Auckland Pushes ANZ Bank to Divest | Break Free From Fossil Fuels / CC BY NC SA 2.0
I have always loved spring in Chicago. The Loop buzzes with music and awe-struck architecture fans, while the lake fills up with swimmers braving the sun-soaked but icy water. In the evening, the air is just crisp enough for a jacket. But spring nights in 2024 were special. There was magic in the University of Chicago’s Quad, where we sat in the grass surrounded by music, poetry and stories. Gathered together, we stretched hope into a belief that the police would wait another night to raid the People’s University of Gaza, UChicago’s student encampment.
Just a few hours later, I would be back with the same poets and musicians, this time, hearing stories about how they woke up to screams from police in riot gear. The magic was gone and soon so was the camp.
A couple of weeks later, I would moderate a conversation with a Chicago Booth finance professor about the economics of disclosure and divestment at universities. The professor did a great job explaining the principles at stake and the nuances of divestment, like how divestment from private equity is potentially more financially influential than from public firms. But afterward I’d realize something was missing.
While a financial perspective is critical when it comes to divestment, the moment required collective action. In 2024, student protesters went beyond analysis and into action, intertwining community-building and mutual aid with their demands for institutional change. Student activists for Gaza asked hard questions to university administrations about where investments are going, and how investment decisions are made.
While listed as 501(c)(3) organizations, large universities mimic corporations in a variety of ways;they compensate executives well, invest heavily through their endowments, and fiercely protect funder interests. Like corporations, well-endowed universities vary in their approaches to integrate ethics into investment decisions. UChicago’s endowment sits at $10 billion, but their Chief Investment Officer (formerly CIO at Boeing) chooses not to disclose where that endowment is invested in and refrains from Environmental, Social, and Governance (ESG) or human rights commitments. The UC system, by contrast, has disclosed investments, signed the UN Principles of Responsible Investment, and tracked ESG standards. When students, professors and alumni called for disclosure and divestment from companies with financial ties to Israel, like Boeing, Lockheed-Martin and other weapons manufacturers, they asked institutions to prioritize accountability to their academic community and ethics commitments over their investments and institutional policies. UChicago and other universities, including UCLA and Columbia who have more progressive ESG commitments, responded by calling in police to shut down encampments (over 3000 activists were arrested by June) and withholding degrees. In doing so, university administrations revealed the lengths they will go to safeguard their sizeable endowments—even when, as Adam Tooze has pointed out, the proposed changes are relatively small.
We use metrics to compare ourselves to each other so that financial institutions can model risk, governments can develop trading relationships, and individuals can find jobs on the other side of the world. Criss-crossing graphs explain how trade works and why, while GDP measurements help us track how ‘rich’ a country is compared to its neighbors. While these measurements and theories have given us immense power, they have also become the norm in the way we think. Diane Coyle once said, “There’s no natural entity called GDP in the universe.”
In focusing on scale and achieving higher metric goals, we ignore the harm caused in the margins of our scaled global economy—and the role of business in perpetuating that harm and measurement’s ability to mask that wrongdoing. Milton Friedman and so many other “Chicago School” economists have hammered home the idea that the purpose of firms is to create returns on investments as part of their fiduciary duty to shareholders, that is, to grow profits. In growth, however, we create distance. Large corporations separate different means of production from each other; Apple’s headquarters is in Palo Alto, but their production is happening in China and their materials are shipped in from all around the world. In her book Spiderweb Capitalism, Kimberly Hoang explains how global fund managers create distance between themselves and their investors through a spiderweb system of cross border financial vehicles and specialists. The complexity of the system keeps them safe from any challenges to the corruption that constantly fills their pockets. We gawk as their wealth amasses, and laud companies like Apple as the pinnacle of entrepreneurship. Fortune magazine calls Apple the “gold standard” of tech companies, and it is currently the highest valued company in the world, with a market capitalization of $3.36 trillion. In doing so, we normalize the immense spatial and power distance between investors, management, consumers, and various producers in the supply chain.
Even at UChicago Booth, home of the Chicago School of Economics, leaders in finance and economics have challenged our obsession with metrics and scale. Ronald Coase, a key figure during the emergence of the Chicago School, used his research to expand the field of economics to include judicial and legal institutions. In his seminal work from 1960, “The Problem with Social Cost”, he reminds us that we must find “broader terms,” to define social issues, rather than costing them by their market measured value. During an episode of his podcast, Capitalisn’t, finance researcher and professor Luigi Zingales calls the economy’s relationship with measurement a “fetishization.” He exposes the stark inability of economic metrics to capture both negative and positive externalities, which exacerbates social issues. Research on externalities and inequality is pushing the frontiers of modern economics, and opening more conversations on social impact in the business world. Still, we continue to forget that there is more to the human experience than what we can see with a traditional economic lens.
The unique power of economic thinking in the US is that we can see it seep into popular thinking across sectors and industries. Impact investment, corporate foundations and social enterprises are blurring the lines between the private and nonprofit sectors to reshape how money flows. Social programs are increasingly being judged along traditional financial metrics—investors expect returns, promising financial models, and predictable growth from organizations working on complicated social issues. These organizations, in turn, are incentivized to prioritize scale over the quality of their programs.
Social costs cannot be effectively measured because numbers can never capture all parts of the human experience. Sitting in my MBA classes, I can chart how a demand shock can shift a demand curve and reduce employment, but there’s no model to acknowledge the suffering it brought to the family of the worker who lost their job. We can measure the amount of money AirBnB may lose if they stop listing homes in occupied territories, but we cannot truly capture the joy felt by the owner who gets their home, livelihood and life back.
Student activism reminds us that collective action has the power to challenge narratives on a national scale—including how we think about measurements for success. UChicago People’s University of Gaza’s community agreements contained solidarity with Palestinian people, inclusion of community members within the student body and outside of it, assuming best intentions of others, and respect for the land. Protest leaders built a culture of solidarity and inclusion through emphasizing transparency: information on the genocide in Gaza, the list of demands for the University, and a schedule of events were publicly listed online; leaders made negotiation decisions collectively; protestors self-selected their risk levels during actions to mobilize safely according to individual needs.
When I think back to the talk on divestment I moderated in the spring, I see value in the numbers and theory that were shared by the professor. The talk had all the tangible components of an academic conversation that I would want to revisit—examples, theory, opinions, and evidence. Even so, I still find myself forgetting those metrics to replay the conversations, poetry and songs from the Quad. On that lawn, I shared a deeply human experience. We felt hope from action; we grieved in community. We contributed to, and perhaps will have helped change, the national conversation around the flow of money and who a university serves.
There were over 200 activists protesting at the Quad. That number matters. But what matters most can’t be counted: the power we created through solidarity.
