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Wednesday, March 25, 2015

ISRAEL/PALESTINE: Apartheid is to Pluralism as Desktop Computing is to the Internet

Caterpillar tractor being used to demolish Palestinian home.
(Source: Electronic Intifada)
I've just returned from two weeks in Israel/Palestine. The trip was centered in Bethlehem, and was focused on issues of peace and justice in Israel/Palestinian. You can read multiple posts about the trip on the Faith in the Face of Empire blog.

In summing up what we were trying to get at with this trip, our principal host spoke of the Occupation by saying,

“The US provides the hardware;
the churches provide the software.”

The speaker was Mitri Raheb -- Lutheran pastor of Christmas Church in Bethelehm, co-author of the Kairos Palestine document, president of the Dar al-Kalima University College of Arts and Culture, and author of the acclaimed book, Faith in the Face of Empire: The Bible through Palestinian Eyes. (See “The churches provide the software”)

I was struck by his summary of the situation, in part because it so closely paralleled a fundamental statement in the recently released "A Global Security System: Alternative to War" from World Beyond War:

[Steps toward] dismantling the war machine and replacing it with a peace system that will provide a more assured common security . . . comprise the “hardware” of creating a peace system. . . . [S]trategies for accelerating the already developing Culture of Peace, provide the “software,” that is, the values and concepts necessary to operate a peace system and the means to spread these globally. [emphasis added]

I find the "hardware/software" analogy extremely helpful. We are dealing with big systems: war, occupation, and Empire. Let's use the insights and organizing concepts of people who have been enormously successful at bending other big systems to useful and humane ends, in order to deal with these systems of war, occupation, and Empire.

We're all familiar with the ways in which the US provides the "hardware" of occupation -- to the tune of $3 billion annually. And certainly churches -- in the US and elsewhere -- provide the "software" of the Occupation in many and diverse ways.

By coincidence, I had the opportunity to attend a public screening of the film, 5Broken Cameras, here in Chicago last night. Much of the film consists of scenes of conflict between Palestinian civilians and members of the Israeli Defense Forces (IDF), and the discussion led by Prof. Daniel Eisenberg of School of the Art Institute of Chicago (SAIC) stressed the ways that evolving technology (including, but not limited to, digital motion photography) changes the terms of engagement between parties to a conflict.

It suddenly occurred to me: "Hardware . . . software . . . yes, and something else . . . . (What is it?)"

The IBM PC 5150
Two floppy disk drives! (What's not to love?)
It came to me in a flash: the Israeli idea of "security" is embodied in hilltop settlements such as Efrat, which are lined up with other settlements in a kind of strategic necklace, using all the old paradigms of security that rely on barriers and isolation, that inevitably lead to a harsh ruler and ruled dichotomy. This is the "desktop computing" of this situation.

But desktop computing is passé. There came a time, several decades back, when the great minds of information technology realized that desktop computing would be surpassed by systems of linked computers. Bill Gates famously sent a wake-up email to his staff about "The Internet Tidal Wave." Internet server supplier Sun Microsystems made the leap with "The network is the computer" -- which in turn meant that the most important attribute of any computer or computer system was its degree of "interoperability" with other computers and computer systems. And today even the least tech-savvy among us have learned to accept that the preponderance of information technology operates communally -- through "the cloud."

So: that "something else"("Hardware . . . software . . . yes, and something else . . . . (What is it?)") is a paradigm - a way of thinking about what constitutes the system, and what enables it to hang together as a system.

The fundamental paradigm of the Internet is actually much older the Bill Gates letter, the Sun Microsystems slogan, and the concepts of interoperability and "the cloud." It was articulated by a man named Paul Baran and it actually had issues of peace and war in mind.

From "What is Packet Switching?" on the Digital fewsure site.
Paul Baran was helping to think about how to provide a communications system that would be adequately "hard" (secure) in the face of potential nuclear attack. By thinking in a new way, Baran was able to help people see that a truly secure communications system -- one that could continue to function even when subjected to devastating attack -- was not the one with the biggest concrete shields surrounding its wires, but rather one that relayed information concurrently along multiple pathways. The key was "n ≥ 3" -- that is, if every message has the opportunity to traverse three (or more) pathways, the likelihood of the entire set of pathways being rendered impassible was reduced to nearly zero. This became the basis of packet switching, i.e. the method by which messages are transmitted over the Internet today.

