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February 09, 2007

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bcowan

Hello Geoff,

A couple of weeks ago Peter singer published an article in the New York Times Magazine which rehearsed a number of arguments as to why there is an ethical obligation for the fortunate and/or deserving rich to share wealth sacrificially for the relief of human suffering.

One of the things he said went right at one of the buttresses of the Kalven Report: the contention that, as you put it, "investments in corporations that may do business in Darfur cannot in any meaningful sense be said directly and materially to have caused the tragedy in Darfur."

Singer challenges that by an argument I had not heard before: the way corporations actually do business in countries with weak or primitive institutions, is to deal with whomever can deliver the business, regardless of constraints that person or group may recognize as binding on (usually) him to use what we pay him to make lfe better in that place. Doing business in this way directly and materially creates incentives for local violence with the aim of getting in the position to do that business.

Such incentives make for the perpetuation of chaotic and brutal local conditions, usually with large sums going into numbered accounts abroad.

This seems to me to make the rather weak argument from remoteness of cause even weaker. (I witnessed Harry Kalven's elegant demonstration, over several weeks in the Fall of 1968, that proximity of cause as a test for legal liability lacks both rational coherence and empirical adequacy. This has forever after made me suspicious of such jiggery-pokery metrics as "meaningful" "direct" and "material")

But the Kalven Report's main contention cannot be refuted: Universities are committed to the entertainment and even at times the realization of certain types of ideals. But in order to carry out those commitments, Universities cannot help but depend deeply on the material conditions that prevail in the historic circumstances in which they find themselves from time to time.

Those circumstances sometimes include passionate demands that something be done that will push beyond tired conventionalities of feeling and expression. There were lots of those big meetings on campus in 1968-71, I remember. They were very exciting, but none of us were able to get outside of history. What we selected for emphasis was just part of the same general process that, from a different perspective, made the bombing of Cambodia seem like a good idea to Nixon.

I still think you and the others of us who protested did a good job. It turned out that the whole world was not watching. Or even if they were, many fewer than we needed in order to make comprehensive change were willing or able to do anything about it. And I am glad they didn't, by and large.

But I still like thinking about it.

Erasmussimo

I'd like to offer an upside-down variation on your argument in support of the Kalven position. My argument is derived from "those who live by the sword die by the sword". If educational institutions choose to become political actors, then they themselves will rightfully become subject to political repercussions. We all screamed bloody murder when the University of California Regents went after Angela Davis, and they were wrong to do so -- but if the University of California had been a political creature, such political intervention would have been justified.

If universities want to place themselves above the reach of political interference, they must not engage in political behavior.

Michael Martin

"The Kalven Report has it precisely right. Universities – most especially this university – exist for a very special reason. They exist to create a forum in which students, professors, and researchers may explore every issue from every side without fear of official condemnation or judgment. They exist to enable talented and committed individuals to seek the truth. They exist to serve as a safe haven in which even the most controversial and despised views may be aired, confronted, and considered. They do not exist so students, faculty, researchers, and administrators can vote to determine the truth. They do not exist to proclaim the truth. For a university, it takes much more courage to stand silent, then to yield to the pressure and temptation to take sides. But once a university takes sides, it is no longer a university."

I disagree with Prof. Stone on many issues. But with respect to this issue, I could not have said it better myself. Too many elite law schools do a disservice to their students by taking sides on political issues. The University of Chicago has an obvious comparative advantage over its peers in this regard.

Frederick Hamilton

Prof Stone,
Your post is a refreshing aknowledgement of a Univeristy's reason for existense. To provide an enviornemnt for students to learn all points of view. Chicago has long been such an institution. Both liberal and conservative in today's jargon.

I would say however that a univresity such as Chicago doesn't live by your exception to when it is permissible to take a stand. Ergo your point "For example, the University may appropriately refuse to allow employers to use its placement facilities if they would use those facilities to discriminate against students on the basis of race, religion, gender, ethnicity, or sexual orientation."

