In Favor of Risk

Tom Vander Ark, in today's Huffington Post, seems to make a case for less, rather than more, oversight of financial institutions, afraid that risk-capital may get sent overseas.
To quote: "The uniquely American combination of market capitalism, extraordinary universities, and risk capital--specifically venture capital and growth equity--are the engine behind a century of remarkable progress."

That may be so, but in my opinion that run has come to an end, not just because of the so-called toxic assets that Wall Street and banks dabbled in, but also because there are other forces at work as well, such as the melting of polar ice, global warming, rising waters, peak oil, mounting unemployment, and industries that continue producing crap that's not needed, nobody wants, and ultimately clogs our rivers and landfills.

His article is based on old-school thinking. There's not a new idea in it. It's typical for the ugly investor we no longer can trust.

Separating funds from morals has lead to a breach in the economic levees and the funds have been drained out of it, not because there was no oversight, but because an environment had come to exist in which bigger equaled better, and richer equaled more desirable. All that now looks silly and out of touch.

Risk capital fleeing to Asia is like water that seeks its own level, like big fish looking for a place to spawn. If he wants that capital to stay in America conditions will need to be created for new investment, not by lax oversight or lack of regulation, but by appealing to a different mindset than playing Russian roulette, knowing that the government will cover your risk in case you bet wrong.

So, while he's talking about risk as a virtue, Mr. Vander Ark seems unwilling to risk anything new. He simply assumes that the same kind of people will be back wanting more of the same. Mostly, he seems afraid. Not exactly the risk taking kind...

So, I'm not sure what it exactly is he's asking for. Venture capitalists can be as supportive of the new economy that will emerge as they want to be. If great American talent and opportunity is going to be skipped over in favor of foreign investment in same than so be it. If you want to preserve capitalism as the only (other) God, than be prepared for how it behaves, like an irresponsible, greedy, destructive, resource-devouring beast.

Perhaps now is the time to look at a better use of capital than purely squeezing profit from it. Money is a natural resource as well, in a way, that helps make things possible. Wonderful things, sustainable things, innovative things, that may nourish us and excite us without creating toxic by-products that smother the environment and in the end our dreams and hopes. Perhaps the new investor will look upon our efforts to recreate the economy with the brave foresight of the risk taker who sees not only opportunity and profit, but also understands that what we all want is to live in harmony. Yes, that investor may not yet have emerged, but those are the ones we're all waiting for. Who goes first?

About Taxes
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