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My Little Hundred Million · Revisionist History

0:15
Speaker 1: Bushkin.
0:18
Speaker 2: In Glassboro, New Jersey, a little community half an hour
0:21
Speaker 2: south of Philadelphia, there's a statue right by the road
0:24
Speaker 2: as you drive into town. It's of a man named
0:27
Speaker 2: Henry Rowan. He liked to be called Hank. Whenever Hank
0:31
Speaker 2: Rohan came to Glassboro, he was mobbed like a rock star,
0:35
Speaker 2: which probably embarrassed him because he wasn't given to those
0:38
Speaker 2: kinds of displays. When Hank Rowan died in December of
0:41
Speaker 2: twenty fifteen, there was a huge memorial service. Then in
0:45
Speaker 2: the evening, students from the local college gathered around his statue,
0:49
Speaker 2: holding candles and sang for him as earnestly as only
0:53
Speaker 2: college kids can.
1:01
Speaker 3: Let me sell you.
1:17
Speaker 2: My name is Malcolm Gladwell. You're listening to Revisionist History,
1:20
Speaker 2: my podcast about things overlooked and misunderstood. This episode is
1:32
Speaker 2: my eulogy for Hank Rowan. I never met him, but
1:35
Speaker 2: he's a hero of mine. I want to understand why
1:39
Speaker 2: he didn't become everyone's hero. Why Hank Rowan's example didn't
1:44
Speaker 2: spread beyond Glassborne, Jersey.
1:53
Speaker 4: He was six foot one or so, not not a
1:56
Speaker 4: huge football player size, and you know, one hundred and
1:59
Speaker 4: eighty pounds no thin, but not skinny, and had a
2:03
Speaker 4: loud voice, strong presence.
2:05
Speaker 2: And yeah he was what was his management style, like.
2:10
Speaker 4: Benevolent dictator.
2:11
Speaker 2: I think that's Rowan's daughter, Ginny Smith. She now runs
2:15
Speaker 2: the company her father started in nineteen fifty three. It's
2:19
Speaker 2: called Inducto Therm. It's right off the New Jersey Turnpike.
2:23
Speaker 2: They make industrial furnaces for melting metal.
2:25
Speaker 4: He started the company basically in our garage and then
2:29
Speaker 4: he sold his first job to the Mint, which was
2:31
Speaker 4: kind of fun, and then the second job to Ge
2:33
Speaker 4: and then the furnaces just got bigger and bigger. Now
2:36
Speaker 4: some of them are fifty ton They're just huge. And
2:40
Speaker 4: kept branching out and acquired some companies and it kind
2:43
Speaker 4: of it grew like topsy. But he also worked very,
2:46
Speaker 4: very hard at it and hired good people.
2:48
Speaker 2: Rowan built Inducto Therm into a multinational corporation thousands of
2:53
Speaker 2: employees around the world, and he became a very wealthy man,
2:57
Speaker 2: although you wouldn't have known it.
2:59
Speaker 4: You know, he would run around and scuffed shoes and
3:01
Speaker 4: tried to not worried about that. He didn't care how
3:03
Speaker 4: he dressed her looked.
3:04
Speaker 2: Roan was an engineer, raced sailboats, flew planes, bleeding hard work,
3:09
Speaker 2: free enterprise.
3:10
Speaker 4: But you couldn't get him to buy a fancy car.
3:12
Speaker 4: He was a nash rambler guy in the early days,
3:14
Speaker 4: and he pooh poohed Mercedes because Mercedes wasn't one of
3:19
Speaker 4: our customers.
3:21
Speaker 2: Did he drive sort of nearly.
3:23
Speaker 4: Near He drove Ozama bills and buicks and finding the
3:27
Speaker 4: company here in Sicity. Drive a Lincoln. He drove it
3:30
Speaker 4: into the ground just about.
3:32
Speaker 5: Oh.
3:32
Speaker 4: It had a Cadillac once, but he towed his boats
3:34
Speaker 4: with that too, because it had a bigger engine. You know,
3:37
Speaker 4: none of us drive around and wave at people's stuff.
3:40
Speaker 1: Yeah.
3:40
Speaker 3: Yeah.
3:41
Speaker 2: Almost thirty years ago, Hank Rowan became friends with a
3:44
Speaker 2: man named Phil to Minia. To Minya was head of
3:47
Speaker 2: development for the local college, Glassboro State, just down the road,
3:52
Speaker 2: a little university started back in the nineteen twenties on
3:54
Speaker 2: twenty five acres too. Minya would drop by and see
3:58
Speaker 2: Rowan on his way up to Trenton. Everyone involved with
4:01
Speaker 2: Glassboro and Rowan has their own version of this story,
4:04
Speaker 2: but here's how Rowan remembered it in an interview he
4:07
Speaker 2: gave a few years before he died with Don Ferris,
4:10
Speaker 2: who's the former president of Glasboro State. He asked Rowan
4:13
Speaker 2: how he first got involved with the college.
4:16
Speaker 1: Well, I think we blame it all on Phil Tomidia
4:19
Speaker 1: because he came to see me and asked if I
4:24
Speaker 1: might make a donation to the scholarship fund of fifteen
4:27
Speaker 1: hundred dollars. Well that sounded easy, fifteen hundred dollars, so
4:31
Speaker 1: we gave him fifteen hundred dollars. And you know what
4:34
Speaker 1: he came.
4:35
Speaker 2: Back to many I wanted Rowan to give money to
4:38
Speaker 2: the business school, which was pretty dilapidated.
4:42
Speaker 1: So he pushed that for a while and finally said, Phil,
4:44
Speaker 1: I have zero interest in your school of business. What
4:48
Speaker 1: this world needs is more engineering, how to make things
4:54
Speaker 1: we have to produce? And Phil, what would you do
4:57
Speaker 1: with one hundred million dollars? And he nearly fell off
5:01
Speaker 1: the chair. But that's how we got to that level,
5:05
Speaker 1: and that's what was the beginning.
