The Man Who Sold Shares of Himself

RougeFemme writes "This is a fascinating story about a man who sold shares in himself, primarily to fund his start-up ideas. He ran into the same issues that companies run into when taking on corporate funding — except that in his case, the decisions made by his shareholders bled over into his personal life. This incuded his relationship with his now ex-girlfriend, who became a shareholder activist over the issue of whether or not he should have a vasectomy. The experiment continues." The perils of selling yourself to your friends.

Slavery?

[Anonymous Coward]

How is this different from slavery?

It's a publicity stunt

[rsilvergun]

and a funny way to say he borrowed a bit of money. :P. I think upstart.com was mentioned later too. So long as we keep laws in place to give borrowers leverage that's all it'll ever be.

That said, the recent trends in bankruptcy law that make it impossible to discharge debt unless you're rich, plus judges finding debtors in contempt of court for not paying and jailing them (aka debtors prisons 2.0) have me scared. This is all in America of course. We need to start breaking down the excesses of the protestant work ethic. Work ethics are good, but they can also be manipulated and abused.

Re:Slavery?

[Billly Gates]

The difference is that Mike can violate the agreement at will, and only be liable for money damages. His "shareholders" have no legal right to physically confine him - they only have a civil remedy in contract law. It is impossible to legally turn yourself into a slave (or other non-person) because a person always has the right to breach a contract.

Spoken as someone who has not graduated recently with student loans. Many with $12hr jobs after graduating are expected to pay $1200 a month or more! They live with their parents and work for free for 10 years. Explain why thats not indentured servitude?

FYI I am not talking isolated cases but the norm in todaus dollars. I am lucky and only pay $600 a month because I went to a community college to cut down costs.

Servitude is the new norm in the 21st century.

The nature of financial products

[Beeftopia]

Financial products are logical constructs. Virtual products. Like objects in an online game which people buy and sell.

The financial world depends on logical constructs. Currency, the base of the financial world, is a logical construct. Slips of paper to which people ascribe value. Gold is the same way. One cannot eat gold, wear it, drink it, shelter under it, use it to bind wounds or cure ailments. But to many (most) it has "value." Currency is a durable construct because it makes people's lives easier, and improves their standard of living.

Stocks ("shares of ownership") are an older financial product. So are bonds. Futures are bets. Then you get into the myriad financial products/bets and their derivatives on which today's global financial system is based.

1) "A financial product is about as conceptual as you can get,” says Wilson Ervin, a senior adviser at Credit Suisse. “You just need paper and ink.”-- The Economist magazine [economist.com]

2) "In an even more blunt description, Tourre calls the CDOs he produced "intellectual masturbation" and likens himself to Dr. Frankenstein. "When I think that I had some input into the creation of this product (which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: 'well, what if we created a 'thing', which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?")" -- CNN / Money [cnn.com]

"Financial Innovation" consists of two things:

1) Creation of new virtual products / logical constructs.

2) Methods by which one can entice others to take on more debt.

Paul Volcker, former chairman of the Federal Reserve, said the only beneficial financial innovation of the last 30 years was the ATM. [telegraph.co.uk] However, the ATM is not a financial innovation, but a technological one. So that leaves a dim legacy of recent financial innovation.

I'm all for financial innovation just as long as it doesn't lead to "financial pollution" - public costs. Like a tannery which dumps effluent into a river. The tannery keeps the profit and the public bears the costs. The concept is known in the financial sector as "privatize the profits, socialize the losses." In recent years, the financial sector has been able to successfully privatize its profits, yet push the costs onto the public. This is done by government insurance of private debt, and outright rescues and bailouts.

In any regulation of the financial sector, the key I think is to make sure that losses are limited to the participants in the transaction.

This fellow - well if he is able to make money, bravo. If he and his shareholders lose money, the laws regulating the financial sector should make sure that the losses are limited to participants in the transaction, and not imposed on the public.

The Unincorporated Man

[fredrated]

Someone gave me a copy a couple of years ago (a galley proof I think) about a future where shares are issued at birth for everyone, and what happens when someone shows up who is not incorporated.
A good read, though I didn't like the ending. It was as if someone said "Quick, we need to publish the book, end it".

Re:Slavery?

[cervesaebraciator]

Theoretically you could come up with a slavery contract that restricted what the owner could ask you to do and when and how much, but at what point would that still be called slavery?

