Ethical aversion to the market?

[djc]

I was wondering if anyone has an ethical aversion to investing in the Stock Market and if so where do you invest?

djc

[theanimal]

See:viewtopic.php?f=20&t=1738&hilit=ethical+investing

[archi]

As a side note, the whole idea of "applied capitalism" (in "a combination of simple living, anticonsumerism, DIY ethics, self-reliance, and applied capitalism") might sound unethical to a lot of people. As pointed in another thread, ERE is a bit like living as a 1%er, only on a different scale.

In my view from an ethical perspective there is not a lot of difference between owning stocks (getting paid for owning parts of companies) and owning bonds (getting paid for lending money). Both systems contribute to inequalities (as the rich is paid for being rich). In ERE you accept that this unfair system exists and you choose to be on the winning side of the redistribution of money (By not being in debt and not contributing to added-value of companies with your work).

[Dragline]

I do not have such an aversion, but a couple alternatives to the stock market would be buying bonds directly from the government (in the US, www.treasurydirect.gov) and peer-to-peer lending (to individuals), such as Lending Club or Prosper. Gold and silver can also be purchased privately in the form of coins. Real estate (land-lording) is another option.

Then there are DRiPs, but that's probably not what you are looking for. See: http://www.directinvesting.com/drip_lea ... _DRIPs.cfm

There is another thread about what people would invest in if financial markets did not exist that you might want to take a look at.

[George the original one]

Real estate is the obvious investment that lets you cut out involvement with Mr. Market, Bankers, and lending money. The problem is that you have to have a large chunk of cash available if you're doing anything more than renting out rooms in your apartment (otherwise you have to take out a mortgage and are back to dealing with Bankers, etc.).

[anomie]

(excellent topic!)

We still have some money in an exclusively alternative energy mutual fund http://www.newalternativesfund.com/

And about 20% in socially responsible investing funds
http://en.wikipedia.org/wiki/Socially_r ... _investing


The basics of money-lending for interest are inherently un-ethical in my ideal view.. but my ideals have deteriorated as I have aged. I feel that I once tried to have ethics...

Many of the big performers in the stock market appear to be drug companies, oil companies, junk food companies, firearms, tobacco.
All the good stuff that makes the consumer world churn.

Have learned to to not look to hard at the specifics of the companies and instead to focus on their performance..

I like to rationalize my investing behavior with the thought of the explicit non-consumer nature of an ER checkout from consumer society... but we may need to re-visit our position now that we are moving to specific stock selections and develop some basic exclusion criteria (maybe no tobacco or firearms for starters)..





keyword tag: ethical investing

[workathome]

Pumping people full of artificially flavored, artificially colored, and government subsided and chemically altered corn-based sweetener has never been more profitable. Also own the companies selling diabetes medicine.



/sarc

[henrik]

The basics of money-lending for interest are inherently un-ethical in my ideal view..

Why? I know many people (and some religions) have this view and I've never understood it. Interest is compensation for using your resources. If that is unethical, how are taxi rides, being employed or renting out an apartment any less so?

[IlliniDave]

I read a book by Rabbi Daniel Lapin called Thou Shall Prosper. On the one hand, he believes retirement is morally objectionable. But on the other he laid out an interesting view of wealth. He doesn't equate wealth to happiness, but points out that money flows towards sources of happiness. Or more accurately, flows from one source of happiness to the next on an ongoing basis.

In the idyllic realm, you go to work and perform your job which makes your employer happy and she/he responds by giving you money in exchange. Feeding yourself and your family makes you happy, so you go to the grocer with the money from your employer and exchange it for food. Responsible lending of money to someone provides them opportunity to prosper, so receiving something in return is the natural completion of the transaction. Investing in a business is analogous, which is essentially what you're doing in the stock market. Businesses and corporations provide goods or services that people at least believe will make them happy, and therefor are willing to exchange their money for. Renting is the same--you provide someone with shelter or a place to run their business, increasing their happiness, and in exchange their money flows toward you. Money can be replaced in the transactions by other goods or services (aka barter), but money is much more convenient because of its fungible nature.

If you object to those sorts of transactions on eithical grounds, then there are no investment options. All you can do is labor to produce things strictly for yourself or to give away freely.

[archi]

Why? I know many people (and some religions) have this view and I've never understood it. Interest is compensation for using your resources. If that is unethical, how are taxi rides, being employed or renting out an apartment any less so?

This is indeed depending of the culture. In ancient Rome, it was almost an obligation of the pater familias to increase the family money by lending.

When Christian religion became dominant, usuria became a sin. Sometimes they are differences between rejecting any money lending altogether or only money lending at a high rate.
In the middle age, only Jews were lending money, and they were often considered outcasts.

The ethical argument against money-lending is that, as a rich person with money in excess, you take advantage of the fact that some people don't have enough money to become even richer yourself, making them even poorer in the process. Instead you should donate.

In my view, from that perspective, renting an apartment to someone is very similar. (You have excess housing with which you make money on people that don't have any housing).

For the taxi, I don't know. It' different from renting your car in my view, as the taxi driver also provides a service.

"Employing people" is even more complicated. Related to that are the attempts to run companies as co-operative entreprises.

They are of course many counter arguments (Like e.g. people that prefer to rent, and so on...). To me it should be looked at in relation to choices available in that society (Are choices like not renting, not being employed, not having to borrow money... available).

[henrik]

"Employing people" is even more complicated.

My examples actually included being employed, i.e. taking advantage of the fact that some people don't have enough time or skills to do all the work they need done, and thus making yourself richer in the process:)

[Hankaroundtheworld]

Probably better to keep it simple. In this highly specialized world, we all provide "services" to each other, either in labor services, housing space services, taxi/transport services, investment capital services, etc.. So, if you call a Taxi a "service" but renting out an Apartment not, then it all will be complicated, where do you draw the line between "donating" money versus getting paid for a Service.

[archi]

where do you draw the line between "donating" money versus getting paid for a Service

Not sure I understand ?

Where do you draw the line between giving something for free or for a price ?
Between lending for free or for a price ?

The line is the price

[Hankaroundtheworld]

Hi archi, I was trying to respond on what was said before by you:
* If something is not seen as a Service, and you have enough money, that you should not take advantage of the poor, instead you should donate
* Then you said that renting out an Apartment was not seen as a Service (but Taxi was), so if you follow that statement, then rich people should donate "housing space" for free instead of renting it out
* So, here I asked "where do you draw the line", when do you call something a service and when do you donate money (or free housing, etc..)

Anyway, our world is so specialized, that everything is seen as a Service between each other

[archi]

Hi Hank,

OK, I see your point. I guess the line then is between passive income (investing) and active income (working). Lending money / apartment = mostly passive income
Taxi= mostly active income

... or something like that

[jennypenny]

This is indeed depending of the culture. In ancient Rome, it was almost an obligation of the pater familias to increase the family money by lending.

When Christian religion became dominant, usuria became a sin. Sometimes they are differences between rejecting any money lending altogether or only money lending at a high rate.

Making money solely though lending or money changing was also viewed as suspect.

Scorn for bankers and the banking industry is nothing new. It's a tradition that goes back several thousand years.

[ToFI]

I invest in stock market but I try to avoid companies that directly involved in production and selling of: alcoholic drinks, tobacco, meat, weapons.