5:08
Speaker 5: So you're the one that suggested one hundred million dollar figure.
5:11
Speaker 1: Not oh yeah, you were talking about ten.
5:13
Speaker 2: I see, this is nineteen ninety two, A generation ago.
5:18
Speaker 2: Almost nobody gave donations of one hundred million dollars. Back then,
5:21
Speaker 2: this was unheard of money. Rowan's gift made headlines around
5:25
Speaker 2: the country. He set a new standard.
5:28
Speaker 6: Did you think it changed the world? The in right ability.
5:32
Speaker 2: At Rowan's memorial service, phil Toominia gets up and says,
5:35
Speaker 2: I think accurately that Roan is the person who triggered
5:38
Speaker 2: what has become one of the greatest explosions in educational
5:41
Speaker 2: philanthropy since the days of Andrew Carnegie and the Rockefellers.
5:45
Speaker 6: From July of nineteen ninety two until the end of
5:49
Speaker 6: that decade, twenty gifts twenty gifts of one hundred million
5:54
Speaker 6: dollars of war we were given out in this country.
5:58
Speaker 2: According to the Chronicle of Philanthropy. As of right now
6:01
Speaker 2: spring of twenty sixteen, we're up to eighty seven gifts
6:05
Speaker 2: of one hundred million dollars or more to higher education.
6:08
Speaker 2: So everyone followed Rowan's lead, except not really. Rowan gave
6:17
Speaker 2: his money to Glasporo State College, a public university in
6:21
Speaker 2: a sleepy little town in South Jersey that no one
6:23
Speaker 2: had ever heard of. The college was close to broke
6:28
Speaker 2: at the time. They had an endowment of seven hundred
6:30
Speaker 2: and eighty seven thousand dollars. But the people who followed
6:34
Speaker 2: Hank Rowan, who were inspired by the size of his donation.
6:38
Speaker 2: Almost all of them gave money to wealthy, prestigious schools.
6:42
Speaker 2: Let me just read to you the names of some
6:44
Speaker 2: of the educational institutions that had received the largest donations
6:48
Speaker 2: in American history. Ready, in twenty thirteen, the billionaire co
6:53
Speaker 2: founder of Nike, Phil Knight, pledged half a billion to
6:57
Speaker 2: the Oregon Health and Science University in Portland, Okay. Not
7:00
Speaker 2: the most prestigious institution in America. But wait, then, come
7:05
Speaker 2: three four hundred million dollar donations. The first is the
7:08
Speaker 2: billionaire John Klugie's gift to Columbia University in two thousand
7:12
Speaker 2: and seven. The second is the hedge fund manager John
7:15
Speaker 2: Paulson's gift to Harvard University in twenty fifteen. The third
7:20
Speaker 2: is Phil Knight's gift to Stanford University in twenty sixteen.
7:23
Speaker 2: And after that, in order, here are the universities that
7:26
Speaker 2: get the biggest donations. JOHNS. Hopkins Harvard again, University of Chicago, Princeton, Tuft's,
7:33
Speaker 2: Carnegie Mellon, Cornell, Yale, Penn, Claremont McKenna, Columbia again, Baylor,
7:38
Speaker 2: USC Columbia a third time, Michigan University of California, Wisconsin.
7:45
Speaker 2: I could go on if you want, through all eighty seven,
7:48
Speaker 2: but basically we're talking about the same wealthy, elite schools
7:52
Speaker 2: getting the biggest donations again and again. Hank Rowan did
7:57
Speaker 2: something unprecedented, and nobody followed him. This episode is the
8:07
Speaker 2: third in my three part revisionist history miniseries re examining
8:11
Speaker 2: the promise of higher education. The first installment was about
8:15
Speaker 2: why the educational system struggles to find talented, low income students.
8:20
Speaker 2: The second episode was a comparison of Vassar and Boden
8:23
Speaker 2: and why it's so difficult for some colleges to find
8:26
Speaker 2: the money for financial aid. But today I want to
8:29
Speaker 2: talk about educational philanthropy, which I think is an issue
8:32
Speaker 2: that doesn't get talked about nearly enough. Higher education in
8:36
Speaker 2: the United States runs on philanthropy. There are almost no
8:40
Speaker 2: schools that can pay their bills just on the strength
8:43
Speaker 2: of students tuition. Those days are over. Philanthropy is what
8:47
Speaker 2: makes the wheels turned. But there's a problem. A lot
8:51
Speaker 2: of that philanthropy doesn't make any sense. It's going to
8:54
Speaker 2: the wrong places for the wrong reasons. Those of you
9:02
Speaker 2: who follow me on Twitter will know that I'm obsessed
9:04
Speaker 2: with this issue. After John Paulson gave his four hundred
9:07
Speaker 2: million dollars to Harvard and to twenty fifteen, I had
9:10
Speaker 2: a kind of Twitter meltdown, sending tweet after tweet, including
9:14
Speaker 2: it came down to helping the poor or giving the
9:16
Speaker 2: world's richest university fond of million dollars. It doesn't need
9:20
Speaker 2: wise choice, John, and then if billionaires don't step up,
9:25
Speaker 2: Harvard will soon be down to its last thirty billion.
9:28
Speaker 2: Then when Phil Knight gave fondred million dollars to Stanford,
9:31
Speaker 2: I got called up for comment by The New York Times.
9:34
Speaker 2: I said that Stamford was part of a crazy arms
9:36
Speaker 2: race and ought to cut its endowment in half and
9:39
Speaker 2: give the balance to schools that actually need the money.
