North Macedonia (Brussels Morning Newspaper), Students in dozens of campuses in the USA are calling on their universities and colleges to divest from Israel and Israeli companies owing to the “genocide” it is allegedly perpetrating in Gaza.
It is not the first time that Israel has been subjected to such censure.
The Arab League boycott of Israel forced many multinationals to divest (disinvest) from it over the first few decades of its existence.
According to the Encyclopedia Britannica, “In 2004 the General Assembly (governing body) of the Presbyterian Church (U.S.A.) approved selective divestment from corporations doing business with Israel out of objection to the country’s perceived violation of the human rights of Palestinians. In 2014 the General Assembly voted in favour of divesting from three major U.S. corporations that conducted business in Israel.”
Countries such as South Africa, Myanmar (Burma), and Sudan have also felt the brunt of divestment. So did certain sectors, most notably the tobacco and fossil fuels industries.
But times are different now, two or three decades later. While there is an increased awareness of the social and ethical responsibility of businesses and institutions as well as a proliferation of ESG (Environmental, Social, and Governance) investment funds – several other transformations have rendered divestment practically impossible.
First: endowment managers have a fiduciary duty to maximize returns. They have no other obligation under the law. ROI trumps values, ethics, morality, and politics. It is a criminal offense to behave otherwise.
Second: most higher education endowments are invested in mutual funds, index funds, and other investment vehicles that make it impossible to opt out of specific securities on whatever grounds.
Third: there is no consensus on values. People are polarized and radicalized. Someone’s beliefs and convictions are always offensive to others or at best, arguable and relative. To expect universities or corporations to serve as axiological arbiters is impractical.
Divestment is a potent form of geopolitical virtue signaling against pariah states. It has minimal economic effects. But, the mere demand to impose it on a rogue polity bears grave implications.
So, even if the students were to fail in their mission, the harm has been done to Israel’s reputation, capacity to conduct business, to engage in academic and scientific exchanges, and to participate in international events and affairs.
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