What has "Ethical Investment" to do with Ethics? continued
		Can products be morally good or evil? Professor Kenneth Minogue notes that the term "ethics" is a rhetorical blockbuster referring to forms of conduct which are unambiguously good and bad: the rejection of criminality. Lying, betrayal, exploitation, and other types of behaviour (whose concrete forms may be much more ambiguous than their abstract description). "'Ethical investment seems little concerned with these things, which are in any case the forms of conduct which could not be caught in the questionnaire nets with which professional ethical investors trawl for iniquities.'" However, '"ethical investment seems to be concerned with such things as smoking, drinking alcohol, trading in arms--things which are disapproved of by specific moral attitudes--Puritanism, perhaps, and pacifism, but whose moral character is controversial. Since about 35 per cent of the population smokes, one imagines they would not regard dealing in tobacco as particularly immoral. 'In any case, the target is abstract, in the sense that making or trading in arms may be judged good or bad according to who gets the arms and how they are used. In other words, the indicators, the criteria of judging, used by the ethical investors are deficient.' One of the major deficiencies is the reduction of complex or controversial moral issues to good/bad product lists. As mentioned above. a lot, not all, but a lot of EI depends on such product-based lists. There are ethical traditions, perhaps dominant ethical traditions, which would find this strange. For instance, a dominant Christian tradition sees products or creatures as not good or bad. The morals come in according to how man uses them. Are they used in accordance with God's wish for his people? In which case that is a right use of creatures. Or against it? In which case it is wrong. The product itself, whether natural or man-made has no moral quality. Morality depends on free will, choice, intention, and foreknowledge. Products have none of these things. Of course their makers may have such intentions. There may be products made in such a way that only one use is likely and that immoral. Pornography may be such a case. But even then it is only likely. And most other products have multiple uses, some of which are good and some bad. Moreover it is the user who decides such use not the maker. It is the buyer, the user, who has intention, foreknowledge, and the other conditions of moral action. A producer could collude in immoral use with a user but that would have to be established in individual cases. It does not follow from immoral use of a product that the producer or the production is immoral. The case of armaments Consider the case of armaments. at first sight one of the likelier candidates for the category "'unethical product'". Yet Gerald Frost, former Director of the Institute for European Defense and Strategic Studies, shows what a second look reveals. "'Almost invariably the lists compiled by those who seek to influence the flow of investment funds according to ethical criteria include the names of defense equipment manufacturers. The argument is seemingly plausible and straightforward: killing is to be deplored and, since modern weaponry is immensely destructive, it is wrong to invest in its production. In passing it is worth noticing the evident distaste for material gain when it is derived from arms production. With the triumph of the market economy over its socialist rivals, profit may have undergone a partial rehabilitation, but residual hostility is still capable of inflaming the puritan conscience when it comes to the business of making and selling arms. '"There is also evidence of particular repugnance towards the idea of profit from sale to Third World states--among the principal customers of Western arms manufacturers. Such attitudes also contain elements of condescension since they assume a superior knowledge of the purchasers' security needs than that of the purchasers themselves." 'In reality, Third World leaders have every reason to take threats to their security seriously, (although not alone in this respect), and very little reason to put their faith in the UN or in other varieties of international diplomacy to preserve the peace. Since 1945 there have been more than 200 wars world-wide, the vast majority involving Third World states, (some, such as the so-called "soccer wars'' between Honduras and E1 Salvador over seemingly trivial matters like the result of a football match). Moreover, with the end of the Cold War, the former super powers no longer have the same incentive to contain the worsening regional conflicts, because the possibility that these might escalate into all-embracing conflicts eventually involving the use of nuclear weapons has greatly diminished. The consequence, however, may be an even more violent and tumultuous future for many in the Third World. Those who wish either to restrict or ban the arms trade should also reflect on the growing danger of full-scale anarchy, with its attendant risks of famine, epidemic, and economic dis-development if no dominant group or faction is able to impose its will by force, a condition into which a large part of Africa, most notably Somalia, Liberia, Angola, and Rwanda have lapsed during the last decade. 