9:42
Speaker 2: The next day, I got an email from the President
9:45
Speaker 2: of Stanford, John Hennessy. He wanted to get together and
9:48
Speaker 2: convince me I was wrong. So I talked to him,
9:51
Speaker 2: and we'll get to that conversation in a minute. For now,
9:54
Speaker 2: I will only say that I was completely baffled by
9:58
Speaker 2: my talk with Hennessy. It was as if he and
10:01
Speaker 2: I were speaking different languages. I understand the people who
10:05
Speaker 2: give money to those who need money, the people who
10:08
Speaker 2: give money to these those who already have all the
10:10
Speaker 2: money they need. I don't understand that. What are they thinking?
10:19
Speaker 2: Let me run an idea by you, which I think
10:21
Speaker 2: helps to frame this question. It has to do with soccer, actually,
10:25
Speaker 2: the difference between soccer and basketball. This idea comes from
10:29
Speaker 2: two economists named David Sally and Chris Anderson, who wrote
10:33
Speaker 2: a really great book a couple of years ago about
10:35
Speaker 2: soccer called The Numbers Game. One of the questions they
10:38
Speaker 2: asked was what matters more if you want to build
10:41
Speaker 2: a great soccer team, how good your best player is
10:45
Speaker 2: or how good your worst player is. And their answer was,
10:48
Speaker 2: in soccer, what matters is how good your worst player is.
10:53
Speaker 7: Soccer is a game where if you get a single goal,
10:55
Speaker 7: if you just happen to be lucky, that goal may
10:57
Speaker 7: hold up.
10:58
Speaker 2: That's David Sally, and.
11:00
Speaker 7: So mistakes turn out to be a very important part
11:04
Speaker 7: of soccer as a team sport that leads you to
11:07
Speaker 7: think about well, mistakes more often happen or more often
11:10
Speaker 7: produced by weaker players on the pitch.
11:13
Speaker 2: Sally's argument goes like this, a soccer team has eleven
11:16
Speaker 2: players on the field at any one time. Suppose one
11:19
Speaker 2: is a superstar and your worst player is maybe only
11:23
Speaker 2: forty five percent as good as a superstar. Because soccer
11:26
Speaker 2: is a sport where everyone on the field depends on
11:29
Speaker 2: everyone else, that forty five percent player can make one
11:33
Speaker 2: mistake and completely negate the skill of the best player.
11:37
Speaker 2: You can have eight beautiful passes in a row, but
11:39
Speaker 2: if your worst player, your forty five percent player, botches
11:42
Speaker 2: the ninth, then all the previous eight beautiful passes are
11:46
Speaker 2: all wasted.
11:46
Speaker 7: That's right, and because of the nature of soccer that
11:50
Speaker 7: those eight beautiful passes may have only increased your likelihood
11:54
Speaker 7: of victory by a small percent, but then it goes
11:57
Speaker 7: right back to zero because somebody turns the ball over.
12:00
Speaker 2: Sally and Anderson did a statistical analysis. They looked at
12:04
Speaker 2: the top soccer clubs in Europe and showed that if
12:06
Speaker 2: those teams upgraded their poorest players instead of their best players,
12:10
Speaker 2: they would score more goals and win more games a
12:14
Speaker 2: lot more. Soccer is a weak link game.
12:18
Speaker 7: Yes, having a better superstar was of course better, but
12:21
Speaker 7: actually having a better end of the bench or eleventh
12:24
Speaker 7: guy on the pitch was actually more influential to whether
12:27
Speaker 7: you won matches or not, which.
12:29
Speaker 2: Would be the exact opposite of basketball.
12:33
Speaker 7: Yeah, basketball is probably the opposite end of the continuum
12:36
Speaker 7: from If you think about soccer is maybe the weakest
12:39
Speaker 7: link sport, Basketball is probably the most superstarter of a
12:43
Speaker 7: team sport that we have.
12:44
Speaker 2: Even the greatest basketball teams often have won, and sometimes
12:48
Speaker 2: even two players who are barely better than mediocre. What
12:52
Speaker 2: matters in basketball is not how good your fifth player is,
12:55
Speaker 2: It's how good your superstar is. It's a strong link game.
13:00
Speaker 2: Think about Lionel Messi, maybe the greatest soccer player of
13:04
Speaker 2: his generation, versus Michael Jordan, the greatest basketball player of
13:07
Speaker 2: his generation.
13:09
Speaker 7: Jordan could do on a basketball court was Jordan could
13:12
Speaker 7: guarantee or virtually guarantee that he could get the ball.
13:15
Speaker 7: You couldn't really stop him, right. He could go to
13:18
Speaker 7: the back court, pick up the ball. He could dribble
13:20
Speaker 7: it forward. He could break double teams. You could try
13:23
Speaker 7: to send three guys at him, but then you're really
13:27
Speaker 7: opening yourself up. He could go and get a shot.
13:29
Speaker 7: Leo Messi is so good that sometimes from rare times
13:35
Speaker 7: where in fact he can dribble the length of the pitch.
13:37
Speaker 7: But the fact is that he in most instances, he
13:40
Speaker 7: really can't. He needs to be He needs those eight
13:43
Speaker 7: beautiful passes to set him up, and then he could
13:46
Speaker 7: do something amazingly transcendent with it.
13:54
Speaker 2: I think the weak link strong link distinction is incredibly
13:58
Speaker 2: useful in making sense of certain kinds of problems. I
14:01
Speaker 2: suppose I said to you, for example, here's fifty billion dollars.
14:05
Speaker 2: Spend it in a way that makes air travel in
14:07
Speaker 2: the United States more efficient. The last thing you would
14:10
Speaker 2: do is to go to Denver, which has that big,
14:12
Speaker 2: gorgeous new airport, and make it even bigger and even
14:15
Speaker 2: more gorgeous. No, you go to the worst and most
14:19
Speaker 2: crowded airports in the country, LaGuardia, Newark, Kennedy, and make
14:22
Speaker 2: them better. Because every single day, delays at Newark and
14:26
Speaker 2: LaGuardia and Kennedy ripple across the country and delay planes everywhere.
