, we are seeing the collapse of the great post-World War II democratization of post-secondary arts and sciences education alongside the appearance of a meritocracy alienated from the public and at odds with democracy. If anyone points out the role of elite education in the reproduction of inequality today, Americans tend to see it as flawed or compromised meritocracy rather than “true” meritocracy. But such responses are signs of a kind of Stockholm syndrome. The “merit” of meritocracy has nothing to do with the worth or value of people as human beings and citizens. It has something to do with intelligence and ability, but also a great deal with résumé-building — which for some starts before kindergarten.

Meritocracy and democracy are not the same thing. The goal of meritocracy is to produce, or reproduce, an elite. There is nothing necessarily democratic about that. The Puritans who founded Harvard, Yale, and Princeton were very good at building stable and exclusive institutions, for many reasons, including that the elite, for them, were the elect: those specially chosen to receive God’s grace, the sanctified and saved few among the masses of the damned. In the early United States, however, New Englanders quickly discovered, to their dismay, that the fact that they thought themselves God’s elect did not mean much to many Americans, and they would be hard pressed to win national elections. Thomas Jefferson feared and reviled the Puritan schools, and founded the University of Virginia to counter what he saw as their anti-democratic influence.

The Civil War and Reconstruction first and the civil-rights movement second constitute the greatest achievements in modern American democracy. Both occurred during high points of public education. In the former, radical Republicans seized control of the government and created America’s land-grant universities, which rank high among the country’s great institutional triumphs in culture and democracy. The civil-rights movement unfolded after substantial Cold War investment in high-quality public university education.

But the United States has spent the last 30 years moving away from this kind of democratic education — and toward a gilded meritocracy. America’s elite private schools remain strongholds of the drunken post-Cold War triumphalism that hoards wealth and privilege to private institutions at the expense of public and democratic ones.

Elite universities in the United States use their collective power to set the terms of cultural discourse, but they also have a financial impact on the cost of education. Sometimes the collusion veers into violations of anti-monopoly law. In 1991, for instance, the Justice Department investigated 23 prestigious Northeastern universities — including Harvard, Yale, and the Massachusetts Institute of Technology — for holding an annual meeting in which they “discussed the financial-aid applications of 10,000 students who had been accepted to more than one institution in the group,” ultimately colluding to offer the same financial package to these students. The attorney general called them a “collegiate cartel.” After a settlement, top universities agreed to stop the meetings, but it’s hard to watch the Ivy League without concluding that they continue to mimic each other carefully.

This collective power organizes more than just student financial-aid packages and tuition. It has a big impact on the financial-services industry itself. The legendary manager of Yale’s endowment fund, David Swensen, invented an entire system of investing, known as the “Yale Model.” Joining Yale’s endowment office in 1985, Swensen was able to generate above-average returns by choosing a riskier set of investment options during a bull market. After Swensen’s success, he seeded the Ivy League and higher-educational institutions with financiers. By 2015, more than one out of every six dollars in U.S. higher-education endowments was run by Swensen or one of his protégés.

These new financiers were not the cautious managers of yore; they piled into illiquid or risky high-fee investments like private equity and hedge funds, funds which were in many cases staffed and run by the graduates of these same elite institutions (who in turn donated back to the universities). Swensen had a catalytic effect on pension funds globally, validating investments that otherwise cautious pension managers might find risky. After all, if Yale put half their money into private equity or other risky asset classes, then why shouldn’t the Kentucky pension fund? And when these investments went sour, as they did during the financial crisis of 2009 (and briefly again during Covid) it was the Ivy League that needed a bailout as much as anyone else on Wall Street. In other words, the restructuring of the American economy by new forms of exotic and toxic finance ran through the prestige of the Ivy League.

In 1940, the acceptance rate at Harvard was 85 percent. In 1970, it was 20 percent. This year, for the class of 2025, it was 3.4 percent. On the surface, a far more selective Ivy League seems to support the notion of meritocracy as something approximating what Jefferson characterized as the purpose of (unrealized plans for) free public schooling in 18th-century Virginia: “the best geniuses will be raked from the rubbish annually.” In practice, however, American meritocracy has gone from producing an elite to reproducing one.

The economist Raj Chetty has found that nearly 40 of the country’s elite colleges and universities, including five in the Ivy League, accept more students from families in the top 1 percent of income earners than from the bottom 60 percent. The computer scientist Allison Morgan recently released a study examining 7,218 professors in Ph.D.-granting departments in the United States across the arts and sciences. She found that the faculty come from families almost 34-percent richer than average and are 25 times more likely than average to have a parent with a Ph.D. Faculty members at prestigious universities are 50 times more likely than the average person to have a parent with a Ph.D. American meritocracy has become a complex, inefficient, and rigged system conferring its graces on ambitious children of highly educated and prosperous families.

In the mid-20th century, when Harvard accepted 80 percent of its applicants, its graduates voted Republican. Today Ivy League acceptance rates are in the single digits and its graduates, as well as 70 percent of people with graduate degrees, vote Democratic. This is why Thomas Piketty refers to the U.S.’s (as well as the U.K.’s and France’s) “Brahmin left.” Yes, the Brahmin left — sometimes lumped in with the conservative punching bag “woke capital” — is a favorite target of right-wing propaganda, so Democrats might assume that this reservoir of elite expertise is good for democracy and progressive ideas.

And indeed, rich meritocratic institutions are natural refuges for leftists or progressives in an oligarchy. But they are poor environments for democracy or democratic thinking. The Ivy League’s prestige is bolstered because it admits the lowest percentage of students. To a real degree, this is inevitable — talents in the arts and sciences can never be democratic. But the basic social logic of meritocratic life is one of exclusion.

