July 11, 2022
Dear President Lawrence Bacow, Mr. John Micklethwait, and Ms. Sally Buzbee:
As you are certainly aware, the issues of antitrust and monopolization have moved to the forefront of public discourse and policymaking as the ills of corporate consolidation — which include rising income and regional inequality, the loss of small businesses, the distortion of our democracy and, as has most recently become evident, weakened supply chains and inflation — have grown ever more apparent. Corresponding concerns have also been increasingly raised as many of the academic experts and scholars being cited by legislators, judges, and the media are also being funded by the same companies they are publicly defending.
Professor Lawrence Summers is taking prominent, public positions on the Biden Administration’s antitrust enforcement actions and economic policies. Given that fact, and the well–documented reality that corporate interests often subsidize favorable views of their work and power, it is essential for the reputation of Harvard University, Bloomberg News, and The Washington Post that the public be fully informed about any funding Summers is taking from corporations he is explicitly or implicitly commenting on.
This is much more than a theoretical question in regards to Professor Summers; for example, his CV indicates his involvement with the Council on Competitiveness and the Group of 30. The Council on Competitiveness is billed as a collaboration between businesses, academics, and labor, but there’s very little labor representation, and no small businesses. Corporations represented include Bank of America, Deloitte, and a plethora of investment and private equity firms. Also listed as “corporate partners” — a thinly veiled way of saying “companies who give us money” — are other firms in concentrated markets, such as Intel and Pepsico. The Group of 30, for its part, is largely funded by banks and private equity firms, including Citigroup, BlackRock, JP Morgan Chase, and Morgan Stanley.
By striving to maintain a hold on their status and deter any competitors, monopolists, often backed by private equity, have had dramatic effects on the market economy in this country. However, a growing movement is challenging their domination. To maintain its credibility as a voice on this and other urgent policy debates, Harvard must hold its faculty to a higher standard of transparency as they — with the weight of the university’s reputation behind them — weigh in. Similarly, Summers’s column in Bloomberg legitimates these positions as the impartial thoughts of a subject matter expert. How are readers to know if Summers is “talking his book,” rather than weighing in impartially, when they hear his ubiquitous voice across the media, including Bloomberg and The Washington Post, or within academia?
It is crucial that Professor Summers disclose to the public any personal income or academic funding he receives from corporations, or from entities principally funded by corporations. Without proper disclosure, Professor Summers, and thus Harvard, Bloomberg, and The Washington Post lose credibility.
Faculty members like Professor Summers enjoy significant respect and deference in the public arena thanks to their affiliations. Indeed, many media outlets routinely reference Professor Summers as an economic authority; he is a part of a unique tier of public intellectuals who are widely accepted as experts any time they opine. Notably, pieces quoting him tend to note his affiliation with Harvard and his time as Treasury Secretary, but there are exceedingly few mentions of Professor Summers’s potential conflicts of interest, many of which, unlike Group of 30, are totally absent from his public CV. For instance, Professor Summers serves on the board of cryptocurrency/fintech firm Block and as a senior advisor to DCG. Also rarely mentioned are his speaking engagements, where he made millions of dollars from banks and investment companies in 2008 alone. And since Summers has not had to make public financial disclosures in the twelve years since he last served in government, we are unsure what other investments or income sources he might have which might help motivate his public proclamations.
We do know, however, that Summers has for decades been involved in profiting off of his ties to the financial industry. He has consulted for Citi and was paid over $5 million for working one day a week at D.E. Shaw in the late 2000s. And the ties don’t end there; there was plenty for an entire article from The American Prospect detailing his wide array of ties to “fintech” startups that all too often prey on desperate Americans struggling to make ends meet. Among the highlights are Doma and Belong, two firms that exploit people looking to buy homes that would benefit from “Anything that makes real estate more profitable, like increased interest rates on mortgages” and Andreesen Horowitz, an investment firm excited by the possibility of profiting off of indebted Americans, particularly those with student loan debt. Summers, conspicuously, is one of the most outspoken economic voices opposing student loan forgiveness. He also sits on the board of Premise Data, a firm that made its workers, without their knowledge, provide information to the military.
Given these extensive ties to firms that stand to benefit from specific economic policy decisions, the question of when Summers provides advice genuinely reflecting economic analysis versus when he simply pushes for decisions that will line his pockets is incredibly important. When he advises the Fed to hike rates to suppress wages is that because he genuinely believes it is an economic necessity, or because he recognizes that the bottom-feeding financial service firms he works for stand to gain from higher interest rates? When he extolls the virtue of cryptocurrency, is it because he thinks it could be a revolutionary store of value, or because he knows that the more people buy into it, the more he can continue lucrative consulting work? Without full, honest, and transparent disclosure of financial and ethical conflicts of interest, there can be no way of knowing.
Views reached by prominent intellectuals in the course of their academic work are accorded greater deference than work funded by a private entity in order to advance a specific, narrow interest. It is of the utmost importance for the quality of democratic debate and for Harvard’s reputation that the university not allow its name to be misused as a shield from public scrutiny for less respectable affiliations. Harvard should require Professor Summers and other professors to clearly disclose any compensation or funding they receive from companies, either direct or indirect (e.g., from a foundation or organization largely funded by a corporation or corporate officer associated with a specific corporation with a stake in the work in question). And the same goes for Bloomberg and The Washington Post’s responsibilities to their readers.
If Professor Summers and his peers are offering their opinions free of financial interests, they should welcome the opportunity to distinguish themselves publicly from so many other experts who cannot say the same. And if corporations are funding Professor Summers’s and others’ work without public disclosure, it is likely only with the spur afforded by transparency and criticism that your institutions can begin to address a heretofore hidden problem.
Revolving Door Project
PHOTO CREDIT: “Larry Summers offers keynote remarks on smart public investments in infrastructure at Brookings.” by BrookingsInst is licensed under CC BY-NC-ND 2.0.