Fixer, I did read the link. I think the author is offering up a strawman in the idea that the motivation of social investors is "allowing the company to get access to capital at a lower interest rate." I am personally less interested in helping out the wind farmers than in avoiding what I consider harmful. Further, I don't understand why the concept
If socially responsible investors are numerous/wealthy enough to succeed in materially increasing the demand for socially responsible stocks, investors will have to pay more for each dollar of socially responsible corporate earnings than for each dollar of socially irresponsible corporate earnings.
doesn't apply to any subset of stocks.
you are intentionally seeking lower returns. Of course, depending on your goals, that might be a tradeoff you’re happy with.
I am ok with that, and I still can't quite crack why Richard3 thinks this is so wrong-headed.
So don't divest from weapons manufacturers and defense contractors for emotional reasons. Explore the option because you believe these companies to be over-valued, and come up with a good, quantitative justification of this.
Now, to me, this seems like an example of Richard3's rationalization.
One could. The human ability to rationalise things is almost endless. . . . Although I bet you think you're still a good person despite misrepresenting yourself to the grocery store (assuming the intent is that they are a Passover freebie for Jewish people).
Well, the story is a little more complicated. There was a big kerfluffle last year because the bones weren't kosher, and a number of folks contaminated their kosher kitchens. This year they are labeled "not kosher." I kind of just wanted to participate in the nonsense. :)
But to your broader point: it's terribly hard, almost impossible, to get an objective perspective on the balance of good and harm you do in the world. I know that we are particularly blind to the harm, and please forgive me if this is not true, but your defense of investing in harmful enterprises may itself be a bit of rationalization, recasting the standard for good as "what makes the most money."
No I would not. Manufacturing weapons is not directly opposed to supporting peace. Or do you think investing in a drug company / other medical company is you profiting from cancer?
Just as supporting weapons manufacture would not be "profiting from peace" because weapons do destroy peace at every scale, supporting medical companies that destroy cancer is not "profiting from cancer." Investing in weapons is profiting from WAR, just as investing in Union Carbide is (in part) profiting from cancer.
I am conflicted about participating in the whole capitalist, corporate-investment system, having studied the harm it's done in the world, and the ways in which it has warped human behavior and redefined standards of value. I don't look at ethical investing as a positive action, merely a less-wrong necessity -- a net weight on the Harm side of the balance, just a lighter one.
My mother's account spent about 5 years at 0% so anything we do will be an improvement (I already stuck a lot in CDs). I promise not to be self-congratulatory about it, but certain companies and industries are just deal-breakers for me. Your wise perspective may not interpret owning their stock as hypocritical, but I would find them so: a mote in my eye, if you like.