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The venture capitalist's dilemma

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81–90 of 94 posts

Re: The venture capitalist's dilemma

#81

Earlier quoted context omitted.

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> You can easily test the strength of that illusion by living for a time in almost any non-OECD country I lived in both sides of the fence, don't worry. > just that we need to appreciate what we have and not talk out of our behinds about the oppression Yes, I'm thankful to be able to discuss with you how badly we are screwed without fear of getting even more screwed. What else should I be thankful for that our benevo…

When I say "appreciate" I don't mean it in a peasant to senior kind of subservient humility, to be thankful for the crumbs.

Rather, to stop and understand the subtleties of our setup and how much of our unprecedented wealth and freedom results from perhaps not very obvious design choices. Every possible system we can come up with has to deal with the problem of human greed, corruption, tribalism. There is no magical alternative around the corner where public officials are virtuous and competent - they are just as bad and greedy as the capitalists, only now they control not only the government but also all economic activities. As a person who lived in a Stalinist economy and the robber baron transition to market economy that followed it, let me reaffirm what you probably experienced yourself: you really really don't want to give control of the economy to the political elites.

Is a better and fairer world possible? Yes, I'm absolutely sure of it. But it will necessarily be an iterative redesign of our own. We'll still have capitalism in the sense of capital ownership and market competition, but maybe you would have an universal income that you can invest in any company. We will still have jobs but perhaps no more wage slavery, with enough robotic productivity to make housing, food and physical safety universal rights.

Re: The venture capitalist's dilemma

#82
post #42

Earlier quoted context omitted.

> If the game is set up so that everyone rich gets a bail out, you'd have to be an idiot not to take the bailout. But that's explicitly *not* how the game was set up. The game was set up so everyone gets insured up to a limit, and if you're rich enough to be beyond that limit, then you should be paying market rate for insurance on those funds (which is, like, a thing they could have done). They chose to forego insura…

I don't understand why there is so much focus on the insurance limit. I'm not sure if such limits are reasonable in the first place because they create somewhat problematic incentives: Assume a bank has plenty of assets, but is temporarily out of liquidity. Why wouldn't an insurer like FDIC force the bank to trigger the insurance policy, cap all deposits at the limit, and realize huge profits after taking over the ba…

The FDIC doesn't cap all deposits at the limit when they take over a bank. That would be insanity.

What they do is insure all deposits up to the limit.

When a bank fails, the assets are used to pay out the depositors (similar to a bankruptcy). If the assets are enough to cover 90% of deposits, then depositors will be made 90% whole. The insured amount is the *exception* to this process, where your amounts below the insured limit will be made whole even when there is an asset shortfall.

I don't think the law would allow the FDIC to cap depositors at the insurance limit, even if the underlying assets are enough to make the depositors whole.

Re: The venture capitalist's dilemma

#83

Earlier quoted context omitted.

> If the game is set up so that everyone rich gets a bail out, you'd have to be an idiot not to take the bailout. But that's explicitly *not* how the game was set up. The game was set up so everyone gets insured up to a limit, and if you're rich enough to be beyond that limit, then you should be paying market rate for insurance on those funds (which is, like, a thing they could have done). They chose to forego insura…

> But that's explicitly not how the game was set up. Sorry, but yes, it was. It might not have been written down, but if all it took was for a few people to "scream bloody murder demanding the government make them whole," we need to look deeper at the implicit assumptions surrounding that system. And, part of those assumptions is that truly wealthy individuals get a greater level of service from that system than the…

Right, but those are the "implicit" rules, and I was very specifically referring to the "explicit" rules.

I agree that the explicit rules are not the implicit rules. That is a big part of the critique. I'm accusing any "libertarians" who demanded a government bailout in this instance of being just as fake, and just as bullshit, as those explicit rules are.

Re: The venture capitalist's dilemma

#84

Capital is just another name for power and powerful people fight to maintain and accumulate more power - welcome to the world, summer child. It's woefully naive to expect individuals to give that power up for social-positive goals, it practically never happened throughout human history. We achieve social-positive goals by behaving as a society and limiting what the powerful can do with their power - democracy, market…

> It's woefully naive to expect individuals to give that power up for social-positive goals, it practically never happened throughout human history.

I would disagree emphatically with this statement. Prior to the advent of capitalism (200 years ago) there was significantly more long term vs short term thinking in society.

We as a people and culture often engaged in massive generation spanning projects where the people who would see and benefit from the results could be generations in the future and the people who started the project would be long dead before it was finished. How much of this do we see today? The ROI cycle now is what a quarter, a few years...

While I don't disagree that power tends to accumulate and is seldom given away, the focus wasn't solely on the acquisition and hoarding of capital. You can see the change in architecture, city design, the arts, and almost every aspect of life. Even simple utilitarian structures were often built as monuments of progress expected to serve generations. We can't even expand existing highways to meet demand.

There always were and always will be the selfish in society but society as a whole wasn't always this selfish.

Re: The venture capitalist's dilemma

#85

Earlier quoted context omitted.

