sick realization: you have negative dollars

For the serious discussion of weighty matters and worldly issues. No off-topic posts allowed.

Moderators: Azrael, Moderators General, Prelates

User avatar
Thesh
Made to Fuck Dinosaurs
Posts: 6300
Joined: Tue Jan 12, 2010 1:55 am UTC
Location: Colorado

Re: sick realization: you have negative dollars

Postby Thesh » Mon Sep 11, 2017 12:18 pm UTC

Chen wrote:
Thesh wrote:Lease them.


Yeah I'm assuming you're still talking in good faith here, so how exactly would that work? How would I lease the shoes/underwear that wear out? Or any clothes for that matter? What happens when I break something I've leased? Forget the fact that people like actually owning things outright, these are just a couple items off the top of my head here. It seems completely unfeasible unless there's more to this system you're leaving out.


The question isn't what people like, it's how you can have equal wealth. To have equal wealth, you simply can't have individuals owning their own property, but all property owned equally by everyone. To lease out clothes, you would likely purchase a service plan that gives you access to a wardrobe that you can add or remove items from within the limits of your plan - most clothes would likely have a deposit, so if they are in good condition you get the deposit back. Your furnishing, appliances, etc. would be leased with your home.

This is also my guess of what the future of capitalism looks like, just with most people owning absolutely nothing in any way.
Summum ius, summa iniuria.

User avatar
Zamfir
I built a novelty castle, the irony was lost on some.
Posts: 7507
Joined: Wed Aug 27, 2008 2:43 pm UTC
Location: Nederland

Re: sick realization: you have negative dollars

Postby Zamfir » Mon Sep 11, 2017 12:46 pm UTC

I have to wonder, why focus on such a level of detail?

Suppose there is a world where the only remaining wealth differences are because some people go to more concerts, and others get more underpants and a bigger TV. Compared to our world, that's virtually the same as wealth equality. If such things are really the last sticking points, then people can work it out when they get there.

Tyndmyr
Posts: 11443
Joined: Wed Jul 25, 2012 8:38 pm UTC

Re: sick realization: you have negative dollars

Postby Tyndmyr » Tue Feb 27, 2018 6:38 am UTC

Zamfir wrote:I have to wonder, why focus on such a level of detail?

Suppose there is a world where the only remaining wealth differences are because some people go to more concerts, and others get more underpants and a bigger TV. Compared to our world, that's virtually the same as wealth equality. If such things are really the last sticking points, then people can work it out when they get there.


Well, the problem is that wealth compounds. The guy with the bigger TV can enjoy entertainment as long as the TV lasts, and if he gets tired of the TV, he can sell it. The chap who prefers to go to more concerts might be equally happy, but he has fewer assets. So long as you can rent, sell, or otherwise get more stuff as a result of having stuff, the lifestyles that preserve wealth, rather than expending it, will be able to gain additional wealth, and that kind of snowballs.

Wealth inequality is natural. Wealth equality, for any particular level of it, must be artificially maintained. There's no particular level at which wealth inequality stops, be it large or small. Inequalities will tend to become larger over time.

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Tue Feb 27, 2018 7:41 am UTC

Getting wealth by selling off wealth doesn't snowball your wealth like renting or lending it out does, because you're just trading one thing for another, and (presuming it's a fair and free market with no other distortions going on) what you get is worth the same as what you lost.

If someone wants to live a more austere lifestyle to accumulate more stuff and is wealthier in that respect that's fine, so long as having more stuff can't then enable him to stop being austere but still keep the stuff (because having stuff gets him more stuff that he can spend away without working for it and without losing the stuff-generating stuff). If one person spends 10 years touring the world then 10 years working hard and saving, while a second person spends 10 years working hard and saving and then spends 10 years touring the world, on average those people should have the same amount of stuff at the end of those 20 years, because the guy who saved and then spent would spend down all that he saved, just like the guy who spent then saved saved back all that he'd spent. It's only a problem if by some mechanism accumulating the wealth first then allows you to keep accumulating more wealth even as you spend it away, while spending first sinks you into a self-perpetuating debt that eats up any attempt to save back up to zero again.

Put another way: two people who, having different amounts of stuff to start with, start living the exact same life style, should start converging in the amount of stuff that they have (as the time they spend living that lifestyle goes to infinity, at least). If two people living the same lifestyle can still diverge in wealth through no further actions of their own, then something is wrong with your economic system.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

Leovan
Posts: 97
Joined: Mon Dec 05, 2016 9:31 pm UTC

Re: sick realization: you have negative dollars

Postby Leovan » Tue Feb 27, 2018 8:16 am UTC

Pfhorrest wrote:Put another way: two people who, having different amounts of stuff to start with, start living the exact same life style, should start converging in the amount of stuff that they have (as the time they spend living that lifestyle goes to infinity, at least). If two people living the same lifestyle can still diverge in wealth through no further actions of their own, then something is wrong with your economic system.


