9:07 PM :: Stephen (contact)

Divesting from defense? As I suspected, it was Prof. Yve-Alain Bois who accused Harvard of "war profiteering"; he did it again in a letter to Tuesday's Harvard Crimson. Rather than make a straightforward demand for divestment from defense contractors, Bois called only for "debate," which took place (although in a somewhat muted fashion) at the next faculty meeting.

Unfortunately, Bois's letter doesn't really clarify the argument in favor of divestment. One possibility is that by investing in defense contractors, Harvard is increasing their ability to produce death and devastation abroad (especially in Iraq). But in fact, the reverse may very well be the case: providing more capital to the defense industry, and thereby making American weaponry more lethal and more precise, probably has the effect of shortening wars and saving the lives of both American troops and foreign civilians. A well-equipped U.S. military is invaluable to the current global security system. As my brother points out, imagine what would happen if defense companies' products were only 50 percent as effective--would America and the world be any safer?

These are the grounds on which The Crimson's editors, in an in an uneven but generally sensible editorial, oppose the call for divestment. In order to justify divesting from U.S. defense contractors, one would have to show that the companies involved really are doing more harm than good--which is the claim of the editorial's dissenters, who raise the issue of arms sales to repressive governments. I don't have enough information to judge this argument; American arms traders may be doing some awful things, and if so Harvard may be obliged to divest from them. But it's important to note that even if the dissenters are right, their criticism has nothing whatsoever to do with the rights and wrongs of war in Iraq.

A second argument for divestment is that it would be immoral for Harvard to derive a benefit from an unjust war. This argument is much closer to Bois's heart; he finds "the idea that Harvard should be made richer by the present war morally repugnant." As someone who benefits from Harvard's wealth, he feels personally "stained" and "soiled" by such enrichment. In fact, Bois isn't just worried about the defense industry, but also about Harvard's investments "in the oil and construction companies that will directly gain from the war, notably through the lucrative contracts they will get for the reconstruction of Iraq."

This position confuses me. Why should Harvard be ashamed of its investments in a company that is working to rebuild damaged Iraqi hospitals and schools? Regardless of one's views of the war, isn't such a company doing the Lord's work? The need for post-war reconstruction is the same regardless of whether the war is just or not. The fact that an unjust war is the but-for condition of a company's involvements seems pretty irrelevant, actually. Trauma surgeons working on a gunshot victim, environmental lawyers suing a polluter, and firefighters combating arson are all employed because of the immoral actions of others, but that doesn't mean that their salaries are somehow morally tainted. And at some level, isn't almost any firm in the economy affected, to a greater or lesser degree, by the demand for goods and services in the process of reconstruction?

It's not even clear that Harvard has really made any money here. For instance, Raytheon (in which Harvard owns more than 68,000 shares) has gone up by about 30 cents since the war began, but the stock has also lost about a third of its value since last June. In fact, the developments of the past 10 months seem to have diminished the company's share price rather than increased it. So how is the financial benefit from the war to be measured? (Bois's argument here is not helped by his admission that "I do not have the foggiest idea of how the stock market operates.")

Some of Bois's points raise deeper questions about exploitation and market incentives. Part of why it seems wrong to profit from others' misfortunes is that by doing so, one chooses to bank on suffering instead of working to reduce it. If you hear that a drought-afflicted country is experiencing bread shortages, the argument goes, the moral response is to donate some food, not to call your broker and invest in wheat futures. On the other hand, the market is able to meet a large number of different needs in part because prices adjust in cases of scarcity. If no one were allowed to raise prices for a scarce good, there would be no profit opportunity and thus no incentive for outside firms to increase their production. Could it be immoral for any particular firm to raise prices, yet morally necessary that prices be allowed to rise?

But no matter how these questions are resolved, the moral difficulties they describe arise only after a deliberate decision to invest on the basis of other people's misfortunes--not a simple continuation of past practice. There is no evidence that Harvard purchased defense stocks with the intent of profiting from an unjust war; the university is being accused only of holding on to its previous investments. And if those investments have not facilitated the suffering of others (indeed, they may have reduced it), there is no reason for Harvard to withdraw them. Whatever financial windfall the university receives--remembering that there's little evidence of one thus far--shouldn't be regarded as ill-gotten gains. If anything, it's a silver lining.