Vice Stocks

Q. Is it unethical to invest in "vice stocks," such as those specializing in immodest entertainment?

A. In a previous column, we discussed the different levels of complicity with wrongdoing. The worst is enabling wrongdoing; this is when the transgression could not take place without your involvement. The next level is participating or abetting wrongdoing; this means that you take an active role in the proscribed action, although without your involvement someone else would have been found. These two levels are fairly clearly defined and strictly prohibited.

A third level of complicity we described is condoning wrongdoing. This is when a person gives the impression that he approves of some prohibited activity. As we explain there, the criteria for condoning are much more subjective; the message transmitted by silence is dependent on a person's capacity for effective protest, which in turn depend on his status and on the general acceptance of the behavior. If a company engages in wrongdoing, the CEO is much more culpable for condoning than a low-level functionary. Protesting toxic waste is popular and often effective, but protesting atheism in our day may be considered quixotic, so religious people are not "condoning" it merely because they don't engage in indignant protests of disbelief.

All of these levels are prohibited because of their effect on the behavior itself: when we enable, abet or condone some harmful activity then this activity is likely to be perpetuated. However, there is a fourth, more subtle impact of complicity in wrongdoing: its effect on a person's character. A person has a responsibility to society, but also a responsibility to his or her self; and a person's character is inevitably influenced by his actions and interests. Indeed, one of the most studied and revered books about traditional Judaism, the 13th century Sefer HaChinuch, explains that the entire system of commandments is based on this principle: "A person's heart is drawn after his actions". (1)

We find many examples where Jewish tradition warns us that a financial interest or benefit is likely to influence our character and opinions. The most prominent is the prohibition on accepting bribes or gifts from litigants: "Don't accept bribes, for bribes blind the sighted and distort the words of the righteous" (Exodus 23:8). As Rashi's commentary explains, it is forbidden to take bribes even if there is no condition to distort the decision, because getting a benefit creates an instinctive alignment of views.

Another fascinating example is found in the renowned late authority Rabbi Yehoshua (Falk) Katz. The Bible teaches that a person should avoid accepting gifts: "He who shuns gifts, will live" (Proverbs 15:27). Rabbi Katz explains a rationale for this: "One who is eager for presents has to flatter others, and he won't reprove them for bad deeds he sees in them." (2)

This is very relevant for your question. Perhaps the world is probably no worse off for your investment in a shady entertainment company. But there will be a big difference in how you feel hearing that their latest offering is a blockbuster in cinemas or a bestseller on videos. Instead of feeling dismay that people are wasting their time and money and corrupting their morals, you are likely to feel elated that your stock is growing in value.

(A previous column brings additional sources and other ways that this consideration can weigh in our choice of investments.)

SOURCES: (1) Sefer HaChinukh mitzvah 16. (2) Sema commentary, Choshen Mishpat 249:4