Тег: Investments

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

If you invest in the business, invest in the fight against violence as well

Voluntarist, Bitarch

Doing business and any financial activity are always associated with certain risks. Many will first think of risks leading to the loss of invested funds, however, that is not the issue we are interested in. We will consider the risk that violence, up to and including liquidation, may be applied to a person engaged in such activity. I think you have heard stories about how some businessmen were “taken to the forest” by their more violent and gangster-like competitors in the market. Frequently, a government may eliminate a person for “unacceptable” economic activity. An illustrative example is the recent story of the death of John McAfee, who had some problems with paying taxes and activities related to cryptocurrency operations, and who, as he claimed before his death, was threatened by representatives of the US authorities.

Of course, some will say that problems can be avoided by strictly playing by the rules of the state power and stronger market agents. But these rules are established unilaterally and can be changed at any moment to destroy your activity or make its conduct impossible. The mere fact of conducting some activity may be unacceptable to those capable of committing violence against you. In the best case, your business will be stopped due to the threat of violence from ordinary or stationary (“state”) gangsters, resulting in large financial losses. In the worst case, you will simply become another person who “committed suicide.”

Anyone engaged in any economic activity, especially if it involves running a business or investing in certain assets, finds it beneficial and necessary to invest in the fight against violence. Only by eradicating violence in human society can its risks be eliminated and one can finally peacefully attend to their affairs without fearing tomorrow. Investing in the fight against violence is clearly worth it to simultaneously preserve both your activity and your life!

The market will decide—but what about those people who dedicated their whole lives to creativity and died in poverty?

The default, most striking example is Van Gogh—but even that is very relative. How does the market decide on art? Of course, it may be unfair that talented musicians are shut down by the FSB (although they become popular), or unfair that there are provincial artists whom nobody knows about. Tell us about art under an ideal ancap. How does the market decide on art?

Yan Libertine

The ability to create, that is, to invent and produce something that did not exist before, will be valued by those who find what currently exists insufficient. Van Gogh’s tragedy was not that he dedicated his life to creativity, but that his form of self-expression was in low demand among his contemporaries. It is his sacred right to create what he wishes to create, using what he has acquired through legitimate means. However, if he wishes to sell the fruits of his creativity to someone, he will still have to find someone willing to buy it.

A characteristic of many creative natures is their impracticality. Van Gogh himself claimed that a painter’s worst enemy is the art dealer. A creator working on commission considers their own vision far more important and significant than the opinion of the client. It is not surprising that this quite often leads to conflicts. A creator working by the call of inspiration often does not even consider who might need the result of their work or why.

But everything I just wrote about creators can also be applied to an entrepreneur. Similarly, instead of working for a boss, they venture into the free market, assuming that their product will be more in demand. They say nine out of ten companies close after their first year of operation, so the market is no more merciful to entrepreneurs than it is to artists. Both act under conditions of future uncertainty, assuming they know better than others what people need and how to provide it.

But, besides entrepreneurs who wish to directly create something new, there are people who wish to help in the creation of the new. Artists are helped by patrons. Innovative entrepreneurs are helped by venture capitalists. Some are driven by the desire to earn from breakthrough projects, believing their intuition works better than the market average. Some are obsessed with the idea of making the world a better place. Some are driven by vanity. Some simply have warm feelings for the creator. Van Gogh, for example, was helped by his brother Theo.

The attempt to organize state support for creators instead of private patronage leads to the appearance of stifling monstrosities like the USSR Union of Writers, the USSR Union of Artists, and the USSR Union of Composers. Choosing between pop art and opportunistic art, I would still prefer pop, although I would prefer not to choose between these two options at all, since the world is infinitely more diverse, and adhering to the mainstream is by no means mandatory.

Especially since technology has already largely neutralized the factor of provincialism, as the internet is global. The tools for monetizing art under ancap will, for the most part, be the same as they are now. This includes eBay, Patreon, or even something like DeviantArt—in short, it’s impossible to list them all.