Letting Your Conscience Be Your Guide : Finances: A growing group of investors and clients are putting their money only in socially responsible companies. They say it soothes their souls and makes good business sense.
Jack Brill has the relaxed, open manner of a man at ease with his conscience. He ought to be. He is one of those rare sorts who have struggled to make their morals and profession a perfect fit.
Five years ago, the 58-year-old stockbroker was another heart attack candidate, a civil servant overseeing quality assurance for the Navy. Watching the excesses of military spending, feeling uncomfortably close to helping build bombs, was “eating away at my gut,” as he puts it. He quit his GS-13, $40,000-a-year job, with the prospect of a healthy lifelong pension, “cold turkey.”
However, Brill was not without resources. Over the years, he had been teaching himself the art of making smart investments, realizing one day that he was making better decisions than his financial planner. When he left civil service, the industrial engineer returned to school, became licensed as a financial representative and went to work selling socially responsible investments.
To Brill, such investments mean nothing more than selling stocks and bonds in companies that promote products and services that are good for people and the environment, and refusing to sell investments in companies that produce pollution, weaponry or engage in unfair labor practices.
“I had been overseeing $500 million a year in contracts. And I was seeing things I just couldn’t stomach . . . sweetheart deals between contractors and military brass anxious to feather their own nests when they retired. It was like a good old boy club,” Brill explains. “(The government) said they wanted it cleaned up, but they really didn’t--the fraud had to be ridiculously blatant, the rest ended up being overlooked. I found I couldn’t handle personally being involved in a system that put my hand on the trigger, so directly involved with war.”
Brill served in the Army in the Korean War and still believes our country needs a strong defense. It was watching military spending grow unchecked--beyond reasonable need, he claims--during the four decades since World War II that caused his turnaround.
That was Brill’s personal economic conversion. Now he is in league with others like him--people who try to demonstrate that good moral sense makes good economic sense--to bring about a similar conversion of the entire economy. They are affiliated through San Diego’s Economic Conversion Council, a grass-roots activist organization working to persuade people that real security depends less on our weaponry than on our social and economic strength.
“We believe military spending is excessive and draining our resources--scientific, financial and human,” says Marsha Boruta, executive director of the ECC. “We’re finding that economic conversion means much more than converting companies dependent on military contracts to commercial production. It also means shifting our national spending priorities.”
Boruta and Brill were among the founders of ECC, which emerged five years ago out of a University of San Diego conference attended by the father of the national conversion movement, former Columbia University professor Seymour Melman. Melman’s theory, that “state military capitalism” protected from free market forces destroys economic productivity and leads to decline, helped spur activists around the country to find ways in their own communities to search for alternatives to dependence on military-related industries.
But during the Reagan Administration’s rearmament, there were few converts to the cause.
“We just sort of plugged along, trying to educate the public about our position through our newsletter and speakers,” recalls Boruta of the organization’s beginnings. The group had just 60 members until last year, when a merger with the local chapter of the National Committee for a Sane Nuclear Policy boosted its rolls to more than 500.
Now, they’re hopping.
The convergence of international events, including the economic ascent of Japan and the thawing of the Cold War, combined with pressing national scourges--from homelessness and drug abuse to the crumbling of inner cities and the deterioration of the environment--are causing ordinary people who ordinarily don’t have the time of day for peace activists, to question whether we shouldn’t be spending more fixing up our country than trying to defend it.
At least four major national magazines have this year featured stories on rethinking our country’s spending priorities. Late last year, the U.S. Conference of Mayors published a report calling for a shift in military spending, estimating that the Defense Department wasted $30 billion a year.
“That’s just what we want, for the debate to start among all Americans,” Boruta says. “When you see defense officials and military on TV, talking about all the cuts they’re making, that’s one thing. But mine or somebody else’s idea of cuts is going to be a lot different than theirs.”
This vitalized interest in redirecting defense dollars surfaced locally at a congressional hearing in November, 1989, called by U.S. Rep. Jim Bates (D-San Diego) at the initiative of the ECC. The conference examined what San Diego should do to prepare for possible reductions in military spending. It attracted speakers representing the city, major defense contractors such as General Dynamics and National Steel & Shipbuilding Co., the Chamber of Commerce, the Economic Development Corporation and labor unions.
Labor unions are showing strong interest in planning to diversify away from defense industries, for nobody stands to lose more than rank-and-file workers whose livelihoods have depended on the Cold War.
“That’s where we’re at right now, just trying to find out where San Diego stands if significant military spending cuts do happen,” says Kurt Chilcott, deputy director of the city’s economic development division. “Maybe we’re fine, and maybe we’re not. But we need to know. The big prime contractors have their own people looking at diversification, it’s in their best interests, but what about all the subcontractors tied to the shipbuilding and aerospace industries? What happens to their workers if they lose contracts?”
The Chamber of Commerce estimates that nearly $10 billion of San Diego’s $51-billion economy--20.5%--is in defense industries. But the figures are only imprecise estimates, the chamber concedes. Much more may be invested in classified contracts that go unreported. And nobody knows how many or how much thousands of smaller companies depend on subcontracts for defense work.
“We’ve made some progress but we haven’t gone far enough,” stockbroker Brill complains. “Why didn’t we get Naasco to assemble our trolley system here? They could have used the work. Why are we using an empty Camp Pendleton to train a handful of Marines when we need new prisons? Why aren’t we using Miramar for an airport or the new water purification system we need so badly? Why aren’t we pouring money into incentives to use alternative engrgy sources instead of a Stealth? Any change is going to hurt, but we can’t afford to go on the way it’s been, so let’s just get on with it.”
“We can sense that people are more excited about this issue than ever before and we need local government to respond,” Boruta says. “It’s like that saying, when people lead, the leaders will follow.”
Brill, meanwhile, a member of the socially responsible First Affirmative Financial Network of Colorado Springs, Colo., continues selling his stocks and bonds, enthusiastic about each new fund that appears in the growing market of “do-gooder” investing, illustrating how pervasive and popular economic conversion is becoming.
“This approach is smarter socially and financially,” Brill insists. “A company that is well managed, not caught in political conflict in South Africa, for example, is more profitable. A company that treats employees like human beings is going to get better production. A company that doesn’t pollute isn’t going to have to cost their investors money for cleanup funds.”
“There’s a new Catholic Income (mutual) Fund that is building schools and hospitals and getting returns between 8% and 9% for its clients who also want to help their diocese feed the hungry and serve the needy,” Brill said. “I’m fully convinced we can use our existing financial institutions--stocks, bonds and the healthy savings and loans to make capital work for peace and justice instead of war.”
