How investment restrictions strengthen the power and wealth of elites

Imagine that you are a talented, smart and, most importantly, hardworking person. Perhaps even financially savvy: you read books about Buffett, follow a few investor bloggers, and even know the difference between a bond and a stock. In short, you’re a winner, ready to take everything life has to offer.

But then the state gently pats you on the shoulder and says: “Hey there, buddy, stop-stop! You’re too poor to invest in interesting things. Why don’t you just put your money in the bank at 4% and don’t make a fuss.” Sound familiar? Welcome to the world of restrictions for “non-qualified investors.”

What is actually happening? In many countries (USA, Russia, EU), a roughly similar scheme is in place: authorities divide investors into two castes — “quals” (those with plenty of money and the right papers) and “non-quals” (everyone else). Quals can invest anywhere: venture startups, hedge funds, IPOs, cryptocurrencies, complex derivatives — in short, any juicy opportunities with the potential for hundreds of percent growth.

But for an ordinary person, even if their IQ is higher than that of many millionaires, the road there is closed. True, in some cases, people have found workarounds through cryptocurrency: thanks to it, one can invest in startups and projects that would otherwise be completely inaccessible due to formal restrictions. The state is protecting us, mere mortals, from risks. Like, just in case — what if we lose our money and become even poorer?

But here is the paradox: casinos and betting shops — please, go ahead. Lotteries — always welcome! Loans at 25% per annum — “dear, come in, we’re glad to see you!”. But a startup by your acquaintance — no way, too risky, you’re not a millionaire to invest in such things! Ironic, isn’t it?

Such restrictions lead to a banal financial apartheid: the rich gain access to the juiciest investments and become even richer, while the middle class and the poor are forced to settle for crumbs — deposits and low-yield bonds. In the USA, for example, only 13% of households fall into the category of accredited investors. And it is they who get access to venture deals that turn 1,000 dollars into a million. Meanwhile, the average John Smith has to sadly watch the success of others, settling for boring S&P 500 ETFs.

Russia has gone even further: “non-quals” are completely forbidden from investing in foreign stocks. Tesla, Apple, Nvidia? Forget it! Your lot is Gazprom shares, a deposit with a yield below inflation, and a state pension. In short, stay quiet and dream of a salary increase at the factory. And Europe? There, regulators have decided that people “do not have a legitimate need” to invest in crypto-derivatives or use high leverage. This is like telling a person: “You do not have a legitimate need to earn more.” Thank you, so very caring!

Who benefits from this? Imagine: if a person earns a lot from investments, they become financially independent. They are no longer afraid of the boss, layoffs, or a crisis. They gain money, time, and the most terrifying thing for the authorities — the ability to think about politics. It is not in the interests of the authorities for the middle class to get rich quickly and stop depending on a salary and the state. After all, as long as you slave away from morning till night at a job you hate, paying off loans and trying to make ends meet, you certainly have no time for rallies and protests. No time to wonder who up there is stealing the budget — you have to feed the family and pay the mortgage! Thus, investment restrictions play into the hands not only of the super-rich (who maintain exclusive investment opportunities) but also of states, for whom it is easier to manage a tired and economically dependent population.

What to do and how to live on? The problem is not that investing is dangerous. The problem is that the state has decided that you are a child, incapable of making a decision about your own money. If a new Apple or Google appears tomorrow, you will be the last to know, when the shares have already hit the exchange and grown dozens of times. Until then, the “quals” will skim the cream. It is time to return the right to take risks!

Voluntarist, Bitarch

Stefan Molynieux, The Practical Anarchy, translation of chapter 23

Today’s chapter of Practical Anarchy by Stephan Molinari is, unlike the previous one, long and thorough. Not surprisingly, as it is dedicated to a topic that has inspired many memes — roads under ancap.

First, the author explains that the best way to understand why on earth someone would suddenly want to pay money to build and maintain a road in a free market is to imagine yourself as a developer approaching investors. Then, he analyzes various typical scare tactics. And in conclusion, he delivers a finishing blow from a related field, which also pertains to public goods.