14:31
Speaker 2: You'd spend all fifty billion dollars in New York. If
14:34
Speaker 2: you do that, you're essentially saying air travel in the
14:37
Speaker 2: United States is a weak link problem. We're limited by
14:41
Speaker 2: how good our appalling New York airports are more than
14:44
Speaker 2: by how good our best airports are. Here's another example,
14:49
Speaker 2: One of the great puzzles of the Industrial Revolution is
14:52
Speaker 2: why it began in England, why not France or Germany.
14:56
Speaker 2: One theory is that Britain was lucky enough to have
14:58
Speaker 2: more geniuses than anyone else, like James Watt who invents
15:01
Speaker 2: the steam engine. But there's an economist named Joel Moker
15:05
Speaker 2: who makes a really compelling argument that England's advance is
15:09
Speaker 2: that it had way more craftsmen and skilled engineers and
15:13
Speaker 2: experienced in mechanically minded backyard tinkers than anyone else. Those
15:18
Speaker 2: were the people who were able to take those inventions
15:20
Speaker 2: and perfect them and make them useful. Moker is saying
15:24
Speaker 2: that the Industrial Revolution was a weak link phenomenon, not
15:28
Speaker 2: a strong link phenomenon, and because Britain had more craftsmen
15:32
Speaker 2: than France or Germany, that gave Britain a huge advantage.
15:39
Speaker 2: So what's Hank rowan? Hank Rohn is a weak link guy.
15:44
Speaker 2: He wants to make a difference to make his country
15:46
Speaker 2: a better place, and he thinks the best way to
15:49
Speaker 2: do that is to improve the forty five percent player,
15:52
Speaker 2: not the superstar. He thinks America is soccer, not basketball.
15:57
Speaker 5: You're a graduate of MIT right here.
16:00
Speaker 2: He is again in the interview with Don Ferish of
16:03
Speaker 2: Glasboro State.
16:05
Speaker 5: Now, I would assume that MIT at that time would
16:09
Speaker 5: have been interested in receiving a gift of that size
16:12
Speaker 5: from you. Did you did you think about giving it
16:15
Speaker 5: to that university?
16:17
Speaker 1: You're no, okay. They were at the time trying to
16:20
Speaker 1: raise seven hundred and fifty million dollars, and my little
16:28
Speaker 1: Hunter Mayon wouldn't have made hardly any immerge at.
16:30
Speaker 2: All, hardly any difference at all. That's David Sally's point
16:36
Speaker 2: about soccer. Upgrading the superstar doesn't help as much as
16:40
Speaker 2: upgrading the worst player. Here's Hank Rowen's daughter Jinny again.
16:44
Speaker 4: Basically, he said MIT had the greatest engineering school bar none.
16:49
Speaker 4: He said it was the best education he could ever imagine.
16:52
Speaker 4: And he said, I'm sure they would do good things
16:54
Speaker 4: with my money, they'd build a building or do something positive.
16:56
Speaker 4: But he said it wouldn't make the difference that it's
16:59
Speaker 4: going to make down here. He said, I enjoy making
17:02
Speaker 4: a difference in this world.
17:04
Speaker 2: So he funds an engineering school in Glassboro. It's not
17:07
Speaker 2: the best or the fancy engineering school in the country,
17:10
Speaker 2: but it's not supposed to be. So it's one one
17:15
Speaker 2: four story building?
17:16
Speaker 8: Is it four is it's three story building? And then
17:19
Speaker 8: it has two wings to it, and there's labs.
17:20
Speaker 3: We'll walk down.
17:22
Speaker 2: I went for a tour with Joe Cardona, the university's
17:24
Speaker 2: head of pr.
17:26
Speaker 3: You know, we're in a state institution, so a building
17:28
Speaker 3: like this was like wow.
17:29
Speaker 1: I was bang.
17:30
Speaker 3: You know, look it's an engineer and building. Yeah, and
17:33
Speaker 3: so here, why don't we just walk down a holiday
17:35
Speaker 3: of it.
17:35
Speaker 5: Yeah.
17:36
Speaker 2: The school was built in the mid nineteen nineties for
17:39
Speaker 2: five hundred students. They've now crammed seven hundred and fifty
17:42
Speaker 2: into the building while they wait for a new annex
17:45
Speaker 2: to be finished next door. Eventually they want to double
17:48
Speaker 2: the school size. The point is not to be more exclusive,
17:52
Speaker 2: it's to get bigger to serve more students. Cardona and
17:56
Speaker 2: I stopped by a lab where a group of students
17:58
Speaker 2: were working on a Baja car, basically a home engineer
18:02
Speaker 2: doom buggy that will race against other engineering schools on
18:05
Speaker 2: an endurance course.
18:06
Speaker 9: So we got some aircraft grade aluminum. We have it
18:09
Speaker 9: two access water jack cutter that can cut out profiles,
18:11
Speaker 9: and we design a part that's bolted together that way.
18:15
Speaker 7: It's nice and strong.
18:16
Speaker 9: And they're graded bolt. But if it does break, you
18:18
Speaker 9: can replace individual pieces without having to make a whole
18:21
Speaker 9: new assembly.
18:22
Speaker 2: The four students I meet, Matt, Seohn, Owen, and Kyle
18:25
Speaker 2: all grew up around here. Are most of the students
18:28
Speaker 2: in the engineering school from New Jersey?
18:31
Speaker 7: I would say, yeah, yeah.
18:34
Speaker 2: Net tuition in state is about nine thousand dollars a year,
18:38
Speaker 2: which is pretty reasonable for an engineering school. Ninety five
18:42
Speaker 2: percent get jobs in engineering when they graduate, and.
