The protests that have erupted on numerous college and university campuses of late often feature a demand that the institution divest from Israel. If administrators give in, will that accomplish anything the students want?
In today’s Martin Center article, Professor Richard Vedder argues that it’s pointless.
He writes:
Presumably, the goal of university divestment is to hurt Israel because it is trying to destroy Hamas’s military capability. But how would Harvard or Columbia selling its stock in Israel-related firms hurt Israel? Some non-university investor would then buy those shares. College endowments together comprise less than one percent of the value of all wealth in the U.S. If Harvard, which possesses the largest single university endowment, sells its stock in Israeli-based companies, it is not likely to move the related equity prices more than one percent even in the short run — and even less in the long run, because other investors without anti-Israeli or anti-Semitic hang-ups will gladly invest. In short, neither Israel nor the American companies are materially impacted.
Someone ought to enlighten the students about how capital markets work.
Vedder sees the demand as just another symbolic act that makes the protesters feel good. If school administrators had sense and backbone, they would ignore these demands.