Sweatshop Finance

There's been a lot of turmoil in the tech industry after the torture-murder of Jamal Khashoggi. We have known for a while that Saudi money (which is to say, the Saudi Royal family's money, or to be even more specific, the Saudi crown prince's money) is a major component of venture capital. Softbank's most recent $100 billion Vision Fund is 45% Saudi, who have major investments in Uber, WeWork etc. Suddenly, that money is looking suspect. A prominent VC, Fred Wilson, wrote a piece which questioned the morals of taking such money.

Of course, foreign capital inflows are hardly unique to Silicon Valley tech. Dodgy capital finds its way wherever speculation and money laundering are to be had. Real estate is a huge example. We have known for a while that some of the priciest real estate in the world in cities such as New York and London is due to capital inflows from the Middle East, Russia, China, India and other places where people have made enormous fortunes through illegal or semi-legal means. But that's only the tip of the iceberg. There's a difference between selling drugs on the street and creating a narco-state. If you want to see the first narco-state of real estate, move to Vancouver, where Chinese capital has turned the city upside down.

The fact is that dodgy capital inflows are central to every speculative bubble: real estate, bitcoin, Uber for X, you name it. Who else has the money to throw around? I feel like we are at the beginning of a sweatshop moment for finance. Way back when it became known that kids were slaving away to produce your shoes, there was a global outcry and enormous pressure put on companies such as Nike to improve their operations. Did that save the world? No it didn't, but it changed the way outsourcing was implemented.

Similarly, we need to change the moral landscape of finance. I don't mean the radical solution of socializing investment or samizdats that people write in secret communist pamphlets. I mean raising the bar for the mainstream - making it impossible for otherwise profit minded people to take certain kinds of money.

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