Bad Logic or Bad Faith?

Retirement and endowment investments implicate academic workers in a destructive system.
By Alberto Hernandez-Lemus

According to a 2014 report by the Economic Policy Institute, “From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period.” What does this mean for us, the faculty?

We know that the electoral process is dominated by big money, yet we believe that we live in a democracy. We know that there is a revolving door between the financial industry and the government charged to regulate it, yet we believe that fairness and equal opportunity are the rule of the land. We know of the conflict of interest between decision makers in government and the military, police, prison, and surveillance industries, yet we believe that our rulers have our safety foremost at heart. We know of the monopolies controlling the media and of the privileged access that big money can purchase, yet we believe what we are told about the fairness of our democracy and of our markets. We believe we live in a permanent state of emergency, which requires greater and more expensive protection of the kind the war industry can supply.

All of these beliefs add up to one core belief: that this is the best of all possible worlds.


Even in recent times of economic crisis, executive compensation in the United States has been soaring. Among the class of top-ranking executives is the CEO of the Teachers Insurance and Annuity Association (TIAA-CREF), the not-for-profit institution that administers the personal retirement stock portfolios of some 3.9 million US teachers and professors. In 2014 his salary and bonuses amounted to $18,250,000, which placed him slightly above the CEO of Coca-Cola and slightly below the CEOs of General Electric and Chevron, according to the Fortune 500. TIAA-CREF itself is the largest pension fund and the twenty-third largest investment firm in the world, right below Bank of America. On the board of trustees of TIAA-CREF sits a former president of Howard University, who left that post amid controversy after giving extravagant bonuses to top university officials during a year in which tuition was increased by 12 percent, programs were slashed, and furloughs for staff were put in place. This trustee is the chair of TIAA-CREF’s Human Resource Committee. Another member of the board, a specialist in creative global financing schemes, is a former managing director of Goldman Sachs and a high-ranking associate of the World Wildlife Fund. During his tenure, Goldman Sachs, the seventy-sixth largest company in the world, engaged in secret and lucrative sovereign debt deals of the kind that came to light during Greece’s most recent financial crisis.

Ten percent of TIAA’s investments are in the energy sector, not necessarily of the clean kind. Among the companies in which TIAA is invested is the coal giant Duke Energy, the largest supplier of electricity in the United States. Duke is known for several environmental disasters as well as for its generous contributions to the Democratic Party, though its contributions to the Republican Party are even more generous. From 2008 to 2010 Duke made $5.5 billion in US profits, collected $216 million in subsidies from the US Treasury, and spent $17 million on lobbing. Its tax rate was a negative 3.9 percent, according to a 2011 report by Public Campaign.


Like our retirement funds, our institutions’ endowments are managed by brokers on Wall Street. The stated goal of the investment firm that handles the lion’s share of the $720 million endowment of Colorado College, where I teach, is to tend to the growth of our endowment. In pursuit of that goal, our brokers put our endowment into circulation, aiming to balance higher-risk investments that may bring higher yields with more reliable, though less profitable, opportunities. The firm’s success depends on the growth of our investment, although its fee structure is not easily ascertained. This firm, owned by its twenty-one partners, also services endowments for Swarthmore College and Princeton University.

According to my institution’s website, “The college’s endowment is overseen by the Colorado College Board of Trustees committee on investments in accordance with policy, UPMIFA, and the rules of prudence. The committee seeks superior investment returns through strategic asset allocation and professional investment management.” Returns from the endowment represent 20 percent of our budget; the remainder comes largely from tuition.

What our pension fund and our endowment have in common is their raison d’être: they exist in order to grow, nothing more and nothing less. Quantitative growth, cost what it may in qualitative terms! There is nothing egregious in that. On the contrary, it is what everybody is doing! The word egregious, from gregge, flock, indicates behavior that so goes against the common morality that it warrants the casting out of the doer from the group. But, indeed, what we do with both our pensions and our endowment is the flock’s norm. Everybody wins when they grow: teachers can supplement their social security retirement and the college can build or maintain facilities, provide financial aid, pay salaries, and, in general, run its operations. Brokers certainly win. The firms whose stocks we own also win: with the money we front them they can expand their operations and increase production, sales, and, ultimately, profit. In so doing, firms are able to fulfill the promise they made to investors who acquired their stock. La promesse de bonheur, the promise of bliss: How exactly is it achieved? How is the promise that “everybody wins” extended to one and all? According to the theory under whose spell we live, bliss trickles down slowly, from the CEOs whose compensation has grown by 937 percent over recent decades to the typical workers whose compensation has grown by only 10 percent.