I, as my prior posts have indicated, don't believe the university's or your position or FAIR v Rumsfeld's position was correct or "fair" to the military. The precise aspects and facets of the issue are too much for this post, but the salient point is that if a university believes as Chicago and you did and as the law school acted, why doesn't the university have the courage of their convictions regarding discrimination to accept the Solomon Amendment as law, and then continue what you and the law school know to be the right action and simply not allow the military recruiters to be given access to University of Chicago Law School students on campus, and accept the penalties that the Solomon Amendment for doing the right thing. A number of law schools have done three things, acknowledge that their interpretation of the first amendment re: FAIR was not upheld by the Supreme Court, they still disapprove of "don't ask don't tell" and feel it is discriminatory, and ergo have continued with their position and decided to forgo the federal funds.

Doesn't the University of Chicago's present stance simply reflect doing for money what you wouldn't do if not for the money and how does that square with the Kalven Report?

The University of Chicago has a long tradition of doing the right thing regardless of the monetary consequences. President Hutchins lead the university to drop football and participation in the Big Ten in 1939 even though the university football teams were known as the "monsters of the midway", had the first Heisman Trophy winner and the first person drafted into the National Football League. The monsters of the midway won seven Big Ten titles, one national championship, and was the home of head coach Amos Alonzo Stagg for forty years. Once football was given the boot, the university made good use of the stadium: to wit, at University of Chicago's old Stagg Field on December 2, 1942, a team of Manhattan Project scientists led by Enrico Fermi created the world's first controlled, self-sustaining nuclear chain reaction under the west stands of the abandoned stadium.

So, your premise in regarding the need to avoid institutional dabbling in the political makes sense, but your exception as noted above takes a moral position that the university won't accept because of money. Shouldn't the university accept your exception regarding discrimination regardless of the financial implications?

BAC

"Indeed, the University should no more divest on the basis of these sorts of issues than it should prohibit students and faculty from speaking freely on campus in support of tobacco subsidies, the moral legitimacy of murdering abortionists, the right of Palestinians to destroy Israel, or even the morality of genocide."

So the University would have no problem investing in a corporation that actively and openly supported murdering abortionists, harboring terrorists, and destroying some ethnic or religious group?

There is no "political" issue in Darfur. The University is not choosing between two viable and reasonable positions; it is choosing indifference (at best) to an undeniable evil.

Akio

I have to question whether it is possible to take a position in a case such as this that is actually politically neutral. When dealing with investments, the money involved is a far more profound statement of support or disapproval than any amount of verbiage - to invest is, ultimately, to express confidence in a company by funding their business model. It is not a black box where the use of those funds is concealed; it is not a slot machine, where money goes in, money comes out, and between is nothing but a trio of bars.

That, however, is the relationship that the Kalven Report attempts to establish between the University and the coporations it invests in; we must either feign institutional ignorance towards the actions of a corporation or attempt to recast its behavior as a force of nature with no connection to the company we invest in.

Though I agree that the University should not exist to express political opinion, I don't see how we can adhere to the recommendations of the Kalven report without unacceptable self-deception. Accordingly, the debate should be reopened, with the realization that the Kalven report, however well meaning, is ultimately wrong in its denial of the power of wealth, and other standards should be taken up in its place while still retaining the goal of maximum political detachment.

Possibility: Consideration should be given not to the morality of a company, but on whether or not it is implicated in that which is illegal.

Political umpire

A similar debate happened in the UK recently when the Anglican Church said it wouldn't be investing in companies which supply heavy equipment (of a civilian nature) to Israel, because that was being used against Palestinian interests.

Although the Church is not remotely the same thing as a University, the 'slippery slope' argument applies in both cases. As far as the Archbishop was concerned, Israel/Palestine was a knock-down argument. So too might others think in the case of Dafur. Yet who is to judge what is a morally one-sided case, who is to police it, and where will the line be drawn. In other words, if cause X should be supported, why not Y, Z, A, B and C?

That is not the most important argument. The essential argument against the University lending its name to a political cause is that to do so would be inconsistent with its role as a forum for education, research and debate. The role of the University is to provide the forum, not take sides in the debate. Else it will find very quickly donors and students will prefer other universities. That is not to say that individual students should not form groups and otherwise participate in political agitation as much as they choose; just that the university's name must remain above the fray to the fullest extent possible.

Erasmussimo

Political umpire has expressed the key idea well: the university's name must remain above the fray to the fullest extent possible. This, I think, is the compelling argument in this debate.

