sick realization: you have negative dollars

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speising
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Re: sick realization: you have negative dollars

Postby speising » Wed Mar 07, 2018 9:50 pm UTC

the extremes on both sides are of course problematical, and a more social economy would probably increase total happiness.
but that's a far cry from completely rejecting the basis of the only economic system we know to work.

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Re: sick realization: you have negative dollars

Postby Pfhorrest » Wed Mar 07, 2018 9:52 pm UTC

Only usurious economic systems are known to work? [citation needed]
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Re: sick realization: you have negative dollars

Postby bantler » Wed Mar 07, 2018 10:06 pm UTC

Pfhorrest wrote:A literally luck of the lottery in two otherwise identical lives, not diluted by time, but multiplied by it. That's the problem.


It's only a problem for Kid B, and only if he decides to live his life with the exact same parameters as Kid A.
No question Kid B has to work harder and make better choices to equalize with Kid A, but that's hardly the downfall of American Society.

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Re: sick realization: you have negative dollars

Postby Thesh » Wed Mar 07, 2018 10:11 pm UTC

I would suggest that capitalism itself is not known to work, and without all the government intervention in our markets, our entire society would have collapsed long ago. The incentives that capitalism is based on leads towards greater centralization of wealth, less equal opportunity, and a more authoritarian state over time. Without the imperialism of Western nations, it's not even clear that we would be as well-off as we are. I'd suggest that the direction we are heading will probably lead us to a collapse.

Plus, co-ops have been shown to have higher productivity than for-profit companies, and growth itself seems unrelated to the relative wealth of the wealthy, with an inverse correlation with high levels of inequality. It seems to me that if you look at the individual pieces of evidence (rather than "we're successful, therefore capitalism"), pretty much everything that makes capitalism unique to other decentralized economic systems (i.e. things that benefit absentee owners) results in primarily negative outcomes to our economy and society as a whole.
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Re: sick realization: you have negative dollars

Postby bantler » Wed Mar 07, 2018 10:22 pm UTC

Thesh wrote:I would suggest that capitalism itself is not known to work...


How many centuries will count as successfully working?

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Re: sick realization: you have negative dollars

Postby Thesh » Wed Mar 07, 2018 10:26 pm UTC

Military conquest has been making the top countries rich for millennia.
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Re: sick realization: you have negative dollars

Postby Pfhorrest » Wed Mar 07, 2018 10:48 pm UTC

bantler wrote:No question Kid B has to work harder and make better choices to equalize with Kid A, but that's hardly the downfall of American Society.

Not just to equalize, but to stay in the same place he already is. God, I don't know how much clearer I can make this.

Picture some kind of racing video game with a weird feature: players in the lead get a speed boost, while players in the rear get the opposite. Players start out lined up in random order and random effects along the track may affect them, and of course the players' own skill at the game is a factor as well. But two players with identical skill and identical luck along the track don't end up just the same distance apart as they started. You seem to think that they do, and that that's my complaint. It's not. It's about that game-breaking speed-boost/retardation feature that gives a hand to the players who need it least and hinders those who need the most help. Nobody would want to play a literal game like that, because it's literally unfair and that's no fun.

"Fun" fact: people hate playing Monopoly for that exact reason, and that's a feature of the game. Monopoly exists to model capitalism as a game and in doing so illustrate how unfair it is. Not just "life is unfair", that we experience different luck with each roll of the dice, but that the "game" we're in distorts those rolls of the dice horribly.

bantler wrote:
Thesh wrote:I would suggest that capitalism itself is not known to work...


How many centuries will count as successfully working?

Capitalism failed by the early 20th century, and has been propped up by statist patches and workarounds ever since.

EDIT: 1900s ≠ 19th century. Fixed.
Last edited by Pfhorrest on Wed Mar 07, 2018 11:18 pm UTC, edited 1 time in total.
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Re: sick realization: you have negative dollars

Postby bantler » Wed Mar 07, 2018 11:06 pm UTC

Thesh wrote:Military conquest has been making the top countries rich for millennia.


Well, that and slavery. It turns out free-labor is a tremendous boon to economies.

