“Socially responsible investing” became a buzzword when high-income baby boomers with unexpectedly bulging stock portfolios began wondering how to apply their politics to their money-making. It’s good to see Paul Hawken’s criticism of this so-called “ethical investing“:
When you invest in such SRI funds as Domini, Calvert, Sierra Club and Pax, you are investing in American corporations that fight against environmental regulation; whose trade associations lobby against living wages or increases in the minimum wage; that lobby for and receive corporate welfare from Congress in the form of pork-barrel tax breaks and subsidies; create non-profit organizations to fight claims that junk food causes obesity; prevent people from getting price breaks on pharmaceuticals, whose CEOs raise millions of dollars for the Bush administration’s assault on human rights and the environment, and more. You would never know this because you invest in the “language” of social responsibility, not the reality.
I’ve criticized this ethical-investing notion several times while focusing on corporate power, especially in a 1996 psychology journal article criticizing the concept of “corporate personhood” and in an opinion piece in 2000 that asked this question: “How can we satisfy our own legitimate needs without strengthening the capitalist system that prevents egalitarian social institutions from developing?”
Unfortunately, I was better at describing the dilemma than resolving it. Indeed, when I ended up with some unexpected money of my own from an insurance settlement, I just dumped it into a “socially responsible” Domini fund. But I still think my conclusion makes troubling sense:
The truth is we have no good options. The left has been out-maneuvered by a structural adjustment of the US economy that’s muddied the line between capitalists and the rest of us. Worse, to the extent that our personal finances really do depend on the health of corporate institutions, we’re not likely to create alternatives. We may still march in Seattle or DC against corporate-designed structural adjustments imposed by the IMF on Third World nations. But people whose minds are on their readjusted portfolios may find it hard to work up much enthusiasm.
I agree that people should really research the companies that they invest in prior to taking the leap.
If we did our part in picking quality companies that are helping people rather than
hindering them the economy would still thrive, but people would make a statement to
corporations that aren’t adding positive influences in our society. Thanks for the
posting!
That’s what all employess have to do.