The Lame-Brain Oil Divestment Campaign

Mark Hendrickson teaches economics at Grove City College. He writes the "No Panaceas" blog at Forbes.com and is a contributing editor of the St. Croix Review. Hendrickson's most recent book is "God and Man on Wall Street: The Conscience of Capitalism" with Craig Columbus.


Tufts-student-activists-divestment-CC-James-Ennis2013-628x314Perhaps you have heard that there is a small but growing campaign calling for colleges, other institutions, and individuals to divest themselves of any investments in fossil fuel companies.

When I first heard of it, I thought, “How extraordinary! Surely no moderately intelligent person (which, presumably, would include college populations) could be ignorant of the indispensable role that fossil fuels have played in enabling and continue to play in sustaining modern standards of living.” But then two incidents prompted me to take a closer look at this phenomenon.

First, I received an email from a Vassar student, asking me to sign a petition requesting American colleges to “educate students about fossil fuels.” At Vassar, guest speakers about the benefits of fossil fuels are persona non grata. Then, a dear cousin of mine, still a political activist in his 70s, forwarded an email to me, urging me to “start or join a local divestment effort.”

The email from my cousin contained a link to a May 17 radio interview with Bill McKibben, who hatched the fossil fuel divestment movement, so I checked it out. What I found was embarrassingly inane. Upon reflection, though, rather than simply dismissing the divestment campaign as a tiresome nuisance or the latest crackpot fad, it can be helpful to view it as an object lesson illustrating the mindset of contemporary liberalism.

Indeed, the fossil fuels divestment campaign is imbued with the liberal ideology of its ringleader. In the radio interview my cousin forwarded to me, McKibben and his campaign come across as textbook, stereotypically liberal:

—Feigning a disarming humility, he candidly admitted that he has been trying to change other people for at least three decades. This is the essence of liberalism: a primary focus on changing others—no getting the beam out of one’s own eye before attempting to remove the mote from the eyes of others.

—Liberals love to flatter themselves as nobly free of parochial prejudices by taking digs at the USA. McKibben showed his anti-American bona fides by saying (wink, wink, ha ha!), “Even the United States signed [the UN document at the 2009 Copenhagen Climate Meeting agreeing to cut future CO2 emissions]” (emphasis added). This snide aspersion is particularly uncalled for, since US emissions of CO2 have been falling, while the emissions of a number of the other signatories have continued to rise.

—In addition to America-bashing, a distinguishing characteristic of liberals is their habitual denunciation of society’s economic benefactors. A decent, appropriate response to fossil fuel corporations would be to respect them, and perhaps even be grateful to them, for having supplied the abundant, cheap energy that lifted us from the historical norm of mass poverty to the modern norm of widespread prosperity. Indeed, in the words of energy expert Daniel Yergin, today, “Abundant low-cost energy is stimulating a revival of manufacturing in the U.S. as well as increased American competitiveness.” Yet, in the best anti-capitalist tradition, McKibben insists on portraying oil corporations as rotten malefactors rather than benefactors. In his own words, his goal is to “turn oil and gas and coal companies into pariahs.” In short, oil disinvestment is nothing more than good old-fashioned anti-capitalism. Another generation of college students is being conditioned like Pavlov’s dog to react reflexively with loathing and disgust whenever they hear the words “oil corporation.”