Pfhorrest wrote:
bantler wrote:No question Kid B has to work harder and make better choices to equalize with Kid A, but that's hardly the downfall of American Society.

Not just to equalize, but to stay in the same place he already is. God, I don't know how much clearer I can make this.


Sounds like you're just down on Evolution.
Disregarding the luck outliers, wealth is predominantly attained through inheritance. It seems like you are suggesting there is something inherently improper or broken with a system that rewards success by benefiting offspring.

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Re: sick realization: you have negative dollars

Postby Thesh » Wed Mar 07, 2018 11:14 pm UTC

bantler wrote:It seems like you are suggesting there is something inherently improper or broken with a system that rewards success by benefiting offspring.


There is if your primary determinant of "success" is inheritance. Succeeding at making money off of savings in a system designed so that savings grow exponentially by default isn't much of an accomplishment.
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Re: sick realization: you have negative dollars

Postby Pfhorrest » Wed Mar 07, 2018 11:26 pm UTC

bantler wrote:Sounds like you're just down on Evolution.

So you're a social darwinist then, i.e. an almost-literal Nazi? Thanks for confirming as I can now disregard anything further you have to day.

Disregarding the luck outliers, wealth is predominantly attained through inheritance. It seems like you are suggesting there is something inherently improper or broken with a system that rewards success by benefiting offspring.

No, more like what Thesh said, it's the other way around: there is something inherently improper where success is the reward of being the right people's offspring, among other things beyond the "successful" person's control.

I don't have any problem with people giving their kids a head start so long as people who have a head start don't also get a speed boost because of it. (At least, so long as that speed boost is coming at the expense of the speed of the kids in the rear). Or to put it back in literal terms, I don't have a problem with some people lucking into wealth, so long as wealth is not itself a source of further income, at least not at the expense of debt generating costs. That's what this is all about. Rent (of which interest is just a special case) is literally making an income just from having wealth, at the expense of other people, who incur an ongoing cost for not having wealth.
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Re: sick realization: you have negative dollars

Postby ucim » Wed Mar 07, 2018 11:33 pm UTC

Pfhorrest wrote:So you're a social darwinist then, i.e. an almost-literal Nazi? Thanks for confirming as I can now disregard anything further you have to day.
What's the difference between this and "Oh, so you disagree with me. You're one of those. Thanks, now I can disregard anything further you say."?

Anyway, what counts as "success" and "failure", now that those terms keep being bandied about?

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Re: sick realization: you have negative dollars

Postby Pfhorrest » Wed Mar 07, 2018 11:35 pm UTC

ucim wrote:
Pfhorrest wrote:So you're a social darwinist then, i.e. an almost-literal Nazi? Thanks for confirming as I can now disregard anything further you have to day.
What's the difference between this and "Oh, so you disagree with me. You're one of those. Thanks, now I can disregard anything further you say."?

Some opinions are so far gone they're not worth the effort to argue against. If I was discussing orbital dynamics with someone who turned out to be a flat-earther, I wouldn't bother continuing with that either.

ucim wrote:Anyway, what counts as "success"

In this context, obviously "wealth".
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Re: sick realization: you have negative dollars

Postby arbiteroftruth » Wed Mar 07, 2018 11:38 pm UTC

Idea: use a system of stocks instead of leases. If you want a court-enforceable rental agreement on something you own, you must register the property as having its ownership divided among some number of stocks. An agreement is made among all owners that whichever partial owner is assigned as the user of the property at any given time is committed to buying stocks from the other owners at a certain rate and price, distributed in equal proportion to all the other owners. This rate and price is determined by contract between the collective ownership and the user just like leases are done today. Independent of all such leases, an owner can sell their stock to any willing party at any time.

Essentially, to rent something out you must register as a corporation whose only tangible asset is the property, and which is selling stock in itself. Management burdens could be provided by an outside provider, paid collectively by all the owners in proportion to their ownership.

Since the price of the stock is negotiated with each new rental agreement, you can charge just as much rent as you would today and thus account for risk. A real estate investor could, for example, buy a property at its lump-sum market value, then reliably sell it at a higher total value by renting it out and thus selling it slowly. Any individual lessee still only has a short term burden with a total cost much less than ownership would be, and that flexibility is the service being provided that still makes this a reliably profitable arrangement for investors.