18:45
Speaker 3: We really want to do what I call a blue
18:47
Speaker 3: collar research, research that is practical that people can see
18:51
Speaker 3: the tangible.
18:51
Speaker 2: Result of Ali Hushman, the university's president. He's an immigrant
18:56
Speaker 2: from Iran. He grew up in a slum in Tehran,
18:59
Speaker 2: fifth in a family of ten.
19:00
Speaker 3: People used to ask me to compare you. That said,
19:02
Speaker 3: the best competison would be to tell you, if you
19:05
Speaker 3: have seen slum Dog Millionaire, you look at that. This
19:07
Speaker 3: one was twice as hard and tough. Oh. Yes, we're
19:12
Speaker 3: a very close family, but very poor. I mean poor
19:16
Speaker 3: to the extent that you walk in the streets without shoes.
19:20
Speaker 2: Hushman runs marathons, which is kind of what you'd expect,
19:23
Speaker 2: right for someone who made it out of the slums
19:26
Speaker 2: of Tehran, A typical student at the engineering school. Where
19:30
Speaker 2: are they from? Can you give me a kind of
19:31
Speaker 2: profile of it.
19:33
Speaker 3: A profile of a kid from engineering. Your father is
19:36
Speaker 3: a you know, fireman, a mom is a teacher. The
19:41
Speaker 3: kid has been going to a public school. He's from
19:45
Speaker 3: forty miles from here, and he's just a brilliant young
19:50
Speaker 3: man or woman. Gone through public school and got great
19:53
Speaker 3: schools and very much focused.
19:57
Speaker 2: It's you in other words, Yes, yes, school full of valley.
20:01
Speaker 3: Yes, yeah, that's the beauty of it, Malcolm. That's why
20:04
Speaker 3: I say it's a blue collar university.
20:10
Speaker 2: Now I'm convinced by Ali Huschmann and by Hank Rowen.
20:13
Speaker 2: I think American society really is soccer. We're so interdependent
20:18
Speaker 2: and we need so many perfect passes to score a
20:20
Speaker 2: goal that our challenges are weeklink, not strong link. What
20:24
Speaker 2: matters is how good our eleventh player is, not our first.
20:28
Speaker 2: We're in a second industrial revolution, and the lesson of
20:32
Speaker 2: this one isn't any different from the lesson of the
20:34
Speaker 2: last one. But it's really hard to get people to
20:38
Speaker 2: accept weeklink arguments. David Sally, the economist who studied soccer,
20:44
Speaker 2: says he'll go to some billionaire oligarch who owns an
20:47
Speaker 2: English Premier League team and say, don't spend your eighty
20:51
Speaker 2: million pounds on one superstar player, spend it on four
20:55
Speaker 2: pretty good players at twenty million pounds each. But the
20:59
Speaker 2: oligarch doesn't want to hear that.
21:01
Speaker 7: If the oligarch is only worried about winning soccer matches,
21:06
Speaker 7: I can sell that that's believable. Oligarchs by teams for
21:11
Speaker 7: many other reasons, including wanting to hang out with really
21:14
Speaker 7: good looking soccer strikers and wanting to sell a lot
21:18
Speaker 7: of shirts. A weak link strategy is not gonna be
21:21
Speaker 7: the most glamorous thing.
21:23
Speaker 2: And that's the problem. Superstars are glamorous. Nobel Prize winners
21:28
Speaker 2: are glamorous. Regional universities in rural South Jersey, and solid
21:32
Speaker 2: capable midfielders are not.
21:36
Speaker 7: What people remember are the unbelievably beautiful goals.
21:41
Speaker 1: It's a brilliant road for missing.
21:42
Speaker 8: I'm going to go all away.
21:45
Speaker 10: It's gonna be great coming away final goals.
21:49
Speaker 7: They may not realize that the seven, maybe less glamorous
21:53
Speaker 7: passes that set up that eighth beautiful through ball were
21:56
Speaker 7: maybe arguably just as important, but they were much more mundane,
22:00
Speaker 7: and they just involved simple movement to open spaces, and
22:04
Speaker 7: people don't adequately value that.
22:10
Speaker 10: When we asked ourselves the question, what could Stanford do
22:13
Speaker 10: to make a better contribution to the world, we quickly
22:17
Speaker 10: converged on building a scholarship program that would bring the
22:20
Speaker 10: most talented students and prepare them to be leaders in
22:23
Speaker 10: the world, to lead on attacking the.
22:26
Speaker 2: Important John Hennessy, president of Stanford University since two thousand,
22:31
Speaker 2: widely considered one of the greatest presidents in Stanford history.
22:35
Speaker 8: As I began to think about the end of my
22:39
Speaker 8: term as president, I started to think, was there something
22:43
Speaker 8: else perhaps we could do where we could build on
22:47
Speaker 8: everything we've put in place at Stanford and offer something
22:52
Speaker 8: that would be a great thing for the world.
22:55
Speaker 2: Not long before we talked, I took a walk across
22:58
Speaker 2: the Stanford campus and it's like entering a shrine higher education.
23:02
Speaker 2: Everything is gleaming, gorgeous, groomed green. That's all Hennessy's work.
23:09
Speaker 2: He's transformed the school, doubled the endowment from eleven to
23:13
Speaker 2: twenty two billion dollars, made it into maybe the greatest university.
23:18
Speaker 4: In the world.
23:19
Speaker 2: When we talked, he was just about to retire and
23:22
Speaker 2: thinking about his legacy.
23:24
Speaker 8: Many people, myself included, became increasingly concerned about what we
23:29
Speaker 8: saw as a void in great leadership around the world,
23:33
Speaker 8: in the public sector as well as in the private sector.
