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There are tons of economic analyses that show that these kinds of boycotts or divestment efforts (usually driven by naive university students) rarely cause any
by supernova87a 7y ago
There are tons of economic analyses that show that these kinds of boycotts or divestment efforts (usually driven by naive university students) rarely cause any noticeable change in policies or operations at the targeted companies.
What is usually happening is that other technological or consumer behavior is already leading to the decrease in business of some industry, and the divestment push happens simultaneously (because of people's awareness) and is merely a symptom of their final decline.
Take South Africa in the 80s, or the ridiculous grape boycott of the 90s, etc. None of those symbolic acts led to actual changes happening -- those were all consumer or political changes already in flight.
People create much more effect by voting with their dollars than by symbolically calling for divestment. It usually turns out that there is someone willing to take your place as a buyer when you choose to divest. It's only through fundamental change in demand or supply that a business is affected. Stop believing in the effectiveness of the feel-good boycotts. Even Blackrock won't make a difference.
- dpflan 7y agoYes, well said. Government enforced constraints can foster economic culture shifts too.
- HoraceSchemer 7y agoTo build on this, I found this New Yorker article interesting in explaining the underlying mechanism of why divestment is arguably not as useful unless certain other conditions are met: https://www.newyorker.com/business/currency/does-divestment-work https://www.newyorker.com/business/currency/does-divestment-...
- gersh 7y agoThis isn't simply a divestment campaign. This is one of the largest shareholder telling the companies to change their practices. There was a business group that played a major role in negotiating the end of apartheid in South Africa (see https://law.yale.edu/sites/default/files/area/center/privatelaw/document/makgetla_shapiro._business_south_african_transition.pdf https://law.yale.edu/sites/default/files/area/center/private...).
- supernova87a 7y agoSo, big shareholder tells coal companies to change their ways, or what? Blackrock will sell its shares? Hard to believe. And even if it sells its shares, someone has to buy them -- perhaps at a slightly lower price if they dump a lot at once. But what change has it produced?