Apartments in large buildings could still be registered as distinct pieces of residential property, and the management of the building would be implemented as an HOA.

Meanwhile, people living by renting are also gradually buying the place. Even if you move around a lot, you're gradually building up a decent real-estate portfolio, which you can sell on the open market to help pay for a lump-sum purchase if and when you're ready for it.

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Re: sick realization: you have negative dollars

Postby Thesh » Wed Mar 07, 2018 11:44 pm UTC

If we are open to changing the laws, I think just banning properties that are not resident-owned and using housing cooperatives for those who rent while maintaining the ability to own would be ideal.
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Re: sick realization: you have negative dollars

Postby Pfhorrest » Wed Mar 07, 2018 11:45 pm UTC

That's more or less a special case of the kind of system I advocate. In occupying the space you are borrowing it, and in having to buy stock in the shell company that owns it you are paying for it, so you're basically paying off something you're using over time, which is an interest-free loan.

It's not exactly the special case I'd be most interested in (I don't want other people to own fractions of my home, even if I also own fractions of all of their homes; I want just my own), but I don't have any moral objection to it and if people wanted to be part of that more power to them.
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Re: sick realization: you have negative dollars

Postby arbiteroftruth » Wed Mar 07, 2018 11:52 pm UTC

Pfhorrest wrote:so you're basically paying off something you're using over time, which is an interest-free loan.


Crucially, in my proposal it's not effectively interest free. The price per stock you're paying when renting is going to be higher than the price you'd pay when making an all-at-once purchase, for all the reasons upthread that people have defended the economic justification of renting.

The difference is that, with renting today, if you think of it as paying off a loan with which you bought the place, 100% of your rent payment is interest, and you never pay down the principal value by even a cent. And when you move out, you effectively sell the place back to the original owner at the same original value. In my proposed system, a lot of the ideas would work the same way, but your rental payments *do* pay down the principal value of the 'loan' as you acquire partial ownership of the property.

Edit: I'm suggesting that the problem you outline is not that loans with interest exist; it's that *perpetual* debt exists in which people end up getting paid on interest long after the value they originally provided has long since faded from relevance.
Last edited by arbiteroftruth on Wed Mar 07, 2018 11:55 pm UTC, edited 1 time in total.

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Re: sick realization: you have negative dollars

Postby Pfhorrest » Wed Mar 07, 2018 11:55 pm UTC

The cost for payment on longer terms is higher, sure, but that's not the same thing as interest. In my own proposals I've pointed out that in an interest-free world sellers could still ask higher prices in exchange for easier terms if the market will bear that cost for the convenience.

But, as you said, it's way better than rent because you're still paying off the debt, and not just putting 100% toward "interest".
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Re: sick realization: you have negative dollars

Postby Thesh » Wed Mar 07, 2018 11:55 pm UTC

If your goal is to ensure everyone has equal housing opportunity, I think housing cooperatives for multi-familiy housing (where the property is equally owned by all tenants and democratically ran), with single-family units generally owned outright like today would be ideal. Effectively, everyone would be a home owner and you wouldn't have to pay your way into it (beyond paying rent).
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Re: sick realization: you have negative dollars

Postby arbiteroftruth » Thu Mar 08, 2018 12:00 am UTC

Pfhorrest wrote:The cost for payment on longer terms is higher, sure, but that's not the same thing as interest. In my own proposals I've pointed out that in an interest-free world sellers could still ask higher prices in exchange for easier terms if the market will bear that cost for the convenience.


I don't see much difference there. If the monthly payment is known, and the interest rate is known, then the effective selling price when the loan is paid off is easy to calculate. If instead you determine the monthly payment and the total selling price, the term of payment and the equivalent interest rate are also easy to calculate. They're just two different ways of describing the same transaction.

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Re: sick realization: you have negative dollars

Postby Yablo » Thu Mar 08, 2018 12:05 am UTC

Pfhorrest wrote:Fast forward 50 years later. Kid A is still richer than kid B, but not just by the amount he started out with in his trust fund. Kid A is fantastically richer than kid B.

