Divestment: A Project in Ineffective Altruism
A Close Look at an Ineffective Methodology on the part of Collegiate and Community Divestment Groups
Ethical theories can be divided into essentially two categories: those which define good actions with respect to good motivations, and those which define good actions with respect to good outcomes. As I think about the growing divestment campaigns, I can’t help but see the two sides divided along these lines. Pro-divestment rhetoric generally ignores fact-based reasoning, and instead highlights people trying to do good in the world: “escape fossil fuels,” “take responsibility for the planet,” maybe even “have a clean conscious.” But at the end of the day, they forego the results-oriented reasoning needed to effect real, worthwhile change in the world, and their naïve methods have done nothing but hurt the environmentalist community.
Let’s apply the growing moral philosophy of “effective altruism”; the theory, developed by Princeton’s Peter Singer, argues that altruistic behaviors are not all one and the same, but that some good behaviors are in fact better than others. For example, we’d normally consider it utterly laudable to donate $40,000 to make sure one blind veteran gets her seeing eye dog. However, it’s better to donate that money to help cure Robles Disease in Africa, and for the same cost prevent a few thousand cases of blindness. Though the former action would not, obviously, be considered “bad,” it would seem noticeably “less good.” No matter how noble the intentions behind each action were, their outcomes varied incredibly in impact. Through efficient investing, the difference individuals can make increases exponentially.
And, if colleges or other groups “invest in socially-responsible mutual funds,” they undoubtedly settle for the “less good” option. Divestment groups, to their credit, don’t argue that they make any real impact on the environment—their market share is so minimal that no energy producer will flinch. On the other hand, though, every participating institution that’s taken the plunge into single-handed collective action will lose hundreds of millions of dollars. Swarthmore’s divestment campaign had a study claiming divestment would cost them “only” $100 million over the first ten years (other predictions were twice that). Projecting the same percentage (~12.5%) loss onto Harvard’s endowment results in more than a $4 billion loss.
Now, if Option A is divesting, and Option B is that $4 billion going unused, divesting seems the wise play. But that’s not how money works—everything has an opportunity cost, and this has a pretty big one. Instead, that money could do infinitely more good; Robles disease, for example, could be wiped off the face of Africa. Shoot bigger, maybe, and you’ll eradicate polio or maybe cure AIDS. $4 billion here, $100 million there, and the money really adds up.
Even if we want to presume that global warming is the most important issue – more important than anything else that it’s practically the only issue that matters – it’s absurd to think that $4 billion is best spent divesting. Every home in America could get energy-efficient light bulbs, or instead the environmental lobby could suddenly have more money than ever before. There measures would all more effectively fight global climate change than a few liberal east-coast bastions further polarizing an issue that the most basic scientific arguments are rapidly deciding, perhaps even hurting the environmental movement in the long-run. It’s unlikely to think “Harvard Divests!” would make headlines in Wyoming or Alabama, and if they did, those headlines would not be greeted with welcoming editorials. Along with this, of course, comes no direct environmental benefit.
At the end of the day, it’s likely even that divestment noticeably hurts the environment. People don’t need convincing whether or not climate change is bad—that seems pretty settled. Except for some extreme right-wing polemicists, everyone only debates the cause of climate change: human or not. By moving the argument away from science and towards morals, and by painting opponents as “evil” as opposed to “wrong,” the anti-science left makes eco-conscious policies look like the stupid ones and alienates on-the-fence voters. Pushing climate change regulations back a few years doesn’t seem worth saying “we were the first!”—at the end of the day it’s about results, not desires.
So, divesters, please understand: We’re on the same team, and I understand that you’re trying. But you’re making a giant mistake. Your time, and your school’s money, can do so much better.
This article represents the sole opinion of the author, and does not necessarily reflect the policy or position of Change-Magazine.