The Demon is in Too Deep: Clashing Orthodoxies of Investment and the Separation Thesis


A comparison of the different rationales directing financial and philanthropic investment suggests that, for many, the moral sensibility which guides philanthropic giving is set aside when investing in securities. This dichotomy in approach reflects the fact-value distinction, or Separation Thesis, which is at the heart of modern finance. This asserts that moral questions are not germane to investment decisions because such decisions deal purely with facts, primarily return and risk. However, given that shareholders have ultimate moral accountability for the activities of the companies in which they invest, this amoral approach to investment is questionable. Ben Nicka issues a call to the asset management industry to direct investment to moral ends.