The Politics of Investment


Local civil rights advocates have betrayed acute myopia in suggesting that Harvard withdraw its investments from "segregationist" Southern firms. Such a policy would probably be neither effective in Mississippi nor administratively feasible at Harvard. But more important, it would be in clear violation of a long-standing and valuable University policy of political neutrality.

Loyalty to the concept of academic freedom has restrained the University, as a corporate body, from taking political stands on issues outside its field of direct concern. When the question was the Red Scare of the twenties or McCarthyism in the fifties, liberal opinion remained undivided. All agreed that the University should not censure its members for their views; it must remain a forum for ideas, not a judge of political rectitude.

Now this policy is to be abandoned. The University is to take a position on the civil rights issue and attempt to enforce it through economic power. Such a step should be seen for what it is: not a simple requirement of morality, but rather a pragmatic abandonment of principle.

Such ad hoc decision-making can be dangerous. The University's political neutrality has safeguarded its political independence. Neither should be sacrificed casually. Civil rights is certainly a crucial political and social issue; but there have been other important causes and there will certainly be more. The University, as a large investor, is involved indirectly in almost every controversial political issue. Should the Corporation set minimum wages and determine fair labor standards for every firm in which it invests? What should be its policy toward companies whose subsidiaries trade with Cuba? Total University abstention from politics is not head-in-the-sand defeatism; it is a practical recognition that the University cannot be both forum and advocate, both scholarly refuge and active participant.

Proponents of the stock withdrawal claim that the University has sacrificed its neutrality by purchasing stock in discriminatory firms. But stock ownership in this country does not necessarily confer managerial control; and the University has always tried to avoid becoming involved in purely business activities. Its investments have remained investments--nothing more.


When the civil rights groups demand that large investors like Harvard utilize their economic power they may in a wider sense be spiting themselves. Money is not intrinsically either representative or progressive. If capital is to be used consciously to promote social change, the powers which control capital cannot be left to determine the direction of that change. Presumably civil rights groups would rather have their fate decided in the voting booth than at the Stock Exchange. They should be happy that business has remained as open as it has to political leadership in racial matters. The impersonality of finance capital should not be discarded lightly in favor of a more socially-oriented economic system. Perhaps we should let sleeping moneybags lie.

Harvard's endowment is controlled by the Corporation, a body chosen to manage--and finance--an educational institution. Its members are not elected for their political acumen. It is not meant to be a representative legislative assembly. The President and Fellows should not be asked to become political seers.