Robust systems -- ones that are secure and vibrant -- have multiple different ways of doing the same thing.

I don't know exactly what this implies for the desired paradigm -- the way of thinking about war, occupation, and Empire that will supplement the notions of "hardware" and "software" -- but it seems to me that it adheres roughly to the logic,

apartheid : pluralism ::
desktop computing : the Internet

And one thing is for sure: we can't begin to say what the "new and improved" hardware or software looks like until we get our minds around the overarching paradigm that we are all working toward.

Perhaps others will elaborate.

Wednesday, March 11, 2015

EXTRA! U.S. Congress Notices Problem with Nuclear Weapons!

. . . and this was just the subtle part of the NY Daily News front page

That a bunch of GOP senators are agitated about nuclear weapons is a good thing. ("Firestorm erupts over GOP letter challenging Obama's power to approve Iran nuclear deal" - March 10, 2015 on Fox.)

Now we just need to re-direct their energy to where the real problem is.

So many exist, ready to be used . . . .
The world's nuclear weapon
count (August, 2014):
Iran and all the other countries in the world are confounded by the existence of thousands of nuclear weapons in US and Russian hands. They have practically no way to change that situation.

The possibility that Iran (or any other country) might obtain a nuclear weapon is significant in several senses -- but the MOST significant sense is its ability to wake us up. (Witness the now-wide-awake GOP members of Congress.)

The trick now is to get Congress to pivot to the REAL challenge: getting the US to eliminate its nuclear weapons. Or -- and this is where it gets really hairy -- getting the US nuclear weapons out of the hands of our thermonuclear monarch.

Yes, that's right. The real threat is a single person with his hand on the switch -- able at any time to release the thousands of nuclear weapons already standing on alert and ready to go.

You want to talk Presidential power?


Sovereignty of the People?

Well then . . . let's see you take on the king . . . .

Related posts

Elaine Scarry demonstrates that the power of one leader to obliterate millions of people with a nuclear weapon - a possibility that remains very real even in the wake of the Cold War - deeply violates our constitutional rights, undermines the social contract, and is fundamentally at odds with the deliberative principles of democracy.

(See Reviews of "Thermonuclear Monarchy: Choosing Between Democracy and Doom" by Elaine Scarry )

The choices are: (a) take back the power currently held by our thermonuclear monarch; or (b) shut up and pray. Those are the only two choices, and everybody gets to choose where they stand. The people in Congress who won't step up to either of them are a nothing but a bunch of putzes.

(See Congress is a Bunch of Putzes )

There are three centers of power that will impact nuclear disarmament: the President, the Congress, and the people. One of them will have to make nuclear disarmament happen.

(See Countdown to U.S. Nuclear Disarmament (With or Without the Politicians) )

The decision about whether to live with the threat of nuclear annihilation is our decision. And that is why the entire country is mobilizing for mass action for nuclear disarmament in 2015. Are we capable of making sure the messengers -- Obama, Putin, the other agents of government -- hear their instructions from us clearly?

(See NEEDED: Heroes to Bring About Nuclear Disarmament )

How do you formulate a statement that can somehow convince the United States to eliminate its threatening nuclear weapons?  How do you formulate the 10th request? Or the 100th? Knowing all the time that the United States is in the position -- will always be in the position -- to say, "No" ?  At what point does it dawn on you that the United States will never give up its nuclear weapons, because it has the power and the rest of the world doesn't?

(See 360 Degree Feedback in New York (2014 NPT Prepcom and How the World Views the United States))

It may be counterintuitive, but House Majority Leader John Boehner has actually done a good thing by inviting Israel's Prime Minister Benjamin Netanyahu to address Congress.

(See Bibi and Boehner's Gift to the Nuclear Disarmament Movement )

Monday, March 9, 2015

News Worth Spreading: "There IS An Alternative to War!"