Akio has the answer to the argument that every investment has moral implications: we should rely upon the law to restrain the behavior of corporations. If a corporation openly supports murdering abortionists, as Mr. BAC points out, then we as a society should rely upon the law to remedy the situation, not the various investors in the corporation.

Let's apply this reasoning to the case of Darfur. Suppose that MegaCorp is selling bulldozers to Sudanese customers. We don't like the Sudanese government because it is failing to stop the genocide in Darfur. So some people think that MegaCorp shouldn't sell bulldozers to Sudanese purchasers. But the moral value of this position is debatable. While you can build a decent case that selling bulldozers to Sudanese clients in some distant fashion contributes to the genocide in Darfur, another person can build a decent case that the causal distance between the two acts (selling and genocide) is so great as to be morally insignificant. In other words, you don't have an ironclad case that selling bulldozers to Sudanese clients is immoral.

The uncertainty of the moral claim is what makes an investment policy here so problematic. This is why law is so useful -- it represents a clear and solid moral judgement that an act is wrong. And the absence of such a law indicates the absence of a clear moral conclusion to be drawn.

I am most certainly NOT arguing that "anything that's legal is right". Legality is a small subset of morality, and I expect individuals to constrain their behavior more tightly than the law constrains their behavior. But there remains a huge difference between the private and the public. If we wish to establish public standards of morality, we must properly take into account alternative moral judgements. If a solid majority of people think that investment in Sudan is wrong, then we can pass a law to that effect. In the absence of such a broadly shared sentiment, we are on thin ice insisting upon our own personal values.

BAC

What "fray" is the University staying above on the Darfur issue, Ump?

There is no debating that the Sudanese government has committed grotesque atrocities against innocent civilians. The only viable debate is whether to turn a blind eye and earn a quick return from your stock in a Chinese oil company in bed with the killers, or whether to act responsibly and divest.

BAC

Eras,

Divestment is the responsible course even if you don't have an "ironclad" argument that investment supports the Darfur genocide.

Divestment alone is a statement against the Darfur genocide. Like wearing a yellow bracelet or pink ribbon, it is a form of speech that promotes a desired, and unambiguously good, outcome.

LAK

After reading this, I can be nothing but ashamed of my generation for not doing more to protest a senseless war fought for the benefit of the military industrial complex and little else. The President takes us to war based on lies and material misrepresentations, he spends billions on waging war, he cuts funding for such social programs as providing food for the least well off, and nobody of my generation seems to care a bit, so long as American Idol is on TV. Maybe we shoudl reinstate the draft. Something needs to be done to make people care again what their government is doing on their behalf.

Frederick Hamilton

LAK,
You point out the right wing military industrial complex. I point out the hypocrisy of not doing the right thing regarding military recruiters at the Chicago law school because of money. What's the difference? Right wing money grubbing or left wing money grubbing. Universities money grub with the best of them. Look at their pandering to athletes. There was a time Chicago under President Hutchins didn't money grub, but those days are gone. If it weren't for the money they would reject the discriminatory military recruiters, wouldn't they?

Both right and left are in it for the money. The last of the purists are you and I, well at least you.

Interestingly, with both sides in it only for the money, this shameful experience called American democracy, gives the average Joe Sixpack his best chance of getting some "of the money". Not much to be sure, but more than available elsewhere. Strange isn't it. Weird in a way. Liberals waffle for the money. Conservatives waffle for the money. If creative and willing to try to excel, Joe Sixpack can get his hands on some of the money. Go figure.

LAK

F,

Not sure what your point is. As Chicagoans, we do cost benefits analyses. Allowing recruiters on campus is not a big deal given the money that flows. AT least there is a benefit there to the school.

I'm not sure whatthe benefit of this war has been to the rest of us.

And Frederick, I'm no fan of Dems, as they are of the wealthy, for the wealthy - but they are no where near as evil as Republicans. Let's not pretend they are. They at least temper their representation of Dem special interests with some social conscience. The same can't be said for Republicans who support the interests of those who arm the world and whoa re indirectly responsible for much of the bloodshed on this planet, including that of our own troops.
There are degrees Frederick, degrees of moral degredation.

ANyway, my point was just how much more involved Professor Stone's generation was, yet how much more awful thsi war is, yet our gnereation does nothing, even passively submits to a bunch of idiot boomers who voted for Bush again.

