I’m not sure when or how this meme about South Africa being liberated through sanctions began. South Africa was a country being torn apart at its seams by internal forces in the 1980s and ’90s — and to some degree still is. To impute the cause of its eventual fall to forces other than white and black South Africans really is ahistorical.

In any case, let us imagine South Africa was freed by sanctions – which I think even Mr Holton would agree is certainly the only country that has ever been freed by them. Assuming the South African model is the gold standard — well, that’s an extremely high bar. South Africa was castigated not just by America and the “West” but also by “the rest”; it was a near-total, worldwide blackout for South Africa. China, Malaysia (big into natural gas), India, Russia—none of these countries are going to be moved to divest from Iran, and their nationals have more than enough capital to buy up whatever shares we would unload to the market. A better analogy to Iran is probably Cuba; have sanctions/divestment been a successful policy there?

I’m willing to admit some “ignorance” so let me pose a couple questions, the answers to which would be illuminating: Out of the 400 ‘international publicly traded companies’ that Mr Holton’s campaign targets, how many of their corporate headquarters are in America? How many are majority-owned by American shareholders? Those questions, if answered the way I think they’d be answered (“very few” and “even fewer,” respectively) tell you everything to know about divestment’s practical efficacy.

We have seen a large amount of gumption go into these wash-the-hands efforts before. I am reminded of the great deal of energy that was expended on college campuses for divestment from multinationals (particularly the Chinese oil company PetroChina) that do business Sudan — the biggest divestment campaign of the decade so far. As far as I am concerned, the verdict is in on that campaign:

PetroChina’s share price peaked in November at around 20 Hong Kong dollars and has since slipped to around 11 dollars, but analysts discount the effect of shareholder activism in the decline. Yan Wang, an analyst at BCA Research Group in Montreal, said the Chinese government holds 86 percent of PetroChina through its parent company. Foreign investors hold only 11.5 percent, and the rest is held by Chinese institutional and individual investors. This shareholder structure, he said, could mitigate the effects of any sell-off by minority shareholders.

I have a feeling we’d be in the same position in Iran via shareholders who are Iranians or who are nationals of Iran’s firm allies.

Again, from a moral point of view, divestment is the least one can do about Iran; and that still means one probably ought to do it. I merely think it should not be oversold. And I remain skeptical about the propriety of state legislators usurping the function of fund managers, for whom the analysis of risk is a profession.