There have been two big trends on American campuses recently. One trend is the “keep away speakers we don’t like or who might hurt someone’s feelings” movement that has flexed its muscles at so many schools. The other is the “divest from bad things” campaign, which mostly targets fossil fuels, but as we read in this IHE piece, also includes tobacco. Penn has been asked to divest from all tobacco stocks because the tobacco industry is engaged in “moral evil.”

Just as with fossil fuel stocks, divestment is a purely symbolic gesture. If those stocks improve the university’s portfolio, the divestment crowd says, “Well, get rid of them and take a lower return so we can feel good.” The tobacco business will go on exactly the same no matter who owns the shares, but the activists will be able to crow. The marginal loss on the university’s rate of return won’t have any impact on them.

This is the same reasoning as with racial preferences for students from certain groups. The university is willing to pass up some more capable students so it can feel good about itself for promoting “diversity,” and similarly is willing to pass up the higher return on “bad” stocks so it can feel good about its stance against evils in the world.