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Saturday, November 17, 2018

Darkstream: Rethinking capitalism



From the transcript of the Darkstream:

Something that I said the other night I think is more important than I had initially thought it was, it was an answer to a question that Alex Jones had when he asked, "what should we do, what's the one thing we should do on the Right? What I realized that we need to do is we need to fundamentally question our assumptions and ideals, because part of what has gotten us here, part of what has gotten us into these very difficult situations and challenging circumstances is our ideals and assumptions.

I'm talking about our ideals and assumptions on the Right. We cannot blame everything on the Left. You know if you look at the people who do nothing but bitch about the Left that's that's what the Ben Shapiros do, that's what the Dennis Pragers do,  that's what the William F. Buckley types did. You know, they're constantly pointing their fingers at the Democrats, at the leftists, and they're never looking at their own assumptions. Now, we've begun to do that. You know, those of us who are on the Nationalist Right have begun to do that, we've begun to question things like free trade, we've begun to question things like legal immigration. Think about how all the Republicans and the conservatives who have said for decade, "the problem isn't the immigration the problem is the illegal immigration."  As we are learning, the problem is actually the legal immigration, you know, legal immigration is just another word for slow invasion, especially in a democracy.

Okay, any time you catch yourself thinking in that the problem is not the pure ideal, the problem is the application of the ideal, that's been used to try to rescue everything from communism to feminism to civil rights. I want to quote this guy here because it's important. Patriot 95 says "crony capitalism is what's wrong with capitalism, capitalism untouched and not corrupted it works well, it's what grew America early on," Well, no, that's not true. Here's the the problem with these false dichotomies, these false dichotomies lend themselves to that sort of misleading formula. Crony capitalism is a problem but the fact that crony capitalism is bad does not mean that capitalism is necessarily intrinsically and always good.

I was thinking about Murray Rothbard's economic history he's got a very large two-volume history of of economics, it's from the Austrian perspective, it's very interesting it's very, very well-founded in economic history, but what I realized about it is that from the  Rothbardian perspective, modern economics is simply the acceptance of debt. Everything that he writes about - it's kind of shocking when you think about it - he devotes an incredible amount of time in this very long book to address the question of usury and it's really remarkable how much space he devotes to Christian theology because he's focused on how getting rid of the prohibitions on usury was necessary for economic development and the modern economic system.

I started thinking more and more about the conceptual problems of capitalism because obviously the issue of debt is a massive problem, and I've demonstrated this, I've dealt with this before. You know, the biggest single problem with debt is that it completely warps the supply-demand curves, and this is without even getting into Steve Keen's mathematical demonstration that there is no such thing as a collective supply-demand curve, that you cannot create a supply-demand curve by adding multiple supply-demand curves together so we're still working within the concept of conventional economics, we're still in the world of Adam Smith here. But once you add debt into the equation, then what you start seeing is people whose demand is lower than someone else's suddenly have the ability to outbid those who have a higher level of demand and a greater ability to pay, and so this turns into a absolute warp of the demand process that completely eliminates the efficiencies of capitalism.

We're not talking about crony capitalism here. We're not talking about the fact that there are favored parties and disfavored parties and that sort thing. We're simply talking about the fact that you have the ability to spend resources you don't have to outbid people who have more resources than you today is intrinsically introducing a level of inefficiency and a level of market misinformation that did not exist before.

Let me back up for a second. One of the problems with communism was the fact that it destroyed the information that is provided to everyone by the market, it destroyed the pricing mechanism, but if you think about it, debt does exactly the same thing! It destroys the pricing information,  and if you look at the situation that we're in now where you have the elimination of contract law and you have the elimination of accountability and contracts and the basic ability to reliably buy and sell - you know you can be working with Pay Pal one day and the very next day, even though you've met your obligations and you've paid what you're supposed to pay and then suddenly it's gone - well how can you build a business based on that kind of unreliable information foundation? You can't....

What is our economy fundamentally built on? It's not debt, if you think about it. What is our economy fundamentally built on? We know it's not built on labor. What do we spend all kinds of money on trying to convince people to do? What our entire economy is built on is sales and contracts. It is entirely built upon talking somebody into agreeing to something, the whole concept of exchange. Rational capitalism is based on the idea that all exchanges are to the benefit of the person exchanging, but we know that's not true, we know that's false.

