In the past few years, a number of investment companies and firms have been formed with the intention of helping Catholics invest their money in an ethical fashion. The existence of these firms has brought to the fore some very pertinent ethical questions, primarily, “What is ethical investing?” For me, this question is not rhetorical. In my role as the CEO of Paladin Financial Group, a firm that helps Catholics to invest according to their beliefs, the determination of what constitutes ethical investing is eminently practical.
Admittedly, though debatable nuances and subtleties surround this issue, the shorthand definition of ethical investing for Catholics is simply this: “Ethical investing is a style of money management that prohibits ownership in shares of companies that perform surgical abortions or produce and market chemical abortifacients.”
Following this definition, a much more practical question needs to be asked, namely, “Must the faithful invest ethically?” More specifically: “Is a Catholic required to divest his investment portfolio of companies that are directly engaged in the practice of surgical abortions or the production of chemical abortifacients?”
For the past ten years, I have searched for answers to this question. Surprising is not the variance of opinion among moralists — it is the similarity. Nearly every reputable theologian I have personally consulted or read has come to a similar conclusion. The following theologians represent a good sampling of the research I have uncovered, and these theologians speak for the majority opinion:
Father John Hardon
Father John Hardon held doctorates in Sacred Theology and Moral Theology, taught theology for several decades, served as a spiritual advisor to Mother Theresa of Calcutta for 27 years, served as a theological consultant to both Pope Paul VI and Pope John Paul II, was the author of over 40 theological texts (including The Catholic Catechism), and was a major contributor to The Catechism of the Catholic Church. Before his death in 2000, some considered him to be the greatest living theologian in the English-speaking world. In the July/August 1996 issue of The Catholic Faith magazine, when asked if it were moral to invest in the stock market, Father Hardon responded:
“…There are stocks which involve the marketing of materials or facilities that are contrary to the moral law, like pornography or the multibillion [dollar] contraceptive trade. Still again there are those involved in stock market trading who are promoting harmful drugs or supporting sterilization. Here, too, it is morally forbidden to engage in the stock market if it is known or even strongly suspected that the stock market dealers are engaged in business which is contrary to the laws of God.”
Father Hardon’s comments should have caused quite a stir among Catholic financial consultants, brokers, and investors. One of the greatest living theologians stating that investing in certain companies is morally forbidden seemed newsworthy. At a minimum, Catholics who continued to invest in immoral companies should have certainly provided a rebuttal — but one never came. Instead, other theologians made similar comments.
James Drummey
In 1995, renowned moral theologian and author of Catholic Replies, James Drummey, was asked this question: “Is it a sin to buy shares in a mutual fund that invests in companies which make and sell contraceptives and abortion-producing drugs?” Mr. Drummey outlined the moral theological principles involved, responding:
“There are two kinds of cooperation in the sinful actions of others: formal and material. Formal cooperation, which means actually taking part in the sin of another, is always sinful because one shares in the sin. Helping a doctor perform an abortion would be an example of formal cooperation in a sin, as would making contraceptives, or abortion-producing drugs since those things are used for sinful purposes.
“Material cooperation, which means assisting in another’s wrongdoing without approving it, is sinful if the cooperation is proximate. It is a sin against charity to aid another in the commission of a sin, even if one’s own action is lawful…”
In answer to [the] question, her cooperation in the sinful actions of the company producing and selling contraceptives and abortifacients is material and remote. However, since she does not have a sufficiently grave reason for remote cooperation in an evil action, she should not buy shares, or she should sell whatever shares she already owns, in the mutual fund that invests its clients’ money in the aforementioned company. (James Drummey, Catholic Replies, Norwood, MA: C.R. Publications, pgs. 353-354.)
This quote of Mr. Drummey’s encapsulates the moral theology aspect of this question. He concludes that material and remote cooperation in evil action would be allowable for grave reasons, but in this case, grave reasons are absent. Since so relatively few companies are involved in the act of abortion, a Catholic investor would have a difficult time justifying why he must own stock in those particular companies, when so many other choices are available.
Dr. Germain Grisez
Dr. Germain Grisez, Professor of Christian Ethics at Mt. Saint Mary’s Seminary, is one of the most widely recognized moral theologians in the United States. In 1997, Dr. Grisez provided another detailed opinion in answer to the question. In his book, Difficult Moral Questions, Dr. Grisez writes:
One normally has no reason to invest directly in a particular company’s stock unless one expects and intends one’s money to be used to make a profit, and one normally cannot intend that without intending that the company do all that one is aware of its doing to make its profit: treat people in certain ways, encourage potential customers to choose its products or services, and so on. Thus, those who directly invest in a company normally intend it to do efficiently all they are aware of its doing to make its profits. If some of the company’s profit-enhancing policies and actions are immoral, the investor normally intends the immorality and so shares moral responsibility for it. (Difficult Moral Questions, p. 505.)
Dr. Grisez’s conclusion expands on Drummey’s comments. Dr. Grisez points out that not only does the investor potentially benefit from the profits of the corporation, but also, that the investor intends that the corporation engage in known activities that are profit-making, some of which may be immoral. The investor “shares moral responsibility.”
Conclusion
The comment was made earlier about the similarity of responses among Catholic moral theologians regarding ethical investments. That is not to say that there is never any disagreement. Occasionally, a call will come into my office citing a parish priest, a Catholic radio talk show host, or a Catholic college professor, who says it’s perfectly acceptable to invest in companies that perform abortions. These callers are looking for loopholes that counter the well-reasoned arguments of Catholic moral theologians, and instead are giving credence to a style of investing that promotes a culture of death.
Most of my clients probably couldn’t explain the difference between material and formal cooperation; many of them may not be able to define “proximate cooperation”; some of them may have never even heard of Dr. Germain Grisez. If you asked them why they invested ethically, they would probably give you a rather simple answer: “because it’s the right thing to do.”
Maybe that’s the best answer of them all.
(John Clark is a registered representative of LaSalle St. Securities, LLC. Paladin Financial Group is a registered branch of LaSalle St. Securities, LLC – a registered broker/dealer. Member NASD/SIPC. John Clark may be reached directly at 888-764-2423 or at www.investprolife.com.)
