Removal of anti-apartheid sanctions against South Africa freed $850 million in aid from the International Monetary Fund. Dwarfing this figure is over $600 billion in private funds that during the apartheid years had been barred from South African investment.
Perhaps you remember watching news reports of students building ''shanties'' on campuses or noisy demonstrators disrupting Baltimore City Council meetings to protest South African apartheid. It was easy to condemn such symbolic acts as futile and ridiculous.
The objective of the divestment movement was less obvious -- the wholesale transfer of investment capital away from companies doing business in South Africa. As a wedge to force change, the divestment movement got it right.
Money, not armies, dictates the living situation for most groups of people. The flow of capital, not rhetoric, determines society's winners and losers. The placards and slogans were important for their galvanizing energy, but it was the redirection of American -- investments that allowed a freed Nelson Mandela to compete in this week's free South African elections.
Opponents of the divestiture movement argued that the corporate exodus from South Africa was due to business decision making rather than public pressure, and that government sanctions applied the real pressure.
Perhaps, but consider this point: Government sanctions have had little success in Cuba, Iraq or Haiti. President Bush lifted American sanctions against South Africa in 1991, but private divestment actions held firm and maintained the pressure on South Africa.
The specter of safety was raised for pension funds or endowments that divested. Investing money in a socially responsible way, opponents said, would cost profits or raise risks. On these grounds, the Baltimore city pension trustees fought a five-year legal battle against the city's 1986 divestiture law.
The courts ruled three years ago against the trustees after millions were spent on legal costs. The portfolio managers nonetheless delayed divestment until last year. Thus for seven years millions of dollars of prohibited stock were purchased by the funds.
But if divestment never happened in Baltimore, the divestment movement got an enormous boost from the local effort. The 1991 court decision solidified the rights of municipalities and public funds nationwide to apply social concerns to their portfolios.
A sad footnote to the pension battle is that pensioners may have gotten the worst of both worlds. Not only was the fight to ''protect'' the funds from divestiture costly to wage, but the refusal to divest may have cost the pension systems lost performance as well. Anecdotal progress reports at the time from other cities showed that divestment enhanced returns. This is perhaps not surprising, since the divested Domini Social Index outperformed the S&P 500 market index every year from 1986 to 1992, confirming that social investing did not necessarily hurt profits.
Real people used their economic clout to make the world change for the better. This week's elections are the tangible result. The divestment tool is suitable in other important areas, too.
The green consumer movement has re-energized the fight for the environment. The campaign for fair employment practices in Northern Ireland recently won unanimous endorsement from the Baltimore City Council. A bill before the City Council would divest the pension funds of all nuclear weapons makers, joining close to $100 billion of nuclear-free funds nationwide in a serious bid to finally stamp out the threat of nuclear war.
These campaigns draw encouragement from the success in South Africa. In the long term, they will find greater sustenance in the powerful idea that one's money should go where one's ethical principles are. The South Africa experience shows that it does make a difference.
Richard W. Torgerson is an investment counselor specializing in socially responsible investing.