The University of Cambridge’s wealthiest constituent college, Trinity College Cambridge, has decided to divest from all arms companies, Middle East Eye can reveal.
MEE has learnt from three well-informed sources close to Trinity’s student union that the college council, responsible for major financial and other decisions, voted to remove Trinity’s investments from arms companies in early March.
According to the sources, the college decided not to announce that it would divest from arms companies after an activist defaced a 1914 portrait of Lord Arthur Balfour - who authored the infamous Balfour Declaration - inside the college on 8 March.
This completely ignores how markets work. First of all real markets are not efficient. Then there is the psychological aspect. We see over-/undervaluation all the time. Then there is the fact that markets reflect back into policy. Many people divesting form arms companies complicit in the genocide creates a political incentive to limit those businesses abilities and hold them accountable. Then there is the effect that as more institutions publicly divest, it increases the motivation for others do divest. Now this can also create a panic where everyone tries to sell of the stocks asap to not lose too much of the value. If the stocks tank the credit rating goes down, business is directly impacted and goes down, so the “purely rational” expected value goes down, creating an incentive to divest…
Oh and also companies with lower stock values are at a higher risk of hostile takeovers, employees start looking for different employment opportunities…