Democracy requires widely available, high-quality public education. But the consolidation of wealth by elite, mostly private schools has gone hand in hand with damaging politically motivated state disinvestments that have weakened even the country’s greatest public universities, such as the University of Wisconsin at Madison and the University of California at Berkeley.

Combining an existential commitment to meritocratic exclusion with sincere progressive beliefs leads to dissonance. Even as we hear grandiose world-historical claims from meritocrats, their institutions struggle to conduct themselves as decent neighbors, good citizens, or respectable employers. Cornell University’s English department changes its name (changing “English literature” to “literatures in English”) and compares their act to the 20th-century decolonization of Africa. The same week, Ithaca College, two miles down the road, lays off more than 100 faculty members. Columbia University announces it has received a $5-million grant to develop a curriculum on “racial justice and abolition democracy.” Soon after, the university tells its striking graduate students, who have exercised their legal rights to form a union, that the university refuses to recognize their right to strike, and will confiscate their wages.

Two Yale professors gain notoriety for ominous exegeses about how Russians and Nazis have taken over the Republican party. A third maintains that Republicans are Confederates. Each of these claims exploits past wars to misrepresent our serious political crisis of democracy as a facile morality play, one in which the last 40 years of austerity economics that have produced iniquitous inequality in the U.S., while, year after year, making Yale richer and richer, play no role. While its professors moralized about the villains of wars past, Yale declined to make its dorms available to New Haven city workers on the front lines of the coronavirus pandemic (the university was soon forced to reverse its decision).

There are some countervailing signs. Three hundred Princeton faculty members signed an anti-racism letter that called on the university to increase its financial support for the people of Trenton, N.J. Princeton’s Anne Case and Angus Deaton have shown that if elite wealth-hoarding has been harmful to the middle class, it has been fatal to many in the working class. Columbia, Cornell, and New York Universities are all building new science-research centers in New York City. These will offer the institutions fresh opportunities to be decent neighbors and good citizens.

But reform will not come from within the Ivy League, or within higher education itself. Incredibly, philanthropic organizations are still giving big grants to America’s richest universities, recirculating resources among the most exclusive and wealthy while chanting social-justice keywords.

This has to stop if Americans want to restore their democracy. The change can only come from politics, from a public expecting education to work for democracy, not a tiny elect. It might begin with citizens and educators realizing that it is a fantasy to expect some of the wealthiest and most exclusive private institutions in the world to serve as pillars of democracy. There are many great things Ivy League institutions do very well, notably produce arts and science scholarship and research. Let’s let them do that. If we expect democracy or social justice from them, we will be disappointed.

There are some encouraging signs. Politicians in Massachusetts sometimes float taxing Harvard’s endowment fund. Last year, as a result of Donald Trump’s inclusion of a minor “endowment tax” in his otherwise reactionary 2017 tax cut, the wealthiest colleges had to actually pay a modicum of taxes. Sen. Tom Cotton, of all political leaders, suggested taxing private colleges with large endowments, and redirecting funds to vocational training. More importantly, a little more than a month ago, Rep. Pramila Jayapal and Sen. Bernie Sanders introduced legislation that would go a long way to restoring democratic education in the U.S, rescuing it from the regime of our gilded meritocracy and its Brahmin byways. Jayapal and Sanders’ proposal would make public college and university tuition free for families making under $125,000. It would transform American life and help the public universities, colleges, and community colleges that have for decades been starved and battered.

We hope President Biden recognizes the impact restoring these non-Ivy League institutions could have. He has certainly reoriented the Democrats in other ways. It was not the meritocrats Bill Clinton and Barack Obama who abandoned decades of austerity economics that threw elite education into the center of the oligarchy economy. It was Biden, a University of Delaware and Syracuse Law School graduate.

There is a large supply of scholars and teachers ready, willing, and able to work. Public universities, colleges, community colleges, and HBCUs have for decades been starved. The Biden family understands public education, and Jill Biden is an educator. With something like a Works Project Administration program to bring arts and sciences education to Americans, the administration could restore democratic education in the U.S.

In essence, the anti-monopoly movement to break up large corporations involves restructuring so that communities and families have more control over their lives and sovereignty. The divide we’re seeing, with a few gilded cities and their educational castles, is a symptom of a broken educational system. It must be fixed if we are to be a free, self-governing people. That means making education work not just for an elect, but for all Americans.

‘When people ask me as a Senator what monopolies and antitrust policy have to do with their lives, the answer,” writes Sen. Amy Klobuchar in her new book, “Antitrust: Taking on Monopoly Power From the Gilded Age to the Digital Age,” is simple. “Everything.”

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It is long past time for policymakers to fight corporate concentration. Fortunately, there is good reason to think they will soon do so

This week, Amazon announced that Jeff Bezos will no longer be chief executive of the corporation but will instead take the position of “executive chairman”. Andy Jassy, who runs the highly profitable Amazon Web Services cloud computing division, will take the title.

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Facebook, Google and Twitter peddle extremism for profit. They must be broken up – if not, worse is coming

In the wake of Donald Trump’s instigation of a shocking attack on the US Capitol, it’s easy to demand that Trump be barred from social media.

“These corporations should announce a permanent ban of his accounts,” said Representative Bennie Thompson, chair of the House homeland security committee. “Nothing short of that will meet this moment.”

Indeed, Facebook, Google and Twitter have taken action, suspending the president from their platforms or removing videos.

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America broke up logging companies in the 1840s, Standard Oil in the 1910s, and AT&T in the 1980s. It’s time to take on big tech

This week the government filed a ground-breaking antitrust suit against Facebook, seeking to break up the corporation for monopolistic practices. The suit comes on the heels of a similar case against Google, as well as an aggressive Democrat-authored congressional report recommending taking apart not just Google and Facebook, but Apple and Amazon as well.

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