Monday, August 4, 1997
Socially Responsible
Funds
by
[email protected]
Beer in hand, cigarette burning in the ashtray, I opened a letter from TIAA-CREF, my very own pension plan for superannuated professors, offering me a free ticket to paradise. I could invest in a socially responsible mutual fund which would make me money without challenging my conscience. The first stocks to be expelled from our financial Eden were alcohol and tobacco producers. The beer spattered on my desk, dousing the cigarette with a disdainful hiss. Imagine my chagrin at being declared socially irresponsible by my own fund. Many professors smoke, almost all of us drink and our students who drove us to these vices often share them. After a round of faculty meetings, Brown-Forman seems quite socially responsible. Perhaps CREF could borrow the name Puritan Fund, using Mencken's definition: "a person who suspects someone, somewhere, is having a good time."
Nicotine is a known anti-depressant, which explains why so many rational adults continue to shorten their lives with it. My Prozac-substitute is produced by A.H. Guinness and remains sanctioned unless I am 20, driving or pregnant. Surely, they both shorten lives, as do abstinence, beef, stress and employment. How do McDonald's and indeed all employers remain off the Index? How did tobacco and alcohol join nuclear weapons, pollution and racism in the Inferno of the 60s generation? When did we stop letting adults "do their own thing?" I understand the notion of screened funds. I do not invest in companies whose success would depress me. What I cannot comprehend, given the probable political predilections of their clients, are the screens they don't use. Thus, they declare companies Kosher solely on the basis of what they do not purvey. If I used my own political views as a screen, I would be limited to drowning in Cherry Garcia and barely rebounding with Stride-Rite.
According to CNBC, the average CEO pay is 222 times that of the average worker, which seems financially and socially irresponsible. Disney is in the CREF portfolio. Sitting comfortably next to Mickey are the censors of Wal-Mart and Blockbuster and Time-Warner, the purveyors of the banned material. Will CREF sell Columbia/HCA or is stealing less offensive than beer? Accused discriminators against women, Home Depot and Morgan Stanley, lie next to Nike and companies that have no women directors. These days I am not certain that Treasury Bills are socially responsible.
Asking an artificial person to be Mother Theresa is somewhat naive. I applaud Burt Morgan of Morgan Fun Shares for investing in tobacco, alcohol, gambling and condoms. Alas, he has recently concluded that vice is so threatened, he must look behind and buy toilet paper stocks (1996 Annual Report); Freud would understand.
I propose to my fellow Aquarians that we take Mr. Morgan's approach one step further. Let us set up a fund called "Swords into Plowshares" or "Robin Hood" and invest in the most disreputable companies that do not get caught -- no ADM or Texaco or Columbia for us. Let them offend our Biblical and social values since we cannot seem to stop them. After we compensate the staff, and the investors are given the rate of Treasury bills, we can take the profits, and they will be prodigious, to finance genuine social change. As Lenin might say when he completes his subterranean whirring, "if you can't beat them, join them and beat them."