Profit, Production Costs, Labor, and the Environment

Profit depends, among other things, on production costs. This explains provocative headlines such as “Wall Street Loves Layoffs.” Labor costs have a way of eating into profit. Since layoffs are assumed to be a firm’s pragmatic response to personnel redundancies, they are assumed to promise larger profits. Other cost-cutting or profit-increasing measures include relocating to a cheaper labor market, reducing tax expenses, and reducing expenses for environmental protection. It is likely that many of the gains in both our retirement accounts and our college’s endowment investments routinely come at the expense of those feeling the brunt of the cost-saving measures carried out on our behalf by the firms whose stock we own. According to the laws of the utilitarian logic under which we live, growth of my capital must be a good because it increases overall happiness. Across a variety of established and emergent markets, in a huge variety of industries, in international and domestic locales, the success of the market “trickles down” to our nest egg.

Though the market is often credited with being the most efficient mechanism for bringing about the largest happiness for the largest number, the utilitarian definition of the good, the formula raises the question what quantum or unit is appropriate to measure happiness. Let’s go out on a limb and choose dollars as the unit of measurement: our opening citation immediately comes to mind as a challenge. “The greatest happiness for the greatest number” seems a democratic idea, but when you think of the disproportion between 937 percent and 10 percent, between the quantifiable happiness of the executive and the worker, the formula seems somewhat disingenuous.

And yet, anybody can belong to the investor class—anybody with a job, that is, who can set aside money for retirement in an investment fund. But not all investors are created equal. The difference is one of magnitude, and is most pronounced before birth, since to a large extent capital accumulates generationally through inheritance.

On Monday, November 16, 2015, a weeklong decline in the New York stock market suddenly shifted for the better. What broke the spell were the mass shootings and suicide bombs of Friday, November 13, in Paris, which boosted the weapons and oil industries. The prospect of more wars promises profits that are hard to match by the prospect of peace, and that is good both for our endowment and for our retirement funds. Large corporations are diversified in their activities: you may think that you are investing in light bulbs when you buy stock in General Electric, but your investment may be benefiting from the $26 billion in military contracts that, according to a report by the think tank Military Industrial Complex, the US government has awarded to that company since 2006.

This market in whose growth we are invested produces cognitive dissonance. We invest in the market even if we do not want wealth to continue to concentrate rapidly at the expense of the poor and the environment. We hold investments in companies like General Electric even if we do not want soldiers to be deployed as cannon fodder, wearing the gear and carrying the weapons with which well-connected industrialists are making a killing in the prolonged state of exception we have inhabited since 2001, and from which we have profited. The state of permanent war is working well for our future and that of our endowment.

The Accomplice

A tension reveals itself: we do not belong to the executive class that has experienced 937 percent growth, yet our interests are linked to those of that group. No matter how keenly we profess liberal or conservative aspirations of equality, fair play, or compassion, we know this to be true.

We academic workers, whose retirement savings and whose institutions’ endowments are invested in the market, experience ourselves, and the world, in a particular way, one marked by cognitive dissonance. We cannot pretend not to notice the performative contradiction between our strongest beliefs in democracy, equality, and fairness, on one hand, and our everyday practices, on the other. Some of those practices, incidentally, are as automatic as the deduction from a paycheck and its investment in the stock market on our behalf. Do we not to notice the pecuniary gain we derive from layoffs, environmental disasters, and war? How do we manage to live in this contradiction? Are there any side effects associated with the logical incongruities that bad faith demands?

In Being and Time, the German philosopher Martin Heidegger speaks of fallenness as the condition in which humans, for the most part, live: we are under the spell of shallow shared opinion and commonplaces. This is the realm of what Heidegger described as the undifferentiated nonattributable they, whose opinion constitutes us. Fallenness is an existential structure as co-constitutive and co-original as temporality, our pull towards death, and existentiality, which refers to our ability to intervene and modify the facts of our condition. Fallenness, codified and conventional, is experienced by inhabitants of different epochs in different ways. The otherwise isolated human being experiences solace in the safety of unquestioned convention, from the particular perspective of her own life experience. The convention, however, is alienating. It is based on life expectations that are shared within the group but never really thought about. It is a form of acquiescence. In addition, the social bond formed by shared truths is not very strong: it is characterized by mistrust. “Everybody’s just trying to keep up with the Joneses,” and nobody really knows why. Diffidence is our bond, and difference is suspicious. As Robert Frost put it, “Good fences make good neighbors.”

Whereas fallenness in Heidegger points to a distracted kind of living, the excuse of distraction soon reveals itself to be a flimsy cover for the lie we academic workers presently live. Under our particular conditions, no distraction can dispel the fact that we know that we know. There is nothing innocently distracted about the way in which we know certain troubling facts regarding our role in shaping our local and global world. Through participation in the market, we contribute to the precarization of labor and to the destruction of the environment. Is there another way of living?