23:36
Speaker 2: Hennessy decided he wanted to start a graduate program kind
23:40
Speaker 2: of like the Rhodes Scholarship. Every year, it would bring
23:43
Speaker 2: one hundred of the brightest, most accomplished college grads from
23:47
Speaker 2: around the world to Stamford and let them apply their
23:50
Speaker 2: minds to the problems of the world. He goes to
23:53
Speaker 2: his deans, then his trustees. Everyone loves the idea.
23:58
Speaker 8: And then over the summer last summer, I went to
24:00
Speaker 8: Phil Knight and explained the idea to him, and he
24:04
Speaker 8: was enthusiastic about it and came back a month later
24:06
Speaker 8: and said he'd help us make it happen.
24:09
Speaker 2: Remember, Phil Knight is the co founder of Nike, a
24:12
Speaker 2: billionaire many times over at a serious philanthropist. How did
24:16
Speaker 2: you pick Phil Knight as someone to approach? Was he
24:18
Speaker 2: the first person you approached?
24:20
Speaker 8: I knew Phil had been concerned about leadership globally. He
24:24
Speaker 8: and I had had a good working relationship.
24:27
Speaker 2: So he ends up giving four hundred million. How does
24:30
Speaker 2: what arrive at that number? Is that a number you
24:32
Speaker 2: suggested to him.
24:33
Speaker 8: It's roughly half. I mean where our goal is somewhere
24:36
Speaker 8: in the seven fifty to eight hundred to implement the
24:40
Speaker 8: entire program, secure it permanently, and so I think in
24:45
Speaker 8: the past finding a naming gift that of that scale
24:49
Speaker 8: is probably necessary, and then you can find gifts to
24:51
Speaker 8: fill in the rest of it.
24:53
Speaker 2: It was my criticism of the phil Knight donation that
24:55
Speaker 2: led Hennessy to get in touch with me. He wanted
24:58
Speaker 2: to explain his thinking, which is John Hennessy wants to
25:02
Speaker 2: do a great thing for the world, so he sets
25:05
Speaker 2: up an eight hundred million dollar graduate program for one
25:08
Speaker 2: hundred elites.
25:08
Speaker 1: Doud.
25:10
Speaker 2: He's the anti Rowan, right Hank. Rowan wanted to start
25:13
Speaker 2: at the bottom and tries to lift as many people
25:16
Speaker 2: up as possible. Hennessy starts at the top and lavishes
25:21
Speaker 2: eight hundred million on the most exclusive group he can find.
25:26
Speaker 2: Rowan is a weaklink guy. His world is soccer. Hennessy
25:30
Speaker 2: is playing basketball and he wants to focus his billions
25:34
Speaker 2: on the superstars. In the time you've been to Stanford,
25:37
Speaker 2: that endowment went from what from eleven to twenty two,
25:40
Speaker 2: Is that right?
25:41
Speaker 10: Yeah?
25:41
Speaker 8: Probably about eleven to twenty two, right, most of that's
25:44
Speaker 8: endowment returns, not mostly gifts, but there's some gifts in
25:47
Speaker 8: there too, obviously.
25:48
Speaker 2: What is uh, how much is enough for institution lake Stanford?
25:54
Speaker 8: How much is enough? I think we if our ambitions
26:02
Speaker 8: don't grow, then I think you do reach a point
26:05
Speaker 8: where you have enough money, and I would hope that
26:09
Speaker 8: our ambitions for what we want to do as an institution,
26:12
Speaker 8: both in our teaching and our research grow.
26:19
Speaker 2: In other words, there really isn't such a thing at
26:21
Speaker 2: Stanford as enough money. The school's ambitions are always growing,
26:26
Speaker 2: so it's endowment should too. Just because you already have
26:30
Speaker 2: more resources than almost anyone else doesn't mean you should
26:33
Speaker 2: stop collecting even more resources. Hennessy is a hard core
26:38
Speaker 2: strong linker. Hypothetically, if you know Bill Gates or Larry
26:44
Speaker 2: Ellison came to you and said, I'm giving you ten
26:48
Speaker 2: billion dollars, I'm retiring and I'm giving it all. My
26:51
Speaker 2: will says everything goes to Stanford. I mean, would you
26:55
Speaker 2: say we don't know, we don't need it, or would
26:58
Speaker 2: you say we can put the money to good use.
27:01
Speaker 8: Well, first of all, I don't think either Larry Ellison
27:06
Speaker 8: or Bill Gates is going to give me ten billion
27:08
Speaker 8: dollar unless I tell them exactly what I'm going to
27:11
Speaker 8: do with it and how I'm going to make it
27:12
Speaker 8: a good investment. Since I know both I know both
27:15
Speaker 8: of them, I can tell you they won't.
27:17
Speaker 7: They won't do it.
27:18
Speaker 2: Could you make an argument to Larry Ellison as you
27:21
Speaker 2: could put if he gave you ten billion, you could
27:23
Speaker 2: put it to good use, ten billion just to put
27:28
Speaker 2: us in the ballpark. Because I worry sometimes that Americans
27:31
Speaker 2: get a little jaded about big numbers. Ten billion is
27:35
Speaker 2: a few billion more than the gross domestic product of Barbados,
27:38
Speaker 2: and four billion shy of the gross domestic product of Jamaica. Basically,
27:44
Speaker 2: I'm asking what would happen if someone gave you, Stanford
27:48
Speaker 2: the average economic output of an entire Caribbean country for
27:52
Speaker 2: a year, tax free. By the way, the guy who
27:55
Speaker 2: gives the ten billion gets to write it off, and
27:58
Speaker 2: every dollar Stanford earns on that ten billion, they get
28:02
Speaker 2: to keep ten billion.
28:03
Speaker 8: I'd have to do something really dramatic for ten billion dollars,
28:09
Speaker 8: really dramatic.
28:10
Speaker 2: He thinks about it for a moment. Actually, I counted
28:13
Speaker 2: for about two seconds. Then he comes up with something
28:16
Speaker 2: really dramatic.
