Are Guns the Next Target for Conscientious Investors?
The gun-control debate in the US is a long and bitter one. But activism by investors and companies in the wake of the mass shooting at a high school in Parkland, Florida, may finally bring about real change.
LONDON – On the morning of September 11, 2001, standing in a conference room in France full of institutional investors from around the world – representing pension, sovereign-wealth, and corporate funds – I spoke about the emergence of an important, but not yet fully recognized, new trend: investing with a conscience. The audience scoffed, to put it mildly. Investing was all about returns.
That afternoon, airplanes struck the World Trade Center, and everything changed. In the days that followed, as the full magnitude of the horror set in, the same people who were skeptical came back to talk to me about investing with a sense of direction and purpose, and in ways that would contribute to something bigger than the bottom line. The investment community had begun to transform its thinking.
In that conference room, I described how investors had opposed apartheid by divesting from South African companies, with state pension funds and others including provisions in their guidelines prohibiting further such investment. Those provisions were withdrawn only in 1993, after Nelson Mandela urged foreign investors to return.
Many organizations, I pointed out, were frustrated by advisers who insisted that to increase their endowments, they had to separate their conscience from the need to achieve strong returns. Charities struggled to find ways to invest their money without inadvertently contributing to the very problems they were trying to solve. Investment committees of anti-smoking charities didn’t want to put their money into tobacco companies.
The shift in the investment climate was a long time coming, even before September 11, 2001, became 9/11. There was a new sense of acceptance, urgency, and pace.
The mass shooting at a high school in Parkland, Florida, could prove to be a similar inflection point for gun control, with companies and investors taking up the issue of gun safety and culpability. Now, US gun manufacturers are starting to feel the impact of the ethos of investing with conscience.
Of course, the gun-control debate in the US is a long and bitter one, shaped by seemingly intractable disagreements over identity as much as policy. Yet the latest mass shooting – in which a 19-year-old opened fire at his former high school with an AR-15 semi-automatic assault-style rifle, killing 17 and wounding 17 more – may serve as yet another tragic but momentous turning point for investors and companies.
The National Rifle Association undoubtedly remains a potent political force in the US. With its large political donations and ability to mobilize its membership, the NRA continues to dictate the actions of lawmakers, who inevitably offer only thoughts, prayers, and excuses after every massacre. Many now even advocate putting guns in the classroom, forcing teachers to act as armed police officers.
But the reality of mass shootings in the US – together with the teenage Parkland survivors’ powerful pleas for common-sense gun regulation – seems to have sunk in for many businesses. One of America’s largest sporting goods retailers, Dick’s Sporting Goods, announced that it will stop selling guns to anyone under 21, and stop selling assault-style weapons altogether.
Consumer-facing companies, including hotels (Best Western and Wyndham), car-rental companies (Hertz and Enterprise), Delta Airlines, and the insurance firm Chubb cut their affiliations with the NRA – a move that carries real risks. Georgia’s Lieutenant Governor Casey Cagle tweeted that he would “kill any tax legislation” that would benefit Delta, unless the company reinstates its relationship with the NRA. Delta stood by its decision, and Georgia’s lawmakers approved a bill that stripped out a tax break proposal that would have saved the company $50 million.
Investors are now looking at their portfolios to see where they, too, can do to help drive progress. This has happened before. After the 2012 shooting at Sandy Hook Elementary School in Newtown, Connecticut – when a 20-year-old man killed 20 first-graders and six adults – CalSTRS, the California State Teachers’ Retirement System pension fund, divested from gun maker Remington Outdoor.
But the Parkland shooting seems to have had an even bigger impact. Blackrock, a $6.3 trillion fund manager, has now established a new approach to gun manufacturers, with investors receiving clear and transparent information about whether they are investing in such companies. Others are following suit, discussing divestment from gun manufacturers with investment committees.
Such actions are part of the larger trend of bringing about important change. Today, large-scale investors, like sovereign-wealth and pension funds, are forcing companies to look more closely at their environmental impact, governance, and pay structures. If companies continue to do harm, those investors will take their money elsewhere.
Norway’s $1 trillion sovereign wealth fund, for example, has strict policies against owning stakes in companies that make nuclear weapons and cluster munitions, or that are involved in production of coal or tobacco goods. US companies, as well as state and municipal governments, have announced plans to meet the commitments made as part of the 2015 Paris climate agreement, despite President Donald Trump’s decision to withdraw the United States from the accord. And it was demands by sponsors that compelled world soccer’s governing body, FIFA, to re-examine its governance and structure.