Hardt and Negri’s Forms of Subjectivity

Without referencing Heidegger, contemporary political philosophers Michael Hardt and Antonio Negri present four pervasive forms of subjectivity, whose origins can be traced at least as far back as the global crisis of 2008, in their 2012 book Declaration. These forms of subjectivity are manners in which we experience the world, ways we respond to the particular set of material conditions and dominant structures of meaning prevalent in our times. Though the particular pressures of our times shape and at the same time limit our options, they do not determine us: alternatives are thinkable and have been possible in the past.

The indebted: According to Hardt and Negri, the hegemony of the financial industry has permeated our daily life either as indebted consumers or as citizens whose government has incurred sovereign debt in our name. Interests on those debts have a huge impact on a person’s access to health care, education, culture, sanitation, and work. This form of subjectivity, which they label the figure of the indebted, results from financial schemes through which greater and greater profit is distilled from debt. The figure of the indebted is the brainchild of an innovative financial industry largely regulated by insiders, who control pseudosovereign central banks. They have found ways to make it legal and commonsensical to produce large profit margins in times of plenty and in times of dearth, as the thirty-five-year growth in executive salaries demonstrates.

Similarly, our experience of the world is shaped by manifold images that make consumption and debt seem natural. We experience the world as a subject of credit who owes and consequently must pay back the interest of her personal and sovereign debt.

The represented: Hardt and Negri refer to the represented as the figure of subjectivity under the spell of a conglomerate purporting to represent our desires and needs. Periodically, this hybrid industry of politicians and the media puts together a pageant not unlike the American Idol contest, where we are invited to judge the candidates’ ability to fulfill their “promise of bliss,” based mostly on their charisma and in direct response to the bombardment of images vying to sway our opinion. We are pressured to believe in the urgency of whatever issue the media choose to peddle. If the message refers to the electoral process, which is the media’s bread and butter, we are asked to believe, illogically, that after casting our vote for one candidate, the “will of the people” will be heeded. As labor organizer Lucy Parsons said in the wake of the Haymarket hangings, “Never be deceived that the rich will permit you to vote away their wealth.”

The fact that abstention today routinely gains the majority of votes points to the wisdom of an electorate able to see through the pageantry and know how little of substance there is in the contest. This knowledge of the abstaining electorate, summed up in the view that “they’re all a bunch of crooks,” points to the conviction that our elected representatives only indirectly represent us and that, with only minor rhetorical differences, whoever prevails will substantially pursue the same interests as the executive class. When we hold our noses as we cast our vote in favor of the least of two evils, we are moved to do so by emotion. Logically, however, we academic workers know that it doesn’t make any difference who wins and that, since our interests coincide with those of the executive class, whose interests will be represented no matter what party ends up in government, this is indeed the best of all possible worlds.

The securitized: The securitized is the user of protective services dispensed by those who stand to handsomely gain from our fear: the media, the military industry that supplies the armies, militarized police, private security firms, and the surveillance apparatus. This particular figure is the condition for the possibility of enormous profit, as the cozy connection between former vice president Dick Cheney and Halliburton shows. Fear sells.

The mediatized: Fourth on Hardt and Negri’s nonexhaustive list of today’s figures of subjectivity is the mediatized, who is constantly bombarded by a barrage of images, submerged in trivial pseudocontent about sports, celebrities, and celebrity-politicians. The images that bombard us with the aim of convincing us of a certain need or desire generate profit on two levels: as advertising, a commodity in its own right, and in the form of sales of the products being advertised. Investors stand to gain on both levels, and here again, there is a good chance that we academic workers may be among the investors who profit from the transaction. TIAA-CREF, for example, is one of the largest shareholders of Walt Disney, which in turn owns ABC and other television channels. Coincidentally, throughout the most intensive years of our war against Iraq, the industrial military giant General Electric owned NBC. The information that shapes our experience is a big moneymaker in the best of all possible worlds.


The figure of the accomplice that I have been describing knows one thing but wants to believe another out of expediency. She lies to herself, sees herself as righteous, as liberal or conservative, but, above all, as democratic and fair. The figure of the accomplice is marked by what Sartre in Being and Nothingness calls bad faith. For Sartre, bad faith involves the performative contradiction of using one’s freedom to deny the existence of freedom for oneself or for others. The vertiginous feeling that results from that cognitive dissonance is nausea.

According to Hardt and Negri, “revolts and rebellions” of the kind the world witnessed in 2011 point to possible escape routes from the domination of each of the four forms of subjectivity exercised upon us by what they call new forms of power: the financial industry, the political system, the security apparatus, and the media. Escaping from these peculiarly isolating ways of living opens possibilities for human solidarity and for what they call the advent of the “man of the commons.”

