To stay or to leave: The moral dilemma of divestment of South African assets

Abstract

The question of U.S. divestment of South African assets can be segmented into two major issues: (1) corporate behavior in a general sense and (2) nature of the product produced. The first issue has four sub-issues: (1) Is apartheid immoral? (2) Do corporations have any social responsibility? (3) Do the rights of South African blacks concerning the issue of apartheid outweigh those of the corporations to do business freely? (4) Are the benefits to blacks greater with divestment than without? The term “benefits” is then defined in both macro and micro dimensions.

A “NO” answer to any one of the several questions would lead to the conclusion that there is no moral obligation for U.S. firms presently in South Africa to divest.

The analysis presented will conclude that the answer to the first three questions is “yes”. Further, the answer to the first half of the fourth question (macro benefits) will be determined to be “no”.

The micro benefit issue, namely, the nature of the product produced, will then be evaluated using a model based on which group benefits most from the item produced. Assuming corporations are successfully meeting their moral obligations under questions # 2 and # 3, then the general conclusion will be reached that firms producing items of direct benefit to the black community should stay; firms producing items of direct benefit to the government should divest; and no generalized model for analysis can be assumed for firms producing items which benefit both groups equally.

Finally, a brief discussion is presented of the issue of obligation for positive action against apartheid, both political and economic, on the part of U.S. corporations.