It's always puzzled me why the left -- in the face of efficient and dynamic distributed networks in everything from entertainment to personal finance to friendships to philanthropy -- insists on seeing only a 1970's-style big government top-down solution to every social problem.
In every aspect of our lives -- except the ones that involve the government -- we're allowed to customize and tailor our choices. We set our preferences. We connect with other like-minded people.
Now, comes an interesting venture called Upstart, from an former Google executive. It's a way to fund promising young people:
Upstart allows you to raise capital in exchange for a small portion of your future income. It’s a new and very different service, but it's not for everybody. By becoming an upstart, you are telling the world and your backers that you want to build a compelling and worthwhile career. And you’re committed to repaying the backers who have taken a chance on you.
It's not the most lucrative investment for the backers, but it's fair and has the unique benefit of being meaningful. This is a contract:
Share a small percent of your income as reported on your tax returns for 10 years. Your payments are capped at a 14.99% annual return to backers, regardless of your success. And you can also choose to buy out of your obligation early. You defer payments entirely in years you earn less than $30,000 or go to school full time. However, one year will be added to the length of your contract - up to a maximum of 5 years.
This seems like an exciting -- and market-based -- solution to a real problem. Kids are leaving school saddled with debt, and tend to avoid riskier and more entrepreneurial ventures -- just when they're at the perfect time of life to jump into a startup.
The left would -- and has -- responded to this by creating a National Task Force or a Federal Administration or a government-sponsored bank.
Upstart does it using a distributed network of backers and a dead-simple contract.
Which one is going to be more effective? For the students who get backed and for the American economic future?