—Like so many other liberal schemes, the fossil fuel divestment campaign manifests an irrational disregard of costs. A verbal trick I once encountered in the environmentalist movement is this: Someone dares to ask, “Can we afford what you propose?” The green replies, “We can’t afford not to.” That is a copout, an evasion of reality. In this world of finite time and wealth, we can’t have or do it all, and so we prioritize on the basis of price—that is, we economize—for in this way only can we rationally calculate how much we can afford. The ostensible purpose of this campaign is to save the world from the catastrophic global warming allegedly caused by human emissions of carbon dioxide via fossil fuel consumption. I have addressed the politicized science and dubious assumptions of the climate change crowd multiple times (including here, here, here, here, and here). What should astound and alarm us all is that the proponents of anthropogenic global warming assert that a 50% reduction of U.S. CO2 emissions by 2050 would lessen warming by all of 0.07oC. Estimates vary about the cost of reducing our fossil fuel consumption so drastically, but I once read a UN study that put the price tag in the tens of trillions of dollars. Even by liberal standards, to pay so much for so little is breath-taking in its audacity. The oil divestment movement is essentially asking Americans to opt for a certain economic catastrophe in the near term over a hypothetical and highly uncertain economic devastation in the future.

—Blindness to costs is one aspect of the appalling ignorance of economics that permeates liberal reformers. Another is the apparent cluelessness about how divestment actually would affect ExxonMobil et al. Let’s say the campaign succeeds beyond McKibben’s wildest dreams, and American institutional investors dump their conventional energy stocks en masse. The major effect would be to knock down the price of these profitable enterprises to bargain basement levels, where opportunistic investors–the Chinese, perhaps—would gladly snap them up. Like so many liberal plans, divestment is just another hare-brained scheme that would redistribute wealth, in this case, from foolish investors to competent investors.

—Liberal economic ignorance continued: If the pro-divestment crowd really wanted to hurt Big Oil, they would have to find a way to slash corporate revenues and profits, not just crash the stock price. The only way to accomplish that would be to convince large numbers of people to quit using fossil fuels. How many of those jumping on the divestment bandwagon are reducing their own fossil fuel consumption in half? Don’t hold your breath. As mentioned above, liberals like to change others more than themselves. Hypocritically, they blame the producers of fossil fuel energy rather than themselves for consuming it.

This brings us to the bottom line of typical liberal schemes like the fossil fuel divestment campaign. It’s dishonest. McKibben doesn’t tell his recruits that the change they want depends on them accepting reductions in their standard of living. Instead, he manipulates them into believing that they are the good guys, energy companies are the bad guys, and that the only way to save the world is for the good guys to smash the bad guys. It’s all very heady stuff. Too bad it’s bunk. McKibben is a liberal pied piper who promises to lead his followers on the path to salvation—all the while taking them down the road to ruin. That destructiveness masquerading as salvation is liberalism in a nutshell.

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  • Chez

    Let’s hope this pathetic initiative comes to naught.

    I have this vision of the medium-term future….where our growing Renaissance of gas/oil production becomes the goose that lays the golden egg and helps us in a myriad of ways….not just in terms of access to affordable energy, but in tax revenues accrued from energy companies that will – someday soon – significantly narrow our annual budget shortfall.

  • earlrichards

    Google the “$2.5 Trillion Oil Scam – slideshare.”

  • nelly2004

    The earth isn’t going anywhere- all these hair brained plans are just going to destroy humanity while the earth adapts to whatever conditions appear

  • CowboyUp

    If everything with petroleum in it were to suddenly disappear, the people in the picture would be standing there naked holding blank signs. It’s hard to believe anybody could be as ignorant as these people.

  • spyeatte

    This is nothing new – similar efforts have been made for decades. Many people who have fossil fuel investments and agree with the divestment effort, will give lip-service, but do the rational thing and keep their investments. Only the true nuts will actually divest if they happen to have fossil fuel investments at all. The vast majority of these people don’t have investments in anything anyway – except for maybe pot futures.

  • onecornpone

    Mc Kibben = Gore 2.0…

    What can we do but let them live their silly, urban, low-impact existence while we capitalist thrive? Eventually their choices will result in catastrophic failure. Sometimes the herd must be culled, and the dim-witted are prime candidates, are they not?

  • midnighteye

    It really doesn’t matter, good investments will always find willing investors. If these watermelons want to divest, it’s only themselves they’re hurting. Let them do it if it makes them feel good.