"There is an alternative to war."
Published March 2015:
A Global Security System
website * paperback * audio book * PDF * teach-in

I'm excited to be associated with an initiative called World Beyond War, and to be sharing a new resource it has created: A Global Security System: An Alternative to War.

Alternative to War weaves together the learnings of major peace efforts of recent times, and lays the foundation for a massive push for education and action.

What I'm feeling particularly energized about is the potential for the thousands of people who have already signed on as supporters of World Beyond War -- as well as millions more who are expected to do so soon -- to become active participants in spreading this good news. Good news has always relied on a community to spread it; today, more than ever before, we all have powerful tools in our hands to be active spreaders.

(1) Spreadability

If an idea is really good, it's worth spreading, and that's especially true for Alternative to War.

In fact, in the areas of publishing, entrepreneurship, business, and leadership, "spreadability" has become a very important focus.

Dandelion seeds: a light touch, by oh-so-spreadable!
One of the questions we've been asking ourselves is, "How can we make this material more spreadable?"

Sometimes, the attributes that make something highly spreadable are different from what we tend to think of as the most desirable.

Our online version of Alternative to War incorporates some features we hope will make it highly spreadable. That's why we emphasized the individual sections. And tried to use stimulating imagery and typography. And included lots of links. And added lots of reminders to share the material on social media. And made a very explicit request that readers think about, comment on, and engage others about the material.

And, most important, we're attuned to watching whether it spreads successfully, and trying to understand why or why not, and making improvements to make Alternative to War really, really spreadable.

(2) Communities of Interest 

Interpenetrating bubbles
One of the great things about Alternative to War is that people can engage with parts of it that are of specific interest to them. For example, I am particularly interested in the sections "End the Use of Militarized Drones" and "Phase Out Weapons Of Mass Destruction," and I am engaged with communities of people who will be, as well.

Other individuals and other communities will find it particularly attractive to begin by engaging with the section on "Spreading and Funding Peace Education and Peace Research" . . . or "Nonviolence: The Foundation of Peace" . . . or "Phase Out Foreign Military Bases" . . . or . . . .

(A conversation begins in the place where there is openness . . . . )

People can start at any point within Alternative to War and explore their way through it.

Ultimately, we will come to realize that our overall "community of interest" for Alternative to War actually consists of interpenetrating, overlapping, evolving communities for all of its parts!

(3) Network Theory

Since World Beyond War was formed about a year ago, we've learned two very important things.

How do ideas become ubiquitous?
First, there is already a huge community of people committed to working to end war. (We've seen this from the thousands of sign-ups on the World Beyond War pledge.)

Second, we've realized that we are going to need many more people to commit to this initiative in order for it to prevail.  The choir's already pretty big . . . but we need to get beyond the choir . . . !

So World Beyond War activists are learning to think creatively about how information spreads, and particularly about the role of interconnecting networks in spreading information. (Networks are related to communities of interest, but go beyond that concept. "Thinking about networks" is like "thinking about communities" on steroids.)

For the curious, Linked: The New Science of Networks by Albert-laszlo Barabasi is a great resource.

The Cliff Notes version? "The quickest path to ubiquity is found by traversing diverse networks."

(4) Ways of Sharing 

from @scarry:
#Nonviolence: Foundation of #Peace -- see
new @worldbeyondwar resource!
@CampaignNV @waginingnv
After many, many campaigns, I've put together a short list of "to-do's" for people who want to help share material:

* Email: share specific links with people you know personally. Explain to them why the material you have shared is important to you. Ask them for their feedback. Ask them if they can think of others who would be interested in the material. Thank them in advance for taking the time to look at the material.

* Twitter: share specific links, and add the handle of one or two Twitter accounts that you think may be particularly interested. Experiment with relevant hashtags. Ideally, include an image (or, ideally, a "meme" i.e. an image + relevant text.)

* Facebook: Combine the tips above. For extra oomph! share a relevant link with a related Facebook group, and/or on an event page for a relevant event. (Those are ready-made "communities of interest.")

Other possibilities include:

* Write a review on Amazon.

The most important concept: Don't just lob material out into the ether -- start a conversation!

(5) The Coin of the Realm: Comments!

In the near term, the most valuable thing for the effort to spread Alternative to Warwould be a large number of comments in response to the individual posts on the World Beyond War website.