'Third World states desperately need order and stability as a condition of development, but these are immensely difficult to establish. Sound defenses are a necessary but far from sufficient condition of order: perceived weakness quickly brings on aggression more rapidly there than elsewhere. The distinguishing characteristic of the "ethical investor'', we are told, lies in his determination to direct his investment to "socially responsible" purposes. What could be more "socially responsible" than to help provide the means by which the people of an African state might help raise themselves from a state of immiseration and anarchy? 'What matters crucially is not the number or destructive power of the weapons that flow to the Third World, but who has them and what they intend doing with them. Weapons may be required to launch an attack or to deter it; to undermine a military balance of power, or to preserve it; as the means of blackmail or coercion, or to enhance stability. These are matters about which Western governments must take a view when shaping policy and when considering weapons export licenses; they lie wholly beyond the knowledge and competence of investors, and it would be fanciful to suppose that investment flows could be fine-tuned in such a way as to permit the use of weapons for morally defensible purposes, but not for obviously unethical ones. 'Those seeking support for their campaign to divert investment away from the arms producers often concentrate on the destructive power of the weapons being produced. In doing so they frequently overlook that many are "cleaner" and more discriminate in their effects than earlier generations of weapons. But far more erroneously they imply that the acquisition of arms is in itself a threat to stability. In the minds and rhetoric of the disarmers the weapons come to acquire a volition of their own. This attitude is best exemplified by the assertion that war becomes inevitable because of an arms race, a claim made frequently during the Cold War, and sometimes repeated in relation to contemporary situations. Arms races can never cause wars in the sense implied: they are essentially a reflection of underlying political conflicts and they are unlikely to abate or vary until those conflicts abate or take on a new form. 'The "ethical investor" takes for granted that a war in which modern weaponry is used will be more destructive than one in which primitive weapons are involved. It is an assumption which is not totally borne out by experience; both the Falklands and Gulf War, which involved modern high-tech weaponry, were relatively brief and casualties amounted to a comparatively small proportion of the forces involved. In more primitive struggles the killing takes place when, having routed its enemies, one side chases and catches the other. In such instances those slaughtered may represent a very high proportion of those engaged in the conflict. 'The ethical investor appears to be on strongest ground when objecting to the flow of arms to those states with questionable human rights records and brutal methods of quashing internal dissent. But even here there is no simple panacea save sound political judgment about extremely difficult and complex circumstances. Few imagined that the hated and vicious regime of Milton Obote, from whom the West gradually withdrew support, could be replaced by something yet more hideous, but Idi Amin demonstrated the naiveté of that assumption. 'Thus, one of the characteristics of the "ethical investor" is his indifference to arguments about where his schemes will lead. Indeed he seems so confident in the purity of his own motives that he is blind to the possible outcome. The pacifist generally admits that the negative consequences which may flow from refusing to carry or use arms may outweigh the good, and that in adhering strictly to an absolute moral principle--thou shalt not kill--he may even harm those for whom he cares. In contrast to the thorough-going pacifist, the "ethical investor" displays no such humility. Moreover, whereas the pacifist can clearly state the principle on which his acts are based, it is impossible to identify any coherent rule or principle on which the ethical investor may base his. The difference between those who accept the inevitability of arms production and sales--subject to the safeguards deemed necessary by democratic governments--and those who wish to starve the defense manufacturers of investment, is not therefore one of ethics at all, but one of calculation and politics. 'Like others, the "ethical investor's" belief in peace and stability is genuine, although his calculation about how these are to be achieved is different. But the difference is not merely one of calculation either. In seeking to restrict investment in armaments he sets out his case for a new international system, one in which the West would be weaker, (because less well-armed and less influential), and one in which greater emphasis would be given to the UN in seeking to resolve conflict and encourage international co-operation. This is essentially a political view--every bit as political as that of those who argue for strong defenses and the maintenance of strong military alliances. If the "ethical investor" were not swayed by politics it is difficult to believe that his calculations about how to achieve peace, stability and other good things would be so obviously flawed.' Ethical investment as pre-empting true moral argument These considerations that the ethical investment industry may even be acting against ethical understanding and the cultivation of refined moral judgment by its simplistic categories are expanded upon by Professor Roger Scruton. 