If both Kid A and Kid B are responsible with what money they do have, this is generally true, but if Kid B has to work every day just to get by, Kid B has a very high likelihood of respecting the value of that money. Kid A may be responsible as well, but having been given the money, there is also a high likelihood Kid A doesn''t respect the value of the money quite as much.

A very good friend of mine grew up in a family that had quite a bit more money than mine. When he turned 18, he received the balance of a trust fund; it wasn't millions of dollars, but it was in the tens of thousands. I encouraged him to invest it, and he agreed that that would be the smart thing (this is, by the way, one of the most intelligent people I've ever met), but he decided what he's really like to do with it is have a three-month-long party full of recreational drugs and expensive food in his new apartment. Fast forward 20 years, and I have quite a bit more to show for my efforts. It should be noted that he has no regrets, and he saw this end result before he spent his first dime.
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Re: sick realization: you have negative dollars

Postby ucim » Thu Mar 08, 2018 12:07 am UTC

arbiteroftruth wrote:Idea: use a system of stocks instead of leases. If you want a court-enforceable rental agreement on something you own, you must register the property as having its ownership divided among some number of stocks.
Oh, the lawyers will have an orgasm over this one. Think of all the extra business this will create for them! Think of all the extra money that will go from poor people who would otherwise have to rent, into rich lawyers' pockets!

You sure you don't want to run for office? :)

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Re: sick realization: you have negative dollars

Postby bantler » Thu Mar 08, 2018 12:23 am UTC

Pfhorrest wrote:I don't have any problem with people giving their kids a head start so long as people who have a head start don't also get a speed boost because of it. (At least, so long as that speed boost is coming at the expense of the speed of the kids in the rear). Or to put it back in literal terms, I don't have a problem with some people lucking into wealth, so long as wealth is not itself a source of further income, at least not at the expense of debt generating costs. That's what this is all about. Rent (of which interest is just a special case) is literally making an income just from having wealth, at the expense of other people, who incur an ongoing cost for not having wealth.


You can't argue with math; Money grows exponentially. Wealth has no feelings.
Inheritance is usually company and asset based rather than pure cash. Certainty it's the business founders prerogative to establish the line of succession for his endeavors. It's the standard moral and socially-responsible choice to pass wealth to offspring. A family's wealth and success is a microcosm of a prosperous community, state and nation.



Thesh wrote:
bantler wrote:It seems like you are suggesting there is something inherently improper or broken with a system that rewards success by benefiting offspring.


There is if your primary determinant of "success" is inheritance. Succeeding at making money off of savings in a system designed so that savings grow exponentially by default isn't much of an accomplishment.


Again, math has no feelings. Besides, savings are universally recognized as the safest yet lowest yielder of all investments.

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Re: sick realization: you have negative dollars

Postby Pfhorrest » Thu Mar 08, 2018 12:26 am UTC

Yablo wrote:
Pfhorrest wrote:Fast forward 50 years later. Kid A is still richer than kid B, but not just by the amount he started out with in his trust fund. Kid A is fantastically richer than kid B.

If both Kid A and Kid B are responsible with what money they do have, this is generally true, but if Kid B has to work every day just to get by, Kid B has a very high likelihood of respecting the value of that money. Kid A may be responsible as well, but having been given the money, there is also a high likelihood Kid A doesn''t respect the value of the money quite as much.

That is true, and given that it is true, we should expect to see people born to wealth more often winding up poor, and people born in poverty more often winding up rich. Or at the very least, we should expect to see people born wealthy and people born poor usually ending more more or less the same, as the wealthy kids spend away their wealth and the poor kids save and save. But, despite that wealthy kids do spend their wealth and poor kids do save and save, the wealthy kids generally still get wealthier and the hard-working poor kids (who don't just give up in frustration) waste all that effort just to tread water. That's what I have a problem with.
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Re: sick realization: you have negative dollars

Postby Pfhorrest » Thu Mar 08, 2018 12:31 am UTC

bantler wrote:You can't argue with math; Money grows exponentially.

That's not a property of "math", but of the economic system we've created.

Remember, we could, if we as a society decided to, declare that if you "voluntarily" give a mugger your wallet, rather than be shot, then that's a legitimate transaction and you have no complaint against the mugger. But we have decided that that's an invalid move in the game of life, in the rules that we have decided to enforce for that game.

