There has been a remarkable level of discourse around the bribery scandals surrounding elite college admissions from the NY Times among many other sources.

My particular perspective on these types of issues is that they arise because of an unwillingness for institutions to be transparent about fundamental realities and the resulting inevitable rise of backchannels. I’ll tell my own personal perspective and generalize why this type of thing will be constant until hard truths are communicated to everyone broadly.

Asians have pending lawsuits against the most powerful, elite universities in the world about admissions discrimination. But even the most vicious tiger mom that I know (and as an Asian, I know many…) would never tell me during Chinese New Year that they:

1) Suffered through poverty and suffering for 16 years with 10 siblings in a “Jungle country”
2) Had their parents sell everything for a one way boat ticket to the United States
3) Worked in a job as a nanny, having earned a degree in particle physics, teaching mandarin to young kids
4) Spent 10 years saving meticulously to afford 200k for their daughter to go to Harvard
5) So that their child could spend 4 years with 1500 other asian children, all of them with impeccable SAT scores but all of them from poor immigrant families as well

Very clearly, that was not the dream.

What “discriminated” minority parents want is really to do all of steps 1-4, and then have their daughter come back one day over Christmas break and say they are roommates with one of Obama’s kids. Or their son is excited that he is roommates with this nice African American at Stanford. Sure he doesn’t dig computer science the same way he does, but he happens to play golf and his name is Tiger Woods. Whether Asians talk about this or not, it is the actual dream. When I put it to my father in law, who himself was a top Indian Institute of Technology grad and often complained about the “arbitrary” American system even he could not deny this, since it’s so obvious.

I think there is this misperception that top tier universities are there to be fair to the world so that anyone has an equal shot at a good education. But education has been so leveled and commoditized that this is definitely not true — there are lots of kids who read wikipedia pages and know a lot more about math than many Ivy League students. Colleges are primarily combustion chambers, not lecture halls. You take a lot of young kids with diverse backgrounds (in a variety of dimensions), put them in cramped quarters for 4 years, and put them all under a lot of stress (via academics, but that is almost a secondary achievement). The ideal is to create small groups of people who learn from each other deeply, complement each other constantly, draw on their help at all times in life, and maybe do some magic together down the line from that shared experience.

Places like Harvard do certain things that recognize hard truths, such as sometimes prioritizing the children of rich and powerful parents. For their goals, it’s important to have well connected, wealthy scions in addition to academically excellent folks. Mark Zuckerberg needs 10k real fast for a server for this small, but quickly growing project called TheFaceBook? Luckily, Eduardo, whose family is extremely wealthy and happens to live in the same dorm can help him with that in a day and it’s off to the races. That combination, while understandably a lot of people hate, works extremely well. This approach means companies are built that would otherwise never be built, and they are built faster than they would otherwise be. Is it fair kids born rich will have this option? Absolutely not, but so much is like that. I was born a short asian kid from New Jersey who will never be a linebacker in the NFL or anything of anything in the NBA but I just have to get over that.

The problem is that places like Harvard are unwilling to communicate, honestly, to the public those truths because they are so unpalatable. But the truth is that life is deeply unfair. Wall Street traders have a saying — it’s better to be lucky than good. It’s a statement that luck in the end dominates all results, not really your skill. The common objection — but what about hard work? Hard work is a conceit promoted primarily by the lucky, but what almost nobody recognizes is that even the mentality to work hard is a result of luck itself. How did you know to work hard? Did you have nurturing, supportive, disciplined parents who set a pristine example? Or did you have abusive crack addict parents and ended up taking drugs to escape an unbearable existence? Luck has always been the ultimate arbiter in life. This is why guys like Warren Buffett will try to remind people that if you were born with halfway decent parents in a decent part of the world you are way, way, way ahead of the game in life just by birth.

