Is class a more divisive issue at Harvard Business School than gender?
As soon as new students arrive, they are expected to write checks of $300 or $400 to their "sections," the groups with whom they take first-year classes, if they want to participate in social events. In recent years, second-year students have organized a midwinter ski trip that costs more than $1,000, while others, including members of "Section X," a secret society of ultrawealthy students, spend far more on weekend party trips to places like Iceland and Moscow. Tickets to the winter ball, called Holidazzle, have cost $200 or more in recent years.
When Christina Wallace, now the director of the Startup Institute, attended Harvard Business School on a scholarship, she was told by her classmates that she needed to spend more money to fully participate, and that "the difference between a good experience and a great experience is only $20,000."
"Class was the bigger divide than gender when I was at HBS," said Wallace, who graduated in 2010.
In reaction to an article published in The New York Times on Sunday about Harvard Business School's attempt to improve its atmosphere for women, many students, alumni and readers echoed her comments.
"A pervasive problem," a member of the class of 2013 wrote on nytimes.com. Another member of the class said that she had borrowed tens of thousands of dollars a year to keep up socially, and that she never invited classmates to her parents' home nearby because she did not feel it was lavish enough.
Many alumni from decades ago, including Suzy Welch, a former editor of The Harvard Business Review, said they were startled by the culture of spending that was depicted in the article, including the news that one student had lived in a penthouse apartment at the Mandarin Oriental Hotel in Boston. When Welch graduated in 1988, money mattered, she said in post on Twitter, "but conspicuous consumption events were rare."
A reader named Ken H said that the tone at the school in the 1970s was downright egalitarian, and that anyone who "flashed money around" would have earned jeers. "Maybe what has changed isn't so much HBS, but America," he said.
The Harvard Business School student body is at least somewhat economically diverse, with 65 percent of students on financial aid, receiving an average grant of $60,000 over the two-year program, according to a spokesman. (Tuition costs more than $50,000 per year.)
The Class of 2013 included former members of the military, children of struggling single mothers and a former butcher, among many others. But just as the school has made efforts in recent years to draw students from a wide array of economic backgrounds, the global elite has been accumulating far more wealth and the American income divide has been growing.
The result is a school that mixes students of relatively modest means with extremely wealthy ones, including in recent years the children of Leon Black, a private equity investor, and Gerald D. Hines, the founder of one of the world's largest real estate firms, among many others. In interviews, some students mentioned the Instagram feed of Michael Hess, a member of the Class of 2013, who has posted photographs of Mick Jagger close-up in concert, courtside seats at a New York Knicks game and stops on his trips around the world.
Many Harvard business students and readers were especially troubled by Section X, and the idea that even within the extremely elite confines of one of the nation's premier business schools, the ultrawealthy are segregating themselves.
"There is this underbelly at HBS of extremely wealthy individuals - spoiler alert, I am not one of them," said Brooke Boyarsky, who delivered a triumphant speech at graduation about social change at the school.
According to students, the members are mostly male and mostly international students from South America, the Middle East and Asia. They organize "the real parties, the parties where it's a really limited list, the extravagant vacations - I mean really extravagant," she said. (No students interviewed admitted to being members of the group, though some said they had attended its parties.)
"More than once I heard that 'the only middle-class students here are the Americans,'" another recent graduate said.
Even though Section X is hard to pin down - some students said they did not believe it existed at all - it causes enormous resentment on campus, starting with its name. Every Harvard Business School class is organized into 10 sections labeled A through J, and the name Section X implies a pulling away from the wider community.
"The Section X dynamics really deteriorate the section togetherness," said Kate Lewis, a 2013 graduate who edited the school newspaper. By the end of this academic year, Section X had become an adjective on campus for anything exclusive and moneyed, with one student talking about a "mini Section X dynamic" within her real section.
Asked in an interview about Section X, Nitin Nohria, the school's dean, sounded crestfallen because he had hoped the group had disappeared. "I thought it had pretty much been on its fingernail edges," he said.
After hearing complaints from students, the co-presidents of the Class of 2013, Kunal Modi and Laura Merritt, worked to introduce less expensive activities, including trivia nights, visits by food trucks and coffee hours. They persuaded administrators to install lawn furniture on campus so students would have another setting where they could relax without spending money.
To help bring the school's culture back down to earth, Thomas J. Peters, a co-author of "In Search of Excellence" who has spoken at the Harvard Business School and has been a frequent critic of business education, suggested that the school apply a simple admissions rule: Anyone from an ultraprivileged background needs to have done something of significant social value to be admitted.
"If you're 27 years old and you've been given a lot of money, that's plenty of time to have done something," he said, adding that he and many of his friends at Stanford Business School in the 1970s were veterans. "Why can't that be in the admissions criteria flat out?"
For their part, students suggested that the school draw on its enormous resources - its endowment is over $2 billion - to supply financial aid for basic extracurricular activities like section events.
As dean, Nohria has been known for fostering frank conversations about social issues, but it is hard to say if Harvard Business could ever mount a true effort to resolve class issues on campus along the lines of the one on gender.
Many of the school's top donors and alumni are members of the same ultramoneyed culture that some students criticize. And because many students attend business school in the specific hope of building a network of influential contacts, they tend to fear offending anyone, especially wealthy classmates who might one day provide connections and financing.
"The No. 1 thing you should take away from the comments section on this post is that no one is putting their real name," one member of the Class of 2013 wrote on nytimes.com, citing fear that strong opinions "could limit future options."
"Without strong opinions, backed by passion, it's unlikely that anything will change at HBS in the near term," the commenter said.
© 2013, The New York Times News Service