We could declare that if you sign a contract agreeing to be someone's slave, that you are their slave, and therefore don't get to change your mind about that. But we have decided that that's an invalid move too. You can act like his slave for as long as you want, but as soon as you decide you'd rather not, you're free to do otherwise, because we've decided that agreements like that don't mean anything.

Money growing exponentially is a consequence of other rules that we have decided to enforce (or not) in the game of life. We could, if we as a society decided to, make those rules different than they are, and money would no longer grow exponentially.

That is precisely what we're discussing here.

Money sitting in a pile somewhere doesn't produce more money by some law of nature, much less a law of math. Human social constructs concentrate money. And we humans get to decide what those constructs are and whether we want them to keep doing that.
Last edited by Pfhorrest on Thu Mar 08, 2018 12:33 am UTC, edited 1 time in total.
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Re: sick realization: you have negative dollars

Postby Thesh » Thu Mar 08, 2018 12:32 am UTC

bantler wrote:Again, math has no feelings. Besides, savings are universally recognized as the safest yet lowest yielder of all investments.


"Savings" is not a synonym for bank deposits; it means all money not spent on current consumption.

Savings grow exponentially because we design the economy so that savings grow exponentially. If you wanted, you can design the banking system in a way that says the government would always lend and borrow at inflation + risk, and then wealth from deposits wouldn't grow exponentially. When it comes to businesses, you can get rid of equity ownership, and just have co-ops that get all money from lending, and then the only consistent way to make more money than you have would be to work for it.

Interest on loans is a direct result of explicitly keeping the supply of money artificially scarce, while returns on investment are a direct result of laws that make people artificially dependent on others.
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Re: sick realization: you have negative dollars

Postby Tyndmyr » Thu Mar 08, 2018 2:31 am UTC

Pfhorrest wrote:My problem is not with inheritance per se, but more with how inheritance (as just one example) matters. If people born into money and people born poor tended, over time, while living similar lives, to equalize in their wealth, then I wouldn't have much of a problem with it. Instead, you can have people born poor work their asses off while those born rich coast, and the lazy rich still get richer faster than the hardworking poor. It's about economic mobility. People behaving similarly should become economically similar over time regardless of their starting economic positions; if they don't, then the results people enjoy are not proportional to their actions which is virtually the textbook definition of injustice. People working hard and living thriftily should quickly become wealthier than those who spend lots and work rarely. People living pretty ordinary middle-of-the-road lives should all enjoy pretty ordinary middle-of-the-road wealth regardless of how rich their parents were or who got the good or the bad luck otherwise. The fact that this does not (reliably) actually happen in practice is the central failing of so-called "free market" capitalism.


So, you want life to automatically make things fair? Not only for advantages to be cumulative, but to be...disadvantageous?

This is simply not how life is, and it is not unique to money. If you have two healthy parents, you are at an advantage compared to someone who does not.

If an advantage provides a disadvantage, it is not an advantage. Wealth is an advantage. Health is an advantage. Social standing is an advantage.

The traditional response to that failure is to make the market even more unfree and use statism to fight capitalism. I think a better long-term solution is to look into why so-called "free" markets do that in the first place, to figure out what is the cause of the disease for which forced wealth redistribution is merely palliative care. I think (and I'm far from alone, though similar thinkers are historically ignored) that the root of that problem is usury, that that is the last vestige of feudalism in this era of supposedly "free" markets, and that it is actually making the market unfree. And by not enforcing the contracts that construct it (just like we don't enforce contracts selling people into slavery, even if they're "freely" entered into) you can solve the problem in a way that increases freedom, instead of solving it with force.

But I mean, if you really want deadly force to be the only option available...


It's not a disease. It's reality. Rejecting it does not make it so. It isn't a form of our particular form of contract law, as advantages accrue under all systems. I'm not sure why you keep dragging slavery back into this without even bothering to address my complaints of it being a poor analogy.

Advantages accruing is GOOD, however. It's why society can progress. If improving society immediately made life suck more, dragging us back down into a cesspit of suck, with no improvement, we could not have gotten where we are today. You and I have better lives than generations long before. If we do good things for society, our descendants will live better lives yet. Accruing advantages literally is the hope for the future.

