Marina Welker and David Wood have written a perceptive article in Current Anthropology, Shareholder Activism and Alienation, that analyzes some of the contradictions thatwe are now realizing our current capital market system contains. Introduction:
This article opens up the category of the shareholder, who conventionally sits as a stick figure at the heart of popular explanations for why corporations ruthlessly seek to maximize profits. Following the logic that a gift may be seen as an extension of the giver’s self, we take up the possibility that investment portfolios might be viewed as reflections or extensions of shareholder personhood. We examine how three shareholder activist movements in the United States—socially responsible investment, shareholder value, and responsible investment—address the relationship between shareholder personhood, values, and investments. The divergent ways in which these shareholder movements have grappled with the contradictory entailments of share ownership illuminate the contestation at the heart of corporate ownership over the nature of the capitalist person.
'As a financial advisor I work and live in two different worlds. The world I live in is populated with caring people who strive continuously to make the lives of their children, their communities, and often the world at large a little bit more livable. The world I work in is populated with people who ceaselessly work to achieve superior investment results for their clients. These two worlds are occupied by the same people. When at home, they care, and when at work, they care. But what they care about in each locale is at conflict with what they care about at the other. As a result, they work long days to achieve a goal that jeopardizes all that they hold dear when at home.' (Domini 2001:xv)
The moral crisis depicted by Amy Domini, one of the founders of the modern social investing community, is no less profound for being conventional. Her words illuminate the schizophrenic way in which capitalism is organized. While she depicts financial advisors inhabiting multiple worlds governed by distinct rules, alternatively, this dilemma could be framed as the compartmentalization of individual persons into multiple selves who must activate certain logics and suppress others according to their context. In this article, we consider how a similar predicament holds much wider currency today, marking the experience of the average passive, anonymous corporate shareholder. As persons, we all inhabit a range of subject positions that give rise to a host of environmental, social, moral, and religious values. As shareholders, however, we are conventionally seen as desiring above all to maximize return on investment through rising share prices and dividends, limiting or precluding consideration of competing values and beliefs. This article seeks to complement discussions of corporate personhood (e.g., Bashkow 2010; Mark 1987; Millon 1990; Sawyer 2006) with a consideration of how shareholder activists construe shareholder personhood and the consequences these understandings hold for the ethical expression and agency of shareholders in the context of capital markets.
We divide shareholder activism into three overlapping movements: socially responsible investment (SRI), shareholder value, and responsible investment. These movements resonate with various agendas ranging from more progressive to conservative ends of the political spectrum. The modern SRI movement emerged in the 1960s and 1970s from larger struggles for civil rights in the United States and the overthrow of apartheid in South Africa. SRI activists sought to create and rationalize a sphere of investment that accounts for social and environmental values. Shareholder value activism, which began gathering momentum in the 1970s, sought to discipline powerful corporate managers and restore control to the “real” owners of corporations, the profit-seeking shareholders. The responsible investment movement, which coalesced in the past decade, promised to synthesize the social values that have driven SRI with the profit orientation of the shareholder value movement. In this article, we stabilize these intersecting social movements in discrete, ideal-typical form for the purpose of distilling from them theories of personhood and value.
The intellectual provocation underpinning this article can be formulated as a question: might an investment or a portfolio be seen, like the gift in Mauss's (1990) classic contribution to exchange theory, as an extension of self? If so, what are the implications for how we see shareholders and for how we theorize persons? A rich anthropological literature has considered numerous ways to conceptualize personhood, much of it focusing on relational understandings in which persons do not act and cannot be understood as free and discrete agents independent of the social relations in which they are embedded. McKim Marriott (1976) coined the term “dividual” to suggest that Indian Hindus conceived of themselves as composite, made up of materials and social relations that originate outside of themselves. Ethnographers of Melanesia have extended this line of analysis in new directions, suggesting that in contrast to the “permeability” of Indian personhood to flows of substance, some Melanesians construe persons as “partible,” or open to reconfiguring, as parts of their selves that are owed to others can be separated or extracted and replaced with other parts (Strathern 1988).
Such accounts of relational personhood often appear in stark opposition to a putative Western notion of the individual, a clearly bounded autonomous subject who has a unique indivisible core or self. Although the individual is often described as completely separable from the social relations in which he or she is embedded, scholars following Macpherson (1962) have argued that the “possessive individual” is in fact a product of capitalist social relations. The distinction between Western/non-Western and individual/dividual notions of personhood has given rise to a debate over whether this binary should be seen as a useful device for critiquing the unself-conscious presuppositions of Western social theorists or as a problematic reflection of the essentializing tendencies of scholars conducting cross-cultural research on selfhood (Battaglia 1995:8; Foster 1995). LiPuma (1998) suggests that all persons have dividual and individual facets and negotiate the tension between the two. Numerous scholars, moreover, have questioned the notion of the autonomous, coherent, self-directing Western self by showing how subjects are formed through sustained interaction with institutions (e.g., Althusser 1971; Foucault 1979; Goffman 1961), are internally divided and in conflict (Freud 1960), utilize multiple voices or registers in everyday speech (Bakhtin 1981), engage in the performance of identity in relation to shifting contexts (Butler 1990; Goffman 1967), and cultivate or cycle through different identities as Internet users (Boellstorff 2008; Turkle 1995). In this article we extend this analysis of multiple and contested personhood to the corporate shareholder, the quintessential possessive individual who is supposed to stand at the heart of contemporary capitalism. We do so by probing shareholder activists' implicit theories of personhood and value.
In the following passage, Graeber connects Strathern's concept of the partible or multiple person to value:
'People have all sorts of potential identities, which most of the time exist only as a set of hidden possibilities. What happens in any given social situation is that another person fixes on one of these and thus “makes it visible.” One looks at a man, say, as a representative of his clan, or as one's sister's husband, or as the owner of a pig. Other possibilities, for the moment, remain invisible. It is at this point that a theory of value comes in: because Strathern uses the phrases “making visible” and “giving value” more or less interchangeably.' (Graeber 2001:39–40)
To briefly preview our arguments about how shareholder activists invoke shareholders and the question of value, we suggest that early SRI activists drew on a relational model of personhood to posit shareholders as moral persons who see their portfolios as an extension of selfhood. Shareholder value activists, by contrast, made visible only one facet of persons as shareholders: a desire for profit. Responsible investment converts moral into economic reason such that responsible investing will conform to the shareholder value imperative. In doing so, proponents suggest that prudent investment can address whole or complete persons (Strathern 2004) in their moral values and profit desires, at least over time. However, we show that “responsible investors” wind up encasing values in economic rationality.
This article grows out of our respective research interests and experience. Serving as director of Harvard University's Initiative for Responsible Investment (housed in the Hauser Center for Nonprofit Organizations) and as a board member of the Social Investment Forum, David Wood is a member of the responsible investing expert and activist community. Marina Welker is an academic anthropologist who has carried out research on the corporate social responsibility industry in mining, focusing on Denver-based Newmont Mining and its Batu Hijau copper and gold mine in Sumbawa, Indonesia. Beyond our professional work, however, we also wrote this article as a means of wrestling with our own roles as typical shareholders, that is, as members of the largely passive and anonymous mass of investors whose future retirement and children's college education hinge on the performance of the corporations in our mutual fund portfolios. We work among academics who are far more likely to criticize corporations for existing to maximize shareholder profits than to acknowledge that we stand among those shareholders in whose name corporations are supposed to maximize profits. While this stance could be seen as hypocritical, we suggest that it also reflects a more general structural predicament of shareholders that we explicate in the next section.
Review by James McRitchie of CorpGov.net