Except in one case you are using someone else's service to finance your trip then paying them back, while in the other you are first allowing someone else to use your service then letting them pay you back. The first person drained the system for their own use, the second added to the system. It makes perfect sense that the person adding to the system would come out ahead.

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Tue Feb 27, 2018 8:20 am UTC

Allowing someone to use something is not "a service".

Besides which: the example works the same if both start out with enough already saved to fund a world trip, so nobody borrows anything.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

Tyndmyr
Posts: 11443
Joined: Wed Jul 25, 2012 8:38 pm UTC

Re: sick realization: you have negative dollars

Postby Tyndmyr » Tue Feb 27, 2018 8:48 am UTC

Pfhorrest wrote:Getting wealth by selling off wealth doesn't snowball your wealth like renting or lending it out does, because you're just trading one thing for another, and (presuming it's a fair and free market with no other distortions going on) what you get is worth the same as what you lost.


It doesn't directly snowball off a single sale, but every time they get hard goods instead of consumed wealth, the two lifestyles are getting further apart in terms of total wealth.

If someone wants to live a more austere lifestyle to accumulate more stuff and is wealthier in that respect that's fine, so long as having more stuff can't then enable him to stop being austere but still keep the stuff (because having stuff gets him more stuff that he can spend away without working for it and without losing the stuff-generating stuff). If one person spends 10 years touring the world then 10 years working hard and saving, while a second person spends 10 years working hard and saving and then spends 10 years touring the world, on average those people should have the same amount of stuff at the end of those 20 years, because the guy who saved and then spent would spend down all that he saved, just like the guy who spent then saved saved back all that he'd spent. It's only a problem if by some mechanism accumulating the wealth first then allows you to keep accumulating more wealth even as you spend it away, while spending first sinks you into a self-perpetuating debt that eats up any attempt to save back up to zero again.


So, no discount for future wealth? All things being equal, pretty much everyone would rather have a thing now rather than in ten years, so what incentive is there to ever loan money under such a system?

What if someone dies after ten years?

The person who puts in the work first is taking risk that the person working later is not.

All rentals and lending pose a significant problem for your model.

Put another way: two people who, having different amounts of stuff to start with, start living the exact same life style, should start converging in the amount of stuff that they have (as the time they spend living that lifestyle goes to infinity, at least). If two people living the same lifestyle can still diverge in wealth through no further actions of their own, then something is wrong with your economic system.


If nothing else, pure luck will eventually cause divergences in wealth. This person happened to run over a nail on the way to work, getting a flat tire, this one did not. Even a pure accumulation of random events will cause some divergence.

Having more resources makes it easier to retain/gain resources even in the absence of lending/rentals. Probably even more so without them, honestly. Clearing the hump to buy a car or a house without debt would be rough. If you've not read it already, consider perusing the Pratchett boots theory of wealth. More wealth is an advantage in getting wealth in just about any system.

Leovan
Posts: 97
Joined: Mon Dec 05, 2016 9:31 pm UTC

Re: sick realization: you have negative dollars

Postby Leovan » Tue Feb 27, 2018 9:06 am UTC

Pfhorrest wrote:Allowing someone to use something is not "a service".

Besides which: the example works the same if both start out with enough already saved to fund a world trip, so nobody borrows anything.


Of course it is. I worked to get the money you're borrowing, and I am allowing you to use it. That means I am working for your benefit. You get an advantage from borrowing money in that you don't need to do the work yourself beforehand, and you're paying me for that service. I do not have access to my money while you're using it, so I have a disadvantage. Interest payments make up for that.

If both already start with enough money, then the person doing the trip later has had more money being used by other people to finance their own stuff over time. It's an integral function.
If neither person is keeping their money in a bank and allowing others to use it, then indeed both end up with the same amount of money at the end, just like you wish. But the second person had access to their wealth at any time, therefore not having any disadvantage, and therefore not being compensated with interest payments.

elasto
Posts: 3568
Joined: Mon May 10, 2010 1:53 am UTC

Re: sick realization: you have negative dollars

Postby elasto » Tue Feb 27, 2018 9:41 am UTC

My solution to wealth equality is to make virtual goods as realistic as real ones. If my senses can't tell the difference between a real rocket trip to Mars and VR simulation then who the hell cares.

The government's job is to give me shelter, food, healthcare and a perfect VR simulation where I am God of my own universe. Yes, my destiny is in someone else's hands but that's true of all of us every second of every day, much though we fool ourselves that it's not. I'd rather be Neo in the Matrix than cold and hurting in Zion any day.

(And I think my version of wealth equality is more likely to arise than any mentioned thus far...)

User avatar
ucim
Posts: 6566
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: sick realization: you have negative dollars

Postby ucim » Tue Feb 27, 2018 4:07 pm UTC

elasto wrote:The government's job is to give me shelter, food, healthcare and a perfect VR simulation
Uh..... your solution changes the purpose of government substantially. Remove the "perfect VR simulation" (because in fact virtual goods are not as realistic as real ones) and you end up with what I presume is your present view of what government's job is - to wit: "to give me shelter, food, [and] healthcare".

