Rob Stock: Captured by the capitalists through KiwiSaver and the banks
OPINION: There's a brothel within 500 metres of my house.
It's very discrete. I don't feel too fussed about it, but I wouldn't want my money to help it grow.
If the brothel owner issued shares, I wouldn't buy any.
But I bet it banks with one of our mainstream banks, perhaps one I have deposits with.
* Rob Stock: Money lessons of Charles Dickens
* Rob Stock: The toxic allure of 'better'
* Rob Stock: Signs of the coming 'prop-ocalyspe'
* Rob Stock: Work close to home to spend less and end up wealthier
* Rob Stock: Powers of attorney have no place in personal loan contracts
This illustrates an uncomfortable truth about modern capitalism.
Unless you lead an extraordinary life off the capitalist grid, you are probably helping fund many, if not all of the following: prostitution, gambling, booze-makers, arms production, exploitative lending, and all the "bigs" like big oil, big tobacco and big sugar.
All these activities are legal. Capitalism equates legality with morality, so banks will lend to companies profiting from them, and most KiwiSaver funds will invest in them.
The financial system makes it hard (at times impossible) for us to see how our money is being used.
While we don't have an ethical bank that lets me be certain pimps aren't getting loans backed by my money, we do have ethical KiwiSaver funds, though most people aren't choosing them.
Earlier this month news headlines highlighted again that some KiwiSaver funds have investments in some weapons makers.
Such headlines are possible because either we don't care, or we haven't bothered to check what our funds are invested in.
Every person with money in a bog standard bank KiwiSaver fund will find something in their fund to made them wince.
Take the giant ASB KiwiSaver Growth fund.
Represented in it is:
- Gambling (Sky City, Aristocrat Leisure, Tatts Group, Tabcorp),
- Big tobacco (Imperial Tobacco, British American Tobacco, Philip Morris),
- Weapons makers (Lockheed Martin, Northrop Grumman, Honeywell, Cisco Systems),
- Big booze (Anhauser-Busch, Diageo, Pernod Riccard)
- Big sugar (Coca-Cola, Mondelez, Kraft Foods)
- Big Oil: (Shell, Statoil, Exxon Mobil)
And there's banks, banks and more banks.
If a company is big enough to merit international headlines for dubious behaviour, a big bank KiwiSaver fund probably owns a stake in it.
Amazon treating workers like robots. Yep, that's in there. Apple accused of using Chinese sweatshops. Yep, that too. Volkswagon lied about vehicle emission. Yep, again.
Countries may offend you, and borrow from your KiwiSaver fund at the same time.
The Philippines president plans to introduce the death penalty. Great. Got a few Philippine government bonds.
Turkish security forces harass women's rights groups. Yes. Got some Turkish debt too.
KiwiSaver and banks work by deploying money entrusted to them by you and me.
There are so many of us, and we have such different moral codes, they couldn't pander to all of us, so "legal" equals "moral" is the the standard modus operandi.
If we want our investments to reflect our moral code, we have to choose an ethical fund, or demand change.
- Check your KiwiSaver's annual disclosure statements online
- They show what you are invested in
- Once you know, you can start making choices