A hospital is a business. Its profits are measured in lives. Any deviation from completely impartial, free-market business practices threatens the viability of a business and its potential to succeed.
In this case, it threatens the lives that the business supports.
By recommending that medical schools divest their portfolios of tobacco stocks, the American Medical Association promotes the unreasonable ethical standpoint that hospitals should financially back a product that has been proven harmful to the public health. These critics are negligent in their analysis of the extensive ramifications of such regulation.
The first issue to consider is profitability. Tobacco has suffered from both legal and social prosecution on the local and national scale and is therefore not as lucrative as it once was.
If an industry is determined to be profitable, or in the best interest of a diverse financial portfolio, then universities should have the freedom to decide whether or not to invest in it. Limiting investment is inherently detrimental to the overall productivity and success of any independent institution.
And while ethics should not be absent from business practices, it is simply too difficult to maintain the standard established by divestment in tobacco.
If tobacco is dropped, should medical institutions abandon all stock holdings in the fast food industry? Especially in light of the recent documentary "Fast Food Nation," burgers and fries have been damned as a major health concern of America in the upcoming years.
How about gun manufacturers, or even any industry that produces weapons? Certainly their products threaten health and safety in our nation.
It comes down to the fact that investing in tobacco is not investing in al-Qaida.