Comments help us turn the corner from talking at people to talking with people.

It's about conversation.
Not incidentally, growing threads of comments cue the search engines in to the fact that these posts are robust and relevant, and worthy of being a place to send more and more searchers.

Comments give life to Alternative to War. Comments tell us what's working, and what's not. Comments expose new possibilities. Comments show us what education and action really look like. Comments can form the base of Alternative to War (Rev 2.0).

That's why the biggest way for World Beyond War supporters to support the initiative -- besides sharing Alternative to War posts -- is by commenting on Alternative to War posts, and by commenting on comments!

Ultimately, it's about conversation.

Can we build a conversation -- one that ultimately gets very large -- about what a world without war would look like, and what we are willing to do to bring it about?

Related posts

In "USA Today Goes Viral" (New York Times, July 14, 2014), we learn that the paper with one of the largest daily circulations in the country has seen the handwriting on the wall and is requiring all its journalists to learn to drive readership via social media.

(See Social Media: If It's Good Enough for USA Today, It's Good Enough for Me)

There is an eerie similarity between events in the book Paul Revere's Ride and events in our world today. I'm thinking particularly of how a network of mass resistance springs into action.

(See New World Counterinsurgency: Deja Vu All Over Again)

The biggest single eye-opener for me came this morning when I was trading emails with Washington Post reporter Peter Slevin. I expressed amazement at the 286 comments that people had appended to his piece on the use of the Thomson Correctional Center to house Guantanamo detainees. (That's a lotta comments!) Peter said, "Yeah, well, that one got picked up by the Huff Post . . . ." (See The World Turned Upside Down - Huff Post, Wash Post, and Twitter )

Sunday, February 22, 2015

"Memes" for Peace and Planet - Promoting the April 24-26, 2015 events

This week, particularly on Tuesday, I'll be using social media to help generate excitement for the Peace and Planet events taking place April 24-26, 2015, in New York City.

In particular, there is a conference taking place both days, and the speaker list is now being release - see

I'm learning, along with everyone else, about good ways to get the message out on social media. My contribution this week will be to create "memes" (graphic + text) that can be conveniently shared by others on Twitter and Facebook.

(Thanks to David Swanson, I now have some ideal dimensions for memes: Twitter: 1024 x 512; Facebook (shared image): 1,200 x 630)

Herewith my growing set of "memes" for the Peace and Planet conference

You had me at "Daniel Ellsberg"
Share on Twitter via @scarry

When will the world heed the testimony of Taniguchi Sumiteru?
Share on Twitter via @scarry

"This is what I saw . . . . " Hiroshima survivor Setsuko Thurlow
Share on Twitter via @scarry

"What can we do  to secure, reduce and eliminate stockpiles
of highly enriched uranium and plutonium worldwide?"
(Photo: Prof. Zia Mian)
Share on Twitter via @scarry

"What would happen if we put our focus on the Global South?"
(Photo: Prof. Walden Bello)
Share on Twitter via @scarry

"What if we feed the PEOPLE not the Pentagon?"
(Photo: Jo Comerford)
Share on Twitter via @scarry

“The nuclear crisis is real and ongoing"
 - Yoshiko Kira
Share on Twitter via @scarry

Thomas de Toledo on #Solidarity #People #Struggle #Peace"
Share on Twitter via @scarry

#PEACE   an old idea whose time has come
Rainer Braun, International Peace Bureau
Share on Twitter via @scarry

"Respect our Mother the #Earth as nurturer of all living beings"
Manuel Pino - Scottsdale College
Acoma-Laguna Coalition for A Safe Environment
Share on Twitter via @scarry

Peace and Planet
Share on Twitter via @scarry

Related posts

2015 "No Nukes" Mobilizations planned in the US already include New York City in April, Nevada in March, and New Mexico in August.

(See Key 2015 Events for Nuclear Disarmament Movement Organizers )

In light of the upcoming review of the NPT (Treaty on the Non-Proliferation of Nuclear Weapons) and the fact that organizations throughout the country and worldwide are organizing to press the U.S. to substantially reduce its stores of nuclear weapons, it seems like a good time to use social media to get EVERYONE on board!

