- it's frankly impossible to pick investment winners - so a more sensible approach might be to provide smaller investments to more people. Governments basically do this by providing schooling and health care to children till age of 18 or so. I mean the RoI on teaching Elon to read was fairly high. I wonder if his primary school teacher could get a lien on future earnings?
- if MMT is right, then the problem is not limited capital but limited investment opportunities- but if we invest in everyone - what does that mean or look like?
> it's frankly impossible to pick investment winners
There's an entire industry of highly compensated people built around the idea that you can pick investment winners.
> so a more sensible approach might be to provide smaller investments to more people.
Banks have commercial lending departments that fill this function. Doesn't help with startup capital, but I doubt that is the limiting factor preventing most people from starting a successful business.
>>> There's an entire industry of highly compensated people built around the idea that you can pick investment winners.
Just because someone pays you because you say you can pick winners, don't make it so. Top VCs like top Heege funds do get access to the best options - but the vast vast majority of those industries don't outperform index funds (after fees).
Plus even for the good ones, it's only the handful of major winners that compensate for their parlours ability to pick winners.
Bert Bachart was asked "what's the secret to a hit song" and he replied "If I knew that why would I write anything other than hit songs"
There is a world of difference between "I have an idea and if it goes wrong I have some good war stories" equity investment and "I have an idea and if it goes wrong I have a decade of debt to pay".
Really commercial lending departments are just part of the banks real roles of printing money and managing the temporal shifting of the liquidity illusion - ie helping existing businesses manage cashflow issues - startups is a tiny fraction of funding. yet startups is where the huge growth can only come from.
> I wonder if his primary school teacher could get a lien on future earnings?
It’s not the primary school teacher that made the investment. It’s whomever was bankrolling salaries and expenses for teachers, cafeteria workers, buildings to house the activity …
The “lien” on future income would likely be “taxes” (assuming public school here.)
Yes - I agree I was just trying to find my way towards
"the human economy is a whole, even within countries seeing government as a cost to be minimised, taxes to be avoided and private investment as somehow privileged"
is a poor analysis.
I mean such a huge amount of private spending is trying to alter "predominant cultural norms" - advertising etc. yet breakout successful companies tend to break at just the right time that their PMFit barely needs advertising.
Less dinosaurs trying to look cool and more evolved companies would help - and it would help in that we have constant turn over of companies would mean we were measuring actual productivity better - very useful in MMT terms.
Somehow I am feeling towards our tournament style approach of allocating the power to allocate resources is false. We have young democracies, but work in dictatorships - and invest in similar ways.
I think basically we need to find better ways of "doing democracy". imagine voting on internal projects? it will hurt but if we think democracy works then open discussion and decision making actually will result in stronger companies - or just a return of capital !
This poses a bit if an interesting quandary for society.
Which society paid for Musk to be educated? He grew up in South Africa. How much tax does he pay there relative to where he built his stuff? Where should he pay his taxes?
What about other people who grow up elsewhere and move? Is it ok to hire a load of doctors from other countries?
There is the glimmer of a movement here - the Yelland led move to 15% minimum corporation tax is part of the move to solve this very problem. The EU is trying to solve this. But it's reaching the point of dealing with cross border fiscal policy and that's really hard without become a real federation.
And Inthink that is the ultimate global goal here. Which is ... science fiction
Imagine how immigration would look different if South Africa had a lien on ex-citizens taxation - if a slice of every sales tax paid in Nevada by a Mexican citizen went back to Mexico City.
I am not sure how it plays out - but it's possible that countries that benefit from immigration have to pay for it.
- if MMT is right, then the problem is not limited capital but limited investment opportunities- but if we invest in everyone - what does that mean or look like?