Much has changed since I stood on that stage in 2001 talking about the future of investing and divesting. Today, companies and investors recognize that the power they wield must be used responsibly, and that they have a significant role to play in driving change and influencing policy and action, not only for their own good, but also for the long-term security and wellbeing of people everywhere.
The Disunited States of American Gun Control
America today doesn’t just have red (conservative) states and blue (progressive) states, but de facto red countries and blue countries: regions with distinct cultures, heroes, politics, dialects, economies, and ideas of freedom. The recent massacre in Las Vegas suggests that it's time to let them go their separate ways.
LONDON – The Las Vegas massacre and its aftermath are pure Americana. A deranged person lugs nearly two dozen high-tech assault weapons to a 32nd-floor hotel room to spray death upon concertgoers in a mass murder and suicide. In response, the culture wars flare anew, with gun-control advocates in pitched battle against gun enthusiasts. Yet there is consensus on one deep truth: nothing much will change. After a week of televised, heart-wrenching funerals, American life will go on until the next massacre.
Mass violence is deeply rooted in American culture. America’s European settlers committed a two-century-long genocide against the native inhabitants, and established a slave economy so deeply entrenched that only a devastating civil war ended it. In almost all other countries, even Czarist Russia, slavery and serfdom were ended by decree or legislation, without a four-year bloodletting. When it was over, America established and enforced a century-long system of apartheid.
To this day, America’s homicide and imprisonment rates are several times higher than Europe’s. Several large mass shootings occur each year – in a country that is also waging several seemingly endless wars overseas. America is, in short, a country with a past history and current stark reality of racism, ethnic chauvinism, and resort to mass violence.
The Las Vegas shootings make clear once more the need to ban assault weapons. When America had such a ban, from September 1994-September 2004, it helped to limit mass shootings; yet Congress failed to renew the ban, owing to intense lobbying from gun enthusiasts. Nor is the ban about to be reinstated any time soon at the federal level. A prohibition against “bump stocks,” the device used by the Las Vegas killer to enable his semi-automatic rifles to fire like fully automatic weapons, appears possible; but there will be little more federal action than that.
When Australia banned assault weapons in 1996, mass shootings stopped abruptly. America’s gun lovers reject such evidence, and mass shootings like the one in Las Vegas serve only to reinforce their belief that firearms are their only true protection in a dangerous world. According to compelling recent survey data, the attachment to guns is especially intense among less-educated white Republican men residing mainly in rural and suburban areas in the South and Midwest – the same demographic that forms the core of support for President Donald Trump.
Despite the deep ideological divisions in the country, there is a glimmer of hope. Under the US Constitution, states have the authority to ban assault weapons and regulate firearms (though not to ban handguns and rifles outright, given the Supreme Court’s interpretation of the Second Amendment’s “right to bear arms”). My own state, New York, already bans assault weapons, as do a handful of other states. Rather than fighting another ill-fated battle in Washington, it is more promising to encourage many more states to exercise their prerogatives.
States that do will have lower rates of mass shootings, more secure citizens, and more vibrant economies. Las Vegas will suffer not only from the trauma of the recent massacre, but also from a diversion of tourism and conferences, at least until Nevada cracks down on assault weapons and can guarantee visitors’ safety.
America today doesn’t just have red (conservative) states and blue (progressive) states, but de facto red countries and blue countries, that is, distinct regions with distinct cultures, heroes, politics, dialects, economies, and ideas of freedom. In New York City, freedom means not having to fear that the thousands of strangers sharing the city’s sidewalks and parks with you on any given day are carrying deadly weapons. In Texas or Las Vegas, freedom is the comfort of carrying your trusty firearms anywhere you like.
It’s time to let red states and blue states go their own way. We don’t need to fight another civil war to agree on an amicable and limited move to much looser linkages across the states. In this, the conservatives have it right: Let’s reduce the power of the federal government and turn more revenues and regulations back to the states, subject to the constitutional limits on the division of powers and fundamental rights. That way, each side of the culture wars can move closer to its preferred outcomes without impeding the other side from doing the same.
My own state would thrive in such a looser federation, using its increased margin of maneuver to tighten its own regulations and to scale up its social services with the savings in taxes now paid to the federal government. And the weaker federal government would mean fewer US “wars of choice” in the Middle East.
At some point, the US will end up with federal gun control legislation. When more Congressmen come to realize that their own lives are on the line – which, sadly, they are – we will finally see national action. Two members of Congress have already been shot this decade (Gabrielle Giffords in 2011 and Steve Scalise earlier this year). For now, however, members of Congress will remain caught in the political crossfire of mad gunmen and pro-gun lobbyists. This is terrifying, but sadly the case.
In Trump’s America, gun violence and instability are being stoked daily. A rapidly implemented, national-scale solution would be ideal. But until that happens, more US states should be encouraged to choose gun sanity for themselves.