(See 5 Ways YOU Can Make a Difference on #NoNukesTuesday )

The Vienna conference in December 2014 was a great start!

NOW . . . it's up to those of us with networks in the U.S. to get the word out to people in this country about the what nukes do to people -- and the need for people to become active in the movement to eliminate nuclear weapons.

(See #GOODBYENUKES: 10 Images I'll Be Sharing From #HINW14Vienna )

Sunday, February 15, 2015

Ayotzinapa43: US People Need an Attitude Adjustment

Human Rights in Mexico After Ayotzinapa
Thursday, February 26, 2015 7pm
at Northwestern McCormick Tribune Center, 1870 Campus Dr., Evanston.

Solidaridad con Ayotipnapa 43
My friend Natalia asked me to tell people about the case of the 43 young people killed in Ayotzinapa in Mexico.

I had a vague awareness of the case, but I have to confess that I couldn't quite understand what it was all about. Just an escalation of the violence in Mexico that we hear about here in the U.S., I assumed.

Then I attended an event hosted by Neighbors for Peace in Evanston that left me flabbergasted.

It will take me multiple posts to spell out everything that I feel needs to be said about the Ayotzinapa 43.  When I'm feeling overwhelmed with information, it usually works best to just get the main points into words, and build from there.

A Mystery That's Not a Mystery

At the NFP event, we started by seeing a film about disappearances in Mexico: Documental Ni Vivos Ni Muertos. There are estimated to have been 27,000 in the last decade. That's disappearances -- we're not talking about the ~100,00 confirmed deaths, the ones in which the facts are known. Disappearances are a terror technique.

I learned to stop thinking about "narcos" (drug cartels) as the sole purveyors of violence in Mexico.  I learned that the system in Mexico has involved the local police, and the federal police, and the army, and private paramilitaries, in corruption and violence. I learned that the Calderon administration saw a massive militarization of all levels of public "security" in Mexico. And I learned that US has been helping every step of the way. (Think School of the Americas.)

Justicia en Ayotzinapa
Comité Chicago
From the talk by members of Justicia en Ayotzinapa Comité Chicago I learned that the economic stakes go way beyond narcotics -- think mining, think control of land, think multinational corporations, think gas and oil -- and that all of these economic factors are driven by U.S. money.

And in all this I heard the term "context" -- as in "to understand what's happening in [Guerrero state, for instance], you need to consider context."  "Context" includes a lot, but a big part of it is the race-based pecking order in Mexico -- a variant of the systemic racism in the US -- based on where people are on the Euro-indigenous continuum.

And so the final piece of the "puzzle" that's not really a puzzle, as explained by Laura Ramírez, a PhD candidate at UIC and Comité member: the 43 "disappeared" young people are not just ordinary students. They are teaching students from one of numerous colleges in Mexico where the spirit of justice and respect for indigenous people, and an alternative way forward for Mexico, is fostered. As Ramírez said, in a country in which the power structure conspires to make people hopeless and to say, "You have no alternative," these young people were part of the small band of leaders saying, "There is another way!" (See this article: "Ayotzinapa: The Rural Normal School and the Criminal Government Offensive ")

The most deadly weapon of all: US ideology toward Mexico

"This is like the story of Mississippi Burning!" I said to myself. "The Ayotzinapa 43 are like Freedom Riders."

Still from A Touch of Evil
"And the difficult lesson that we're still learning about that episode in US history -- that systematic racism and a corrupt system is not just something that's happening somewhere else, in that other, bad place -- is the same lesson that we need to learn about what's happening in Mexico today."

The old paradigm -- the old US attitude -- is that there's a border, and everything on this side of the border is good and everything on that side of the border is corrupt.

This attitude is epitomized by the old film, A Touch of Evil. Cross from San Ysidro into Tijuana and it's night and day.

This attitude has been updated only slightly by the hit TV series, Breaking Bad.  (Moral: yes, one or two US people can go bad, but it is all about the drugs and the really horrific violence is done by the Mexicans.)

Hold it. Pause a moment to look at a couple of snapshots of the real US-Mexico relationship:

Here's a map of the terrain that David Rovics is singing about in that song about the St. Patrick's Battalion:

The Hispanic and Latino American population in the United States
in 2010 and the Mexican-American border of 1836 in red.