Groups around the world are inventing and implementing new forms of sociability characterized by the sharing of resources rather than their commercialization; a more horizontal decision-making process; the absence of a political class of “leaders”; and a thorough rethinking of the practice of moneylending, which amounts to a net transfer of money from the poorest to the richest groups.

Hardt and Negri outline an ongoing tradition, present today in modest form, of human networks that make the commons their place of social interaction. New forms of social life can flourish in the commons. In contrast to the market, which mediates most of our social interactions and inflects them with a quantifiable monetary value, the commons is a space in which use value takes precedence over exchange value. By circumventing monetary transactions, we can build cooperative communal relationships not mediated by quantitative exchanges but rather interwoven in qualitative acts of sharing. Communities smaller than the modern nation-state have existed in the past and are in existence today. Some have held territory for decades (Mexico’s Zapatistas, Brazil’s Landless Peasants’ Movement); others, like the Arab Spring, Madrid’s indignados, Athens’s Syntagma Square protests, and the Occupy movement, are events and happenings in which groups are experimenting with ways of saying “no” to the forms of subjectivity that for us are common sense. Together, these resistance movements make up a series of lived experiences that offer an alternative to the dominant narrative, according to which the only way to achieve democracy, equality, and justice for all is the very way we have been going about it in the recent past.


I have so far been speaking from the point of view of a college professor in US academia attempting to observe the ethos of his own profession. What would philosophy say about the existential predicament we academic workers face, in which we need to choose between bad logic and bad faith? Underlying the four forms of subjectivity identified by Hardt and Negri is a structure of complicity with the success and perpetuation of the very powers that keep us indebted, mediatized, represented, and securitized. With our agency colonized by the commonsensical story of the best of all possible worlds, what is there to do?

A modest first step is to recognize the colonization of our logical faculties, which leads us to respond emotionally to the charisma of leaders and the media directing us to “like them” and to “follow them.” Since we are invested in the success of business as usual, there is an obvious incentive to abandon logic and plunge into bad faith. We willingly deny our freedom even to think of alternatives to the best of all possible worlds.

However, for those of us struggling to imagine alternative ways to live, a historical outlook might prove helpful. Such an outlook shows that today’s particular democratic narrative is part of a long chain of cosmogonies, accounts of how the world came to be. Ours starts with the myth of the social contract and ends with the 937 percent. To it we subscribe, explicitly each time we pledge allegiance, tacitly each time we use a postage stamp. But outlandish cosmogonies have been exposed and toppled before! Take the peculiarly uneven arrangement under which it was natural for the feudal lord to own the serfs upon his land, for example, or the improbable scientific and religious justifications for the slave trade that persisted until the nineteenth century. A modicum of historical perspective can help us contextualize the logic under whose spell it was our lot to be born, a logic that presents itself as the instantiation of a timeless order: things have always been this way. History shows the eternal return of the form in which ideologies claim to be the definite, eternal truth.

It is incumbent on us as academic workers to reflect on the subjective figure of the accomplice, which shapes us. With our logical functions turned off or distracted, this mode of subjectivity causes us to live in a way that involves us in a performative contradiction: we cannot want to live in a world in which money buys public office, where politicians and bankers collude, where the ratio of 937 to 10 is considered “natural.” Were elections meaningful and substantial, would the will of the people have been choosing this kind of deal since we became a democracy? Why?

For the past twenty-one years, the poor, indigenous peasants of Chiapas, in defiance of constant military and paramilitary harassment, have managed to practice horizontal, participatory democracy to decide collectively on issues that matter, such as the allocation of work and resources. During the Spanish Republic, from 1936 to 1939, workers took over and managed thousands of enterprises and farms, maintaining production and equalizing salaries between workers and worker-managers. In Homage to Catalonia, George Orwell describes a new subjectivity in the making: "Up here in Aragon one was among tens of thousands of people, mainly though not entirely of working-class origin, all living at the same level and mingling on terms of equality. In theory it was perfect equality, and even in practice it was not far from it.”

These two improbable, modest examples demonstrate that things need not always be the way they are for us today. Though it is expedient to acquiesce, it is thinkable to withhold consent in two small ways: we can refuse to allow our retirement funds and our institutions’ endowments to be automatically invested in the stock market and its outlandish priorities.

Current divestment initiatives, mostly among students, focus on fossil fuels in a way that resembles efforts to divest from South Africa in the 1980s. As the 937 percent figure indicates, however, the logic of the market has existential repercussions for us academic workers that cannot be exclusively traced to one particular industry.

Alberto Hernandez-Lemus is associate professor of philosophy at Colorado College. His e-mail address is



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