April 15, 2008

Bad council

[img id="80479" align="alignleft"] This week, after a small group of U of C activists spoke to an alderman about the issue, the Chicago City Council condemned the University’s decision not to divest from Sudan. The scolding was a bit late in coming; the University made its decision in early 2007 and most members of the University community have long since moved on.

Apparently, business in the Council is slow these days. But the Council’s resolution has reopened old wounds and put the issue of divestment back into campus conversations and debates. And if divestment is, in fact, the beyond-all-argument moral imperative that its proponents claim it is, then maybe that’s a good thing. But it’s also time to raise a few questions about the wisdom and efficacy of divestment as a means of fighting genocide.

The rationale provided by the University administration for the decision not to divest—namely, that the University’s commitment to free inquiry prevents it from taking a stand on hot-button political issues—is wrongheaded. First, mass murder is a pre-political moral crime, not something about which reasonable people disagree. Second, the decision not to divest is itself a political act, and the idea that the University, a powerful and wealthy political actor, somehow stands above politics is ludicrous.

Nevertheless, the University was probably right, if not for the same reasons it offered. The most powerful argument against divestment is that it is entirely arbitrary.

For example, one of the biggest companies that does business in Sudan is PetroChina, a state-owned Chinese oil company. If I directly owned shares of stock in PetroChina, it would seem that the responsible thing to do would be to dump them. But what if my IRA includes American mutual funds with some tiny stake in PetroChina, among thousands of other companies? What if I regularly consume the products of companies that do business with China? After all, since PetroChina is state-owned, anyone who has ever contributed to the Chinese economy (all of us) has funded PetroChina. And since PetroChina’s profits are related to the price of oil, which is related to global oil demand, anyone who has ever driven a car or lived in a heated home has funded PetroChina.

Divestment amounts to a costly form of ethical window dressing. By making us feel better about our investments without actually making a difference, it is an evasion of real responsibility. Last year, activists successfully convinced the mutual-fund company Fidelity to dump its PetroChina shares. PetroChina is one of the major drivers of the Chinese economy, and its share price has grown by almost 500 percent over the past five years. Are we to suppose that Fidelity was content to deny its investors those returns?

More likely, Fidelity removed its direct PetroChina holdings while replacing them with stock funds that have large holdings in PetroChina, less-visible companies that form part of PetroChina’s supply chain, and companies whose growth depends upon PetroChina’s ability to find and process oil in places like Sudan. Such moves would allow them to please the political noisemakers while still reaping the benefits of PetroChina’s activity. After Fidelity’s much publicized divestment, analysts wrote that the decision would have no discernible effect on PetroChina’s long-term share price. And if removing Fidelity’s billions of dollars of investments in the company didn’t make a dent in PetroChina, why are we to believe that a choice to divest by the U of C will?

The idea that a committee can peruse a list of global companies and investments and give each a moral thumbs-up or thumbs-down is silly; each one is connected to every other. Large companies are not discrete, stand-alone entities. Their profits and size are as much a function of global economic conditions as they are a function of sales.

Many supporters of divestment see it less as an efficacious way of stopping genocide than as an expression of opposition to genocide. Such symbolism is an essential part of politics, no doubt, but we should not delude ourselves into thinking that divesting would make one iota of difference to the communities being destroyed in Darfur.

Suppose the University “divested,” however the administration might choose to interpret that term—what then? Would that give us a sense of moral comfort and assuage our progressive egos, leaving us free to go about our daily lives—in which our every economic decision has some distant or not-so-distant connection with companies that do business in Sudan or otherwise contribute to human suffering and environmental destruction?

All of us are, without exception, immersed head-to-toe in global capitalism, and for student activists to sound their moral trumpets and declare that the University’s refusal to go along with the meaningless charade of divestment means that the administration is complicit in genocide is hypocritical in the extreme. That the City Council unanimously signed on to the activists’ cause with nary a voice raised in opposition should be held up as an embarrassment to the city and a sign of the bankruptcy of its political institutions.

The question of how to live ethically in a globalized economy is profoundly serious, but targeted divestment is a shortcut rather than a solution. Passing smug, self-congratulatory City Council resolutions won’t help the people of Darfur—but calling congresspeople and lobbying for military intervention might.