Student calls for university divestment won’t help their cause
I’ve been watching the current university student protests in my own city and across the country. Their main demand now is university endowments divest from companies that support arms sales. Even if universities could meet this demand today, it will not meet the goals of the student protesters. Here’s why and here’s what the students could do instead if divestment is their goal.
Why university divestment won’t work
University endowments largely invest in funds. Funds are made up of investments in many different companies. The mix of companies in a fund is not controlled by the university. The mix of companies in a fund is controlled by a fund manager at the financial institution the company has contracted to invest their endowment money.
Yes, the university could look for funds that meet the student demands. They may not exist, but the university could look. If funds that meet the student demands don’t exist at the financial firm that invests the endowment for the university, the university could look for a different financial firm. Another firm may not be able to do any better than their current firm, but the university could look.
Even if the university could find funds or a financial firm that meets the student demands today, the mix of companies in any fund are dynamic. The fund manager can change them at any time (and they do). So while a fund might meet the student demands today, it may not meet their demands tomorrow. Demanding immediate university divestment could be a short-term fix. It’s possible there are funds and firms that commit to never investing in arms companies, though they may invest in companies that have other problematic issues (i.e., investing in fossil fuel companies).
If divestment is really a goal the students want to achieve, they could do the following:
- Protest directly against the companies that support arms sales, not the university.
- Protest directly against the fund managers and financial institutions that invest in companies that support arms sales.
That’s it. Those are the only two options I see to get to the root cause of the issue and achieve their goal of divestment. They could also change their goal to be more unifying, for example freeing the hostages to bring them home to their families and force Netanyahu to leave Gaza. Greater change happens faster when we build coalitions, not divisions.
I encourage all activists and change makers to have a clear goal, and then identify the root obstacle to achieving that goal. To be successful, focus efforts on removing that root obstacle.
In this case, I also want to be clear that anti-semitism and hate speech against anyone is never to be allowed, tolerated, accepted, or ignored.