The federal district court has ruled that Harvard’s admissions practices, while “not perfect,” do not violate federal law. This does not mean that Harvard is not engaged in “discrimination,” only that any such discrimination is “narrowly tailored” to address two compelling governmental interests -- remedying the effects of past discrimination and diversity in higher education. Under the Supreme Court’s strict scrutiny standard, Harvard may consider race to achieve diversity only if there is no workable race-neutral alternative that ensures a sufficiently diverse class. The multitude of cases to come before the high court concerning admission preferences suggests these principles may be easier to articulate than to administer.

Harvard is constrained by both law and economics in the degree to which it discriminates against merit applicants. Harvard has considerable, but not unlimited, discretion in how it administers its admissions policies. Should Harvard violate the “narrowly tailored” criterion of race-based admissions policies, the court will order it to cease and desist. If Harvard trades off too much merit in order to achieve a sufficiently diverse class it will cede its esteemed reputation to other prestigious universities that do not. The law delineates what is permissible, but the market dictates what is sustainable.

Is “Discrimination” Well-Defined?

Each Harvard applicant exhibits a unique set of attributes: scholastic performance, extracurricular activities, personality/leadership, public service, athleticism, etc. Harvard assigns weights to these attributes in selecting its entering class. The lawsuit claims that the weights that Harvard has chosen for certain attributes in its admissions calculus discriminates against Asians.

Admission practices at a prestigious university that trade off too much merit for diversity, legacy, or athleticism will with the passing of time cease to be a prestigious university. The very best students are attracted to Harvard for the academics, not for experiments in social engineering. Hence, regardless what the law permits in trading off one attribute for another, the market serves as the final arbiter. This suggests that the concept of “discrimination” in college admissions may not be well-defined given that the weights assigned to student attributes vary according to the university’s specific institutional mission.

Is the high court prepared to rule that a prestigious university that admits an academically qualified applicant with legacy dollars in tow rather than an academically superior student without such dollars is necessarily engaged in “discrimination”?

The Law

In the landmark 1978 Bakke decision, Justice Lewis Powell wrote that “the attainment of a diverse student body... is a constitutionally permissible goal for an institution of higher education.” Justice Harry Blackmun further underscored in Bakke that “[I]n order to get beyond racism, we must first take account of race.” This principle has been upheld in every “preferences” case to come before the Supreme Court in the last four decades. The public policy question concerns whether sufficient progress has been made in moving “beyond racism” that race-based preferences are no longer justified. On this question, the country is seemingly as divided as ever.

While universities are permitted to take race into account in their admissions decisions, how they do so is tightly circumscribed. Racial quotas and set-asides are not permitted, nor are mechanical adjustments for race in the admissions calculus because doing so violates the “individualized consideration” that the law requires. Race can be a factor in the admissions decision, but it cannot be the determinative factor. It can be a “Tip” as the Harvard Admissions Office uses that term. But the use of so-called Tips is not limited to racial attributes. These Tips also advantage so-called ALDCs (Athletes, Legacies, on the Dean’s or Director's interest list, or Children of faculty and staff.) An applicant that checks one or more of these boxes may receive a Tip in the admission’s calculus on an ex post basis, which is to say after the admissions office has assigned ratings for the individual components (academic, extracurricular, athletic, and personal).

The debate centers on the fact that Harvard does not select its entering class on the basis of academic merit alone (e.g., GPA, ACT, and SAT). In fact, if Harvard relied solely on academic merit, the percentage of Asians in the entering class would almost double. The seminal question concerns why Harvard does not appear to have suffered any measurable damage to its reputation if it is engaged in the systemic discrimination that has been alleged?

The Economics

The rationality axiom states that economic agents act in their own best interest. Businesses maximize profits and consumers maximize satisfaction. This implies that Harvard would have no incentive to deviate from an admissions standard that reinforces its reputation as one of the foremost educational institutions in the world. Whatever discretion Harvard is granted with its admissions under the law must still pass muster in the marketplace.

The line between diversity preferences and fair competition is not always an easy one to draw. When Harvard admits an academically able student from East St. Louis High School over an academically more able student from Beverly Hills Preparatory, is it invoking preferences for diversity or simply recognizing that the two students differ exogenously with respect to their opportunities to succeed and handicapping the “contest” accordingly? Notably, in Olympic diving competition, divers are evaluated on both the difficulty of the dive and how well it is performed.

Those opposed to race-based admissions policies often invoke the Mismatch Theory which counsels that minorities would be better off graduating from a less-prestigious university than enrolling but not graduating from a more prestigious university. Whereas this theory is not without merit, the problem is exacerbated by university administrators who emphasize minority admission rates over minority graduation rates. It is ethically questionable to admit underdeveloped academic talent without committing the resources necessary to properly develop that talent.

The reputation of a prestigious university is based on many factors, including the selectivity of admissions, the accomplishments of its graduates, the prominence of its faculty and the size of its endowment. Still, there are natural limits on the degree to which prestigious universities can substitute ALDCs and race-based admissions for merit-based admissions.

The Ideological Paradox

The opposition to preferences in college admissions and the departure from a strict, merit-based admissions standard comes principally from the right side of the political divide. These individuals tend to oppose government intervention in the marketplace out of deference for the discipline of competition. Why not trust the market for college admissions?

If Harvard is engaged in discrimination to the degree that is alleged, these academically gifted students that Harvard has rejected would enroll at other prestigious universities and thereby enhance the reputations of those schools. Harvard’s reputation would then decrease in direct proportion to the increase in the reputation of its nondiscriminating rivals. And yet Harvard consistently ranks first or second in the annual rankings of American universities. This suggests that whatever discrimination Harvard is engaged in with its Tips for ALDCs and diversity initiatives, it is not trading off a sufficient amount of merit to materially diminish its reputation.

6. Conclusion

An appeal in the Harvard case is pending and the Supreme Court may once again wade into the social minefield of preferences in college admissions. This is not uncharted territory, but it is divisive territory. The high court has been tweaking, clarifying, and refining the use of preferences in college admissions for the last 40 years. If the high court were to find that Harvard’s admissions calculus is not narrowly tailored, it will naturally look to the alphabet of “ALDCs” to find the culprit. Will it conclude that the Tip that Harvard places on “A” is too high and that this served as a means to discriminate against Asians who did not as a group excel on this metric? Will it conclude that the Tips on “L” “D” and “C” are too high which will adversely affect Harvard’s endowment, recruitment of distinguished faculty, and in turn its reputation? Is the court prepared to prohibit universities from using socioeconomic and environmental considerations in the admissions calculus, and are there unintended consequences in doing so?

Alternatively, the Supreme Court may find that the lower court followed precedent and no correction is required. Setting aside precedent seems unlikely given the currency of these rulings and the relatively modest changes in the ideological makeup of the court. In the final analysis, the Supreme Court may conclude that trading off too much merit for ALDCs and diversity does not require legal discipline administered at the hand of the court, but rather economic discipline administered by the invisible hand of the marketplace.