Also, feudalism hated usury, yknow that, right? That whole history is why ethnic outsiders, including the Jewish people, often were associated with banking. Make the outsiders do the job that is necessary, but nobody likes. And then, paradoxically, blame them for doing it. That whole history is a giant mess, and hatred of usury has...enabled some fairly bad stuff.

Pfhorrest wrote:Only usurious economic systems are known to work? [citation needed]


It depends on how you define all those words. Some systems relabel certain things as "not usury". Some rely on external agents to conduct such business.

But there is absolutely no functioning economic system under which starting out with a fuckton of extra wealth isn't helpful.

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Re: sick realization: you have negative dollars

Postby Pfhorrest » Thu Mar 08, 2018 2:38 am UTC

Medieval Catholicism (like modern Islam) hated money-lending at interest, but the feudal world absolutely loved land rent. Part of the reason anti-usury laws went away was because people work working around them with a combination of an interest-free loan, insurance, and rent, where rent did all the heavy lifting substituting for the interest, because people back then failed to realize that rent is the general concept of which interest is just a special case (just like land is just a special case of capital more generally).

I don't care to have the long discussion necessary to draw out the connection between slavery, feudalism, and capitalism, because it would fall on deaf ears anyway and Marx already gave that a pretty long decent treatment that you can go read up on if you want to. My only addition is identifying usury (meaning all rent and interest, any fee for use) as the central defining feature of capitalism that underlies the effects Marx discusses.
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Re: sick realization: you have negative dollars

Postby ucim » Thu Mar 08, 2018 2:59 am UTC

Pfhorrest wrote:My only addition is identifying usury (meaning all rent and interest, any fee for use) as the central defining feature of capitalism that underlies the effects Marx discusses.
It's more like redefining usury, for the purpose of employing all the baggage the word already has.

Even if technically usury is any form of interest, in common usage usury means abusively excessive interest, typically charged only to those with no other choice. Thus, it has acquired "bad thing" baggage. You successfully make the case that advantage begets advantage, and that non-advantage therefore leads to disadvantage. Sucks to be poor. But (at least to me) you have not successfully made the case that rent and interest are the cause of all this, nor that it is to be singled out over all the other causes of advantage (which beget advantage).

You've tried to make the case that renting, which is a very useful commercial tool for both sides of the transaction, should be abolished. I don't think you've made the case that doing so would provide any benefit, nor have you made the case that it wouldn't lead to the horrible complications that other posters have pointed out.

Yes, unrestrained capitalism is a Bad Thing; some (governmental) restraint is necessary. But this isn't the restraint you're looking for.

In some sense, rent price controls (of which this is an extreme case) is analogous to price controls, wage controls, and timeclock controls. Perhaps some controls are necessary (and they do exist), but abolishment of the concept is a bit heavy handed.

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Re: sick realization: you have negative dollars

Postby Pfhorrest » Thu Mar 08, 2018 3:04 am UTC

The sense of "usury" I'm using is older, and I'm only using it because it's etymologically illustrative (a fee for a use is what defines rent) and shorter that writing "rent and interest" over and over again.
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Re: sick realization: you have negative dollars

Postby sardia » Thu Mar 08, 2018 8:27 am UTC

I get the feeling that some posters believe that large amounts of wealth inequality isn't that bad. Aren't there large negative economic effects from having a really small percentage of each nation controlling the vast majority of the wealth/income/education/health? The ultra rich distort our laws and worldview, in their favor. Eg Welfare should be limited to the superdeserving, and only for a short time, while corporate tax expenditures should be unending.

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Re: sick realization: you have negative dollars

Postby Tyndmyr » Thu Mar 08, 2018 1:15 pm UTC

sardia wrote:I get the feeling that some posters believe that large amounts of wealth inequality isn't that bad. Aren't there large negative economic effects from having a really small percentage of each nation controlling the vast majority of the wealth/income/education/health? The ultra rich distort our laws and worldview, in their favor. Eg Welfare should be limited to the superdeserving, and only for a short time, while corporate tax expenditures should be unending.


