The fossil fuel divestment campaign has become one of the most rapidly growing divestment movements in history and has unified an impressive diversity of supporters—from liberal Californian universities to the Rockefeller’s family trust. But the contradictions between divestment and the logic of neoliberalism are enduring, and arguments between campaigners and their opponents are typically framed by questions relating to efficiency, feasibility, and the ethics of using fossil fuels.
Such questions are certainly important to ask, but we should also look beyond them, because by doing so we can uncover the deeper ethical contradictions inherent to capitalism which shed important light on strategies for change.
Economists and philosophers have long disputed whether capitalism's theoretical potential to harness human self-interest for the greater good of society is a virtue or a vice. Many argue that capitalism doesn’t just harness a natural human inclination towards self-interest, but rather systematically cultivates it. Others point to the vast increases in material wealth experienced around the world over the past centuries as all the proof we need of capitalism’s superiority; in this view, debates about the morality of self-interest as the driving force of change become irrelevant.
But two particular arguments against divestment demonstrate that capitalism not only cultivates negative moral values, but actively suffocates positive ones as well.
The first argument claims that divestment is hypocritical while we continue to depend on fossil fuels for our day-to-day activities. In short, we are urged not to abandon the companies we rely on.
This argument is easily refuted. It is effectively a preference to act consistently unethically rather than inconsistently ethically; a difficult position to defend in any context. It also fails to recognise the significant differences that exist between the agency of consumers and investors. Is a smoking addict who is determined to quit obliged to invest their pension in Phillip Morris? Of course not—they are only obliged to pay for their cigarettes. In the same way, our only obligation to fossil fuel companies is that we pay for the fuel we consume.
As consumers, our actions are constrained by factors such as current energy and transport infrastructures, and pressures to conform to environmentally-destructive social norms. But as investors—of personal savings or institutional money—our agency, the choices available to us, and, therefore, our moral responsibility, are radically different.
Moreover, the choice of where capital is invested in the present strongly influences our future capacity for low-carbon living. But by arguing that investments should be guided only by our current, highly-constrained consumption patterns—rather than by moral values that relate to the future well-being of humans and the world around us—opponents of divestment are effectively advocating a position that would lead to a perpetual suffocation of those values.
Even more revealing is the fact that those who oppose divestment on the grounds of hypocrisy would make no such accusation were it to be motivated by economic self-interest. Imagine a university that holds shares in ExxonMobil and is also connected to a fossil-fuel dependent national electricity grid (as many are). If the university’s investment manager noticed that returns on the Exxon shares are falling, it’s inconceivable that they would hold onto them—in the face of more lucrative share options—just in case the decision appeared to contradict the university’s electricity supply. Rather, they would simply reinvest in better-performing companies, as they are paid to do.
Hence, divestment is considered perfectly legitimate if it is made for reasons related to profit but not to morals. According to the logic of opposition to divestment, the profit-motive is permitted to do things that moral imperatives are not. Not only is profit-seeking rewarded, but morally-motivated actions are ridiculed and opposed.
A second revealing argument against divestment is that it leaves more opportunities for less scrupulous investors because those with more of an environmental conscience abandon the marketplace. A more effective approach, according to the critics, is for activists to become ethical shareholders by using their investments to pressure fossil fuel companies to become part of the solution to climate change.
The typical response of pro-divestment campaigners to this argument is that the kind of shareholder activism it recommends isn’t appropriate in this case. Fossil fuel companies aren't like those who produce clothes or food or electronics: the impacts of fossil fuels don’t just arise from the ways in which the supply chain currently happens to operate; rather, they are inseparable from the products themselves.
Lobbying a company to improve wages and working conditions is one thing; lobbying them to stop selling their primary product is another. Past experience suggests that it is therefore very unlikely that shareholder engagement could be successful in the case of fossil fuels (although a more aggressive ‘forceful stewardship’ approach might have greater chance of success).
Either way, when such debates become stalled on a choice between strategies it is easy to overlook the way in which moral values are suffocated. From the perspective of those who oppose divestment, market logic determines that it is better for investors to work within the norms of the system, even to achieve moral goals. One divestment skeptic puts it particularly bluntly, arguing that “moral outrage is not as effective as capitalism.”
Are such arguments merely pragmatic—a call to take a rational, consequential moral stance rather than an emotional, categorical one?
In considering this question, it’s worth recognising that this argument sounds uncomfortably like those made in the early days of capitalism, when profits depended upon slavery rather than fossil fuels. Owning slaves was often justified via the argument that, if released, they could be in an even worse situation, left at the mercy of the new exploitative industrialist class. Therefore, it was better to keep hold of slaves and treat them slightly better; a position which, at the time, may have been considered rational in moral terms by some. However, a transformation in values since the abolition of slavery has shown it to be indefensible.
Capitalism has always strongly resisted any challenge to the energy source that lies at the heart of its profits, whether that was from human-energy in the form of slaves or fossil fuel-energy today. While benign changes around the periphery of production are tolerated reluctantly, actions that threaten to achieve more fundamental changes are deemed to have dangerous, unintended consequences, or are dismissed as having no consequences at all. The divestment campaign highlights how the logic of capitalism achieves this goal, in part, by declaring moral inclinations to be obsolete whenever they threaten to be transformational. Those campaigning for divestment must therefore prepare to be ridiculed with accusations of hypocrisy, naivety and a misguided sense of moral superiority.
Such accusations are especially harsh given that most serious campaigners don’t believe that divestment is an effective tactic on its own. The general consensus is that it is primarily a moral and political strategy, not an economic one. But it is also crucial to recognise that not all opponents of divestment are CEOs, industry lobbyists and Wall Street bankers who are set to profit directly from fossil fuel companies going forward. They may also include people who, if asked openly, wish for the same future as the average environmental campaigner, but have had their own moral inclinations suffocated by capitalist realism and the cynical view of human motivation that is the foundation of neoliberal psychology.
The divestment movement highlights a set of challenges to the future of capitalism that extend far beyond its unsustainable environmental externalities. With considerable clarity, it shows the ways in which market logic not only cultivates action that is led by calculated self-interest, but also actively suffocates intrinsic human drivers towards questions of fairness and equality.
Fortunately, these values have evolved over tens of thousands of years and, despite these latest attempts at suffocation, they will not die easily. The challenge—of particular importance for the divestment movement—is to move towards a society in which our morals are worth at least as much as our money, and ideally much, much more.