Can You Buy an Internship on Snobster?
posted by Frank Pasquale
Timothy Noah has described the growth industry in internship sales at Slate:
[T]he internship-selling racket has slipped the surly bonds of philanthropy and entered the for-profit marketplace. An outfit called the University of Dreams guarantees placement or your money back. Summer-internship fees (the University of Dreams prefers to call it “tuition”) range from $5,499 to $9,499. For 3 percent extra, you can pay on an installment plan. The interns have been placed with firms like Hill and Knowlton and Smith Barney (did a rich, dumb intern start the credit crunch?)
“It’s a huge misconception to say this is a program for rich kids,” Eric Lochtefeld, CEO of University of Dreams, told the Journal. “The average student comes from the middle class, and their parents dig deep.” To whatever extent that were true, inegalitarianism would shade into encyclopedia-salesman-style exploitation.
Cyberspace appears to be catching up to real space in stratification potential:
Affluence, the online social network for millionaires, a Facebook for elitists that launched late last year[, has] the aim of becoming “the exclusive organisation of the world’s wealthiest people.” . . . A whole segment of internet entrepreneurs are working hard at building exclusive communities like this, online worlds that strike a balance between openness to new members and a hostility to the great unwashed.
A prime example is the social network A Small World, known by those outside its gates as Snobster. The network (which received a large start-up investment from the film producer Harvey Weinstein) relies on cool rather than cash as the determining factor for membership, in an attempt to create that magical mix that keeps many a nightclub in business: brilliant and beautiful side by side with the rich and clueless.
Given the rise of economic policy designed to help the “rich and clueless,” we shouldn’t be surprised by a social network that does the same. From private college admissions counselors to internship sales to lucrative I-banking jobs to bailout-funded bonuses–life’s got a lot of crystal stairs for those at the top and their kids. Fortunately sites like Little Sis and Political Friendster keep some tabs on elite interconnections.
February 10, 2009 at 11:45 am
Posted in: Economic Analysis of Law, Social Network Websites
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Responses (5)
Public School Student - February 10, 2009 at 12:18 pm
Par for the course to see you spew this classist venom. Somebody who attended Harvard, Oxford, and Yale should not excoriate “crystal stairs” and “network[s] for millionaires.”
AF - February 10, 2009 at 12:30 pm
Public School Student, by your logic a “Public School Student” should not complain about the “spewing” of “classist venom.”
Paul Gowder - February 10, 2009 at 1:52 pm
Augh! I knew it was bad, but I didn’t know it was this bad. Thanks, Frank, for pointing this stuff out.
GW 1L - February 10, 2009 at 6:46 pm
Young people in Washington should be anything but surprised by the development of “Affluence.” “Late night shots,” an invitation-only social networking site for (presumably) well-off DC-area college students and young professionals, has been operating for some time.
You can see the homepage here: http://latenightshots.com/
You can also find some interesting Wonkette commentary on LNS here: http://wonkette.com/211127/last-weeks-shots-the-best-of-lns
I find this phenomenon particularly interesting because it seems that wealthy adults are now mimicking their children’s efforts to extend social exclusivity to the internet.
ohwilleke - February 11, 2009 at 6:23 pm
There was a time in U.S. economic history (really all of U.S. history prior to the post-WWII G.I. Bill) when paying for the privilege of being apprenticed was more common than paying for college.
It is also widely believed in most enterprises and industries that it takes a certain amount of time to recover the investment made in a new hire. Colorado’s lawmakers recognized this, for example, by creating an exception to their ban on non-competition clauses for unskilled employees in their first two years in a field — a provision that is mostly invoked in practice by skilled tradesmen concerned about employees learning a trade and leaving before they provide their employer with a net profit.
The practice of buying a job, as opposed to training, also has continued economic relevance. Seats on the NYSE are commodities to be bought and sold to the highest bidder with the proper licenses. Notary public commissions in Continental Europe are limited in number per jurisdiction and sold in the same manner. Pick up any Asian immigrant oriented newspaper in America and you will find pages of turnkey business opportunities intended for owner-operators, right next to the matrimonial ads. The entire franchising industry operates the same way. The availability of business loans, particularly SBA loans, limits, but does not eliminate, the barriers purchase price pose to the less affluent who seek to access these opportunities.
Naturally, asking people to pay money to work for you raises eyebrows for would be interns who are rightfullly worried about scams. One who offers these opportunities has to be careful to stay within the safe harbors of the Fair Labor Standards Act, and also of securities regulations applicable to promises of returns from business opportunities that either don’t depend primarily on the efforts of the person involve or constitute Ponzi schemes.
But, I’m not deeply offended by, and there is nothing fundamentally wrong about, paying to be an intern, even though the situation is vunerable to many abuses.
The general concept of organizations whose main value is the opportunity they provide customers to associate with other customers is one explored at great length and with considerable insight by Henry Hansmann, who now teaches at Yale Law School, in his 1996 book “The Organization of Enterprise.” Hansman makes a strong empirical case that many organizations like elite universities and country clubs are organized as non-profits primarily to discourage third parties from profiting from the associational value that their customers provide, and that exclusive nightclubs like the infamous Studio 66 are the exception rather than the norm in this regard.
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