Republicans’ Responsibility for Gun Violence
After every mass shooting in America, the Republican Party mobilizes to block any legislation that might strengthen gun control. Why, then, do journalists and pundits persist in attributing the lack of commonsense regulation to political "dysfunction," rather calling a spade a spade?
BOSTON – After the mass shooting at a concert in Las Vegas, Nevada, on Sunday night, Republican Senate Majority Leader Mitch McConnell told reporters that, “It’s particularly inappropriate to politicize an event like this. It just happened within the last day and a half.”
With 59 dead and more than 500 injured, McConnell insisted that it was “[e]ntirely premature to be discussing about legislative solutions” to America’s gun-violence epidemic. His party’s legislative priority, he added, would continue to be tax cuts.
McConnell’s response was fully in keeping with the Republican Party’s stance on gun violence. It is disheartening, however, that none of the reporters assembled in front of McConnell so much as tried to call him out on his position.
It would not have been unreasonable to ask the Senate majority leader: “If you think it is premature now, then when do you think the right time will be? Could you provide a timetable?” Nor would it be unreasonable to question the premise that Democrats are “politicizing” a tragedy. After all, claiming politicization has been the go-to Republican talking point after every gun massacre for decades now.
McConnell and his Republican colleagues should have to explain why they will not even discuss policy solutions to the scourge of gun violence in America, instead of being allowed to continue pursuing their transparent efforts simply to avoid the issue of gun control. And they must be held accountable for their positions, which reflect an instinct, both telling and chilling, to view any discussion about gun violence as a political issue, offering an opportunity to score partisan points, rather than as a policy and public-safety issue.
One could argue that the repeated mass shootings in the United States over the past few decades have all had a Republican stamp on them. After every (predictable) tragedy, the party mobilizes to block any legislation that might strengthen gun controls. In 1996, the Republican-controlled Congress went so far as to threaten to defund the Centers for Disease Control and Prevention if it even tried to study gun violence. Until the Sandy Hook massacre in 2012, the CDC was forced to abstain from conducting any such research.
The response to the Las Vegas shooting from Paul Ryan, the Republican Speaker of the House of Representatives, has been to dismiss the issue of guns, and to instead frame the tragedy as primarily a mental-health issue. Accordingly, Ryan has been breathily touting reforms to the mental-health system that Republicans supposedly worked on in the past.
But Ryan chose not to mention the fact that, this past February, his Republican colleagues (and four Democrats) in the Senate voted to revoke a rule requiring the Social Security Administration to report the names of mentally-disabled Social Security recipients to the National Instant Criminal Background Check System. After that vote, US President Donald Trump repealed the rule, allowing mentally ill individuals to purchase deadly firearms without hindrance.
Ryan also neglected to mention that his party’s repeated efforts to repeal the 2010 Affordable Care Act (“Obamacare”) included plans to defund mental-health programs, and to eliminate a rule requiring insurance companies and Medicaid to provide mental-health treatments.
Journalists and pundits tend to be vague when assessing culpability in this distinctly American tale. They blame the failure to address America’s gun-violence problem on Congress, the “Washington establishment,” or the political system as a whole. Such manufactured even-handedness is tantamount to “fake news.” It is time to call a spade a spade: the Republican Party is overwhelmingly responsible.
Consider the issue of “bump stocks,” the gun modification that the perpetrator of the Las Vegas massacre used to be able to fire faster. Some Republican senators have now drawn praise for indicating that they will support a ban on the device. But when Democratic Senator Diane Feinstein proposed a similar ban in 2013, Republicans overwhelmingly opposed her. After decades of such staunch opposition to any semblance of gun control, the small amount of flexibility Republicans are showing on banning bump stocks – which will just make killing with semi-automatic weapons slightly slower – should not be reason for high praise.
To be sure, some congressional Democrats and independents have occasionally joined with Republicans in blocking gun-control legislation. But there is a fundamental difference: Democrats who oppose gun controls do so in defiance of their party’s official program, whereas Republicans do so in conformity with theirs. As a result, the degree of culpability between the parties is not even close. For evidence of this, one need only follow the money. According to the Los Angeles Times, in 2016, the National Rifle Association (NRA) donated $52.6 million to electoral campaigns, of which just $265 – yes, you read that right – went to Democratic candidates. McConnell received $1.3 million from the NRA in 2016 alone.
After the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut, where a lone gunman murdered 26 schoolchildren and their teachers, Senator Joe Manchin, a Democrat, proposed a bill to require universal background checks on all commercial gun purchases. The Manchin Amendment failed to gain the 60 votes needed to overcome a Republican filibuster. Just four of the 54 senators who voted in favor of the bill were Republicans; only five of the 46 senators who voted against it were Democrats.