28:17
Speaker 8: The one area where I think there is an opportunity
28:21
Speaker 8: for significant incremental funding is in the biomedical sciences. If
28:28
Speaker 8: that were an endowment, for example, so you're throwing out
28:32
Speaker 8: a half a billion dollars a year, I could find
28:35
Speaker 8: a way to spend a half billion dollars a year
28:37
Speaker 8: in biomedical research.
28:41
Speaker 2: Ten billion. He could totally use another ten billion. At
28:46
Speaker 2: this point, I'm just curious. I mean, I've read about
28:50
Speaker 2: strong link thinkers in books, but I've never actually talked
28:53
Speaker 2: with one before. So I keep posing more and more
28:57
Speaker 2: far fetched scenarios. Do you ever imagine that a president
29:01
Speaker 2: of Stanford might go to a funder and say, at
29:06
Speaker 2: this point in our history, the best use of your
29:07
Speaker 2: money is to give to the UC system, not to Stanford.
29:10
Speaker 2: The UC system is the University of California system ten
29:14
Speaker 2: schools Berkeley, UCLA, San Diego, Davis, Santa Barbara, et cetera.
29:19
Speaker 2: Maybe the finest group of public universities in the world.
29:23
Speaker 2: If you listen to the previous episode of Revisionist History,
29:26
Speaker 2: the one about Vassar, I talked about the New York
29:29
Speaker 2: Times Access Index. It's a ranking of one hundred and
29:32
Speaker 2: eighty universities in the US according to how good a
29:34
Speaker 2: job they do in finding, educating, and financially supporting low
29:38
Speaker 2: income students. Right now, Vasser comes in eighth. Well, six
29:44
Speaker 2: of the first seven spots on that list are University
29:47
Speaker 2: of California schools. Stanford has sixteen thousand students. The UC
29:52
Speaker 2: system has two hundred and thirty eight thousand students. So
29:56
Speaker 2: I'm asking John Hannessy, might there ever ever be an
30:01
Speaker 2: instance where he might tell a would be super philanthropist. Look,
30:06
Speaker 2: we've already got twenty two billion dollars in the BA,
30:09
Speaker 2: higher than the output of two Caribbean countries, and it's
30:12
Speaker 2: earning us a couple of tax free billions every year.
30:16
Speaker 2: Your dollar would go further at the public institutions down
30:20
Speaker 2: the street, since they educate two hundred and twenty two
30:24
Speaker 2: thousand more students than we do with a fraction of
30:26
Speaker 2: the endowment. I'm not holding Hennessy to his answer. I'm
30:31
Speaker 2: not looking for him to make a solemn pledge. I'm
30:34
Speaker 2: just asking, well, that would be a hard thing to do, obviously, to.
30:40
Speaker 8: Turn them turn them away. And I think the other
30:45
Speaker 8: question we'd be asked is how can I have confidence
30:49
Speaker 8: that they'll use my money? Well, which we're obviously the
30:52
Speaker 8: president of Stanford is not in a position to vouch for.
30:55
Speaker 2: I think now I realize he has institutional loyalties. He's
30:59
Speaker 2: the head of Stanford, and I must say, I like Tennessee.
31:03
Speaker 2: But am I the only one who finds his answer
31:05
Speaker 2: ridiculous even offensive? He's suggesting that he can't guarantee that
31:11
Speaker 2: the UC system may be the most successful and socially
31:15
Speaker 2: progressive public university system in the world. He can't guarantee
31:20
Speaker 2: they would use that money well as opposed to what
31:24
Speaker 2: as opposed to spending eight hundred million dollars on a
31:27
Speaker 2: boutique graduate program for one hundred elite students a year.
31:30
Speaker 2: That kind of using money, Well.
31:32
Speaker 11: It is the pre eminent scholarship program. You'll get the
31:36
Speaker 11: best and brightest young men and women from around the
31:38
Speaker 11: world who will receive a graduate education at the world's
31:41
Speaker 11: best university.
31:43
Speaker 7: When this program is established.
31:45
Speaker 2: That's the promotional video for the Scholarship Fund. You just
31:48
Speaker 2: heard Phil Knight talking about it. You can watch all
31:50
Speaker 2: four minutes and twenty three seconds of it at revisionististory
31:53
Speaker 2: dot com. It's impressive lots of drone aerial shots of
31:57
Speaker 2: Stanford's spotless palm lined avenues. But let's do the math
32:02
Speaker 2: on the scholarship. Hennessy's plan is to fund it from
32:08
Speaker 2: the proceeds of investing eight hundred million dollars. It's an endowment.
32:13
Speaker 2: The usual rule of thumb is that an endowment gives
32:15
Speaker 2: you about five percent a year, so forty million dollars
32:19
Speaker 2: and with one hundred students a year in a three
32:21
Speaker 2: year program, that comes out to one hundred and thirty
32:24
Speaker 2: three thousand dollars per student. One hundred and thirty three
32:28
Speaker 2: thousand dollars per student per year are precious medals also involved? Helicopters?
32:35
Speaker 2: Are they doing this on a beach at Saint Bart's.
32:38
Speaker 2: When Hennessy announced this scholarship, he gave an example of
32:41
Speaker 2: the kind of issues that perhaps these mega scholars could tackle.