RPM

The number of experiments being conducted in society at a given moment, or the conditional “revolutionariness,” has a good analogy with a car engine. In English, even the names coincide—you have surely noticed the RPM abbreviation on the tachometer, which stands for “Revolutions Per Minute.” If the needle is at zero, the car will not move at all; too low an RPM means poor traction and the engine may stall, and if it is in the “red zone,” the engine roars violently and fails very quickly. Only in a narrow range around 2K RPM is stable engine operation ensured, where it simultaneously provides good traction and does not fail too quickly.

Put simply, “revolutionariness” is an indicator of entropy in a system: the higher it is, the faster the development, but also the higher the probability of the system “spiraling out of control” and self-destructing. At a zero “revolutionariness” indicator, development stops, and for any living system, this means death.

A great example is the planned economy of the USSR. A quote from one article reviewing the reasons for its collapse:

“A mobilization economy of the Soviet type implies, suddenly, some task for the sake of which the mobilization is carried out. Previously, these goals were quite obvious—develop an industry like the capitalists, win the Great Patriotic War, create a nuclear bomb. Further it became more difficult: a developing economy requires the search for creative solutions for the further growth of the population’s standard of living/increasing labor productivity/searching for new energy sources and so on. In a market, this issue is solved by each agent individually at their own risk, and out of a thousand failed attempts, a couple or three correct solutions will be found. In a planned economy with a single decision-making center, experimenting is more difficult.”

Here lies the most hypocritical position of many authoritarian conservatives: they oppose any experiments in society, but at the same time, for some reason, they violently criticize the USSR. Although from the outside, it was precisely the Soviet communists with Gosplan who were the embodiment of the ideal world of conservatives, in which any experiments were maximally limited, providing a sense of “order” and a reduction of entropy. And the fact that zero entropy is death was perfectly demonstrated by the USSR in 1991, ceasing its existence. Worse still, the hypocrisy of authoritarians extends across the entire planet: they openly express a desire to ban any experiments globally (here one can recall American conservative organizations like the ADF, which pursues the goal of criminalizing homosexuality not only in the USA but also in other countries), while constantly criticizing modern globalists like Soros and Schwab.

Voluntarist, Bitarch

War under ancap

I recently came across an interview of Evgeny Volnov by Mark Solonin.

Briefly: it describes the organization of a business process for the decentralized volunteer production of consumables to supply the army. Toward the end, Solonin inevitably reflects on libertarianism, so it’s worth me reflecting a bit as well.

The question that concerns me is: can an ancap community already provide all the necessary ingredients for conducting a full-scale war?

Volunteers are capable of mass-purchasing everything necessary for logistics, nutrition, and daily living on the free market and delivering it to the combat zone. The production of small arms and explosives are developed civilian industries. In the absence of government orders, they will not wither away, and in conditions where the state is not getting in the way, they are capable of responding to increased demand by increasing production. Distributed production, similar to what was described in the interview, is capable of saturating the army with light combat mechanisms. Heavier specialized mechanisms can also be produced by volunteers; it’s just that 3D printers on a balcony will no longer suffice—small workshops will be needed instead. The Ukrainian war demonstrates to us that this is also not a problem. Such mechanisms also include long-range drones, including high-speed ones.

Private entities already know how to provide communications and satellite intelligence data excellently.

What about people? Volunteer units are performing excellently at the front and, compared to their state counterparts, demonstrate far fewer problems finding people willing to join them. The better the unit’s reputation, the higher the competition.

Coordination between units is also showing results at least as good as state chains of command, and authoritative commanders are capable of rapidly expanding their sphere of influence, taking responsibility for increasingly larger areas of work.

