One problem with ethical investing is how do you determine what companies are being “ethical”. This essay points out just how poorly popular perceptions of a company’s ethicality correlate with an actual cost benefit analysis.
I completely agree that it is not at all obvious what good and bad effects there are of companies’ activities. I think it is very possible that some ‘unethical’ activites have more positive effects than many activities commonly understood as ethical. It would take a lot of reflection to work out what good and bad effects certain companies have. The point of my post was to ask, before engaging with this question, whether individuals’ decisions about their investments in the secondary market have much or any influence on companies. If not, it’s not urgent to think through the question about how much good various companies do, at least in terms of what influence this should have on your investment decisions.
This may have been obvious to many people from the start, but it wasn’t to me.
Or rather, how the author’s unsympathetic perception of popular perceptions …
(I suspect this author has less idea of what people who care about “ethical investing” actually care about, than I have of what fans of the San Francisco 49ers care about. Broadly, people who dislike X are not able to provide credible descriptions of what people who like X like about it, even if they have accurate models of what those people do as a result of their liking.)
One problem with ethical investing is how do you determine what companies are being “ethical”. This essay points out just how poorly popular perceptions of a company’s ethicality correlate with an actual cost benefit analysis.
I completely agree that it is not at all obvious what good and bad effects there are of companies’ activities. I think it is very possible that some ‘unethical’ activites have more positive effects than many activities commonly understood as ethical. It would take a lot of reflection to work out what good and bad effects certain companies have. The point of my post was to ask, before engaging with this question, whether individuals’ decisions about their investments in the secondary market have much or any influence on companies. If not, it’s not urgent to think through the question about how much good various companies do, at least in terms of what influence this should have on your investment decisions.
This may have been obvious to many people from the start, but it wasn’t to me.
Or rather, how the author’s unsympathetic perception of popular perceptions …
(I suspect this author has less idea of what people who care about “ethical investing” actually care about, than I have of what fans of the San Francisco 49ers care about. Broadly, people who dislike X are not able to provide credible descriptions of what people who like X like about it, even if they have accurate models of what those people do as a result of their liking.)