Over the past few years, students have raised concerns about an array of Yale’s financial investments. Without fail, those dubious toward each of these criticisms have invoked a popular myth: that in the 1980s, Yale’s leaders moved quickly to avoid abetting apartheid and fully divested Yale’s endowment from companies dealing with the South African government. In light of this precedent, contemporary critics are chided, any company from which Yale hasn’t divested must just not be that bad (or if it is, Yale’s leaders will soon figure that out for themselves).
The first problem with this story is that it ignores the pivotal role of sustained pressure from students, community members and employees in effecting what change did happen. That included mass civil disobedience, a symbolic shantytown on Beinecke Plaza and a building takeover, none of which are acknowledged by those who scold contemporary critics to wait patiently for change. The second problem with the dominant narrative is that Yale never did fully and publicly divest from South Africa. As other universities took the lead, Yale may have discreetly shifted some holdings, but it never announced a divestment policy. Instead, after Nelson Mandela had already gone free, Yale’s leaders authorized an inconspicuous inscription on Beinecke Plaza dedicated to “the people of South Africa who were supported in their struggle for freedom by members of the Yale and New Haven communities.” That Yale did not support them institutionally through divestment is shameful.
Last week, the Yale Corporation avoided making the same mistake in Sudan. Yale’s announcement — that the University will divest from seven oil companies operating in Sudan — is one we can be proud of (divesting from other companies operating there would represent further progress). Like other progressive changes here, from Yale’s organic food program to the increase in Yale’s financial contribution to New Haven, divestment was the right thing to do, but that alone wasn’t enough to make it happen. Each of these changes came after sustained pressure from concerned students. Last week’s announcement followed months of aggressive, confrontational work by Students Taking Action Now: Darfur.
Such activism is made more urgent by the absence of an effective institutional avenue for critically assessing Yale’s investments. The body charged with this purpose, the Advisory Committee on Investor Responsibility, lacks the accessibility to do justice to student concerns. It lacks the capacity to move quickly when it could count. And it lacks meaningful information about where Yale’s money is actually invested.
Last year, ACIR chair K. Geert Rouwenhorst met with a group of students urging action over Yale’s relationship to a sour gas well drilling project in Alberta overseen by Compton Petroleum. Compton’s bid to drill evoked serious concern in Canada due to the potential for a devastating fire and the lack of a sufficient evacuation plan. Rouwenhorst responded with a rhyming couplet: “If it’s still being debated, no social harm has been created.” Three years ago, I attended a public ACIR meeting; this one was distinguished by the presence of Chief Investment Officer David Swensen. I asked Swensen whether, as the man personally empowered as a moral agent to make ethical decisions about spending our money without our oversight, he saw Halliburton as an ethical investment. He simply responded that given the vagaries of how tuition is spent, “I am not your moral agent.”
While ACIR — prodded by activism and national news — made the right call on Sudan, it has been unfortunately silent on other troubling investments, such as those in the Corrections Corporation of America. CCA is America’s largest private prison company, and the worst example of what happens when the government takes away prisoners’ own oversight of their health and security but fails to take responsibility for ensuring them itself. The millions spent by CCA in settlements over abuse and death serve as a grim testament to the consequences of this abrogation of public responsibility. As Yale economics professor John Roemer observed, while the public will is for humane prisons which rehabilitate, in private prisons “there is an additional link in the chain of agents who must carry out the will of the people” because a private manager “is not only or mainly accountable to the officers of the state, who represent the interests of citizens, but to a board of directors who are seeking to maximize profits.” Criminologist James Austin finds that private prisons have 65 percent higher rates of violence against inmates. Amnesty International has cited CCA for acts of torture, such as the case of one prisoner who reported being “handcuffed, stripped, forced to kneel on the floor, sexually assaulted with a shampoo bottle by a guard and shocked with a stun gun.” Such a company represents the kind of “grave social injury” to which, accordingly to ACIR’s guidelines, Yale should not be a party.
But in December, ACIR declined to address this investment in an industry which creates demand by increasing the incarceration of marginalized Americans and turns a profit by reducing the resources for their care. Rouwenhorst defended inaction on the grounds that “we sort of take the view that the prison industry is a regulated industry.” So are the petroleum companies from which Yale divested last week. Fortunately, the national group Not With Our Money has joined a partnership with GESO to hold universities to a higher standard. That activism will be pivotal in extending last week’s precedent: Yale’s choices as an investor should not undercut Yale’s mission as an educator.
Josh Eidelson is a senior in Jonathan Edwards College. His column appears on alternate Tuesdays.