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From: neveu@lll-crg.ARpA (Charles Neveu)
Newsgroups: net.college
Subject: Re: Apartheid
Message-ID: <1021@lll-crg.ARpA>
Date: Thu, 21-Nov-85 15:43:41 EST
Article-I.D.: lll-crg.1021
Posted: Thu Nov 21 15:43:41 1985
Date-Received: Sat, 23-Nov-85 10:11:11 EST
References: <4982@stolaf.UUCP> <4992@stolaf.UUCP> <4993@stolaf.UUCP>
Reply-To: neveu@lll-crg.UUCP (Charles neveu)
Distribution: net
Organization: Lawrence Livermore Labs, CRG Group
Lines: 37

In article <4993@stolaf.UUCP> knutsonk@stolaf.UUCP (Kari E. Knutson) writes:
> Here at St. Olaf, we are attempting to get our Board of Regents to
> divest all portions of the College's Endowment that are invested in
> companies with holdings in South Africa. 
> Kari Knutson
> ...ihnp4!stolaf!knutsonk

I have a question about divestment that I have never had answered to
my satisfaction. It is this: Does divestment actually put any pressure
on the companies which do business in South Africa, and hence, on the
South African government? The answer to me appears to be no, for the
following reasons. The University owns stock in IBM, which does
business in South Africa. They divest themselves of the stock, which
means they sell it to someone else at the Stock Market. The amount of
IBM stock in circulation has not decreased one share. IBM doesn't know
or care who owns their stock. It hasn't decreased their income one
cent.Consequently, this action has had no
influence on IBM's policies, nor on the policies of the South African
government.  Furthermore, if IBM ever cared what the University's
position on investment in South Africa was, it certainly doesn't now.
In fact, it would seem that if one wanted to affect IBM's policies,
one should OWN the stock, go to the shareholder's meetings, and make a
ruckus.
	I can foresee a few rebuttals to this. First, divestment is purely
symbolic. It makes news and keeps the situation in S.A. in the
public's mind. Second, selling the shares may lower the price of the
stock on the market, which may affect the amount of capital IBM can
raise in future stock offerings, which would certainly influence them.
	My response to the former is that as a symbolic act, it is still
inefficient, and chaining onself to the S.A consulate would equally
effective. My response to the latter is that the companies usually
mentioned, like IBM, are so large that even the largest university
endowment controls only a fraction of a percent of the stock, and
that the effect on the price would be miniscule and temporary.
	I don't mean to pick on IBM, I'm just using them as a generic and
common example.
						Charles