OPINIONS

Divestment and its discontents

To the Editor:

Divestment seems to be the new activist fad. Stanford needs to divest from fossil fuel companies. The Gates Foundation needs to divest from G4S. This is now the “cause” for which elections are held and petitions are signed. This movement, however well-intentioned, is a new high point in activist naiveté.

One major problem with so-called “ethical investing” is that in an institution as large as Stanford, there are disagreements about what is ethical and what is not. When Stanford divested from coal mining companies and threatened to go further, it alienated a large share of students and faculty who had no qualms with fossil fuel companies – companies that provide abundant, cheap energy without which our economy would not function. But who is right on the issue is not the point; the point is that there are two sides within Stanford on the issue. And Stanford chose to use its endowment to make a political statement, endorse one group’s opinion and simultaneously denounce the other’s. (And it seems that more than anything, Stanford’s choice was a petty move to look “better” than Harvard.)

That is not the purpose of an endowment.

The true purpose of an endowment, like it or not, is to make money. It is not to make political statements. It is not to endorse one opinion over another. It has one purpose and one purpose alone: make money. Nothing else should factor into the decision-making, however much you personally find making money repugnant.

Consider, moreover, what divesting does: nothing, besides making a little statement and cutting off our nose to spite our face. Does ExxonMobil care whether Stanford is an investor? Absolutely not. Its stock is bought and sold all the time. All divesting means is that Stanford sells it stock to someone else who wants it. All it can do is hurt the divestor, if its returns suffer, and with a set of profitable options having been eliminated, presumably they will. Furthermore, divesting gives up the divestor’s voice in the company from which he has divested. Shareholders control the company. When those shares are sold, so is the control within that company and the only hope of changing the company from within.

Ultimately, the divestment movement is a cop-out. It is a way for some people to feel self-righteous without having to do anything. Students can celebrate that Stanford divested from coal without having to make any real changes in their lives. The investors in Peabody Energy Corp. may change, but that company mines coal just the same as it always has. If the divestment protestors really believed in their cause, they wouldn’t even be divestment protestors – instead, they would be working harder to reduce their own fossil fuel consumption. If the G4S protestors actually cared about human rights, they would be trying to protect human rights instead of changing the investors in a security company, a goal which does absolutely nothing for human rights.

There are many reasons to question the causes of today’s activists, but it’s quite clear that divestment movements are not movements for any real cause that could be questioned – they’re here because of laziness, stupidity, or both.

 

Daniel Wright ’17

Contact Daniel Wright at dlwright@stanford.edu.

  • Guest

    This is one of the stupidest writings about divestment I’ve ever read. Mostly, it’s pretty ridiculous to call any divestment movement stupid and lazy when massive amounts of people support it, including YOUR OWN FUCKING SCHOOL.

    Stanford understands that divesting often involves taking a stance, but it, along with many other people and institutions arguing for divestment, don’t see climate change as a political issue. Therefore, it would not “alienate” people. But PRIMARILY, a school like Stanford would only ever divest if it thought it would be the proper financial decision, as in this case, coal is not a stable investment, as seen by the new federal regulations against them.

    Also, by your tone, I assume you’re not an activist for either fighting climate change or human rights issues, so what gives YOU the right to tell those people who spend their time trying to make a difference in the world by arguing for one method that they think would have an impact that “if they actually cared” or “really believed in the cause” they’d be doing something else? Think about what you say, please, for your own sake.

    With this letter, you’re disrespecting your school in addition to thousands of people by calling them stupid and lazy. Disagreeing is one thing, but spewing insensitive opinions out your ass is another.

    p.s. GO CAL.

  • Paul

    Proof positive of Mr Wright’s assertions – both lazy and stupid.

  • Ryan

    Everyone agrees that saving the environment is a good goal, but Daniel is disagreeing about the premise of divestment being an effective way to combat climate change. What Daniel is saying is that people who want to save the environment would achieve better results if they focused on something else that would actually concretely help the environment. For example, pushing for new government regulations or investments in alternative energy. Divesting doesn’t do too much other than serve as a “symbolic” gesture. Divestment is unlike other “human rights” issues because the environmental issues are less black and white: there are plenty of economic factors that shape the best policy. His stance is perfectly reasonable.

  • Martin

    If the purpose of an endowment is solely to make money, then shouldn’t the university invest in the most profitable businesses? Drug cartels, terrorism, illegal prostitution, child porn, paid assasins, all of them are way more profitable than the more ethical coal industry.

Advertisment ad adsense adlogger