> VCs, and capitalists in general, put money at risk in the hope of generating wealth above their initial capital. They produce goods or services that benefit society, absent the internet-controlled juice-squeezers. VCs hoarding even more capital doesn't contribute anything to society, they are all 100% rent-seeking juice-squeezers. They are a huge example of why capitalism is so broken. > Society has benefited great…

> people like Bill Gates and his contemporaries like Elon Musk only show why people should never be allowed to own billions You picked the guy who’s curing malaria and the one who kickstarted the modern electric vehicle and rocket industries. Yes, they’re flawed. But all humans are, especially the ambitious. I’m struggling to imagine an alternate system where e.g. they’re in better form as elected representatives.

> You picked the guy who’s curing malaria and the one who kickstarted the modern electric vehicle and rocket industries. Yes, they’re flawed. But all humans are, especially the ambitious. I’m struggling to imagine an alternate system where e.g. they’re in better form as elected representatives.

You may struggle to imagine an alternate system but others don't. Billionaires should not exist. Relying on billionaires to do good is ludicrous.

Tesla was founded by others, Elon bought Tesla.

Rocket industries are not good for the environment or our future. We can do mostly without them. Maybe to keep GPS up and running but that's it.

Re: The venture capitalist's dilemma

#86

Earlier quoted context omitted.

> VCs, and capitalists in general, put money at risk in the hope of generating wealth above their initial capital. They produce goods or services that benefit society, absent the internet-controlled juice-squeezers. VCs hoarding even more capital doesn't contribute anything to society, they are all 100% rent-seeking juice-squeezers. They are a huge example of why capitalism is so broken. > Society has benefited great…

> of people like Bill Gates and his contemporaries like Elon Musk only show why people should never be allowed to own billions Does it really? Honestly, it's hard to take such sentiments seriously when you start mentioning these particular "hype" billionaires. For one, it seems like most spite comes of expecting them to act like some godly idols, instead of like some dudes. But largely, it's just that there are so mu…

> You just can't help but wonder if the person actually grasps the scale, or if the whole thing boils down to distaste of someone's character and behavior.

It's not about them as personalities, but what they represent. And their flaws only prove why billionaires should not exist and why they should not have that kind of power.

Re: The venture capitalist's dilemma

#87

Earlier quoted context omitted.

> VCs, and capitalists in general, put money at risk in the hope of generating wealth above their initial capital. , absent the internet-controlled juice-squeezers. You're so close to getting the point, yet so far. The whole point of the article is that there is nothing in the VC handbook that has anything to do with the "benefits society" part of your "They produce goods or services that benefit society" statement.…

> In fact, if slavery is magically made legal today Then society deems it ethically ok. You're argument is void. If society thinks things are ok, why are VCs the heavenly instance to rectify that? > And we need people like Molly White to keep them accountable You mean crypto shills will enforce ethics? Lol

Molly White a crypto shill? Her writing career is dominated by crypto skepticism and skewering crypto shills.

Re: The venture capitalist's dilemma

#88
post #13
post #7

Earlier quoted context omitted.

Yes, what we need is more hecklers vetos over more spending. Democratic control makes no sense. That's the entire reason the US has a representative government - direct large scale democratic control doesn't get anything done for starters. Heck, even the representative form has scaled to the point it doesn't get anything done. If the control that already existed produced anything other than total dysfunction, things.…

I think the problem is the other way around: the population's lack of experience with actual democracy is what hampers any attempt at it. If we had more democracy people would learn to be responsible with that power out of necessity. But of course, a functioning democracy needs some sort of shared goal among its population, to help people compromise on less important matters and agree on that which is important. This…

Agreed. This is my view on Brexit (as a Brit). There was a democratic referendum plus somewhere between 1 and 27 general elections, prime ministers and parliamentary rebellions (it all got confusing). We as a country made a decision - not one I agreed with but still. Somehow taking that back and saying "no try again" is going to make the next decision just impossible.

You concentrate on your balance without a safety net.

Personally I think the big advantage America has is they vote for everything - sheriffs, mayors, dog catchers and presidents. It matters, because it happens a lot. Is it perfect. Hell no. But we get good at what we do most often.

Re: The venture capitalist's dilemma

#89
post #3

> that those controlling massive amounts of capital and power in our society are not the smartest, or most level-headed, or most altruistic among us. This seems to be the telling quote - and is to me the point. We are missing democracy in control over at least half of the spend in society. It's going to be weird, but we need democratic control over companies, as well as government. No idea what it's going to look lik…

And then nothing will get done because everyone has a different opinion? It won't work. We already have enough politics and corporate games at work. Are you advocating for more of that?

Yes because at work only a few people take part in the games (those with allocation control over a budget at least 50 times their own salary say). Everyone else is like slaves fighting over who gets to be head slave.

Re: The venture capitalist's dilemma

#90
post #43

By the time it gets out that a bank is too illiquid to cover its deposits, the situation is already too unstable for any kind of careful coordination of thousands of parties with real concerns about their valuable resources. Imagine the results of an email sent to everyone in Silicon Valley: — “So the local bank screwed up and can’t cover all its deposits. But let’s get together to see if we can all agree to wait thi…

You do realise that no bank ever have had enough liquidity to cover its deposits? That is what a bank is for...

Ah yes. Not enough assets, as apposed to liquidity. Thanks.
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