Is It Moral to Invest in the Stock Market?

Looking up at a computerized stocks-value board at the Philippine Stock Exchange

Suppose someone offered you the following proposition: Invest a dollar in the slave trade and you will make a million dollars in a week. Definitely a good monetary investment, but obviously an immoral one. At the other extreme if you could invest a dollar in WeHelpChildren Inc. and get a million dollars returned this is both a good monetary and moral investment.

Now suppose you let a million dollars sit in a credit union (much more moral than in a bank) and the money will stay even with inflation, or you could put the same money in an index fund and make on average 5% or $50,000. The latter is obviously the better financial move but the former could be the more moral move. And that’s because the credit union is a non-profit loaning the money to other members while the stock fund invests in for-profit companies some of whom are no doubt exploiting people, despoiling the environment, etc.

In fact, there is no doubt that someone, somewhere is being exploited by the corporations in which you are invested. On the other hand, some of that corporate investment is probably making the world better. No, I don’t trust GE or Monsanto either, but just because they are motivated by profit doesn’t mean light bulbs or even genetically modified food is bad. No matter what company I invest in, I’m just not clear what they are doing with my money. In other words, it’s unclear whether the investments in a stock portfolio are actually doing good or harm, or at the very least it is exceedingly difficult to find this out.

In the end, since one doesn’t really know what their monies are supporting, it may be foolish to forgo the added monetary gains, unless one knows for sure their investments are doing harm to others. And even if the added monetary gains are supporting an unjust worldwide economic system, one could always give away their gains when they receive them.  Given that the worldwide economy is so complex, I’m not sure we can feel confident no matter which way we proceed. All we can do is research the issue and try to use our monies–essentially our power in a capitalistic system–for the best.

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