Is this your actual view of the job of government? Because I don't see it as government's job to give you anything.

I see the primary role of government as protecting the weak from the strong. That may involve giving, but the giving is not the primary purpose.

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

elasto
Posts: 3568
Joined: Mon May 10, 2010 1:53 am UTC

Re: sick realization: you have negative dollars

Postby elasto » Tue Feb 27, 2018 5:25 pm UTC

ucim wrote:...you end up with what I presume is your present view of what government's job is - to wit: "to give me shelter, food, [and] healthcare".

Is this your actual view of the job of government? Because I don't see it as government's job to give you anything.

I definitely view it as the government's duty to offer me those things if I lack them. It's my right to refuse them of course. Does your worldview genuinely clash with mine..?

Yes, I definitely expect the government to seek out homeless people and offer them shelter, food and access to a doctor. Here's an example of that happening in Europe right now (which the BBC has framed in slightly clickbaity fashion)

Homeless people in Brussels could be detained overnight if they refuse shelter, as extremely low temperatures grip the Belgian capital.

At the weekend police in the Etterbeek suburb were asked to remove people from the street for their own protection. The mayor of Brussels later issued a similar order in the city centre.

Like much of Europe, the city is going through a bitter cold spell and temperatures could fall to as low as -10C (14F) in the coming days.

Etterbeek Mayor Vincent De Wolf said people would be forced into shelters only in cases of absolute necessity: "The homeless who would stay outside in these conditions may fall into hypothermia and even die of cold," he said.

Each homeless person will be taken to a heated room and seen by a doctor, who will then advise on whether they can safely return to the streets.

The order will be in force from 20:00 to 07:00 until 8 March. If the cold weather persists, it could be extended for longer.

After announcing a similar decision, Brussels mayor Philippe Close said he had asked police to focus especially on children who could be sleeping rough.

The non-profit group l'Ilot, which provides shelters and other support for the homeless, said it supported the new policy: "Let's hope this help is maintained all year long," it tweeted.

User avatar
ucim
Posts: 6566
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: sick realization: you have negative dollars

Postby ucim » Tue Feb 27, 2018 6:03 pm UTC

elasto wrote:I definitely view it as the government's duty to offer me those things if I lack them. It's my right to refuse them of course. Does your worldview genuinely clash with mine..?
Maybe.

Why is it the government's duty to offer these things? And then why that? And why that...until you get back to the fundamental purpose of government, which is.... what? I contend that it's to protect "us" (the governed) from "them" (the outsiders), and to protect the weak from {being taken advantage of} the strong. It's in essence a "let's team up and we'll all be stronger" thing, whose alternative is "everyone for themselves".

Now, while it's at it, and sometimes as a result of being at it, other benefits can be conferred, and {appropriate} aid to the poor is certainly one of those benefits.

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

User avatar
Zohar
COMMANDER PORN
Posts: 8268
Joined: Fri Apr 27, 2007 8:45 pm UTC
Location: Denver

Re: sick realization: you have negative dollars

Postby Zohar » Tue Feb 27, 2018 6:29 pm UTC

Except usually the reason the outsiders want to come after us is because of the government, not the governed...
Mighty Jalapeno: "See, Zohar agrees, and he's nice to people."
SecondTalon: "Still better looking than Jesus."

Not how I say my name

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Tue Feb 27, 2018 6:45 pm UTC

Tyndmyr wrote:All rentals and lending at interest pose a significant problem period.

FTFY.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

Leovan
Posts: 97
Joined: Mon Dec 05, 2016 9:31 pm UTC

Re: sick realization: you have negative dollars

Postby Leovan » Tue Feb 27, 2018 7:26 pm UTC

Rental and interest is not a problem, it is merely the fee you pay to be allowed to use what someone else has paid for. If you don't want to do either, you simply wait with fulfilling your desire until you've earned it yourself. Nobody is forced to participate.

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Tue Feb 27, 2018 9:21 pm UTC

People who can't afford to buy necessary things like housing because prices are artificially inflated by richer people buying it up to lend it out (and because they're too busy paying to borrow it meanwhile to save to buy any themselves) are forced to participate.

Rent and interest do nothing but transfer wealth from those who have less than they need (and so have to borrow) to those who have more than they need (and so can afford to lend it out).
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

speising
Posts: 2281
Joined: Mon Sep 03, 2012 4:54 pm UTC
Location: wien

Re: sick realization: you have negative dollars

Postby speising » Tue Feb 27, 2018 9:33 pm UTC

do you have a solution for a small entrepreneur who'd like to open a business but doesn't have sufficient money to cover initial investments?