'For the most part "ethical" is another name for fashionable causes, and a way of pre-empting complex moral arguments in favour of a particular foregone conclusion. There is a real ethical question. For example, about the use of animals in testing pharmaceutical products. Are we to test these products on human beings? Use them without testing? Give up pharmaceutical research altogether? Would those who oppose investment in these areas refuse drugs tested on animals when, without them, they will not recover from a serious illness? To assume that this complex ethical issue can be brought to a conclusion, simply by refusing to invest in firms which test drugs on animals, is to adopt a frivolous and self-indulgent response to a real moral problem--and that itself is immoral. 'The same considerations apply, of course, to nuclear power. Those who care for the environment cannot, surely, wish for a return to coal power, or the kind of mad hydro-electric project which led to the Aswan dam, from which environmental catastrophe Egypt will never recover. The desire to short-circuit moral, (and in this case pragmatic), argument might be seen as the sign that someone is trying to reach moral conclusions without doing adequate moral analysis. 'The attack on tobacco products is another matter altogether. It seems to be now the established view that people do not have the right voluntarily to engage in practices which shorten their lives, even though their lives are for the most part far too long, and the real cause of our environmental problems. Smoking, it seems, is the greatest of all immoralities for modern people--in comparison with which adultery, deception, sponging off others, and sinking into sloth and moroseness in front of a television are rewarded as mere peccadilloes. A wholly new morality is emerging, in which you guarantee your purity of heart simply by controlling the substances that enter your body. If this is a serious moral viewpoint-- and I suppose it is--then it becomes possible sincerely to believe that investment in tobacco, wine or whatever is sinful. Nothing can be said in response to this, except that it is difficult to see the point of human life, when its virtues and vices are conceived in this grim physiological way. 'On the other hand, there are serious ethical flaws mixed in with the fashionable frivolities. There is no doubt in my mind that we all have a duty to oppose tyranny and oppression if we can. But again the question is extremely complex. Some argue that investments in countries with such regimes further the cause of oppression, others that they lighten the burden for the oppressed. Surely it depends on the nature of the investment, the degree of control exerted over it, and the ability of a firm to provide better conditions for its work-force. I suspect that anyone who really cares about these matters would not hand over his money to an investment agency which simply applied mechanical criteria, but would want to examine each case on its merits. 'Another serious ethical view that surfaces in the agenda of the Ethical Investment industry is the hostility to pornography. Here is an activity which is clearly immoral--unlike smoking--and in which it is therefore wrong to invest. Of course there are moral arguments on the other side --concerning the utility of pornography in releasing tension, etc. But they are both shallow in themselves, and in any case tend only to the conclusion that the evil of pornography is offset by a greater good. It is interesting that this real example of moral judgment should have got mixed up with the fashionable knee-jerk politics that is involved in the other cases mentioned. 'There are also causes which are supported which seem to me to be downright immoral. For example, the assault on the fur trade, and the refusal to invest in it. This is a deliberate attack on the livelihood of innocent people--indeed on whole societies--who have achieved through their activities, a balance with the animal kingdom that urban people could never simulate. The fur trade, properly conducted, is no more cruel than the meat trade or the trade in pets. It also makes a great contribution to the protection of wild life, since for the most part furs are the furs of wild animals, and a person who lives from them will therefore do his best to protect the habitats that produce them. To bring this trade deliberately to an end is, I think, an outrageous assault on innocent people and on the environment. 'The meat trade too is condemned by many of the brochures: presumably because of battery farms. But again--without investment, how are we to improve the conditions in which animals are reared? And if we do not eat meat, will they be reared at all? The only coherent moral view here is one that obliges us to eat meat. and obliges us also to take the production of meat seriously, and to ensure that animals raised for our consumption have a decent life.' Previous... Continued... Table of Contents || The Contributors Appendices || About the Social Affairs Unit
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