Not long ago, NBA General Manager Daryl Morey of the Houston Rockets made a comment on Twitter supporting the Hong Kong demonstrators. “Fight for freedom, stand with Hong Kong,” he tweeted. China took offense and immediately made moves that cost the NBA a lot of money. This put mainly black NBA players who have supported social justice in the U.S. on the spot. Would they call out totalitarian China, or shut up and hope to keep making money off their sneaker contracts? They shut up, and now the issue has died down. China cowed everyone into submission in the name of access to their huge markets. So much for principles and Colin Kaepernick.
This has a similar ironic flavor to the County’s recent approval of a Socially Responsible Investment policy. The elected County Treasurer, who has final say, has to by state law safeguard the county’s principal, have enough liquidity to pay the bills, and after the latter two points are satisfied, maximize returns. To quote Jenny at Wine Water Watch, “in other words, it’s okay to divest from the destruction of the planet (and the inhuman treatment of human beings, too), as long as it doesn’t affect your profit margin!”
It turns out all the big banks the County works with are deeply entwined with fossil fuel investments. And while we all sit contentedly at home this holiday season around the hearth, or the space heater, the world unashamedly turns on one big Faustian bargain…
I imagine many people’s personal investments conform to this same pattern. The returns just aren’t there for the green and the equity stuff: pollution and exploitation are what really pays the high returns. I worked for a millionaire in New Hampshire, back in 2003, and I asked what he thought of green investments. He said, “that’s like pissing in the ocean,” meaning it’s good for nothing and makes no difference, so why try?
Let me take this a bit further. In Tucson, I saved water religiously for years, as it was apparently the right thing to do. Then, I had the stunning realization that I was saving water so others could have lawns and swimming pools, and play golf. I had arrived at a prisoner’s dilemma/ Tragedy of the Commons breaking point; if others are cheating, I’m a sucker for playing by any rules. There’s no pragmatic reason to be ethical if others are not and they are coming out ahead of you materially.
And so, for business and investing, if other guys are making the big bucks off unethical practices, do you take less and deprive your wife and kids? To make matters worse, investment entities have so many shells, blinds, obfuscations, and unknown terms, that an average guy will never know if something is ethical or not. You can then spend all your gains on specialists to tell you what is what.
Or you can just go with something like the Vanguard FTSE Social Index fund. Could people and municipalities learn to take less so they can sleep at night? “Ye cannot serve God and mammon both, mammon being money.” Matthew 6:24
Maybe to be ethical, you have to resign yourself to finding more money on the laundromat floor than you’ll make on a five-year CD. But hey, if I’m at the laundromat, that already makes me a business loser, and thus able to think about ethics. Bottom line, in a world full of sharks, life will never be fair, you’ll never have enough to pay the multitude of rents and fees. It’s never enough. Might as well be satisfied with what you’ve got and make it work. An ethical stand has to start somewhere, might as well be with you.
“The time is always right to do what is right.” MLK Jr.