When an Individual is an Investment
Should you be allowed to sell a percentage of your future earnings to investors, in exchange for cash on the spot? Would this be a good way to help people escape poverty?
That's the subject of an interesting discussion going on across several blogs — among them Marginal Revolution and Overcoming Bias — provoked by a sci-fi novel called The Unincorporated Man where characters can do just that.
In the novel, one character argues that such an investment system is superior to development aid because investors, in contrast to charity donors, have a personal interest in making sure that the kids they're giving money to survive to adulthood and become profitable.
Both blogs have a gotten a lively response in their comment sections, and comments range from those who wonder what such a system would mean for personal autonomy, to others who think the idea is akin to structures we already have — like taking out a bank loan to fund your education.
Meanwhile, Ryan Hahn at the Private Sector Development Blog points out that one company, called Lumni, is already doing something similar: "Students at Lumni don't get loans — they get financing that they subsequently pay back as a percentage of their income over some agreed number of months." For Hahn, this model has a lot to offer as a tool for poverty alleviation.
What do you think?
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