No it doesn't. It's pure nanny statism. The government has no business telling people what they can and can't invest in or spend their money on. Yes startups are risky. So are lots of things. Why should the wealthy have no restrictions on them, but the poor do? This is literally "class warfare".
Private companies are a very specific kind of company—they're supposed to be a temporary condition, a way for companies to not have to go through the effort of going through disclosure, underwriting, etc. right away, because they're still just two guys in a garage and don't have the resources to do so. Private companies, as a special case, don't get to participate in all the things public (i.e. "normal") companies do. Private companies are to public companies as minors are to adults.
In your phrasing, you could say that government also "tells people what they can and can't" eat, in the form of the FDA. But, just like this case, it should be clear that the FDA never goes after someone for eating a poisoned cucumber; it just goes after the company for selling poisoned cucumbers.
(The DEA, on the other hand, is pure nanny-state-ism.)
In your poison cucumber example I think this would qualify as knowingly poisoning someone else which is clearly illegal and we do not need the FDA for that. As long as the cucumber is labeled as "poison" I have no problem with people selling them.
To be clear, the strict purpose of the FDA is to ensure that for things-where-you-can't-easily-tell-what's-in-them, like food or drugs—but which have ingredient labels (or names that serve as common-sense ingredient labels), the thing must actually contain what it's labelled (or common-sense expected) to contain.
The FDA looks for poisoned cucumbers, because the FDA's job is to define "cucumber" and stop people from selling something as a "cucumber" if it's not one.
That's about poisoning; but it's also about high levels of weird things like potassium, that are fine normally but which people don't think of as being in a cucumber and might interact with the drugs some people take. It's also about products that don't contain the right ingredients (i.e. why Cheez Whiz isn't Cheese Whiz.)
And, for drugs, it's about the name mapping to a registered claim of a particular effect, such that manufacturing pills that don't have that effect means you can't call them by the registered name. (Otherwise you could sell "ibuprofen" with 2 nanograms of ibuprofen per cap. The ingredients list wouldn't be a lie, per se; it would still contain ibuprofen.)
"In your phrasing, you could say that government also "tells people what they can and can't" eat, in the form of the FDA."
"The FDA doesn't tell you what drugs you can and cannot take."
The FDA's actions do effectively stop you from having any source to buy a poisoned cucumber, or homeopathic ibuprofen, or whatever else, where said source is a US corporation. But only because it's going after those corporations. It doesn't care what you do.
(In a world where the FDA did care about such things, we'd probably have "drug tourism" laws the way we have "sex tourism" laws, where you could be prosecuted for drugs you used while abroad.)
That's not what the FDA does (the DEA, OTOH...)
The FDA deals with how drugs can be marketed, not what people can take.
If that's all it did, the FDA would be an ideal system. However, that's not true; the FDA also deals with which drugs can be marketed. Effectively, the FDA is indirectly preventing citizens from taking experimental drugs, whether they have a terminal illness or not.
IANAL, but I'm fairly certain it's actually the solicitation part that's illegal. In theory, the company could accept it without an issue if they could prove that they didn't solicit at any point. In practice, there's no way to do that reliably, though.
It's not leftover morality laws; it's that monitoring commercial gambling to protect against exploitation of the poor is a really hard problem, one we haven't really solved. Some states choose to allow it despite this, and then deal with the consequences of increased poverty. Most don't. (And then they're forced to allow it in anyway by native on-res exceptions.)
This is also why such commercial gambling establishments as are legalized, are heavily regulated. For example, see the Nevada state laws on gaming fraud: https://www.leg.state.nv.us/NRS/NRS-465.html#NRS465Sec070
Those laws aren't there to stop people trying to cheat the house. They're there to stop the house from exploiting people by rigging the game.
And we all know no poor person in these states ever gambled their money away! Or, alternatively, they did gamble it away, but since gambling is illegal, they were also cheated mercilessly and have no recourse and no place to complain, since being poor and telling police you participated in illegal activity gets you an express ticket to jail.
Gambling is viewed as entertainment, both by the government and the people participating in it.
As entertaining as startup life can be, there's a very big difference between a risky investment and gambling for entertainment value.
I might advocate for shutting down gambling, credit cards and getting the government out of student and home loans, but if we think those actions should be are allowed, investing in small companies should be also.
Why not reintroduce prohibition while you’re at it? It is not possible to force your opinion on other people like that, it only drives the behavior underground, which is a breeding ground for crime.
Its just the Maggie meant what she said about a shareholding democracy
And even Sweden has a strong retail shareholdings they even have national organisation that looks out for their interests
Anyone can invest in publicly-traded companies. The law prevents unaccredited (i.e. not rich) investors from investing in private companies.
A company has to go through a number of processes, such as disclosure and underwriting, when it goes public. These processes effectively make it a much safer investment vehicle, amenable to purchase by pretty much anyone. A company that hasn’t gone public hasn’t gone through these processes, and therefore might just be a huckster’s sham.
For a look at what it looks like when private companies are allowed to raise money from the public, don’t look at other countries (which have similar laws) or at Bitcoin (which nobody but rich people even understands.) Look at early Kickstarter, before they put in more stringent disclosure requirements; and look at Indiegogo, which still doesn’t have such requirements. Especially look at projects that started on Kickstarter, were kicked off for not meeting the disclosure requirements, and then went on to raise money on Indiegogo. You know what percentage of those are scams? It’s not small.
Early US stock market investment, before the requirements to IPO were made stringent, look a lot like Indiegogo. Anything and everything was up for investment, without examination. Many people did lose their livelihoods.
The first thing to come to mind for me, besides taking a test, is for people to show they can make it as a blackjack card-counter -- seriously, wouldn't an official investor-accrediting poker league, even, do a better job of sorting out or educating the marks and freeing up much more of the population to invest? If we have to deal with this problem by prior restraint at all.
Something that also should be legal (with reasonable discrimination). I would choose a different metaphor because this one doesn't work in your favor.
But I don't believe that we would benefit, on net, if you could buy heroin in the corner convenience store without a doctor's encouragement to do so. The number of people who would be able to safely manage their own treatment, would be outweighed by the number of people who would become newly addicted due to increased access and the aura of illegitimacy being removed.
Right now, we're spending a lot of money trying to figure out how to get people out of these ruts. (Free housing seems to be helpful.) Creating more ways for people to get themselves into them seems ill-thought-out.
On the other hand (to pile tangent upon tangent), something like UBI would neatly fix the "problem" that investor accreditation addresses, because it would mean that even the poorest people would have a cushion in case their investments don't work out.