Conversely, at what point could employment conditions in the industrial world, where the threat of being fired is like the threat of losing access to healthcare or even losing your home, be called a slow, steady return to the servile state? In the Roman republic, the working poor largely chose to work as what we would call day laborers. Workers would hang out near the forum (they didn't have a Home Depot, or I suppose a Domus Depositum back then, the savages) and wait for someone to come hire them for the day. One of the most common jobs was simply carrying goods, mostly building material, from the outer to the inner parts of town since ox carts were forbidden in town. You'd get a flat wage for the work once the day was done and you'd likely work for someone else entirely the next day. I forget the exact calculations, but once the public grain dole was in place an unskilled laborer could make a living for himself and his family by securing such work for about 100 days out of the year. You wouldn't get rich but you'd have food in your stomach and enough money to rent an apartment in one of the massive apartment blocks (insulae). This was considered a preferable form of unskilled labor for many because there was a stigma attached to regular employment, i.e. going to work for the same person day after day, and taking his orders, looked too much like slavery.

Re:Slavery?

[wisnoskij]

In my opinion, that is one of major downfalls of living in civilization that has outlawed slavery. It becomes far harder, if not impossible, to tell if you are a slave or not.

Slavery and Exploitation

[cervesaebraciator]

Indeed many did choose to sell themselves into slavery, or their children, in order to secure a better life than they could make on their own. Slaves very often lived better off than the unskilled poor, and they weren't likely to be found starving on the street. To say they weren't as exploited as in modern times, however, is something I would hesitate to do. I suppose it depends on your definition of exploitation. In the end, the pater familias had the power of life and death over his household. He could even kill one of his own sons (though this was rarely done in later times), so a slave who was on his bad side much to fear. Sure, some bought their way to freedom or even pleased their masters so much that freedom was given them, but this depended entirely on the good nature of the owners who might just as likely work them to death in the mines. If you've ever heard those stories of the "good" slave owners in the U.S., whose slaves would willingly fight for them or were freed, you will recognize that they're exceptions used to justify a broadly exploitive system. The same applies to Roman slavery. Give that much power to any person and the same results will always show.

Re:Wow

[Sarten-X]

you put a lot of effort into a post full of hate for the poor :P. Are you really that ignorant of why people file for bankruptcy or do you get paid to spew that nonsense?

Starting off the flames from the start, I see. No, I'm not getting paid to comment on Slashdot, and no, I don't hate the poor, having come pretty damned close to bankruptcy myself. Rather, I hate the people of all economic standings who think that if someone gives them credit they're free to forget about repayment and pass the burden on to the rest of society.

In the interest of full disclosure, I am currently involved in a bankruptcy lawsuit. A guy owes me a few thousand dollars, that went into buying his second sports car (or maybe his boat, or both... we're not certain) rather than paying off the back taxes he owed. Meanwhile he owns a business bringing in about a half-million dollars a year.

1. Bankruptcy is basically 8 years without credit. If you're a poor person that's a nightmare. No house and no car, both of which you need.

Not at all. Bankruptcy will stop you from getting new loans for a few years until you establish new credit, but the other poster already covered that. I'll just also point out that a single house and a car are usually protected in bankruptcy, so the debtor isn't left destitute without a means to make a living. This is actually a key detail in my own lawsuit, since the debt went to buy a car (and supposedly his other two cars and boat are actually company assets, he claims).

2. The lender should be expected to accept risk. It's funny how capitalists get shield from market risks by guys like you but workers are expected to suck it down. Workers pay for their masters bad decisions with lower standards of living.

The lenders do accept risk in many ways. First, there's the risk that the loan's interest won't actually outpace inflation, though that's rather unlikely right now. There's the risk that by loaning out money, they don't have the capital they need for a better opportunity later. There's the risk that a borrower might default without bankruptcy, in which case they have to go through foreclosure (which usually costs them more than they get). Then there's the big risk of bankruptcy, where they lose everything loaned out.

About the only time the lenders actually make money is when a loan is (almost) fully paid off or when it's sold to someone else who assumes the risk.

3. Usury loans quickly become slavery. You're not really free if someone controls your access to food/shelter/health care.

And that's why they're illegal in most jurisdictions. There are actually laws regulating what interest may be charged, generally hovering around "expected inflation plus a little bit". Anything higher is usually thrown out immediately in court.

4. People filing for bankruptcy have little money. They often can't afford the legal representation they need to avoid being taken advantage of. If they do hire a lawyer the settlement negotiated is often worse than the original loan terms. That's because there are hundreds of bankruptcy firms that just take your money and then take the first offer by the court. They pray on people trying to keep their heads above water by working 80 hours a week. I've known several people in that situation.

...and that's bad, I guess. I don't see the relevance to the original comment, but let's continue anyway. It's a slow day at the office.

So your argument is that we should be able to throw out more debt because evil companies take advantage of a difficult legal system? Personally I'd rather just reform the legal system. Maybe we could make some sort of public repository with resources for handling one's bankruptcy, where people could learn how to figure out what they can afford... We might even be able to incorporate it with other sources of knowledge, perhaps even with some trained