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Universities are currently at the center of a heated debate regarding the use of boycotts and divestments as a strategy for social change. Private sector funds, particularly those from fossil fuel companies, are often viewed with suspicion by activists, leading academics who accept such funds to be stigmatized. However, the focus should be on the terms of the funding and the negotiated contract rather than the source of the funds. Public sector funds and donations from nonprofit foundations can also have strong political biases, impacting the quality of research. The book “Billionaire Wilderness” by Yale sociologist Justin Farrell highlights the idiosyncratic agendas of some philanthropists in the environmental arena.

While universities are considering conflicts of interest policies for receiving funds, students are advocating for boycotts and divestments to push for policy changes. It is important to assess the effectiveness of such actions and their potential opportunity costs for society at large. Industry funding can be biased towards commercial interests, but great scientific advancements have been made by industry scientists, as evidenced by Nobel prize-winning work in various fields. It is essential to evaluate individual projects rather than demonizing industry research as a whole.

When it comes to divestments, the impact depends on the scale. While smaller companies may suffer, major multinationals can weather the storm, as seen during the apartheid years in South Africa. Research shows that university endowments would not suffer from divesting from fossil fuels, as socially responsible investment funds are available. The primary purpose of divestments is to stigmatize and create reputational loss. Boycotts, on the other hand, have proven to be more effective in causing harm to targeted entities. Evidence shows that boycotts can significantly impact corporate behavior and public policy, making them a powerful tool for social change.

Boycotts and divestments are different in terms of efficacy, with the former being more impactful. The effectiveness of boycotts has been demonstrated in various conflicts, such as in the Middle East, where companies like McDonald’s and Starbucks have felt the impact of consumer boycotts. The right of sellers to refuse sales and the right of consumers to choose where to spend their money are complex issues that have been litigated, but consumer boycotts have the potential to drive corporate and policy changes. Activists, academics, and students should consider the empirical evidence on the effectiveness of different strategies when advocating for social change, rather than relying on presumptions about funding biases. Human behavior is multifaceted and cannot be generalized based on financial dealings alone.

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