Bombs that kill Yemeni civilians are likely also making a herd of rank-and-file Americans richer, according to an investigation by the First Look Media outlet Reported.ly, because of the U.S. investment industry’s connections to the company making the bombs.
The German arms manufacturer Rheinmetall has been supplying components for large bombs to a factory in Abu Dhabi called Burkan Munitions Systems. Burkan, which was owned by Rheinmetall until 2012 according to Reported.ly, then assembles the weapons and passes them on to the military of the United Arab Emirates (UAE). The UAE is participating in a Saudi-led coalition bombing campaign by numerous Arab states to beat back Houthi rebels in Yemen. Using leaked documents and on-the-ground reports from Human Rights Watch observers in Yemen, Reported.ly concludes that Rheinmetall’s bombs have probably been used in attacks that killed civilians, potentially violating international law. (An arms trade expert quoted in the piece also affirms that the supply chain that moves these munitions appears to be following international standards that minimize the risk that the weapons will be trafficked into criminals’ hands.)
Thanks to the intricate and interconnected nature of global finance, there’s a decent chance these arms sales have benefited your bottom line. Rheinmetall is a publicly traded company that some stock analysts have predicted will see a significant increase in profits this year. That forecast has lured a broad range of investment houses, including Wells Fargo, Allianz, Hartford, BlackRock, HSBC, and other financial firms that sell retirement investment products to individual consumers and companies. If Rheinmetall’s stock does as well as predicted by some analysts, anyone whose retirement savings investment portfolio includes a mutual fund or other vehicle that’s tied to Rheinmetall will see a bounce in value.
The Commonwealth of Virginia’s college savings system is a particularly notable name on the list of Rheinmetall shareholders referred to in the Reported.ly investigation. Just a handful of Americans currently take advantage of the system of investment accounts known as 529s to save for college, even though investing just a few hundred dollars early in a child’s life can dramatically improve the odds that they’ll end up getting a degree. But some of those who do, in Virginia at least, are also positioned to collect if Rheinmetall’s price goes up. One of the state’s several different investment options for 529 plans is currently the third-largest institutional investor in Rheinmetall, according to Morningstar data.
Moral quandaries are common in the investing world, where advisers and computers who don’t necessarily share the societal concerns and opinions of the individual humans who contribute to the funds being managed by Wall Street on their behalf. The New Jersey public pension system has long been a major shareholder in a payday lending company, even though payday lending is illegal in New Jersey. The fund announced earlier this spring that it will divest from the company. Columbia University just announced that it will divest from the private prison industry, something that made the news in part because it is the first college to take that step — suggesting many other higher-education institutions have their endowments tied to the prison industrial complex.
The financial connections between mainline American households and remote-seeming global ills generally go unacknowledged, until a given political cause decides to call attention to them and convert the investments into a pressure point. The divestment campaign against apartheid South Africa is one of the most famous examples of such an effort to turn the interconnectedness of global capitalism into a direct, explicit weapon for social progress.