RiskParticipation
“Wiki” increasingly represents social values not just technical methodologies. For example there is reflected a caring about broad participation. Note this fits well with increased levels of democracy.
Today how much do average folks get to “participate” in early stage risk, meaning where money is needed to cover this risk and move a project or effort forward (such as the start up of aboutus)? Little if any. Today that is the domain of early stage angel investors, and later in an evolutionary process, venture capitalists and financial investment institutions.
People or entities take on this early stage risk because it has big upside potential. People able to participate in this early stage risk have a better chance than the general populace, to gain “more” wealth in our society. So in the wiki spirit of more participation, why not “push” for enabling the average Joe and Jane to also play this early stage risk game?
In response the totality of those with deep pockets and passion for wiki participation might in effect say, “we would love to enable this increased early stage risk participation, but our hands are tied, the federal government (Securities and Exchange Commission – SEC) has rules and regulations in place, such as requiring one to be an accredited or qualified investor (sophisticated in the ways of investments and having a certain degree of wealth), that limit participation”.
For example these rules make it illegal for a company to advertise their investment opportunity on the Internet, to the broad populace.
Entities on the wealth side of the teeter totter, and state and federal governments often tell us, “these regulations are put in place to protect you from scam artists that want to take your money”.
This explanation is weak. It does not take much research to discover that the history of the SEC is filled with cases of them doing nothing to protect the average person, until after it has hit the fan and they have lost their money (the Enron fiasco is just one example of many). In terms of dollars it is such white collar “executive” scammers that have fleeced the US populace far more than any small time scam artist.
And notice that the States and Feds allow and promote gambling (that is a financial risk activity) via lotteries all over the USA, which is known to have a negative impact on people of lower wealth and social status – yet then they don’t protect because they want the added tax revenue.
When there is a big problem like Enron our federal legislature will “act” outranged and pretend to set things straight at the SEC, so the small fry can no longer be ripped off. Yet at the end of the day, due to strong lobby efforts in D.C. by entities having wealth, there always remain loop holes through which entities of wealth find ways to slip. In terms of process nothing has really changed – those “few” with opportunity to take early stage risk get wealthier, while Joe and Jane public is excluded from participation.
One can argue that the SEC does a lot more to protect the wealth of those already having deep pockets, than it does to prevent the small fry from getting ripped off. Strong political pressure could force legislation on the SEC, that would change the participation “rules of the game”.
For example why not put in place some federal hoops that a very transparent Internet infrastructure (typical of wiki culture) must jump through, for example to prove that they have in place a strong reputation economy system, and trust systems and security and privacy methodologies – and after this is done, let them advertise to their community, early stage risk opportunities?
Will there be scams if this happens? Of course – so what! There are already “big” scams like Enron. The upside is that if the Feds allow such experimentation, then over time these online communities will figure out checks and balances, that reduce this scam tendency – and they will figure out such “ways” much faster and more efficiently than the federal government.
So where are all the enlightened deep pocketed folks out there in wiki land with passion for participation and more democracy and transparency? How about you folks form a large consortium. As a deep pocketed group you have clout and influence in D.C., and could lobby the federal government for relevant legislative and legal change. MartinPfahler