Mass murderers such as Adam Lanza at Sandy Hook, Omar Mateen at the Pulse nightclub in Orlando in 2016, Stephen Paddock in Las Vegas, and countless others pulled the trigger. But the Republican Party acted as a political accomplice to all of these murderous acts.
As a country of immigrants, the United States is held together more by shared laws than shared culture. But when it comes to gun rights, laws must compete with myths, none more powerful than that of the rugged gunslinger, the freedom-loving rambler whose way of life is threatened by government control.
NEW YORK – Defending the right of United States citizens to buy semi-automatic rifles or carry concealed weapons is akin to denying any human responsibility for climate change. Rational arguments are not the point. No matter how many schoolchildren are gunned down or what the scientific evidence may be for the effects of carbon dioxide emissions, people will not change beliefs that define their identity.
It follows, then, that the more liberals from New York or San Francisco, or indeed Houston, agitate for ways to control the sale of guns to civilians, the harder proponents of the right to own lethal weapons will fight back. They will often do so with the zeal of religious believers who feel that their God has been offended.
Collective identities have a history, of course. The US Constitution’s Second Amendment, which guarantees the right to keep and bear arms, was adopted in 1791, when citizens who had rebelled against the British monarchy thought they needed to protect themselves, if called upon, against an oppressive state. Interpretation of this amendment has been contested terrain, but the original idea was that citizen militias should be armed.
For many Americans, especially in rural areas and in the southern states, this collective entitlement became akin to a God-given individual right. Demagogues have had great success pitting such people against coastal and urban elites who supposedly want to strip them of this right. The fear that demagogues exploit is rooted in more than a shared taste for hunting, or a notion of self-defense. It is about who people think they are. Take away their gun rights, and they would feel culturally and socially annihilated.
But if this is the core of many Americans’ identity, it points to an odd contradiction in their national self-image. The Second Amendment is of course a legal concept. In a way, that is true of the US itself. As a country of immigrants, the US is not based on shared ancestry or culture. It is based on laws – the only way a people from so many different cultural backgrounds could be bound together in a common enterprise.
No wonder, then, that there are so many lawyers in the US, and why Americans are more litigious than, say, the Japanese, who rely more on customs and traditions. If the US can be said to have a civic religion, the Constitution is its holy writ. And that is precisely how conservatives treat the foundational laws, including the Second Amendment.
At the same time, however, many Americans cherish national myths, no less foundational in their way, which are in direct opposition to the idea of a nation of laws. In classical Westerns, the true American hero is the rugged gunslinger, the outlaw who knows right from wrong in his gut, the freedom-loving rambler who rides into the sunset on his trusted horse, a rifle slung across his shoulders. John Wayne arrives to save the citizens from the bad guys in black suits whose nefarious deeds undermine the liberty of the American frontier.
But who are those villains dressed in black? They are bankers, lawyers, businessmen, and railroad builders, often representing the interests of powerful figures in the big cities on the East Coast. They employ fighting men of their own, to be sure, but the black-suited men come from a world of contracts, treaties, and big government.
The story of most Westerns is of a wide-open rural idyll, where man has found perfect autonomy, threatened by a state ruled by man-made laws. The only laws the Western hero respects are those laid down by God and his own conscience. And he badly needs his gun to defend them.
The problem with the American myth is that this rural idyll of perfect individual liberty, this state of nature, as it were, cannot possibly be maintained in a highly organized state of banks, courts, business corporations, and legislatures. The Second Amendment is a sop to the myth, disguised by the fact that it is also encoded as law.
Ronald Reagan understood the mythical yearning of many Americans better than most presidents, perhaps because he had acted in a number of Westerns himself. When he famously proclaimed that “government is not the solution to our problem, government is our problem,” he was talking like a gunslinger, even though he was officially speaking as the newly installed US president.
In a far coarser and more belligerent way, Donald Trump has followed Reagan’s example. In fact, he really is a kind of outlaw, with no use for norms of civility in government. In many ways, Trump has managed to combine the habits of a desperado with the interests of the men dressed in black suits, the corporate leaders, the bankers, and their political representatives in Washington.
Trump is a New York hustler who can tap into the fears of Bible Belt gun-lovers. If the US is riven by an escalating culture war over its national identity, Trump has the uncanny ability of personifying the worst aspects of both sides of the divide: the lawlessness of the gunslinger and the rapaciousness of the city slicker.
To overcome the dangerous fissures that are tearing its society apart, the US must find a president who can bridge the cultural divide. Alas, it could not have chosen a man less suited to the task.