Virtue signaling refers to the act of publicly sharing one’s beliefs or opinions as a display of one’s moral values or character, particularly on issues that one is passionate about.
For example, I am deeply committed to supporting the roughly 15% of the population that is born with disabilities. This commitment is evident not just in my writings but also in my philanthropic efforts.
However, problems arise when virtue signaling goes overboard, causing others to feel morally inferior. In some cases, individuals might engage in virtue signaling to enhance their self-image, even if their actions don’t match their stated beliefs.
Here are some common scenarios where there’s a mismatch between what people say and what they do:
- Politicians who champion public education but send their kids to private schools.
- University officials who talk up diversity but maintain small, exclusive class sizes and use manipulative admissions practices.
- Vegetarians who decry meat-eating but use leather goods.
- Building inspectors who criticize illegal renovations but take bribes.
- Wealthy folks who lament low tax rates but don’t donate more to the government.
- Advocates for free content who refuse to work for free.
- Personal finance gurus who stress the need for affordable financial advice but charge steep fees.
- Housing advocates who oppose new developments in their area.
- Pro-immigration voices who are unwelcoming to immigrants in their community.
- Defund-the-police supporters who call the cops during emergencies.
- Businesses that prioritize diversity in hiring but lay off those very employees first.
These examples illustrate the prevalence of virtue signaling and its problematic nature when not supported by consistent actions. Genuine actions are admirable; hypocrisy is not.
A Remarkable Instance of Genuine Virtue Signaling
Take the case of parents who advocated for leniency for their daughter’s killer, aligning with her belief in restorative justice over punishment. Their actions, though personally costly, matched their stated beliefs, raising the question of the potential for repeat offenses.
The Complex World of Investor Virtue Signaling in Capitalist America
Investor virtue signaling is when investors criticize certain investments on moral or ethical grounds, a phenomenon that’s particularly interesting in a capitalist society like the U.S., where freedom of expression and investment choice is valued.
However, as investors, our primary aim is to see a return on our investments. It’s paradoxical when investors decry certain strategies while practicing them. For example, real estate investors criticizing others in the field, or stock investors taking aim at their counterparts, is inconsistent.
Investing fundamentally involves understanding supply and demand. Success often comes from securing and holding onto scarce resources, whether that’s prime real estate, companies with limited share issuance, unique artwork, or capped-supply cryptocurrencies.
An Investor Virtue Signaling Example
Since 2016, I’ve diversified my portfolio with private real estate funds like Fundrise, aiming for passive income. Yet, some criticize these investments as unethical, comparing them to firms like Blackstone, accused of monopolizing U.S. real estate.
People are entitled to their views and investment choices, as are Fundrise and other investors in seeking profit. For instance, a podcast listener criticized my Fundrise investments on ethical grounds, despite being a real estate investor himself.
This contradiction represents investor virtue signaling—critiquing an activity one is involved in. It shows a misunderstanding of investment principles and capitalism.
The Freedom to Think and Invest as You Wish
In the U.S., we value the freedom to express our opinions and make investment choices. This liberty extends to sellers deciding their buyers and companies like Fundrise pursuing profitable opportunities.
I was curious about the background of the critical commenter, expecting him to be in a non-profit or government role, not real estate. To my surprise, he was a pharmaceutical consultant and real estate investor, which seemed at odds with his criticism.
As a pharma consultant, he’s likely involved in maximizing drug company profits, an industry often criticized for high medication prices affecting access. Yet, he took issue with the investment strategies of institutional real estate investors.
In Conclusion: Match Your Actions to Your Beliefs
It’s perfectly fine to hold personal beliefs and investment strategies. But criticizing practices you partake in is inconsistent and diminishes the credibility of your arguments.
In both investing and life, aligning your actions with your beliefs is crucial for authenticity and integrity.
I’ll continue to share my views, welcome differing opinions, and ensure my actions reflect my beliefs. Whether it’s investing in real estate through platforms like Fundrise or trying out their Innovation Fund, I’m committed to diversifying my investments in line with my principles.