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Tue Feb 27, 2018 10:20 pm UTC

Borrow money from a community-owned credit union that exists for exactly that purpose to give interest-free loans (using the money the community aren't presently using for anything else, that they have saved with the credit union)? That's just off the top of my head, I can probably do better.

Also: take on a silent partner who does have the money, who will then recoup his investment via his share of the business's profits?

Por que no los dos: take the community-owned credit union on as exactly such a silent partner. Bonus benefit for that: local businesses end up partially owned by the communities they serve.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
ucim
Posts: 6566
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: sick realization: you have negative dollars

Postby ucim » Tue Feb 27, 2018 10:37 pm UTC

Zohar wrote:Except usually the reason the outsiders want to come after us is because of the government, not the governed...
Yeah, that's why we came after the American Indians and took their land. It was the Indans' governments that made the Europeans want to colonize them out of existence.

Pfhorrest wrote:Borrow money from a community-owned credit union that exists for exactly that purpose to give interest-free loans (using the money the community aren't presently using for anything else, that they have saved with the credit union)? That's just off the top of my head, I can probably do better.
Why would somebody lend their money out to strangers interest free? Especially if there's a risk they wouldn't ever get it back? Would you?

Pfhorrest wrote:Also: take on a silent partner who does have the money, who will then recoup his investment via his share of the business's profits?
Yeah, that could work, if you can find one.

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

cphite
Posts: 1292
Joined: Wed Mar 30, 2011 5:27 pm UTC

Re: sick realization: you have negative dollars

Postby cphite » Tue Feb 27, 2018 10:39 pm UTC

Pfhorrest wrote:People who can't afford to buy necessary things like housing because prices are artificially inflated by richer people buying it up to lend it out (and because they're too busy paying to borrow it meanwhile to save to buy any themselves) are forced to participate.


A house would be well beyond what the average person could afford to buy outright, with or without any inflation caused by rental practices. The same is true for a car and many other large investments. People often find themselves wanting or needing things that they cannot afford outright.

And, some people prefer renting to buying. For something like a house, it might be because they don't plan on staying long enough to justify a purchase; or it might be that they prefer someone else be responsible for maintenance and improvements. A lot of people prefer leasing cars to buying because the payments are lower and they can change cars more often.

Rent and interest do nothing but transfer wealth from those who have less than they need (and so have to borrow) to those who have more than they need (and so can afford to lend it out).


Which is no different than any other service. A mechanic earns money by having skills and equipment that his customers either lack access to, or don't want to deal with. A doctor earns a living by having the education to diagnose and treat illness. A moneylender has money that his customers need, for whatever their reasons, that he allows them to use; a landlord has property that he allows others to use, for a fee. As long as lending and renting are done openly and fairly, there is nothing wrong with either of them.

Certainly there are people who abuse lending and renting... but that just means we need better ways of enforcing fair lending and renting practices; not that we necessarily need to abolish lending and renting.

User avatar
Zohar
COMMANDER PORN
Posts: 8268
Joined: Fri Apr 27, 2007 8:45 pm UTC
Location: Denver

Re: sick realization: you have negative dollars

Postby Zohar » Tue Feb 27, 2018 10:44 pm UTC

ucim wrote:
Zohar wrote:Except usually the reason the outsiders want to come after us is because of the government, not the governed...
Yeah, that's why we came after the American Indians and took their land. It was the Indans' governments that made the Europeans want to colonize them out of existence.

Oh yeah great example, governments certainly weren't responsible for that atrocity.
Mighty Jalapeno: "See, Zohar agrees, and he's nice to people."
SecondTalon: "Still better looking than Jesus."

Not how I say my name

User avatar
ucim
Posts: 6566
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: sick realization: you have negative dollars

Postby ucim » Tue Feb 27, 2018 10:58 pm UTC

Zohar wrote:
ucim wrote:
Zohar wrote:Except usually the reason the outsiders want to come after us is because of the government, not the governed...
Yeah, that's why we came after the American Indians and took their land. It was the Indans' governments that made the Europeans want to colonize them out of existence.

Oh yeah great example, governments certainly weren't responsible for that atrocity.

The point was that the lack of a sufficiently strong government in what was to become the US is what allowed the invaders to succeed. The invaders came for the land and resources, not in response to actions of the American Indians' Governments.

Government's first duty is to protect the governed from outsiders, and to protect the weak governed from being run over by the strong governed.

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

User avatar
Zohar
COMMANDER PORN
Posts: 8268
Joined: Fri Apr 27, 2007 8:45 pm UTC
Location: Denver

Re: sick realization: you have negative dollars

Postby Zohar » Tue Feb 27, 2018 11:05 pm UTC

And my point is that all wars and all need to "defend from outsides" comes from governments.
Mighty Jalapeno: "See, Zohar agrees, and he's nice to people."
SecondTalon: "Still better looking than Jesus."

