The Atlantic Cities has an interesting post by Emily Badger about a pair of brothers — Dan and Ben Miller — who are trying to raise local neighborhood capital to build on a small basis in Washington, DC.
Reading it, Badger relays from the brothers many of the problems such advocates of local investing bump up against that are pieces of fallout from the Securities Act of 1933, and its requirement that securities only be sold to “accredited investors.”
This all sounded familiar to me. The reason for that was, I’d heard Michael Shuman give a talk in support of his book, Local Dollars, Local Sense.
What’s particularly interesting to me is, these efforts at local investing have the potential not only to completely overturn our current models about where and how to invest — they’re also a lot closer to what I would consider an authentic libertarianism.
What I mean by that is, your typical libertarian candidate today tends to have this as a program:
1) Elect me…
2) …and I’ll use the power of my political office…
3) …to completely re-shape the current regulatory regime, using the power of the state.
They may well be well-intentioned. They may well believe that radically removing regulations is what the market needs to be kick-started. But the fact remains that many of those regulations have existed for decades, if not generations. The market has responded to them, and priced them in. To use the power of the state to suddenly remove those regulations is just as much of an intervention as installing them suddenly would be. Both actions dramatically change what a fan of biology would call the market’s homeostasis, or what Hayek called the extended order. Both actions perform what Hayek calls “the fatal conceit” — sudden do-goodism to reshape the market in a manner more pleasing to the shapers.
Contrast that to what the Millers and Shuman are advocating:
1) Here are the rules
2) Here’s how you can work within them…
3) …to great profit.
In other words, rather than using the state to destroy the market in order to save it, the Millers and Shuman are proposing methods of the market, by the market, for the market to wring the most from the current extended order.