Even if these firms implemented more progressive labor policies, it would have little impact on the position of blacks and other non-whites. The U.S. firms are largely capital intensive and employ less than 1 per cent of Black workers. Improved conditions in American-owned firms would not alter the fundamental facts of life for black South Africans. Blacks form 71 per cent of the population and receive 17 per cent of the income. Their wages, if they are employed, are 20 per cent of white wages in manufacturing and 11 per cent in mining. Four-fifths of workers show signs of malnutrition. Half of all black children die before the age of six.

Although U.S. banks and corporations have done little to improve the situation of blacks and other non-whites, they have provided vital support to the apartheid regime. According to the Senate subcommittee report:

1. U.S. private banks held $2.2 billion of the $7.6 billion in outstanding bank claims as of 1976. Since the early 1970s, U.S. banks have provided South Africa with one-third of its bank credits. These have gone to the state and to public corporations, the parastatals which are strong in iron, steel, railroads, electricity and chemicals. These loans have enabled South Africa to pursue a strategy of strategic investment in energy, armaments and industry at the same time that it was paying for oil at increased prices and raising its expenses for domestic security. U.S. aid was doubly important to the regime because Britain was unable to play its formerly dominant role.

2. As of 1976 the total value of U.S. investment was $1.665 billion or 40 per cent of all U.S. investment in Africa.

3. The U.S. provides South Africa with half of its computers, one-third of its vehicles and two-fifths of its petroleum.

4. The U.S. supplies advanced technology and equipment for the electrical, rubber, mining and agricultural industries. It is the major supplier of nuclear technology and technology for converting coal to oil.

5. U.S. firms, the Senate report stated, "do not avoid business transactions which might support the continuance of apartheid."

The overall assessment of the Senate subcommittee was even more scathing. Allow me to quite in full:

U.S. economic interests in South Africa may not be decisive in bailing South Africa out of its economic woes. But there is no question that it has been pivotal in directly assisting the South African Government during its worst economic difficulties in the past, and, if permitted, could do so in the future. International credit provided the margin of funds needed by South Africa in the 1974-76 period to finance its military buildup, its stockpiling of oil and its major infrastructure projects in strategic economic sectors such as transportation, communications, energy and steel production, all of which are related to security needs. Collectively, U.S. corporations operating in South Africa have made no significant impact on either relaxing apartheid or in establishing company policies which would offer a limited but nevertheless inportant model of multinational responsibility. Rather, the net effect of American investment has been to strengthen the economic and military self-sufficiency of South Africa's apartheid regime, undermining the fundamental goals and objectives of U.S. foreign policy.

South Africa is, I would argue, a situation where there is "no longer room for argument among people who accept out basic socio-economic-political system," to use the words of the Austin report cited in the most recent ACSR report. This is a situation where Harvard should not take a neutral position.

Of greater importance, this is a situation where Harvard has not taken a neutral position. The decision to retain investments, the decision to refrain from initiating shareholder resolutions, the decision to refuse to divest are political decisions, with ethical and moral implications. To pretend otherwise is at best disingenuous, at worst dishonest. To pretend otherwise speaks ill of the moral education we claim to impart to our students. Far from being "free from pressures exerted by other groups in the society," Harvard is tied to and strongly influenced by those corporations in which it has invested. The choice is not between political and moral action, but between competing political and moral courses. I urge the Corporation to recognize this, to reconsider its policies and to divest itself of stocks in corporations which invest in South Africa.

THEDA R. SKOCPOL

In preparing for this Faculty Meeting, I have tried to review the major reports and position papers issued at Harvard over the last two years on the question: How should Harvard respond to requests that it use its power as an investor and shareholder to try to influence events in South Africa? The official documents I have reviewed--including reports of the Advisory Committee on Shareholder Responsibility, the Corporation's statement of last spring, and various statements by President Bok--reveal an unmistakable trend. There is a steady retreat from the notion that the University has any responsibility to use its power in ways that could actively help to further basic institutional change in South Africa. The ACSR Report of last year (March 1978), while not presenting a consistent or fully adequate position, did foresee ways for the University to work actively (if necessarily indirectly) for change in South Africa, but this spring's ACSR Report abandons without reasoned comment all such possibilities. The culminating step (so far) in this steady retreat is the "Open Letter" issued last week by President Bok on "The Ethical Responsibilities of the University in Society." This letter, I believe, requires serious rebuttal, because it quite obviously provides the rationale for the current evolution of University policy on the South Africa issue.

The essential points in President Bok's letter are straightforward. The "institutional goal" of the University is defined in a purely formal manner as "the discovery and transmission of knowledge." Universities function, President Bok insists, is not to "reform society in specific ways." And he maintains that the University must avoid taking ethical or political positions except on issues which directly involve the exercise and defense of existing academic functions.

I see two basic flaws in this overall argument--especially in relation to the South Africa issue. Let me discuss each in turn.