What private suppliers are not ready to provide today is manned combat aviation. However, today a combat aircraft is de facto a platform to lift a radar and missiles into the sky, and then to ensure that the pilot sees the radar data and launches missiles accordingly. A pilot is no longer needed to perform high-level aerobatics during an aerial dogfight between planes. Given a stable communication channel, the pilot can actually be on the ground, and a stable communication channel can be ensured if there are many planes in the air forming a relay network. A plane’s radar is something comparable in complexity to a Starlink terminal—it also needs to track multiple satellites and somehow make sense of a jumble of signals. That is, a private entity can produce it without an exorbitant price tag. Consequently, under ancap, a combat aircraft looks like a plump propeller-driven carrier of several missiles and many drones, flying in swarms that hover in the air around the clock, analyze the situation a couple of hundred kilometers from the swarm’s perimeter, and clear out everything interesting they find—and as fuel and/or ammunition are exhausted, they fly back to base in automatic mode, calling for a replacement in advance. However, this is still an unrealized fantasy.

Two questions remain.

First, motivation. States are breeding grounds for patriotism, and patriots are precisely the fuel of war. Will an ancap community be patriotic enough to organize large-scale resistance against a state? The example of the beginning of the invasion of Ukraine shows that the chances are quite high: the primary resistance to the sudden attack in areas where hostilities had not occurred since 2014 was mainly volunteer-based, and at the very least, it thwarted the blitzkrieg.

Second, economic sanctions. Sanctions are an insult to the element of the free market. They are imposed by states, and states monitor their compliance, while the market ensures that sanctions work poorly. It can be stated with considerable confidence that sanctions as a tool for influencing an opponent under ancap will have an extremely weak effect, representing isolated examples of refusing deals for moral reasons. Simply put, some will be actively donated to and worked for out of conviction, while others will be provided services only for good money. Since each side may have a quite diverse composition, there will be both volunteers and mercenaries on both sides. And victory will go to the side that is more effective in this resource confrontation. But in the long run, efficiency will be determined by how many ideological and talented people work for the victory of one side or another. And this, in turn, will depend on whose side the majority believes justice lies.

Childhood violence – traumas for a lifetime

Let’s be honest: cruel upbringing is not just a bad idea, but a real crime against a child’s freedom and happiness. Of course, some might claim that “the belt builds character.” But let’s face it—the belt builds psychological trauma, not strength of spirit.

We have said before that physical punishment does not work. And these are not just words—they are the results of a massive analysis of 75 studies conducted on 161 thousand children. The result is simple and sad: the belt does not make children obedient; it makes them miserable. Such children later have worse memory, lower IQ, and higher aggression. But if you think this is old news—wait, it gets even more interesting.

A recent study by the University of Michigan, conducted on 6,500 Americans, proves that childhood traumas haunt us for our entire lives. Imagine, even at nearly 80 years old, people continue to experience depression, loneliness, and physical pain due to the violence they suffered in childhood. Such trauma is not a scratch that will heal, but a deep scar that only hurts more over time.

Another striking discovery: it turns out that parental cruelty turns children into “evil geniuses.” A study by the University of Texas on 524 students showed that abusive upbringing develops malicious creativity. Instead of creating peaceful and responsible citizens, parents literally train cunning manipulators, professional liars, and masters of petty mischief, possessing low conscientiousness. And that, to put it mildly, is not what makes society better.

Why does this happen? It’s all about the brain. Research shows that in children who were systematically traumatized by their parents, the development of key brain areas such as the amygdala and hippocampus, which are responsible for emotions and memory, is impaired. Imagine the brain as a computer that constantly crashes and slows down because of viruses introduced by violence. It is also interesting to note that even in monkeys subjected to violence in childhood, disruptions in the serotonin and dopamine systems of the brain were observed. These are very serious disorders affecting happiness and even the will to live.

Unfortunately, that’s not all. The long-term consequences of such “upbringing” include an increased likelihood of developing alcohol and drug addiction, difficulties in establishing stable relationships, and even a propensity for crime. After all, a person who grew up in an atmosphere of fear and violence often considers aggression to be the norm of behavior and carries it into their adult life. It is a vicious cycle that can only be broken by a radical change in approaches to upbringing.

