Investing In Iniquity
A regular article written by Phillip Jensen in his role as Dean of Sydney at St Andrew's Cathedral.
6th August 2011
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I do not understand ethical investments. As a concept it goes back centuries, to the Quakers and the Wesleys using money for good not evil. But in our context it is becoming increasingly confusing.
On a simple issue I would not invest in a company engaged in illegal activities. There is no way I would want to be a partner in loan sharking, slave trading or selling drugs.
I also would not invest in a company engaged in immoral activities like gambling, prostitution or producing pornography. The difference between immoral and illegal is small. The illegal is immoral, that is why it is declared illegal. But there are some “legal” activities that trade in immorality. Prostitution is legal, but I would not want to be a part owner of a brothel.
Similarly I do not want shares in a company producing known harmful products like tobacco, asbestos or pornography. Again, the difference between ‘immoral’ and ‘harmful’ is small. Sometimes what makes something immoral is that it is harmful. Were we not told that climate change is “the greatest moral challenge of our times”? But once we move to harmful products, where do we draw the line? Should we be concerned ethically over the environmental damage done by the companies we invest in? And what of companies that promote unhealthy materialism, using spin to advertise and promote rubbishy items of no real value to the consumer?
And what about our company’s employment practices? We live in a fairly regulated industrial environment – but still poor people are forced to work unseasonable hours for the sake of the wealthy. But that is nothing compared to companies making profits out of sweatshops in the third world. Even if we do not invest in such companies, we still buy their products. We enjoy cheap prices on clothing and other items because they have been made under work conditions which would be illegal in Australia. In some lines it is very difficult to buy any other products than those produced overseas.
If that was not all, how much information can an investor realistically have about their company’s practices? It is quite possible to unknowingly invest in a company that illegally taps people’s phones and immorally invades their privacy. Who would have predicted when they bought shares in a large retail grocer that they would wind up owning pubs and poker machines? And what is my superannuation company investing in? Or who is my bank lending my money to?
It is not possible in this world to separate ourselves from the contamination of sin all around us. It is not really possible to separate out some part of the economy as pure and ethical. George Bernard Shaw’s play “Major Barbara” presented the ethical dilemma of the donation of money to a Salvation Army Officer by her arms dealing father. Does war profiteering so stain money that it cannot be used for the good of humanity? Money flows through our society doing good and ill and it is impossible to track its progress, only dealing with good notes and ignoring bad ones. Indeed, the whole system creates the wealth and health of our society, such that without it, we could not feed or house the population. Third world sweatshops are truly appalling but what is the alternative – starvation?
However, the issue of my involvement in unethical financing has been brought home to me with a development of a brothel in Camperdown. Not knowing my involvement, I wrote of it a few months ago when news of its development and listing on the stock exchange was made public. (See The Brothel and the Academic)
Prostitution has been legalised on the grounds that it ‘cannot’ be stopped and without legalisation there is no protection for the prostitutes or control of the spread of certain diseases. Prostitutes’ health and safety could not be assured unless brothels operate under government regulation. If ever there is a group of victims who need protection from exploitation and abuse it is the women who have been brought and bought into this industry.
While some people see no moral problem with prostitution and while the ‘sex industry’ and its ‘sexual service workers’ are trying their best through media spin to make it socially acceptable – there is little doubt that the community considers it deeply immoral. Very few people want it to operate next door to them and, who wants, hopes, plans or trains their daughter to join the trade? It is repugnant to all family values. However, being legal means it can trade publically, advertise freely and raise finances through banks and other public institutions. And there is my problem.
Some years ago I deposited a small amount of money in a building society. It was taken over by a larger building society, which was then turned into a bank. This turned my small investment into shares. When my bank was taken over by another bigger bank I became a shareholder in the old Bank of New South Wales currently called Westpac. The bank does not consult with its minor shareholders about its investments. So it was only when reading the newspaper I discovered that Westpac is the principle financial backer of the brothel in Camperdown.
Does this mean to invest ethically I must have nothing to do with banking? Does it mean I should sell my shares or protest at the Westpac AGM? Is it illegal for the bank to refuse, for purely ethical reasons, to invest in a legal, commercially viable, and very profitable business? Would such morally discriminating board members be accused of discrimination? It would certainly be discriminating, indeed ethical – but are boards allowed to discriminate or be ethical? And if they are, why is the Westpac board so unethical as to enter into the wickedness of promoting prostitution?
Is it only the individual or can we also ask society: what does it profit to gain the whole world and yet forfeit your life?