The fact that so many hand-wringing leftists demonize American success stories like Walmart (WMT) should come as no surprise, because the left believes there cannot be success without someone suffering as a result.
That’s just not true, and anti-capitalists often point to companies that should behave more “morally.”
The result of this mind-set was the creation many years ago of “socially responsible investing,” or SRI, which I place one level below the notion of “social justice.” Playwright David Mamet refers to the latter as inflicting pain on one party for the benefit of another. Socially responsible investing is what I refer to as inflicting the pain of below-market returns on foolish investors.
SRI is a sales gimmick, designed to appeal to those suffering the guilty pangs of success who want to pay penance for their involvement in capitalism, and invest their ill-gotten gains in something that is “good for the community.”
Unfortunately, those following this train of thought are doing the equivalent of running through a minefield of fallacies while wearing clown shoes. So I’m going to detonate a few of those fallacy bombs.
SRI Fallacy Bomb No. 1
Somewhere along the chain of manufacturing or distribution of a socially responsible investment, something immoral is going down.
One or more of the workers is a convicted felon, or worse. One of the tools hidden away in some robot in the factory was manufactured by child slave labor. The company is unquestionably using fossil fuels. Some widget in the final product is purchased from a country on the (fill in the blank world watchdog) agency’s list of countries with human rights violations. The floor manager is a homophobe/racist/sexist. The district manager kicks puppies.
My favorite example: diamonds. In the 1990s, there were horrific civil wars in West Africa in which crazy people were fighting over diamond mines. Butchers and maniacs were digging up diamonds, and they were sold into the public’s hands. These were called “blood diamonds” or “conflict diamonds.”
Oh sure, there was all this talk about how government verification processes were put in place to identify conflict diamonds. The truth is there was no way of telling what was or wasn’t a conflict diamond. Many of them are on the fingers of Western women. Zillions of others are used in drill bits by countless companies.
So, what … are you going to boycott the companies that use diamonds in their drills? What about products created from the drill bits? What if those products get placed inside other products?
There is an infinite number of elements that socially responsible investing funds have no knowledge of, and by extension, neither do you. So in some way, every time, you aren’t being totally socially responsible, and neither is the SRI fund.
But I guess it’s OK if you don’t know about it, right?
SRI Fallacy Bomb No. 2
What makes a company “socially responsible,” anyway? Whose definition are we using? What exact line has to get crossed for the SRI label to apply?
See, any standard set is, by its very nature, going to be arbitrary.