There are more effective and far more humane methods of upbringing that do not deprive a child of dignity and freedom. Science confirms that empathy, love, and understanding promote the development of a strong and resilient personality. This is how we can help children become not just successful, but happy people, capable of creation and independence. Children deserve respect, and the recognition of their freedom and autonomy. Parents should be mentors, not overseers, allowing children to make their own choices and take responsibility for them.

Parental cruelty is incompatible with the ideals of individual freedom. We must resolutely reject abusive “upbringing.” Because, in all fairness, you either raise a free person, or it is better not to raise anyone at all. So let us be free not only in words, but in action—starting with respect for the freedom of children!

Voluntarist, Bitarch

Can a libertarian society withstand the pressure of hereditary inequality?

Imagine this: one person works hard their entire life, building a business from scratch—while another is born with a “silver spoon” in their mouth and receives millions without lifting a finger. A couple of generations pass—the grandchildren of magnates bask in luxury, while the descendants of laborers barely make ends meet. Unfair? Absolutely. And with each new generation, the gap only grows.

Of course, a person has the right and freedom to dispose of their labor and property. But it’s important to understand those who feel a boiling sense of injustice within. Imagine: you strive, you slog away, and next to you, some privileged kids live off the interest of their grandmother’s capital and look down on everyone else. It hurts, right? And although life never promised to be fair, you still want everyone to have a chance, not just those lucky enough to be born into a wealthy family. It is a serious question: how to ensure the stability of society amidst accumulating inequality—while remaining true to the principles of freedom?

To start, a bit of optimism. It is often said: “the first generation earns, the second squanders, the third begs.” Often, that is exactly what happens: the grandfather built a fortune, the son spent it all—and the grandson has nothing left to inherit. Wealth without effort slips through the fingers, so part of the accumulated inequality dissolves on its own over time.

But relying solely on this is cold comfort. Yes, many “golden children” sooner or later end up with nothing. But there are also families like the Rockefellers, who manage to stay at the top for many generations. They say their secret is simple: they force every new heir to work no less than the previous one. No free rides—if you want to use the family capital, multiply it. Such an approach helps preserve wealth for a long time.

So what should we, as a society, do? We want to preserve freedom and create more opportunities for everyone. How can this be achieved?

First, fair competition and equal rules for all. If a wealthy heir conducts business poorly, they should go bankrupt like anyone else—no special privileges or state monopolies. Without friendly officials, even a huge inheritance is not insured against bankruptcy. Conversely, a talented and hardworking person, even without connections, will be able to break through if obstacles are not placed in their way. Competition is the best equalizer when it is truly free.

Second, equality of opportunity. A talented child from a poor family should have the opportunity to study and realize their potential, rather than remaining poor forever simply because of the circumstances of their birth. Society, through private foundations, scholarships, and mentoring, can facilitate this. In the end, everyone wins: more talented and productive people will emerge. By the way, many wealthy people understand this and invest in education and startups—investing in the future.

Third, a culture of responsibility. Freedom goes hand in hand with responsibility. If you were born into wealth, it is not your achievement, but it is also no reason to rest on your laurels. Consider it an advance that must be justified. Many heirs do exactly that: instead of a life of leisure, they start their own business or engage in science—trying to leave their own mark.

Finally, social elevators—the opportunities to rise from the “bottom.” Fortunately, the free market regularly provides chances for the talented and energetic. An example is WhatsApp founder Jan Koum: he arrived in the States as a poor immigrant, and a couple of decades later sold his creation for billions. No titles or special connections were required—only an idea and perseverance. There are many such stories, and they are inspiring: even without any “silver spoon,” it is possible to make it in life.

It turns out that the recipe for stability under freedom is this: ensure that the “playing field” remains fair and open to all. Yes, some have a head start from the beginning of the game—wealthy parents did their part. But the game is not lost as long as others have the opportunity to make their move. The most dangerous thing is if the rules of the game begin to be written for the chosen few. This must not be allowed to happen!

