Sunday, May 30, 2004

On 'Socially Conscious' Investing

Should one be bothered, morally speaking, that the mutual funds (shares of which) one owns invest in companies that produce alcoholic beverages, tobacco products, and firearms? I say no.

For some, alcohol is the devil in liquid form. They should avoid the stuff, and it is certainly within their power to do so. For most of us, however, alcohol is a delightful adjunct to a civilized life. What good is a hard run on a hot day that doesn’t eventuate in the downing of a couple of cold beers? To what end a plate of Mama Gucci’s rigatoni, if not accompanied by a glass of Dago Red? I am exaggerating of course, but to make a serious point: alcohol for most us is harmless. Indeed, it is positively good for healthy humans when taken in small doses (1-2 oz. per diem) as numerous studies have been showing for the last twenty years or so.

The fact that many abuse alcohol is quite irrelevant. That is their free choice. Is it Sam Adam’s fault that you tank up on too much of his brew? No, it is your fault. This is such a simple point that I am almost embarrassed to make it; but I have to make it because so many liberals fail to grasp it. So read your prospectuses and be not troubled when you come across names like Seagrams.

I would also point out to the ‘socially conscious’ that if they enjoy an occasional drink, then they cannot, consistently with this fact, be opposed to the production of alcoholic beverages. You cannot drink alcohol unless alcohol is there to be drunk. Consistency demands of them complete abstention.

As for tobacco, suppose we begin by reflecting on this truth: Cigarettes don’t kill people, people kill people by smoking cigarettes, or, to be precise, they increase the probability of their contracting nasty diseases (lung cancer, emphysema, heart disease), diseases which are often but not always terminal, by smoking sufficiently many cigarettes over a sufficiently long period of time. If X raises the probability of Y to a degree <1, I don’t call that causation; I call that probability-raising. It should also be obvious that correlation does not prove causation. So I don’t want to hear about causation in this context. Nor do I want to hear about addiction. To confuse a psychological habituation with addiction is quite foolish. Addiction, if it means anything, has to involve (i) a physiological dependence (ii) on something harmful to the body (iii) removal of which would induce serious withdrawal symptoms. One cannot be addicted to nose-picking, to running, to breathing, or to caffeine. Furthermore, (iv) it is a misuse of language to call a substance addictive when only a relatively small number of its users develop -- over a sufficient period of time with sufficient frequency of use -- a physical craving for it that cannot be broken without severe withdrawal symptoms. Heroin is addictive; nicotine is not. To think otherwise is to use ‘addiction’ in an unconscionably loose way.

Liberals and leftists engage in this loose talk for at least two reasons. First, it aids them in their denial of individual responsibility. They would divest individuals of responsibility for their actions, displacing it onto factors, such as ‘addictive’ substances, external to the agent. Their motive is to grab more power for themselves by increasing the size and scope of government: the
less self-reliant and responsible individuals are, the more they need the nanny state and people like Hillary, who aspires to be Nanny-in-Chief. Second, loose talk of ‘addiction’ fits in nicely with what I call their misplaced moral enthusiasm. Incapable of appreciating a genuine issue such as partial-birth abortion, they invest their moral energy in pseudo-issues.

The main point is that tobacco products can be enjoyed in relatively harmless ways, just as alcoholic beverages can be enjoyed in relatively harmless ways. I have never met a cigarette yet that killed anybody. One has to smoke them, one has to smoke a lot of them over many years, and each time you light up it is a free decision.

Some people feel that smokers are irrational. This too is nonsense. Someone who smokes a pack of cigarettes per day is assuming a serious health risk. But it may well be that the pleasure and alertness the person receives from smoking is worth the risk within the person’s value scheme. Different people evaluate the present in its relation to the future in different ways. I tend to sacrifice the present for the future, thereby deferring gratification. Hence my enjoyment of the noble weed is abstemious indeed, consisting of an occasional load of pipe tobacco, or an occasional fine cigar. (I recommend the Arturo Fuente ‘Curly Head’ Maduro: cheap, but good.) But I would not think to impose my abstemiousness, or time-preference, on anyone else.

As for firearms, one can with a clear conscience invest in the stock of companies that manufacture them. One thereby supports companies that make it possible for the police and military to be armed. Think about it: without gun manufacturers, there would be no guns, and hence no effective police and military forces. And without gun manufacturers, decent citizens would be unable to defend themselves, their families, and their communities against the criminal element. The ‘socially conscious’ or ‘socially responsible’ want the protection afforded by the armed, but without getting their hands dirty. To be wholly consistent, they should go live somewhere where there is no police or military protection.

If the price of 'social consciousness' is logical unconsciousness, then I prefer to be socially unconscious.