To some extent, wealth inequality can be good. In a productive sense, having the capital somehow concentrated enough to build, say, a CPU manufacturing facility, is desirable, and that's mostly going to require some degree of unequal wealth in practice.

But more so, it's unavoidable. If someone is born into tons of money, and opts to never do anything useful with their life, living off the excess, that's not terribly economically productive. That probably isn't very common. The vast majority of people, even if above average in wealth, are not so rich as for that to be a viable option, and even among those who are, the super-rich mostly keep their wealth invested towards productive ends. So, while it's bad, it's sort of like the popular image of a welfare queen. Not terribly representative of that social class as a whole.

In theory, democracy is some kind of check on economic power translating into other kinds of power, but I'd agree that in practice, nobody has entirely figured out how to stop money from conferring advantage in legal arenas as well. Certainly the same is true of other types of power as well(which likely are strongly correlated). If daddy is socially well connected, odds are good that you're gonna be too, and it's easier for you to pursue politics if you wish. The political class as a whole tends to be not terribly representative of society as a whole.

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Re: sick realization: you have negative dollars

Postby Thesh » Thu Mar 08, 2018 2:24 pm UTC

Being able to raise funding does not require income inequality, just organizations with the ability to raise funds; hell, you could build an entire factory off of a loan. On top of that, inequality leads to lower demand for factory-made goods, so it's possible the inequality itself reduces the demand and results in less infrastructure being built as there is lower potential benefit to the consumer.

EDIT:
On top of all that, inequality (along with centralization) means that many communities as a whole have less money to fund things beneficial to their community, and this is what keeps communities from being able to escape poverty and have equal opportunity for jobs and education - this is probably the biggest drag on productivity in our economy. I'd say there's a good chance any level of inequality that leads to upper and lower class communities results in less overall investment due to these effects, and at the very least it leads to less productive investment.
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Re: sick realization: you have negative dollars

Postby bantler » Thu Mar 08, 2018 6:27 pm UTC

Thesh wrote:Being able to raise funding does not require income inequality, just organizations with the ability to raise funds; hell, you could build an entire factory off of a loan. On top of that, inequality leads to lower demand for factory-made goods, so it's possible the inequality itself reduces the demand and results in less infrastructure being built as there is lower potential benefit to the consumer.


Income inequality absolutely contributes to successful funding. Good credit-ratings and collateral are necessary to ensure safe economic growth. The global economic crash of 2008 is a prime example of what happens when loans and funding aren't properly restricted.

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Re: sick realization: you have negative dollars

Postby Thesh » Thu Mar 08, 2018 7:35 pm UTC

Inequality means that regular people don't have as much stable income or wealth. The greater the inequality, the further the middle class can fall. The 2008 crash came because of predatory lending and over-lending to regular citizens who were poorer because of inequality. There's a lot of evidence the crash was caused by inequality itself.

EDIT: It also means that businesses are more likely to find it more profitable to move production to areas with cheaper wages, leading to local economic declines that can significantly limit their ability to borrow as they go underwater on existing loans.
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Re: sick realization: you have negative dollars

Postby bantler » Thu Mar 08, 2018 8:18 pm UTC

Thesh wrote:Inequality means that regular people don't have as much stable income or wealth. The greater the inequality, the further the middle class can fall. The 2008 crash came because of predatory lending and over-lending to regular citizens who were poorer because of inequality. There's a lot of evidence the crash was caused by inequality itself.


Are you implying that inequality created poor-folks and thus predatory-lenders surfaced to sell them sub-prime loans on over-valued property?
Poor folks have always been a terrible long-term investment.

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Re: sick realization: you have negative dollars

Postby Thesh » Thu Mar 08, 2018 8:40 pm UTC

Yeah, I'm calling Poe's law on this one.
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Re: sick realization: you have negative dollars

Postby Tyndmyr » Fri Mar 09, 2018 1:06 am UTC

bantler wrote:
Thesh wrote:Being able to raise funding does not require income inequality, just organizations with the ability to raise funds; hell, you could build an entire factory off of a loan. On top of that, inequality leads to lower demand for factory-made goods, so it's possible the inequality itself reduces the demand and results in less infrastructure being built as there is lower potential benefit to the consumer.