Probably the biggest impediment to US people getting any kind of clarity on the US-Mexico relationship is the idea that the US has an "immigration problem" ... and that the most we can possibly do is be more generous to "undocumented" people -- "illegals." The band OUTERNATIONAL has another perspective on that:

"Some day it will be ridiculous to say people are illegal the same way it’s ridiculous that people used to own other people as slaves.”(See "Outernational and the Return of Revolution Songs")

REPENT!  (US People Need an Attitude Adjustment)

Wednesday is Ash Wednesday -- the beginning of Lent.  It's the time when we acknowledge our own failures, and commit to repent -- to make an about-face -- so that the future can be different.

I can't think of a better way for people in the US to repent than to work to change their own attitude about Mexico, and about the culpability or all of us here in the US in the wrongs that are being done down there. The Ayotzinapa 43 were persecuted for saying "the future can be different." It's time for us to take up their cry.

NEXT IN CHICAGO: Human Rights in Mexico After Ayotzinapa - Thursday, February 26, 2015 7pm at Northwestern McCormick Tribune Center, 1870 Campus Dr., Evanston.

Human Rights in Mexico After Ayotzinapa
Thursday, February 26, 2015 7pm
at Northwestern McCormick Tribune Center, 1870 Campus Dr., Evanston.

Friday, February 13, 2015

There ARE Alternatives to War (A Personal Commitment to the World Beyond War Initiative)

The present confrontation between "the West" (i.e. the US/NATO military alliance) and Russia over Ukraine is a case in point that illustrates what the thousands of people who have committed themselves to the World Beyond War movement are committed to. @WorldBeyondWar

"#Ukraine ceasefire deal agreed at Belarus talks"

There is no denying that there is conflict within Ukraine and there is no question that Russia is involved.

There is also no denying that Ukraine now sticks out like a sore thumb as a remaining contested space in a process of Western power creep that has been taking place in Eastern Europe since the collapse of the Soviet Union.

NATO's eastward expansion -- 1990 vs. 2009

The news in the US is full of Russia and Ukraine and Putin and Crimea, and I recognize in myself a curiosity and thrill at learning about this new, exotic part of the world. Unfortunately, this is a movie I've seen a growing number of times in the last decade -- the U.S. dazzles the public with "foreign-conflict-as-entertainment," and the public loses sight of the big picture.

The big picture -- the forest for the trees -- is that we have to de-escalate conflict, not engage in one-upsmanship. This is particularly true in the US-Russia relationship, where job #1 is the elimination of the two countries respective nuclear arsenals.

The World Beyond War initiative is aimed at encouraging everyone to stay focused on the key point: there ARE alternatives to war, and when we are able to proceed with those alternatives, we CAN succeed in achieving peace.

Four people who discovered the truth of this statement are François Hollande, Angela Merkel, Petro Poroshenko, and Vladimir Putin. When they met in Minsk and talked, they were able to achieve a ceasefire in Ukraine.

Peace is not a one-shot deal. It involves a continuous process. A process of choosing the alternatives to war.

There are already an AMAZING number of people around the US and around the world who have committed themselves to choosing these alternatives -- and they're doing so in more ways than you can imagine.  Over the days and weeks ahead, World Beyond War will be lifting up these alternatives and the way people are pursuing them, and encouraging everyone to #choosepeace.


Sign up at
and tell others.

Like World Beyond War on  Facebook
and join the conversation.

Follow @WorldBeyondWar on
Twitter and #choosepeace

Related posts

It can all happen very fast . . . . No one really knows ahead of time what will happen . . . . That's why it's so important for people to get together and talk.

(See The Lesson of Reykjavik: TALK About Nuclear Disarmament (You Never Know) )


Everyone in the world should be doing everything possible to drive the nuclear "haves" towards an agreement on nuclear disarmament. It's more important than ISIS. More important than Iran, Bibi, or Boehner. And certainly more important than the top ten things trending on Twitter or coming up in your Facebook feed.

