Hunger Striking for Socially Responsible Capitalism

Members of Students for a Democratic Society at the University of Florida are on a hunger strike, but this is not your parents' SDS (or yours, depending on your generational perspective). For those not steeped in the lore of 1960s' leftist activism, SDS was the linchpin of the 1960s student movement, whose political vision was emblematic of the New Left's commitment to participatory democracy. SDS members sat-in against the war in Vietnam, engaged in large scale non-violent disobedience, and advocated for civil rights.

The SDS members at the University of Florida are clearly a bit more savvy than their parents were about global capital markets. They are on a hunger strike to demand that the University implement a socially responsible investing policy to govern its 1.2 billion dollar endowment.

Their initial demand is simple, and, it would seem, non-controversial: they have asked the University to implement a policy of investment transparency so that students, faculty, alumni, and other members of the University community can educate themselves about the university's investment holdings. According to SDS hunger strikers, the university has stonewalled their requests for almost a year. University officials claim that transparency would jeopardize financial returns, but substantial experience with disclosure in the financial markets demonstrates that this is simply untrue.

At the core of the students' demand is the notion that investors are ultimately responsible for the practices of the companies in which they are invested. If profits are being made by violating human rights or international environmental norms, then investors are morally obligated to do something about it, since the investors are the ultimate beneficiaries.

Socially Responsible Investing, also known as Ethical, Social, and Governance (ESG) investing, can take a number of forms. The practice of selecting stocks based on ESG criteria -- called social screening -- is already well-established. More than $1.7 trillion dollars are currently managed under some sort of social screen. This is an obvious and effective way of avoiding investments that inflict social and environmental harms.

However, ESG investing does not require that an investor pick and choose investments based on social criteria. For large institutional investors like the University of Florida, a policy of shareholder advocacy is likely to be far more effective in actually changing the practices of the companies in which the university is invested. Shareholder advocacy requires that shareholders pay attention to reports of a company's wrongdoing, and then file a shareholder resolution, or vote in favor of a resolution filed by another shareholder, calling upon the company to change its business practices.

Over 80% of student voters in a recent University of Florida student government referendum supported the adoption of a socially responsible investing policy. Until the University of Florida heeds this morally unambiguous clarion call, 11 SDSers will be hunger striking.

Contact information for University of Florida President Bernie Machen:
Phone: [phone]
Fax: [phone]
Email: [e-mail]

Comments

[glitzqueen]

I'm glad the kids are passionate enough to take action, but hunger-striking seems out of all proportion in this case. What option does it leave them for protesting something more serious, except self-immolation?

[Thermodynamics]

Back in November the University of Florida paid the recently unemployed Bush Attorney General, Alberto Gonzales, $30,000 for a speaking engagement.

Maybe the kids are worried about how the U of F is spending its money.

http://www.nytimes.com/2008/04/13/washington/13gonzales.html?hp

[Thermodynamics]

We are talking about a public institution here. Its investment positions should be open to public scrutiny. This has further ramifications.

Recently the State Board of Administration fund, which is where FL counties put billions of short term funds, simply lost several billion in the subprime mess. Some counties got wind of the mess and got their money out in time but then the State Board of Administration froze the fund and the remaining counties have had to borrow money to operate, pay teachers and county workers. One problem with the fund was tied to bad subprime loan packages purchased through buddies of Jeb Bush back when he was governor. I think the buddies were at Lehman Bros.

In the last decade Florida has acquired some serious third-world, banana republic political attributes. Katherine Harris, Caging Lists, Stolen Election..........

[SamThornton]

Looks like moral corruption is not solely confined to Florida politics. That it pervades even their so-called institutions of higher learning should probably come as no surprise. Without taking the trouble to fully investigate it, here are the current Members of the Board of Governors with any record of political contributions in national elections, according to HuffPost's Fundrace2008:

Carolyn Roberts, Chair - G.W. Bush $2,000, John McCain $2,300
Sheila Mcdevitt, Vice-Chair - Fred Thompson $2,300, Rudy Giuliani $2,300, Mitt Romney $2,300
John Dasburg - RNC $50,000, G.W. Bush $2,000, John McCain $2,300
Ann Duncan - Mitt Romney $2,300
J. Stanley Marshall - founder of conservative think tank, the James Madison Institute
Gus Stravros - Rudy Giuliani $1,000
John Temple - Rudy Giuliani $500, John McCain $2,300
Zachariah P. Zachariah - Fred Thompson $2,300, George W. Bush's $100,000 Club

Anyone see a pattern here?

[January]

Bravo for Florida U SDS. May they live long and prosper. And may they be more savy than the originators of their name, whose savyness was not too shabby. (Too old to be a member, but I marched with them frequently.)

I became a recycler 30 years ago, and I read today that I am doing no one but myself any good. We have committed ourselves to a world disaster that makes carbon caps and more mpg just whistling past the graveyard. (See "Rolling Stone" magazine 10-17-07) So I am being selfish by continuing to recycle. I guess I'll just have to live with that.

[moderationsmuse]

Sounds like it's their intellectual nutrition rather than their corporeal nutrition that ought to concern parents. If these students find their university not to their liking, why don't they get their education elsewhere? Their grandstanding is morally bankrupt.