Divestment Revisited

What are the effects?

Niral Shah, the recent Dr. Frankenstein of Free ‘Waligore’ Dartmouth, the Dartmouth blog-o-sphere’s mysteriously reticent, left-liberal web log, has been pushing for divestment on that site and also the Lil’ Green One. Here’s what he says.

Since our decision to pursue divestment, we have conducted our own research into corporate activity in Sudan, and worked with the ACIR (Advisory Committee on Investor Responsibility) to accomplish our goal.

So, to be specific, they are divesting the College’s endowment from corporations operating in Sudan, especially those dealing with the Khartoum government, which arms and supports with air cover the janjaweed, the ones on the ground literally raping and pillaging and killing. This is a multi-step process, and in each step it requires self-interested people to engage in economic calculus so as to effect a moral change.

Then he outlines the categories of companies that will not get investments from Dartmouth. There are oil companies / military suppliers, ‘infrastructure,’ service / product exporters, essential services (think ‘baby formula’), and the fifth, unknown. Then, he adds that the committee doesn’t really know which ones to ask the College to extricate itself from:

The difference between divesting from the first category versus the second and third is that, well, the first category is a clear cut moral obligation to stop the genocide. Their is debate on the remaining categories, regarding actual purposes of infrastructure and adverse effects on development and the population. Supporters of divestment during the anti-apartheid referred to this differentiation as fighting apartheid versus fighting the apartheid economy. The argument is that only the latter is effective, seeing that a successful divestment campaign amounts to a privatized version of sanctions.

The question in my mind is this. If Dartmouth pulls its funds, will it be enough to get the companies to change their minds? If those companies change their minds, will that get Khartoum to change its mind, or will some sleazy Russian companies just step in? (I understand theirs and China’s provide a lot of support already.) And if Khartoum decides, begrudgingly, to stop shipping Auto-Kalashnikovs to the western regions, will that be enough for Joe Janjaweed and sons to decide not to strip just one more village bare, since they obviously have the resources for it already?

But Niral talks about moral obligations. I half-argue here that tracing one’s loyalty is not really a moral action since it doesn’t affect another human being. Let me be clearer: if you rush into a burning building to save someone, but you cannot save anyone because it turns out to be physically impossible, that’s moral. You thought at the time you might do some good. But if you do something you know, perhaps 99%, will not save people, that is less moral and maybe a little dishonest. If it’s 100%, neither deontolocially nor teleologically is it moral.

Why do I say it wouldn’t effect change, specifically in Darfur? I see it as something of a prisoner’s dilemma. That is, if all the ‘players’ (investors) participate, that is the best outcome. There’s some leverage. However, if only Dartmouth divests and no one else (or just a few other colleges), then companies will not care, nor will Khartoum or the janjaweed, and Dartmouth will have participated in a futile yet expensive gesture. (I always thought Thoreau looked ridiculous sitting in that jail– it seemed more like self-indulgence than true protest to me.) You could argue that your divestment will inspire others. People make this argument about voting. One person says, ‘I’m not gonna vote. My vote won’t count– it’s one of millions.’ The second says, ‘What if everyone said what you say? Where would we be then??? It’s, like, democracy would be shackled.‘ And he’s right. But the decisions in divestment are not simultaneous. If we had ‘divestment day,’ it just might, especially if others received word that companies would divest. To be effective, it must be a group effort.

Wrong, too, are arguments that smidgen of divestment could save a few lives. A critical mass is necessary to convince the fanatics in Khartoum. This, after all, is not about oil (the civil war, which ended a few years ago was); it’s about race (hence ‘genocide’). These Darfuris (or, some armed groups) rose up to protest discrimination by ‘Arabs’ in the government. The fanatics are almost done with killing– soon Darfur will be destroyed for many generations to come. Unlike apartheid, which was sustained and not a ‘finishable’ action, Khartoum, even if they stopped when the UN increased presence many, many months from now (doubtful) would still have succeeded in its goal. Then, they can purge their party of thugs by sending a dozen on a Roman ICC Holiday. Poof, they’ve atoned! A leak in the project won’t slow it down, unlike apartheid. (Well, maybe) Plus, the apartheid divestment in the U.S. happened in conjunction with other international pressures– the most effective of which, arguably, were not economic. South African teams were barred from sports events, and the like. I do not believe that those Burqa-pushing tyrants care much for good international PR if they can retain a stranglehold on their nation.

Divestment also presumes that corporations care entirely about money (a pretty cogent assumption). But. If they’re supposed to pull out of Sudan because they’re concerned about money, which would concern them more: 1) their stock suffering from Dartmouth or other parties hurting it 2) losing very lucrative oil contracts with Khartoum? Seems like divestment has the wrong assumptions, doesn’t it? He also says:

In the fall, Dartmouth held stock in PetroChina, an oil company that Harvard recently divested from.

Well, how did that work? Has the company complained; has Beijing released any dissidents? I don’t ask that sarcastically– what’s the solvency record of divestment? Is there a historical precedent of: ‘corporate divestment’ –> ‘stop genocide’? I honestly don’t know.

I don’t doubt that financial considerations are a huge part of Khartoum’s considerations. But why not put a cap on the bottle, instead of trying to block individual bubbles at the bottom, to use a really stupid metaphor? That is, sanctions, coupled with military threats. That happens at the national level. (The slimy Security Council– with China’s supposed veto intentions– won’t do anything.)

I know, I know: DAG is supporting the Darfur Accountability Act. That’s good; I think we all should. But it doesn’t mean that divestment isn’t a waste of time and money.