Not how I say my name

User avatar
ucim
Posts: 6566
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: sick realization: you have negative dollars

Postby ucim » Tue Feb 27, 2018 11:15 pm UTC

Enemies from outside need not be governments. Anarchistic hoardes still need protection against... if they exist. So, if there were no enemies, there would be no need for government. Is that what you're getting at? Are you from Redmond?

(Sorry, that was uncalled for on my part. :) )



Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

User avatar
Zohar
COMMANDER PORN
Posts: 8268
Joined: Fri Apr 27, 2007 8:45 pm UTC
Location: Denver

Re: sick realization: you have negative dollars

Postby Zohar » Tue Feb 27, 2018 11:17 pm UTC

You seem to think enemies and aggressors are just naturally occurring elements of society and not a result of government. What I'm getting at is governments are the cause of these enemies.
Mighty Jalapeno: "See, Zohar agrees, and he's nice to people."
SecondTalon: "Still better looking than Jesus."

Not how I say my name

speising
Posts: 2281
Joined: Mon Sep 03, 2012 4:54 pm UTC
Location: wien

Re: sick realization: you have negative dollars

Postby speising » Tue Feb 27, 2018 11:32 pm UTC

Pfhorrest wrote:Borrow money from a community-owned credit union that exists for exactly that purpose to give interest-free loans (using the money the community aren't presently using for anything else, that they have saved with the credit union)? That's just off the top of my head, I can probably do better.

Also: take on a silent partner who does have the money, who will then recoup his investment via his share of the business's profits?

Por que no los dos: take the community-owned credit union on as exactly such a silent partner. Bonus benefit for that: local businesses end up partially owned by the communities they serve.

why would anybody put their hard earned money into that credit union, and how would that credit union deal with the inevitable losses from failed businesses?
bonus question: what happens with any profits of profitabe businesses partially owned by the credit unions? suppose the capital bound in the cu makes a profit, is that distributed to the people who payed in? if yes, doesn't that mean they earned interest on their capital?

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Tue Feb 27, 2018 11:39 pm UTC

ucim wrote:Why would somebody lend their money out to strangers interest free? Especially if there's a risk they wouldn't ever get it back? Would you?

"Borrowing" something and not giving it back is theft. If we had proper rule of law where stolen property could actually be recovered, then yeah, I'd be fine with letting property I'm not using be of use to someone else in the meantime. (Especially if it was as part of a larger community project, like a credit union, to whom I lend my saved money, which is pooled with other members' saved money to be lent to those with some use to put it to, so it's not just me bearing whatever risk remains, it's a social endeavor that many people have an interest in protecting). In general, society needs enforcement of elementary protections like this for markets to work properly. That's the "regulation" Adam Smith wrote about.

cphite wrote:A house would be well beyond what the average person could afford to buy outright, with or without any inflation caused by rental practices. The same is true for a car and many other large investments. People often find themselves wanting or needing things that they cannot afford outright.

And the people who have those things and want to sell them want to be able to sell them to more than just the few people who can afford them outright too. And lucky for everyone, those sellers have the option to do so: they can accept payments over time, which is basically an interest-free loan. Why would they offer that, you ask? Because the alternative is no sale at all. Better to get paid for your stuff over time than to just have useless stuff you don't need lying around forever. If those are the only options, because rent and interest aren't an option, sellers will sell on the terms buyers can buy on, because that's better for them than no sale at all.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Tue Feb 27, 2018 11:41 pm UTC

speising wrote:bonus question: what happens with any profits of profitabe businesses partially owned by the credit unions? suppose the capital bound in the cu makes a profit, is that distributed to the people who payed in? if yes, doesn't that mean they earned interest on their capital?

The CU is owned by its members, so any money it makes, they make, yes. And returns on investment are not identical to interest. Ordinary profit is not interest, so ordinary profit earned by a business distributed to its owners distributed to those owners' owners is still not interest.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
Yablo
Posts: 620
Joined: Thu Feb 02, 2012 9:57 am UTC
Location: Juneau, Alaska

Re: sick realization: you have negative dollars

Postby Yablo » Tue Feb 27, 2018 11:55 pm UTC

Pfhorrest wrote:
speising wrote:bonus question: what happens with any profits of profitabe businesses partially owned by the credit unions? suppose the capital bound in the cu makes a profit, is that distributed to the people who payed in? if yes, doesn't that mean they earned interest on their capital?

The CU is owned by its members, so any money it makes, they make, yes. And returns on investment are not identical to interest. Ordinary profit is not interest, so ordinary profit earned by a business distributed to its owners distributed to those owners' owners is still not interest.

In general, a major difference between credit unions and banks is that credit unions are owned by members, yes. It's also important to note credit unions are not-for-profit. That doesn't mean they can't make a small profit or even make a ton of money and spend most of it on expansion. the important thing about a credit union being not-for-profit is that since they are financial collectives, every member stands to benefit in the form of dividends on checking balances and lower loan interest rates.