Voluntarist, Bitarch

How would private military companies act under anarcho-capitalism?

Mauser

Anarcho-capitalism is a free market plus the decentralization of power. A private military company under ancap is a company operating in a free market to solve military tasks—that is, tasks arising from conflicts where people are willing to kill.

It is very easy to imagine the activities of private military companies during a society’s war of liberation against the state. Something similar to how this looks could be observed in the initial stage of the Russian invasion of Ukraine, in those areas where the state was practically inactive, yet defense tasks were nonetheless being solved. What is characteristic of such a war? The emergence and decentralized coordination of numerous startups focused on three types of tasks: direct combat operations, supplying those on the front line, and crowdfunding to finance the first two. If the war drags on, the supply task becomes more complex, and a separate industry emerges for the development of new means of warfare.

But once ancap dominates the world, all this flourishing complexity is a heroic past. The grandfathers fought their wars. Military tasks become much more local; the duration and frequency of military conflicts decrease. Thus, private military companies under ancap will operate in survival mode. They will have to exert significant marketing efforts just to justify why they still exist at all, and many will prefer to liquidate instead, since there are many peaceful tasks on the market that will bring a much more significant income with far less effort.

Believe me, you wouldn’t want to work as a PMC employee under ancap. No romanticism, no heroism, very few actual tasks, existing merely as a formality, in conditions where people look at you askance and wonder why you even exist, and if you wouldn’t accidentally like to create a new state, because you seem kind of aggressive—maybe you need a little injection. So, I fully admit that almost no military companies will remain at all under ancap. There will be gamers. There will be reenactors. There will be some kind of brutal sport. There will be fans organizing into teams to vent aggression on one another under the pretext of supporting sports teams. There will be various book theorists imagining what war could be like under current material and technical conditions.

The production of specialized military equipment will inevitably be shut down. Old stocks will be gradually disposed of, and those that make no sense to dispose of will eventually become obsolete anyway. Cheap mass-market items for the civilian market can be adapted for war using blue electrical tape if necessary, but engaging in this—and especially starting to produce more serious military tools—will only happen in the event of a real war whose duration exceeds at least a couple of months. And where would this real war come from?

A mass war under ancap would require a combination of two factors. First, the appearance of a sufficient number of sweet summer children convinced that war is a fun festival of courage. Is this possible under ancap? Of course it is, and it is even inevitable. And second, a talented psychopath is needed who can convince them that the world is rotten to the core, society has lost its purpose, and it is time to shake up these bloated pigs so they scream in terror. Is this possible under ancap? Of course it is; you can’t assign a Bitarch to every psychopath.

As for what happens next, that is also generally clear. There will be bewilderment. There will be distrust of news channels, claiming they are creating hype out of nothing. There will be helpless attempts to counteract this by service agencies involved in maintaining order and security. Then, more and more people will begin to realize that they are actually being fought against. Mostly, they will simply flee far away from the danger zone after receiving insurance payouts (if policies still imply coverage for civil unrest risks). But entrepreneurs will emerge who begin to solve the arising problem. And then the market will do its work, and it will be the hour of glory for private military companies. They will emerge from nowhere, attract all the necessary resources, deal with the war, and disappear again.

Such a boring story.

A hardware problem cannot be solved with software

When a capacitor on your motherboard bulges, you resolder it rather than trying to solve the problem by changing some variable in the Windows registry. When a shock absorber in your car dies, you certainly won’t go in and reprogram the electronic control unit in the hope that the problem can be solved without “dirty work.” But for some reason, when it comes to malfunctions in human “hardware,” many mistakenly believe that these problems can be solved purely “programmatically” (through philosophy, religion, social institutions), without therapeutic intervention in the defective systems of the body.

This misconception is especially noticeable in discussions about the violence inhibitor. But in fact, it is exactly the same kind of hardware system as processor elements like the ALU and registers. If a processor has physical defects or has degraded, no firmware update will help — this sad lesson was well learned by owners of the latest generations of Intel “stones.” Likewise, in the case of a degenerate rapist, no amount of persuasion will help — the problem is purely “hardware,” it is in his “noggin.” It’s time to accept the truth and abandon the illusions: hardware (physical) problems require a corresponding hardware solution (action in the real world)!

