Lately there’s been a big push for “ethical investing” including, for instance, fossil fuel divestment and, more recently, Harvard being told not to invest in prisons. No, really; like tobacco or South Africa back in the day, prisons are apparently bad, especially private ones. The trouble is when really big pension funds start ignoring returns in favour of virtue signaling, they distort the market, steal from the people counting on returns from the funds, and generally lose their green shirts. Which Harvard seems to realize but can’t do much about now that they’re riding the PC tiger.
The disinvestment movement has a distinguished pedigree, going back to anti-slavery Quakers refusing to eat sugar because every lump had slaves’ blood in it. How can you not sympathize with such origins? But Harvard’s president warned the students against too much of a good thing, saying he’s besieged by disinvestment demands on everything from fast food to corn sweeteners and has to put his money somewhere. (One of the prison protestors sneered that “It was as if he was equating our concern for the suffering of people in prison with corn syrup”, apparently not realizing that the anti-HFCS campaigners feel just as passionate about the environment and health as he does. One shudders to imagine the resulting cage match.)
As NBC noted, “Aside from prisons, some students are also calling for divestment from the fossil fuel industry, a campaign that has seen its own opposition from school leadership. In 2013, Harvard President Drew Gilpin Faust said that the ‘endowment is a resource, not an instrument to impel social or political change.’” Indeed. And while it’s one thing to avoid spectacularly obnoxious or uncool investments, once you start listening to the “smash reality” crowd and refuse to invest in anything they dislike, which is virtually everything, you end up having no funds to withdraw from anything, which is a problem for your university and also means you can’t boycott the next big bad thing.