Absurdistan of Licensing

Mar 25, 2023

The idea of licensing is ridiculous.

With the laws of licensing, we give away the right decide who can do business or not to a group of fat criminals (government) and also we're forced to pay them loads of money for that right. What licensing does:

  • It creates a shortage of professionals in the licensed area because the entry barrier becomes high;
  • It allows licensed professionals to charge above-market fees for their work;
  • There's no guarantee that a licensed professional is better than the unlicensed one;
  • Customers and other professionals lose, while the select group of people win;

Now let's look at forex brokers. I was looking for a second broker with MAM/PAMM for my new client from the UK, as my primary PAMM broker cannot accept UK clients. It was ridiculous. I have discovered so many professional brokers who would love to accept my client but their hands are tied due to licensing laws. And also I discovered so many crooks who said they have no problem accepting my client, but after deeper investigation I found out they're criminals - licensed criminals!

The idea is that there's no difference in what jurisdictions and how many licenses a broker has. You might think that the one who has a license in EU is more reliable than the one who only has license in an offshore island, because obviously EU license costs much more and it shows a certain level of seriousness. I wish things worked that way, but they don't. It's a fantasy! I even found a broker who has a shitload of licenses and a very popularised brand and guess what - they have been outright scamming their customers for the last 10 years straight without any problems! 90% of reviews about them are negative, it's unbelievable. So licensing alone is never a sign of credibility and professionalism and it's a bad indicator to use.

What we need is transparency. Every broker could show their deposit/withdrawal transaction history in some sort of widely accepted, public and verified online banking resource (perhaps based on blockchain). In that way you could see how much money is flowing in and out of this broker and then judge how serious it is. Or instead of wasting all that money on licensing they could simply deposit that money on a public blockchain account and then everyone would see how serious they are. If they can put only $10k you would know they're not trustworthy because if you give them another $10k they can simply run away.

Who remembers what happened to FXCM? One of the biggest brokers on Earth, licensed as hell, turned out to be a group of criminals. They filed for bankruptcy and 98% of shareholder value was lost. What's even more mind blowing is that they quickly reorganised after the bankruptcy and they continue to operate as if nothing had happened. OK if it happened to me by accident I would do the same of course because life is life and if it's my life's project then it has to continue. But if I was a criminal who stole the money on purpose then I don't think that my project would continue because it would be enough for me.

And how about banks? Oh boy how well licensed they are. So what? USA, Cyprus, now Switzerland - banks are collapsing! In Cyprus they stole almost everything from depositors pockets. In Switzerland - everyone heard about Swiss quality, right? Swiss banks can't collapse? Really? Where do you think the money goes before the collapse? Remember, the collapse is never a surprise to the management of the bank. It cannot be, because of all the licensing and auditing laws. They spend millions on that, and perhaps even more millions on faking the audits. The collapse cannot be anything else than a coordinated and profitable business decision between the interested parties, possibly including government officials as well. For the media and masses they always invent a new reason (excuse) and present it as a surprise so that they can rob the taxpayers and print more money. But think about it - they never say where the money disappeared during the collapse. It can't just evaporate - it has to be stolen and put into the pockets of certain people.

If we go outside of the finance scene - In Lithuania a few years ago they wanted to implement licensing even for yoga teachers. That's ridiculous. Yoga is a technique for spiritual self development, what does it have in common with the brainless fat chair sitters in the government and how they can force yoga teachers to teach what the system wants them to teach? It's impossible, they would rather die than do what the lost minds want them to do. Why? Because yoga teachers know who they actually are, and most of the government officials don't! Because if they knew they wouldn't be sitting in that stupid glass cubicle doing pointless work! If you tell a yoga teacher "I'll chop your head if you don't buy the license" he will reply "you can chop my head but I will still be here". These are not the right people to be messed with! 

And how about taxi drivers? In Lithuania's capital (Vilnius) it was a licensed activity and the service quality was very poor until Uber came. They broke through the licensing laws by paying kickbacks to the government officials and they changed the industry entirely: they brought lower prices, better cars and better drivers! The people who never thought of becoming taxi drivers suddenly started driving for Uber and they were not even labeled as taxi drivers, it was surreal! Lithuanians invented a word "pavezejas" for that, which literally means "a lift giver". It's hilariously ridiculous, but hey you do whatever it takes to shape the public opinion to where you want it to be, because public opinion is an opium for the masses anyway - it was never meant to be the complete truth! Of course now things changed and all drivers have to be licensed but we all know it was never necessary and it's still not necessary.

My main point is that never put your trust on licensing and don't support licensing laws because they're harmful to the society and they bring one more illusion to the world of curved mirrors.

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