William G. Bowen is president emeritus of Princeton University and the Andrew W. Mellon Foundation.
Campaigns urging colleges and universities to divest stock holdings are again on the rise, focused today more often than not on holdings in fossil fuel companies. Many of the arguments against divestment as a general tactic are by now well known. They include practical ones, such as the difficulty of divesting fully when portfolios contain index funds, hedge funds and other complex instruments; concerns about adverse effects on the ability of endowments to support education and research as fully as they could if they were unconstrained; and doubts about the effectiveness of divestment in bringing about changes (which are often unspecified) in corporate practice. In general, I find these objections persuasive, though they need to be tested and debated in each situation.
One argument in favor of divestment that I find entirely unpersuasive is the claim that a university is obligated to take a stand on any issue of broad social import that individuals — including, not infrequently, the president of a university acting in citizen mode! — regard as highly consequential. This is nonsense. To abstain is both a legitimate and appropriate action when the issue is not central to an institution’s educational mission. Universities need to keep control over their agendas and decide for themselves when it is appropriate to take a position. An issue such as affirmative action — which directly affects educational processes and outcomes — has a very different claim on academia than does the conflict between the Israelis and the Palestinians.
Taking an institutional stand on political issues of many kinds threatens the primary educational mission of the university, which is to be avowedly open to arguments of every kind and to avoid giving priority to partisan or other political viewpoints. The university should be the home of the critic — indeed, the home of critics of many different persuasions — not the critic itself.
But my main quarrel with current debates over divestment is that they pay too little attention, if any attention at all, to what I regard as the insidious moral perils of divestment. There is, first of all, the sometime hypocrisy of seeking institutional “purity” while failing individually to reduce consumption of fossil fuels or, for a faculty member, to divest one’s personal stake in investment vehicles, including index funds, that contain questionable holdings.
Second, with regard to endowments, there is the question of an institution’s obligation, seen as a matter of trust, to honor the intent of donors — many of whom surely gave money to endow specific activities, such as scholarships, believing that the institution would seek to earn as large a return as it prudently could.
Third, there is the very real danger that, as Macalester College President Brian Rosenberg has explained so well, joining the crowd in pushing for an institutional position on issues such as fossil fuels is too easy; it can tempt individuals to substitute such “easy” actions for their responsibility to act as citizens in pursuing more difficult courses of action, including working tirelessly in the political process. Of course, one can do both, but one wonders how often that happens.
Finally, these are times when educational institutions need to work harder, in my view, to improve educational outcomes, especially for less-privileged students. A related obligation is to seek new ways of controlling educational costs to address affordability issues that will not be solved, I suspect, by increased governmental support. At the institutional level, there are only so many dollars to spend, and only so many hours in the day to work on issues of consequence. Well-intentioned but poorly conceived efforts to compel colleges and universities to fight extramural battles of all kinds can impair efforts to work harder on issues of great social as well as educational consequence that are at the core of the basic educational mission of higher education. Such trade-offs receive too little — and sometimes no — consideration. And there is a slippery slope to be considered — divesting for one purpose can make it harder for the institution to resist other calls to use divestment as a political tactic.
Searching for answers to the question of how to make one’s greatest contribution to the common good is anything but easy, for institutions or for individuals. But it should be at the forefront of our thinking — not an afterthought.