Political umpire

Hello BAC,

Agree Sudan is an awful situation. But if UC is to 'take a stand' there vis a vis companies, why not other companies and countries? If so, a comprehensive list of both is required, please.

BAC

I'm afraid you'll have to explain that one to me, Ump. Why does the University need a comprehensive list of potential divestments to decide whether divesting its Sudan holdings is appropriate?

Are you really saying that if the school can't (or won't) divest in all countries that endorse genocide, then it shouldn't divest in any country that endorses genocide?

Frederick Hamilton

LAK,
I get it. Just do a cost benefit analysis and then decide whether the cost outweights the moral decision in question. I like it. I always knew there was a better way the left did their moralizing. Cost benefit. And the Dems have some social conscience and the Repubs none. That sounds about right.

Yes, and I like the degrees of moral degredation. Dems have a lower degree of moral degredation than Repubs.

If only I could think and write like a liberal/Dem/lawyer/law school professor. Your ethics are so good. Yep. Keep going. The Chicago law school stench is only mild compared to the DOD stench. Makes sense to me.

You guys spew so much bullshit it is a wonder any lawyer can think straight.

Dems less degenerate. Repubs more so. Alice in Wonderland. Surreal arguments. Must be at a law school. Keep taking the federal money and keep the discriminating recruiters coming. No exceptions as Stone says there should be. Just a bunch of lawyers taking money. Sounds about right.

And Bush is the only sicko right? Why doesn't Chicago grow a set of balls and kick out the recruiters if you think the DOD, Bush and the military are evil? Money, that is why not. Cost Benefit. Don't talk morality. It rings hollow.

LAK

F,

Don't ask don't tell is hardly overt discrimination, it's just not open acceptance. I wouldn't get your panties all in a bunch over it. Some close calls can easily be resolved by simple cost benefit analysis, as was the case here. That's not to say all should, but your anger at the law school over it seems misplaced. Letting them on campus to interview is hardly a big moral lapse. I'm confused why you are so bent out of shape over it.

bcowan

Re-reading the Kalven Report, I see that George Stigler disagreed with the rest of the Committee as to whether there could ever be instances in which the University should seriously consider the consequences of its corporate activities' incompatibility with paramount social interests.

The majority, with due humility I thought, left a small window open for "exceptional instances" in which such deliberations might properly be undertaken. Stigler's recommendation for the only test was that the University conduct its affairs with "honor," by which I guess he meant it should not engage in outright misconduct. Admittedly a more definitive, though not as difficult a test.

I prefer the majority's formulation, notwithstanding that it is less a "bright line" than the other. The majority's is the more realistic and more interesting because it reflects the cumulative, successive, recursive, fallibilistic character of institutions' adventures in the world.

The majority seem to expect that at least there ought to be a debate, with all the slippery conceptualizing and passionate exchanges that occur when paramount social values are in question; that past instances of similar experiences should be scoured (as the Kalven committee did) for factors relevant to the present crisis; and that, for all that, there will very likely not emerge an apodictic answer that satisfies all or, possibly, anyone; that whatever is the result of the process, it will have created something new, appreciating the riches of a cherished tradition and adding to them.

Compared to the majority view, Stigler's confidence in asserting that the University simply must rule out any relevance of moral and political factors from its corporate decisionmaking looks both naive and smug, not to mention a bit disrespectful of what has gone before.

But in deeper retrospect his minority report paragraph reveals itself as a relic of the Chicago School's first rush to glory, when only he and a few other initiates recognized the true omnipotence of price theory, and that it was about to conquer the world.

I understand that that Chicagoist effort to neaten everything up is now widely recognized to have had its best days. I am glad in this respect, as well as others, to have lived long enough to see it.

Sarah L.

There seem to be two separate issues (at least in the comments): whether the university should financially support corporations that are engaged in bad actions, and whether the university should use its institutional weight to condemn bad actions. Here are some possible actions the university could take:

(1) Retain all current investments.
(2) Choose which investments to retain and which not to retain based purely on financial concerns.
(3) Choose which investments to retain based at least partially on moral concerns, but do not reveal the morality-based divestments to outside parties.
(4) Divest, and reveal divestment and the reason for divesting.
(5) The university happens not to have any stock in companies that do business in Darfur, and it makes a public announcement: "As it happens, we don't currently have any stock in companies that do business in Darfur, so we can't divest, but what is happening in Darfur is terrible."