Income inequality absolutely contributes to successful funding. Good credit-ratings and collateral are necessary to ensure safe economic growth. The global economic crash of 2008 is a prime example of what happens when loans and funding aren't properly restricted.


Indeed. Even if one is out to seek investment from another...if everyone had equal funds, you would need to convince a great number of people to invest in your idea. If funds are unequal, you may need to only convince one, or a few. This can greatly lower the difficulty of getting funds. Sure, crowdsourcing is an option...but it's an option either way. The angel investor isn't a way with heavy economic equality(assuming you can get that to stick)

The US has tons of inequality, and tons of demand for factory made goods. This statement seems fairly difficult to support in light of that. Demand seems primarily governed by average wealth.

Also, seriously, this doesn't even hold up to cursory inspection. If we use Gini to look at countries with high economic equality, the "best" on the list are, in order, Ukraine, Iceland, Slovenia, Chech Republic, Slovakia, Kazakhstan, Kosovo....cmon....these are your economic models? Source: World Bank(https://en.wikipedia.org/wiki/List_of_c ... e_equality)

The dogma of economic equality being good for an economy is not very well supported. At best, the relationship it has must be quite weak compared to other factors.

Anyways, if you want to show examples of CPU factories funded entirely in a co-op fashion or similar by many stakeholders with generally equal income, go nuts. Forget proving it's superior, prove it's possible. Without that, you pretty much have to accept that wealth inequality is helpful for funding such projects.

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Re: sick realization: you have negative dollars

Postby Yablo » Fri Mar 09, 2018 1:17 am UTC

bantler wrote:
Thesh wrote:Inequality means that regular people don't have as much stable income or wealth. The greater the inequality, the further the middle class can fall. The 2008 crash came because of predatory lending and over-lending to regular citizens who were poorer because of inequality. There's a lot of evidence the crash was caused by inequality itself.


Are you implying that inequality created poor-folks and thus predatory-lenders surfaced to sell them sub-prime loans on over-valued property?
Poor folks have always been a terrible long-term investment.


I was a loan auditor for a credit union prior to the crash, and I remember being shocked and a little terrified that people with terrible credit were not only getting mortgages to buy property they couldn't afford, but then getting second mortgages at much higher rates which would raise the total amount borrowed against the property to as high as 125% of the assessed value. Our VP of Lending agreed that it was the worst lending policy he'd ever seen, but he said the credit union's hands were tied in the matter. The federal government was not only encouraging the practice, it was all but requiring it.
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Re: sick realization: you have negative dollars

Postby Thesh » Fri Mar 09, 2018 1:46 am UTC

People will always seek retirement savings. The closer we all our to average (mean) wealth throughout our lives the more most of us will have to save in general, the more opportunities we will all have in general, and the more ability to go into business for ourselves.
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Re: sick realization: you have negative dollars

Postby cphite » Fri Mar 09, 2018 4:23 pm UTC

Yablo wrote:
bantler wrote:
Thesh wrote:Inequality means that regular people don't have as much stable income or wealth. The greater the inequality, the further the middle class can fall. The 2008 crash came because of predatory lending and over-lending to regular citizens who were poorer because of inequality. There's a lot of evidence the crash was caused by inequality itself.


Are you implying that inequality created poor-folks and thus predatory-lenders surfaced to sell them sub-prime loans on over-valued property?
Poor folks have always been a terrible long-term investment.


I was a loan auditor for a credit union prior to the crash, and I remember being shocked and a little terrified that people with terrible credit were not only getting mortgages to buy property they couldn't afford, but then getting second mortgages at much higher rates which would raise the total amount borrowed against the property to as high as 125% of the assessed value. Our VP of Lending agreed that it was the worst lending policy he'd ever seen, but he said the credit union's hands were tied in the matter. The federal government was not only encouraging the practice, it was all but requiring it.


That last part always seems to get left out of discussions about the housing crash... people act like the banks did all of this on their own and - of course - use that as a reason to call for government to step in and control them... the reality is, a lot of their bad lending behavior was practically mandated by the government. There were plenty of people in the industry that were predicting the crash before it happened. But nobody wanted to listen.


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