The General Conference on Weights and Measures met last week to finalize a standard that would be, for the first time, something state-of-the-art. After 24 meetings, this august group was going to standardize the second, the meter – which up until that point was simply a stick and the kilogram – which up until that point was determined by a lump of metal held in some secret vault in France. Science has advanced these constants to the point where something physical is no longer needed.
The point of this whole process is to satisfy some human urge to measure and have those measurements be accurate as possible. How big something is, is determined by something against which big is measured. How heavy an object, how long or how much time are all questions of measurement and in the scientific community, these are referred to as ontic.
The word ontic comes from philosophers of old who sought to separate what they saw as two distinct ways of measuring: One was physical and the other was an experience. If you can use someone’s morality as a standard of whom they are, then the ability to measure that person describes how they exist. But at some point, the act of measuring was replaced by the measure itself. It is somewhat more important to calibrate the details that it is to understand why we are measuring in the first place.
Too often, as we examine who we are, we become bogged down, even disappointed in the tools we have to measure ourselves and this leaves us frustrated that we don’t have the self-knowledge to make the choices we need to make. This frustration is almost palpable in the world of investing as we sort through such abstracts as risk and bias, opportunities and what is a loss. Daniel Kahneman once asked when he was invited to Wall Street decades ago: why do buyers sell and why do sellers buy and even more consequential, what do both parties know about the price? What measure were they using? Something tangible or something emotional? Of course we now know that this question, ironically never asked, has become a course of studies that focuses on behavior.
I just finished watching the documentary on George Harrison “Living in the Material World”. As Mike Hale of the NYTimes wrote this was as much about Harrison as it was about martin Scorsese: “ two questing minds, raised in Roman Catholic families, who were drawn to Asian philosophies and art and driven to stump for them in the West; two reserved but powerfully controlling and perfectionist artists; two men conscious of their roles as standards keepers and cultural influencers.” They felt as though what they could do as people who in effect alter the standard of measurement about who we are and what we should be doing in this world.
Granted, Harrison was spiritual and talented man who had a wealth of riches in which to help him discover who he was and where he would like to go. Because of his ontological understanding of who he was, he didn’t so much encourage followers as he encouraged leading each of us to become better socially. This wasn’t lost on me in the decades between his first album sans the Beatles and his recent passing. It was just not needed.
But what Harrison saw was that there is an opportunity to live in a material world and exist in a spiritual one as well. While he didn’t invite the idea of becoming social, he did take it to the next level, dropping to distinct measures of what we are and what we need into one giant mixmaster.
Social Investing has been around for centuries. Quite possibly the first use of it was with the Quakers who in 1758, the Quaker Philadelphia Yearly Meeting prohibited members from participating in the slave trade–buying or selling humans. From the pulpit, we have John Wesley (1703–1791), one of the founders of Methodism, using his now famous sermon titled “The Use of Money” in which the first raw outlines of what would become social investing. His parishioners were told to not to harm their neighbors by blindly conducting their business affairs as if the world around them didn’t matter. It’s no coincidence that some of the most well known applications of socially responsible investing were religiously motivated. Investors would avoid “sinful” companies, such as those associated with products such as guns, liquor, and tobacco and in doing so, gain the graces of whatever faith they practiced.
But even as the years have passed, and the world of Socially Responsible Investing has flourished, our measurements of what it is and whether or not it is important to us is still not, at least in my mind, calculable on both the tangible and spiritual level. And this is problematic for the average investor looking to do his part in the world, gain something from it (a monetary return would be nice) and on the receiving end, vote your care, a feel good moment that only change can bring.
Yet the SRI world has done little to promote what it does to those that need to hear what it is. This gives us cause for wanting to do the right thing and trying to invest accordingly. But the place where this investing takes place (Wall Street) has only the veneer of ethics, only the wink-wink attempt to do everything according to some vague measurement – a standard that pits the exact opposite of what SRI is against every other investment.
Is green investing also focused on women’s issues, the corporate compensation that has the OccupyWallStreet taking to the streets, the activism needed to end the confusion (is a big company brand really green) and lastly explaining what it is? While a marketing effort would help, it is not clear if the idea has gelled to the point where even those in the industry can come together and offer a cohesive product, one that fits all of the subsectors at once.
There have been inroads made on the cost of getting these investments down to a comparable level as their (less ethical?) cohorts. And even as they do, they are plagued by the simple fact that most of these funds will be actively managed and carry the costs of doing business that way. To date, there are less than a third of the 401(k) plans offering this option. And there is no single group that favors the approach.
Most investors try to walk the walk of being socially responsible. Yet the choices remain hard and still require too much cognitive exercise to make it easy to be green. A simple measure would probably solve a great many of these problems.