32:45
Speaker 2: He thought that they could look at the effects of
32:47
Speaker 2: one hundred million dollar gift that the Facebook founder Mark
32:50
Speaker 2: Zuckerberg gave to the New Jersey public school system. Newark
32:54
Speaker 2: historically has some of the worst public schools in the country,
32:58
Speaker 2: and I guess the reason Hennessy thought Zuckerberg's gift needed
33:01
Speaker 2: to be studied. Was that there's a feeling among some
33:04
Speaker 2: that the donation hasn't had quite the impact people thought
33:07
Speaker 2: it might. This is That's the exact quote Hennessy gave
33:10
Speaker 2: to The New York Times. Nobody understood the real difficulty
33:15
Speaker 2: in making significant change in the public education system. The
33:21
Speaker 2: first thing that the strong Link guy wants to do
33:24
Speaker 2: with his crack team of eight hundred million dollar scholars
33:27
Speaker 2: is critique the weak Link decision to spend one hundred
33:30
Speaker 2: million dollars on poor kids. A billionaire gives a fortune
33:34
Speaker 2: to an elite school in order to understand why another
33:37
Speaker 2: billionaire's donation to a poor school isn't working out? And
33:41
Speaker 2: what if Stanford's mega million dollar scholars can't answer that question,
33:46
Speaker 2: should another billionaire give it even more money to an
33:49
Speaker 2: even more lead school to answer the question of why
33:52
Speaker 2: the four hundred million dollar gift to study the one
33:54
Speaker 2: hundred million dollar gift hasn't worked out. Please stop me
34:00
Speaker 2: before I tweet again. I'm not saying that the strong
34:06
Speaker 2: Link approach is never appropriate. I grew up in Canada
34:09
Speaker 2: in the nineteen seventies, and at that time the country
34:12
Speaker 2: had lots of good universities, but there was a feeling
34:15
Speaker 2: that what the country needed was at least one world
34:18
Speaker 2: class science in technology university. So they created that, the
34:22
Speaker 2: University of Waterloo, and it was a great idea. But
34:26
Speaker 2: the United States today is not Canada in the nineteen seventies.
34:30
Speaker 2: It does not suffer from an excess of egalitarianism. It
34:34
Speaker 2: suffers from the opposite problem. Its strong links have never
34:38
Speaker 2: been stronger. And when you make strong link arguments at
34:42
Speaker 2: a time like now, you end up sounding ridiculous. Just listen.
34:51
Speaker 2: February twenty fourteen, the billionaire hedge fund manager Ken Griffin
34:56
Speaker 2: gives one hundred and fifty million dollars to Harvard is
34:59
Speaker 2: to support Harvard's financial aid program. Here's what the President
35:03
Speaker 2: of Harvard says, Ken Griffin's extraordinary philanthropy is opening Harvard's
35:08
Speaker 2: gate wider to the most talented students in the world,
35:12
Speaker 2: no matter their economic circumstances. And here's what Ken Griffin says.
35:18
Speaker 2: My goal with this gift is to make sure and
35:21
Speaker 2: this is the exact quote, that our nation's best and
35:24
Speaker 2: brightest have continued access to this outstanding institution. Now, let
35:30
Speaker 2: me remind you, at the time of Griffin's gift, Harvard
35:34
Speaker 2: had an endowment of thirty six billion dollars. So a
35:38
Speaker 2: billionaire gives one hundred and fifty million to an institution
35:42
Speaker 2: that has an endowment of thirty six billion because he
35:45
Speaker 2: thinks the school needs help opening its gates wider to
35:48
Speaker 2: the most talented students in the world, because he's worried
35:52
Speaker 2: that thirty six billion might not be enough to ensure
35:56
Speaker 2: continued access to this outstanding institution. These two comments were
36:01
Speaker 2: not off the cough remarks. I'm reading them from the
36:04
Speaker 2: official Harvard press release. Trained professionals perfected those quotes. Smart
36:11
Speaker 2: Harvard educated people approved them. They probably sat down in
36:14
Speaker 2: teams around a long oak antique conference table dating back
36:18
Speaker 2: to the eighteen hundreds and came up with what they
36:20
Speaker 2: thought was the most compelling justification for why giving another
36:25
Speaker 2: one hundred and fifty million dollars to Harvard is a
36:27
Speaker 2: good idea? Is that the best they could come up with.
36:32
Speaker 2: We're talking because I, as you know, have been critical
36:36
Speaker 2: of some of the I'm part of the backlash. I
36:38
Speaker 2: guess back to my conversation with John Hennessy of Stanford,
36:42
Speaker 2: and I'm just curious about whether how common or how
36:47
Speaker 2: often do you run into the two backlash to people
36:50
Speaker 2: saying enough with some of these large Am I a
36:55
Speaker 2: lonely voice? Or is this something that you have encountered
36:57
Speaker 2: a lot and think about a lot?
37:00
Speaker 8: We don't encounter it a lot, I would say. I
37:05
Speaker 8: think the reason we probably don't encounter it is that
37:10
Speaker 8: we don't view this as who gets the biggest slice
37:16
Speaker 8: of pie here? We view it as what can we do?
37:22
Speaker 8: What can we do to that's transformative? How can we
37:24
Speaker 8: increase our contributions to the world.
37:27
Speaker 2: I mentioned maybe the most obvious criticism of what Stanford
37:30
Speaker 2: is doing, and he says, we don't encounter it a lot.
37:34
Speaker 2: Apparently the President of Stanford only encounters people who look
37:39
Speaker 2: at American higher education and conclude that what it really
37:42
Speaker 2: needs is more money at the top. With all due respect,
37:46
Speaker 2: the president of Stanford needs to get out more. Take
37:50
Speaker 2: a little trip to Glassborough, New Jersey, to the campus
37:53
Speaker 2: of what's now called Rowan University. Maybe take a look
37:57
Speaker 2: at the statue up front.
38:00
Speaker 3: Cannot he's talking about family? Have we got everything?
38:04
Speaker 7: I would say, as.
38:14
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38:18
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38:21
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38:27
Speaker 2: other episodes at Revisionististory dot com or on your favorite
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38:40
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Speaker 2: the Penalty Management team Mora Mayer, Andy Bauers and Jacob Weisberg.
38:55
Speaker 2: I'm Malcolm Gladwell.