The university doesn't do (1), and that's not what the Kalven report requires, obviously (the university presumably moves its investments around all the time; there's nothing magical about its current portfolio). The university also doesn't do (4) or (5), which seem to be clearly barred by the Kalven report.

But what about (3)? Does the Kalven report distinguish between (3) and (4)? Would those demanding divestiture be satisfied with (3) (i.e., the university divests but keeps it secret)? If the university had, by chance, no investments in Darfur, would those now demanding divestiture be unsatisfied unless the university made a statement along the lines of (5)?

Political Umpire

Sarah L does a fine analysis. My point to BAC was along the lines of the final paragraph of the original post. I'm not suggesting this is straightforward. If this was 1940, I imagine most would have an axe to grind with any institution that knowingly purchased stock in a German armaments manufacturing company (I'd hope so, anyway). What to do with existing stock in that situation would also be tricky. Keep it, and reap the benefits of Hitler's invasion of France? Sell it, and pocket 30 pieces of silver but at least rid yourself of the moral stain? Keep it, but donate profits to refugee charities in Europe? All but the first option might be inconsistent with the duties of the trustees responsible for managing university funds.

I must admit I don't have a hard and fast view on it. No-one wants to be seen to be trading in blood-stained stock, but at the same time how does one set out rules for ethical investment? Much of the world's oil derives from corrupt regimes in the Middle East, or the former Soviet Union. The latter has for years been commiting atrocities in Chechenya. Russian oil oligarchs live in staggering wealth in London leaving their workers to stagger on in dire conditions back home. Should the University refuse to deal with any of these, or with say Zimbabwe?

There are therefore the following problems: (i) identifying how bad a regime has to be before refusing to deal in stock of companies who trade with it; (ii) how to reconcile the University's position as an apolitical forum of academic advancement with its desire not to be seen to be profiting from the likes of the Sudanese government.

Frederick Hamilton

LAK,
I am not. Actually I felt the FAIR side was wrong. Just trying to point out the hypocrisy of the argument by the law schools.

Roach

I think that universities should make all their investment decisions on the basis of the rate of return. It otherwise gets too messy. Do you invest in oppressive theocracies like Saudi Arabia? Repressive communist regimes like China? Demagogues like Hugo Chavez? Euthanasizing Norweigans?

Every issue could yield reasonable disagreements, even if this particular case is pretty clear cut.

I do believe, however, nations and political entities should make these decisions. I've always thought cases like Burma's Junta or Sudan's oppression of minorities and Christians are kind of fun little playthings for most people. To divest from Darfur or Sudan is not that big of a deal. On the other hand, one of the real major human rights abusers of our time is China, whether in the form of religious discrimination, its extravagent use of the death penalty, or its disregard for liberal rights like free speech and property. (It's interesting Professor Stone's narcissistic trip down memory lane did not mention his, the SDS's and other far-left students' support for communism in the course of their opposition to the Vietnam War.) But there's no way the university or anyone else is divesting from China because it's such a big player and far too lucrative for companies and investors.

LAK

Ah Frederick, now I understand. You just weren't doing a very good job of it. No hypocrisy here buddy, but your strain to find some is revealing though. Were you drunk yesterday?

Frederick Hamilton

LAK, stone sober. Just trying in a feeble way to point out that law professors, law schools, medical schools and universities first pursue what is in their economic best interest before they apply their "strongly felt" moral beliefs. That's all. You never want doing what is right to keep you from the money. aka Jerry Maguire....show me the money.

LAK

Well that is clearly not always true is it now? First of all, you are wrongly attributing one position to the whole of the law school which is ridiculous. Collective action issues, especially with respect to political and ethical decisions requires more nuanced thinking before you start throwing hyposcrisy around. Secondly, attempting to have a policy with respect to those who discriminate on the basis of sex race age or sexual orientation is clearly not the same thing as having a policy about having investments in war torn countries. And what is wrong with considering the financial impact of certain decisions one might make for ethical or political reasons?

I'm not sure I see the problem with the school not wanting to give up federal funds just not to allow recruiters on campus who passively discriminate against homosexuals.

You are trying way too hard to find hypocrisy where there is none. I wonder why.

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