While credit unions do own assets, they don't typically invest their members' money in for-profit enterprises.
If you like Call of Cthulhu and modern government conspiracy, check out my Delta Green thread.
Please feel free to ask questions or leave comments.

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Tue Feb 27, 2018 11:58 pm UTC

I'm saying "credit union" here as a familiar term for roughly the kind of institution that could serve this function. As I've been describing it so far in this thread (bearing in mind that I'm making this part up as I go along), it also seems similar to a mutual fund. The general structure is: people collectively pool their excess resources together, that can be borrowed to fund new enterprises, that the resource-pooling organization owns a share of, and thus profits from, distributing that money back to the people who own it. It's basically a kind of socialism (inasmuch as it results in community ownership of businesses and redistribution of wealth from those businesses back to the community), framed in "capitalist" institutes.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
ucim
Posts: 6566
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: sick realization: you have negative dollars

Postby ucim » Tue Feb 27, 2018 11:59 pm UTC

Zohar wrote:You seem to think enemies and aggressors are just naturally occurring elements of society and not a result of government. What I'm getting at is governments are the cause of these enemies.
Yes, I think that enemies and aggressors are naturally occuring. That's how people are. They want something, some of them will just take it. No government needed. Governments sometimes help formalize and amplify and focus certain aggressions, but they are by no means its source.

Pfhorrest wrote:"Borrowing" something and not giving it back is theft.
What is it when you borrow something you can't afford (that's why you borrowed it) and then become unable to return it? You crash the car, you run the business into the ground, you are robbed... is that theft? It doesn't even matter, because it's still a loss. Risk of that kind of loss is worth something.

In a barter economy, this risk is one of the things that keeps people from lending stuff out.
Spoiler:
I'll be in your area next week - can I borrow your car? What if I give you ten bucks for the privilege? What if I give you a thousand bucks?
In a money economy, this is why we have banks, and why banks charge interest.

Risk is why some jobs pay more than other, similar ones. The actual work may be the same, but in one case you risk falling into a pool of lava, and in the other case you risk a paper cut. Guess which pays more. Is that ethical? If you think so, then abstract it away - banks charge for the risk of loss. It's called "interest".

Banks also want to make a profit just like any other business. The source of this profit is... fees for the service they offer. It's called "interest". (Yeah, they also charge fees for the other services they offer... go figure - I have to pay extra for cheese at McDonalds too). And while "interest" and "profit" are not the same, profit comes from interest - the price people pay for them to assume a risk and to give them something they don't have (use of the money for a given time).

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

speising
Posts: 2281
Joined: Mon Sep 03, 2012 4:54 pm UTC
Location: wien

Re: sick realization: you have negative dollars

Postby speising » Wed Feb 28, 2018 7:35 am UTC

so, what you seem to be getting at is actually the difference between equity and debt financing. the thing is, if you take on a partner, that parter has a say in the running of the business, and has equal share in your earnings (as well as losses). not every entrepreneur might want that. generally, they'll expect to follow their own ideas and earn more revenue than the cost of borrowed money.
you can construct partnerships with restricted rights and risks, but then you are functionally back at a credit.

cphite
Posts: 1292
Joined: Wed Mar 30, 2011 5:27 pm UTC

Re: sick realization: you have negative dollars

Postby cphite » Wed Feb 28, 2018 3:38 pm UTC

cphite wrote:A house would be well beyond what the average person could afford to buy outright, with or without any inflation caused by rental practices. The same is true for a car and many other large investments. People often find themselves wanting or needing things that they cannot afford outright.

And the people who have those things and want to sell them want to be able to sell them to more than just the few people who can afford them outright too. And lucky for everyone, those sellers have the option to do so: they can accept payments over time, which is basically an interest-free loan.


People can do that now. The thing is, most people wouldn't want any part of that.

Say you decide to move, for whatever reason; and you sell your house to Bob, and buy another house 400 miles away. It turns out that Bob cannot make the payments; Bob completely lied about his financial situation, he has nowhere near the income to make the payments, he has no assets he can sell.

At this point, you've got to get Bob out of your old house - which could take months - and make new arrangements to sell the house - which could take months. Months during which you aren't getting payments that you expected; and therefore aren't making payments that are expected of you. And that's actually a fairly mild scenario... it could be far worse. For example, what if the house burns down? Bob needs a place to live, but he obviously cannot afford to pay you and whatever it costs to live someplace else; you've not only lost the income from Bob, you can't even sell the house to someone else.

Chances are, you're counting on Bob's payments to make the payments on your new house; which you now cannot make, because Bob isn't paying you. And chances are fairly good that the guy you bought your new house from is also counting on your payments to make his payments, and so forth.

If only... if only there were people out there who actually specialized in lending money, who had the means of absorbing this sort of risk without being completely ruined when a loan went wrong. Perhaps those people could charge some sort of fee, that they could use to not only mitigate that risk, but to actually make a living by providing this valuable service?