Voluntarist, Bitarch

Stefan Molynieux, Practical Anarchy, translation of chapter 22

Today, a very short chapter from Practical Anarchy by Stephan Molignu has been translated. The chapter is titled Tank Control and quickly addresses a couple of topics: how the prevention of behavior potentially dangerous to neighbors on one’s own private property will be handled in a stateless society, and how gun control will work, given that people’s opinions on this subject are polar opposites—some believe that widespread gun ownership increases safety, others that it decreases it.

No mega-revelations or grounds for flame wars; the author is simply tying up loose ends, concluding the second part of the book.

Golden cage or contract slavery: why non-compete is inhumane

Imagine this situation: you are a talented engineer at a tech giant. You love your work, you are passionate about your ideas, and you want to push the industry forward. Suddenly, you decide to change jobs to continue growing and keep pace with the times. But then comes a surprise—your contract forbids you from doing what you do best. How is that possible?

Recent news about Google DeepMind employees in the UK, who it turns out are forbidden from working for competitors for a year after leaving, is a great reason to discuss why “non-compete” contracts are, to put it mildly, a very bad idea. And not just bad, but inhumane and contrary to the basic principles of freedom.

What is a non-compete? It is an agreement according to which, upon leaving a company, you pledge not to work for its competitors for a certain period. Moreover, you may continue to receive a salary during this time. Sounds almost dreamy, right? But it’s not that simple. In effect, you are sent to a “golden cage”: you get paid, but professionally you degrade. This is especially true in fast-changing industries like IT and AI, where a year of downtime can cost you your career.

Why is this unacceptable from a libertarian perspective? The core value of libertarian philosophy is personal freedom and the right of self-ownership. When an employer restricts your freedom to pursue your favorite activity, they are infringing upon your fundamental right to dispose of your own labor and talents. Furthermore, such contracts contradict universal human rights. They go against basic humanistic principles by restricting freedom and forcing talented people to either “sit on the bench” or move into another field, losing their skills and motivation.

The good news is that not all courts support such agreements. For example, in the US, the California Supreme Court long ago recognized most non-compete agreements as illegal because they “unfairly restrict a citizen’s ability to earn a living.” In 2021, the Illinois Supreme Court refused to recognize non-competes for restaurant workers, ruling that there were no fair grounds to prohibit waiters from moving to competing establishments.

Other examples of inhumane contracts:

– In 2017, a British court ruled a contract illegal that prohibited nurses from leaving a public hospital to move to private clinics—the court considered this an infringement on the freedom of labor.
– An American court overturned agreements under which Amazon employees were required to reimburse the company for training costs if they resigned early—this was recognized as a form of debt bondage.
– In 2019, a German court overturned a football club’s contract that prohibited a player from playing for competing clubs in the same league upon leaving. The judge argued: “A human is not a commodity.”

Why is this important now? The world is changing rapidly. Artificial intelligence, blockchain, biotechnology—these industries are evolving so quickly that losing even a few months can result in complete professional obsolescence. Are we really ready to allow corporations to control not only our present but also our future, dictating where and as whom we can work tomorrow?

The libertarian view is broader: freedom of contract is good, but freedom should not turn into chains. After all, freedom of contract ends where the restriction of fundamental human rights begins. One cannot sell or buy the right to someone’s future! And the authoritarians who disagree and are ready to forcibly impose such an order on others must understand that the rejection of universal human rights will inevitably work against them as well—for example, through the rejection of non-interference in their nervous system without consent, which is currently perceived as a given, but is actually someone’s goodwill and desire to observe conventions, rather than the laws of physics.

Let us remember: people are not resources. Talent is not company property. And a person’s freedom to dispose of their own life and career is sacred.

Voluntarist, Bitarch