(See Job #1 Vis-a-vis Russia: NUCLEAR DISARMAMENT)

I wonder . . . what would it look like . . . if we could use social media to underline the concrete ways each of us is, in fact, choosing alternatives to war? And expressed interest in how others are choosing, too? (Including by sharing and spreading what we find valuable?)

(See STEP ONE: CHOOSE (To Have the Power to Choose, Putting Alternatives to War into Action) )

Wednesday, February 11, 2015

The Feel-Good Folly of Fossil-Fuel Valuation

Mother Nature Says "Divest!"
(So do Black and Scholes.)
If the people who organized Global Divestment Day are looking for a sign that they're getting under the skin of the oil industry, they need look no further than yesterday's Wall Street Journal.

In "The Feel-Good Folly of Fossil-Fuel Divestment," Daniel R. Fischel summarizes a white paper written by his firm and financed by the Independent Petroleum Association of America: “Fossil Fuel Divestment: A Costly and Ineffective Investment Strategy.”

Fischel provides a very interesting argument about why universities, despite their possible wish to appease student activists, shouldn't divest from fossil fuel companies. It goes something like this:

Fossil fuel companies are more like "the market in general" than like any other sector in particular.

As everyone knows, investors are wise to diversify, so that they are not over-exposed to any particular market sector.

The more fossil fuel stocks you have, the wiser you are (because the more your portfolio will resemble a diversified one). Conversely, the less fossil fuel stocks you have . . . well . . . you get the idea . . . .


The readers of the Journal are likely to recognize this as an analysis that has something to do with correlation -- "alpha" and "beta" and the "capital asset pricing model (CAPM)" -- and if this recognition brings back painful memories of business school finance classes it would be hard to fault them for deciding to simply call it a day and just give Mr. Fischel the benefit of the doubt.

Perceptive readers, however, will stop to ask, "What's the real correlation that's at issue here?"

The Wrong Correlation

The premise of the analysis presented by Fischel is that diversifying market risk is the greatest challenge university investment offices face, and that the historic correlation of fossil fuels stocks to possibly risky market sectors is what matters most. (This might be called "avoiding bad alpha.")

But far more important is the future correlation of fossil fuel stocks to generalized, systemic risk in the market, and their negative correlation to the few sectors of the market that stand apart from that risk.  (This might be called "avoiding bad beta.")  Specifically: as the world economy faces a carbon bubble, fossil fuel stocks are likely to go into free fall, and since fossil fuel stocks constitute such a large part of the overall market beta ain't gonna be doing too well, either.  ("Highly correlated," remember?)

Mr. Fischel might assert that I have no way of really knowing if and when fossil fuel valuations are going to go into the toilet. And you know what? I completely agree.  But you see, his is the argument that depends on the proposition that fossil fuel asset valuations are predictable: "load up on lots of fossil fuel stocks, and stay away from instability."  Mine is the argument that is consistent with a high degree of fossil fuel asset valuation uncertainty: "avoid fossil fuel stocks (after all, at best they're little better than a diversified portfolio of other sections."

The reason university (and other) investment offices should divest from fossil fuel stocks is: they provide overly-large exposure to risk. Raising awareness of this is the real point of Global Divestment Day.

Related posts

What was striking to me was that, despite the U of C's reputation as a center of economic research and thinking and teaching, all four of the panelists appeared singularly uninterested in the central economic problem of the climate crisis: how will the supply and demand of goods and services change as a result of society's understanding of the climate crisis? and how will the market react to signals about such changes?

(See EXTRA! Climate Economics Confound U of C Profs! )

Oil companies are valued by the market based on their reserves. The problem with this approach is that the total reserves claimed by the oil companies is FIVE TIMES what can possibly be burned without driving up the temperature of the atmosphere up by a catastrophic amount and, as McKibben puts it, "breaking the planet." How can the value of oil companies be a function of reserves that can never be used?

(See The REALLY Big Short: The Jig is Up with Oil Companies)

The planning that is under way for 2015 clearly envisions the connections between multiple issues -- nuclear disarmament, clean (non-nuclear) energy, and climate -- and a need to involve everyone who cares about these issues.

(See #NoNukesTuesday: Disarmament? Clean Power? Climate? All three?