Why would they offer that, you ask? Because the alternative is no sale at all. Better to get paid for your stuff over time than to just have useless stuff you don't need lying around forever. If those are the only options, because rent and interest aren't an option, sellers will sell on the terms buyers can buy on, because that's better for them than no sale at all.


But if you notice, rent and interest are options precisely because - as an almost universal rule - people find them to be desirable options. Because people often find themselves needing to either acquire assets that they cannot immediately afford, or to release assets that their potential buyers cannot immediately afford.

A system where all homes were bought and sold via private transactions that consisted of payments over time would only be horrendous; it would be completely unworkable. That's why you never, ever see that kind of system in practice on any sort of large scale; and you almost certainly never will.

We have rant and interest loans because they work.

speising
Posts: 2281
Joined: Mon Sep 03, 2012 4:54 pm UTC
Location: wien

Re: sick realization: you have negative dollars

Postby speising » Wed Feb 28, 2018 4:26 pm UTC

it's basically the same reason we have money instead of a barter society.

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Wed Feb 28, 2018 6:14 pm UTC

cphite wrote:But if you notice, rent and interest are options precisely because - as an almost universal rule - people find them to be desirable options.

They are desirable options to the people in power, because they help them maintain and grow their power.

Slavery was a desirable option for slaveowners, too.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

cphite
Posts: 1292
Joined: Wed Mar 30, 2011 5:27 pm UTC

Re: sick realization: you have negative dollars

Postby cphite » Wed Feb 28, 2018 7:14 pm UTC

Pfhorrest wrote:
cphite wrote:But if you notice, rent and interest are options precisely because - as an almost universal rule - people find them to be desirable options.

They are desirable options to the people in power, because they help them maintain and grow their power.


They are a desirable option to a lot of people no matter where their position.

If I need a new car, but cannot afford one right now, I can get a loan. That loan isn't going to be free - the lender is taking on the inherent risk of lending money, and he needs to make a living. The loan process benefits me because I can buy the car I need, today, despite not having the money today. Or, even if I do have the money, I might decide I don't want to tie up all of my money into the car.

One might argue that the car dealership could simply allow me to make payments, without interest, until the car is fully paid... but why would they want to do that? Why would they want to take on the hassle and the inherent risk of that sort of thing? Even a handful of customers failing to make payments could put them out of business. The loan process benefits the dealership, because it allowed them to do more business; because their customers can have payment plans without the dealership taking on the risk.

And yeah, the loan process also benefits the lender; but why shouldn't it? He's providing a valuable service. I am paying more in the long run; but I can actually make the purchase.

The same idea holds for renting. Renting allows people to have access to goods - a home, a car, a television, whatever - that they could not afford to actually purchase; or that they'd rather not purchase. They benefit from being able to have things they need without having to spend they money that would be required to actually buy them.

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Thu Mar 01, 2018 2:33 am UTC

cphite wrote:One might argue that the car dealership could simply allow me to make payments, without interest, until the car is fully paid... but why would they want to do that?

Because they won't make nearly as many sales if they don't. (In a world where rent and interest aren't options).

As for individual sellers not wanting to take on the risk themselves, again that creates a market for an intermediary institution (possibly of the same kind I've been describing thus far) who has the cash on hand to buy things up and sell them off on longer terms. They can of course buy low and sell high to try to make a profit, if the market will bear that -- which, if they're really providing a service worth that difference, it should.

In such a world, people who want to have things for short periods of time will pay more (per time used) than people who hold on to them long term, and that's fine if that's worth the convenience to them, so long as people who are just trying to get their hands on long-term essentials for life (like a place to live) aren't pouring money down a hole forever and getting nothing to their name for it.*

Need to "rent" an expensive tool for a one-time job? There'll be a used tools place that will sell it to you on installment, and also gladly buy it back long before you're done paying it off (so you never end up having to finish paying it off), though they'll pay less than they ask of course, so if you have to do that over and over again you're going to lose money compared to someone who just buys it to use a long time and pays it all off. There also remains the possibility of selling the partly-paid-off tool to someone else instead of back to the shop, which keeps the difference in price the shop can ask for in check.

*That's the specific problem eliminating usury solves: people stuck long-term renting something they would much rather buy, because they are unable to buy, costing them much more in the long term than buying ever would have. My parents have spent hundreds of thousands of dollars on housing in their lives and own no housing for that money, despite staying put for long periods of time in the same area, because they've never been able to escape from renting. I've warped my entire life around avoiding their fate. That kind of thing is simply unconscionable.
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
ucim
Posts: 6566
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: sick realization: you have negative dollars

