A Response to Jacob Imam

This article series will be a three-part series in which I wish to speak about ethical investing from a Catholic perspective (though there is a debate!) This series was prompted by an interview that Jacob Imam had with Pints with Aquinas. In this article, I will address the question of ethical investing and how the USCCB has recommended Christians navigate the modern economy. In my next piece, I will discuss the responsibility to invest. In my third piece I will break down usury and why (most) modern investing would not fall into this category.

I want to first acknowledge what I understood is the core concern Jacob has with investing: getting rich off others’ sinning. I share this concern with Jacob and, while I will go to some lengths in this article to show why the concern may be overstated, I think this is an issue Christian investors should wrestle with and think about before putting any money into a company or an ETF.

We live in a complex world market where even the smallest corporations are part of a vast global supply chain. This creates significant ethical questions when we consider the raw number of people who are involved. In the USCCB’s document on Socially Responsible Investment Guidelines they say:

The entangled web of corporate relationships that is today’s economy almost makes it impossible to know all the effects investing in a single company, specific security, or investment fund can produce. Nevertheless, we must do all we can to assure that we invest in those corporations and institutions that promote human dignity and enhance the common good.

The above paragraph I find to be more helpful a presentation of my views than I could write myself. We are caught between two principles, the principle of financial stewardship and the principle of ethical investing. In my second article, I will address the principle of financial stewardship, but for this piece, I wish to break down the principle of ethical investment:

The Conference should exercise ethical and social stewardship in its investments.
Socially responsible investment involves investment strategies based on Catholic
moral principles. These strategies are based on the moral demands posed by the
virtues of prudence and justice. They recognize the reality that socially beneficial
activities and socially undesirable or even immoral activities are often
inextricably linked in the products produced and the policies followed by
individual corporations. Nevertheless, by prudently applying traditional Catholic
moral teaching, and employing traditional principles on cooperation and
toleration, as well as the duty to avoid scandal, the Conference can invest wisely
and ethically.

In trying to decide on courses for action the USCCB gives us different options. We can divest from a company when needed, but we must balance this against our duty to be responsible for what we are given. Another option that may work in conjunction with divesting is to influence the companies we invest in. How this specifically applies will vary from person to person depending on your financial state and how much influence you have. For the rest of this article, I will outline a way to try and strike this balance in the hope that it will start a conversation on the topic. To do so I raise three common issues and how I would deal with them.

Issue #1: An evil CEO/leader
In the instance of a CEO or leader who acts against God and the divine order to the world in significant and public ways, I would still invest in the company. Just like with a daily transaction, if I were to tip a waiter who will go and use that money for prostitution, I am not morally accountable for their sins. While sin does have infectious qualities, it is first and foremost a choice we make in our own free will. If I am completing an unrelated transaction with someone this has no ethical bearing. In fact, if the company produces a good product, then the support for the company is good. No institution is perfect and if we (Catholics) were to abandon an institution when its leader is a deep sinner, Pope Alexander VI would have long ago ended the Church before the reformation ever occurred.

Issue #2: An evil governance
In the instance of a company where the whole of the governance is evil and pursuant to evil goals, then I would have more concern. While an evil CEO may come and go, an evil board of directors would significantly increase the likelihood that the corporate mission will go astray. While I am not completely against investing in such a company, I would personally seek to divest from such a company. I would see it as only a matter of time before the governance of the company leaks into the mission and product.

Issue #3: An evil mission/product
At this level, I would argue that it is immoral to invest in a company. A porn company that makes its money from destroying families, young women, and masculinity should not be invested in by Christians. Any company whose mission or product is evil I would divest from.

My principle is generally this: If I am willing to buy from a company or work for a company then I should also be willing to invest in it. An investor, rather than a consumer or employee, has the most ability to influence the direction the company is going. One of my large-scale concerns with Jacob Imam’s position is the further worsening of corporate responsibility. If every well-meaning Christian, Church, and Bishop took Jacob’s position, all corporations would have to look to ill-meaning investors to raise capital. This would worsen the conditions for the vast majority of companies morally and further trap many of these same well-meaning Christians into working for evil companies out of a lack of options.

Most folks do not invest in companies individually. Rather people will put their money into mutual funds or ETFs that aggregate an entire market segment to minimize risk. I think, in addition to minimizing risk, ETFs do mitigate moral questions around investing. One principle is to realize we are always investing. Whether we have our money in the bank account, property, or stocks, we are placing our money into the global market. When we use USD to transact our business dealings, we are supporting the US government, both the good and the bad. Just as we choose to interact with countries in a variety of ways (currency, taxes, tourism, etc), we can choose between different ETFs. I would not support going to North Korea on tourism because you are helping to support a country’s government that is mostly causing evil in the world. Similarly, we can choose between ETFs as a whole.

Jacob Imam leans heavily into the principle of ethical investing in the conversation he has on Pints with Aquinas. This question is not an easy one and I am grateful for the nudge Jacob gave me personally to consider his arguments and seek out the truth in this matter. Yet, throughout this whole article, I have been assuming a duty to invest. In my next piece, I will publish what I think this duty means and how I would live it out. 


Disclaimers

This article is meant to address moral issues and is not financial advice. Any ideas or strategies discussed herein should not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your personal financial objectives, needs, and risk tolerance. Morning Walk and I expressly disclaim any liability or loss incurred by any person who acts on the information, ideas, or strategies discussed herein.

I have great respect for Jacob Imam and Pints With Aquinas. I have been an avid listener to Pints with Aquinas for years at this point and really appreciate the full interview and would recommend anyone to check them out.

One small correction to Jacob I would offer: even if you take Jacob’s position, you can still have a 401(k) and choose to invest in specific companies that are run by practicing Catholics (like Domino’s for instance!) This wasn’t mentioned in the video, but I think it is worth pointing out.

About The Author

Holding degrees in Theology and Political Science from Loyola University Chicago, Daniel is the Executive Director of the Morning Walk Website (SAC of Morning Walk). As Executive Director, Daniel is tasked with maintaining a regular blogging schedule, marketing the website to the general public, and containing the excesses of an over-scrupulous Chief Editor. He also helps coordinate between Morning Walk branches, organizing Morning Walk’s organization-wide events.

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