It would be refreshing yet certain political suicide if places like Harvard just posted: this year we have 1500 undergraduate spots, we are willing to give 150 of them to any set of parents who will wire us a $10M check. I know lots of rich, well connected people who would do that in a second. The other seats we’re going to reserve for a set of people of other styles of diverse backgrounds.

The upshot? Well that amounts to 1.5 billion dollars so nobody else needs to bother with tuition, and hopefully this class will have a combination of people with financial resources, political connections, charisma, guts, raw technical talent, drive and diverse religious and geographical viewpoints that might just combine and create novel companies, social organizations, new therapies, and new ideas for everyone.

Sounds ridiculous? But I think it’s strictly better — at least the money would go directly to the university so they could deploy it. Instead, the situation we have right now is one of backchannels. Brokers who know the right people and can get the right favors for a fee. Do people think that what I described above is actually more ridiculous than soccer coaches at Yale being bribed enormous amounts of money to lie about applicants and the sports they have never played? Or grown men being paid hundreds of thousands of dollars in cash to answer SAT questions, on behalf of a 16 year old that look like this:

The recommended daily calcium intake for a 20-year-old is 1,000 milligrams (mg). One cup of milk contains 299 mg of calcium and one cup of juice contains 261 mg of calcium. Which of the following inequalities represents the possible number of cups of milk m and cups of juice j a 20-year-old could drink in a day to meet or exceed the recommended daily calcium intake from these drinks alone?

So while SAT proctors are pocketing hundreds of thousands to rig questions like that one above on behalf of 16 year olds, here’s a question: why should all that money flow through intermediaries when by virtue of having the courage to have an honest conversation of unfairness it could just go directly to the beneficiaries? Harvard can both receive directly and invest quickly that money into cancer research more efficiently than the multi billion dollar “we will write your son’s admissions essay” industry can.

I’ll give one last example. Everyone in the industry I work in knows that it’s a clubby affair. How to objectively get certain licenses is about who you know and who can introduce you to who. There are no manuals for this sort of thing (as a naif, I of course tried to google this in the early years). And there are plenty of unspoken rules. And similar to elite college universities, these agencies are required to look optically fair.

Let’s see what happens in an environment like this. Well, to figure out how the game is played you hire advisors (well connected, high priced lawyers) who then charge you to put you in touch with lobbyists you have never heard of, which also charge you a monthly fee. These guys advise you by getting you meetings you can’t get otherwise, and they say essentially nothing during them. Sound familiar? This is the same back channeling, intermediary rife system that high priced college advisors engage in (Which soccer coach at Yale should I talk to? How can I get an introduction to him? Who’s the right person to have a conversation with about what Harvard’s orchestra needs are this year?)

I have a deep appreciation for how hard the staffer level job is at a government agency. Their time is a finite resource. They are swamped and understaffed, and quite simply, they do not have the ability to take an audience with every crank and lunatic that wants to apply for a federal license. The current system is they are essentially referred good candidates through this network of intermediaries who get paid handsomely. It is a reasonable filter, to be honest, in the same way you can only get a top tier VC partner meeting in Silicon Valley unless a known quantity refers you.

Instead, I have a suggestion similar to the one I mentioned earlier. Just publish an open price to talk to a government regulator. Charge $1M to start the application process, $100k of it nonrefundable (sort of an application fee) and if the application goes through the $1M will go to whatever regulatory reserve fund is needed once live. This shows seriousness so people will not waste time. It also saves so many headaches and makes the playing field much more even quite simply because it’s transparent. It will also cut out all the intermediaries involved (lobbyists, lawyers) and funnel more money to the US government, improving the resources available and benefit the taxpayer.

But again I recognize this will never happen. It’s politically unpalatable similar to Harvard’s situation — nobody wants to publicly admit that pay to play is a reality of life. So everyone will continue to spin impartiality while the real action happens with intermediaries and backchannels, and all the fun private conversations associated with that sort of thing.

It might just be bad luck that we find all of ourselves in this position.