Postby ucim » Thu Mar 01, 2018 3:17 am UTC

Pfhorrest wrote:again that creates a market for an intermediary institution (possibly of the same kind I've been describing thus far) who has the cash on hand to buy things up and sell them off on longer terms. They can of course buy low and sell high to try to make a profit, if the market will bear that -- which, if they're really providing a service worth that difference, it should.
This sounds a lot like renting, except that
Pfhorrest wrote:There'll be a used tools place that will sell it to you on installment, and also gladly buy it back long before you're done paying it off (so you never end up having to finish paying it off)
is a horrible way to do this. It means that the renterbuyer-hoping-for-resale is stuck with an expensive tool that they are then at the mercy of the maybe-I'll-buy-it-back store when they need to unload it. You don't see the potential for abuse? This happens for real in the auto leasing business, when at the end of the lease the car is inevitably in "worse condition" than the lease specifies, and has a handful of (very expensive!) extra miles on it... Your system is no freer of abuse than the existing one.
Pfhorrest wrote:so long as people who are just trying to get their hands on long-term essentials for life (like a place to live) aren't pouring money down a hole forever
Lots of times long term essentials (a place to live) are a series of short-term choices (this apartment, that apartment, this town, that town...) and your system would preclude (or make extremely difficult) such choices. Compare the process of renting an apartment for a year and a half with buying a house, and selling it a year and a half later. Closing costs alone probably add up to what the rent would have been. And closing costs will be higher, since now we'd need to factor in the costs of selling homes to people who have no business owning a home and can't take care of one.

Renting serves a valid need and is a valid way to make money and is a valid way to acquire the use of something when you (for whatever reason) need it short term. It sucks to be on the short end of any stick, but you seem to be bent on eliminating sticks, which won't actually eliminate short ends.

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.

User avatar
Pfhorrest
Posts: 4969
Joined: Fri Oct 30, 2009 6:11 am UTC
Contact:

Re: sick realization: you have negative dollars

Postby Pfhorrest » Thu Mar 01, 2018 3:30 am UTC

ucim wrote: This happens for real in the auto leasing business, when at the end of the lease the car is inevitably in "worse condition" than the lease specifies, and has a handful of (very expensive!) extra miles on it... Your system is no freer of abuse than the existing one.

When you're leasing a car, you can't choose to return it to a different lessor if the one you leased it from is dicking you around like that. Under my system, you can resell the car to a different reseller if the one you bought it from tries to screw you over on the deal. Or to another private party entirely if you so choose.

Compare the process of renting an apartment for a year and a half with buying a house, and selling it a year and a half later. Closing costs alone probably add up to what the rent would have been.

Why does the process of buying a house have to be any more arduous than renting one? It is at present, sure, but what factors force it to be that way, if there were heavy market pressure to make it another way?
Forrest Cameranesi, Geek of All Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The Codex Quaerendae (my philosophy) - The Chronicles of Quelouva (my fiction)

User avatar
ucim
Posts: 6566
Joined: Fri Sep 28, 2012 3:23 pm UTC
Location: The One True Thread

Re: sick realization: you have negative dollars

Postby ucim » Thu Mar 01, 2018 3:57 am UTC

Pfhorrest wrote:Why does the process of buying a house have to be any more arduous than renting one?
When you buy a house, you are assuming complete responsibility for it. You will owe ALL THE MONEY. You will have ALL THE HOUSE. You will pay ALL THE TAXES. It's an actual transfer of property for money - usually lots of money. So, it's incumbent on you to ensure that you in fact have bought the house you think you're buying, and that the seller actually owns the house he's selling you, and that there are no liens, no back taxes, no septic issues, the roof will last more than another few years, that little crack in the foundation isn't serious, the basement doesn't flood.... all these things. It's a big responsibility. And the seller needs to know that he's going to get all his money, and (if there's a lender involved) that lender needs assurance that you (the buyer) will eventually pay all the money even if you don't have a job, break your arm, have to care for your elderly grandmother, and get typhoid fever. There's a huge amount of money at stake. (This is why you're ranting about it, right?)

When you rent, none of this is the case. You as the renter are not responsible for the taxes, the roof, the foundation, the septic system, the underground oil tank, a bad title, claims that indians once owned the land and want it back, and if the house burns down, it's not your problem. You sign a lease for a year of payments, and that's all you're on the hook for. You can walk away at (almost) any time, and that's that. There's a lot less at stake.

True, the landlord needs to know you're a decent sort that won't be making explosives in the basement or running a brothel, and that you will actually pay the rent and not trash the house in that year, but that's a much smaller deal than if you were committing to the (something like) twenty times as much that it would cost to buy the house. And in the purchase case, you'd have to do it twice, rather than just moving out of a rental and saying 'bye'.

Jose
Order of the Sillies, Honoris Causam - bestowed by charlie_grumbles on NP 859 * OTTscar winner: Wordsmith - bestowed by yappobiscuts and the OTT on NP 1832 * Ecclesiastical Calendar of the Order of the Holy Contradiction * Please help addams if you can. She needs all of us.


Return to “Serious Business”

Who is online

Users browsing this forum: AdsBot [Google] and 9 guests