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205 Comments:

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Blogger John Best. November 17, 2018 9:05 AM  

My cousin was scammed the other week, it was a voluntary transaction, however they were pretending to be her bank when they weren't. In economic terms if was voluntary exchange. They got away £120 I bet they were disappointed.

Blogger SupersonicG November 17, 2018 9:15 AM  

Ban usury, use honest weights and measures, don't do business with heathens or Baal worshipers.

Blogger pyrrhus November 17, 2018 9:20 AM  

Austrians understand that an economy based on expanding amounts of debt will always crash when the debt can no longer be expanded..Its curious, then, that they haven't thought about the problems created by consumer debt, and worst of all, financialized consumer debt, which was the cause of the 2008 meltdown.
Dmitri Orlov and many others have written about the chaos caused by our system...

Blogger Jack November 17, 2018 9:25 AM  

The liberal notion of "consent" is a very flawed concept, whether applied to sex or to economics. The Devil is perfectly capable of securing consent to a whole host of sins.

Blogger Unknown November 17, 2018 9:30 AM  

Communism and capitalism are two sides of the same shekel. It's about losers becoming "winners" through the looting of labor, whether through expropriation or usury.

Blogger Gastguma November 17, 2018 9:34 AM  

Economic and political systems are only as good as the people who participate in them. There used to be a time when people eschewed both debt and handouts. Now they embrace both. Capitalism is like the Constitution: it only works for a moral and religious people; it is wholly inadequate for any other.

Blogger justaguy November 17, 2018 9:34 AM  

Too many paradigms have morphed over a century of progressive thought and no one dares to think about the basic assumptions behind them. I haven't put much thought into the topic beyonda detailed exploration of Austrian economics and haven't thought if their assumptions are now wrong. Look forward to someone without an agenda in the now to put forward big thoughts.

Blogger Unknown November 17, 2018 9:39 AM  

Gastguma wrote:Capitalism is like the Constitution: it only works for a moral and religious people

Usurious debt works for a moral and religious people? Vox is saying that capitalism is the acceptance of debt, at least from the Rothbardian perspective. And from that perspective, the more economic activity under capitalism, the more debt - debt becomes massive. Perhaps a moral and religious person can refrain from getting hooked on heroin when giant quantities of heroin are being injected into his veins, but it isn't likely.

Blogger John November 17, 2018 9:45 AM  

Interesting Darkstream.

I'm quickly coming to the conclusion that when it comes to anything invented by men...it really just depends. Capitalism can be good. It also can be bad. A system of voluntary exchange can be good. It also can be bad. A system of loaning money to entrepreneurs can be good. It can also be bad.

Maybe capitalism within a Christian community can be good. But that doesn't necessarily mean it'll also be good when extended to unbelievers, xenos, Christian LARPers...or even to the neighboring Christian city.

Maybe the progressive-SJWs were right all along about "who, whom?"

One of the big lessons we've learned is that not even game theory can save a system design...if the wrong people are playing. Maybe the best game theory can do is help keep the right people on the straight and narrow.

But there is no law for the lawless. All the talk about divine vengeance in Romans 13 is starting to make a lot more sense. Are "legal rights" really anything more than just evolved customs meant to serve the maintenance of good order within a Christian nation? That would help explain why we don't see them in operation anywhere except Christendom, and why they no longer exist in Post-Christendom.

Lately I've also been getting the idea that the USA didn't drive off a cliff in 1965. It drove off the cliff in 1790. 1965 was simply the year the country smashed into the ground. I mean, the Romans waited seven centuries before granting citizenship to all free (white) persons. This could help explain why America's imperial cycle seems to be so accelerated.

Blogger Lauri Stark November 17, 2018 9:50 AM  

One point that came up during the stream was the "not real X" -argument. It is a convenient excuse to not look at the foundational aspects of your ideology. Like the commies saying, it's not the theory but the application. It's not actually too uncommon to even hear from non-commies that "communism was a beautiful ideology that just doesn't work", when in fact it's an ugly philosophy in every way.

My question about capitalism is that, are big corporations and monopolies an inevitable outcome of capitalism. Does it lead to a centralization of power in the same way as communism does. Then the difference comes down to who gains that power, multinational corporations or multinational empire-states.

Blogger The Depolrable Podunk Ken Ramsey November 17, 2018 9:59 AM  

We can see that wherever we have easy loans or subsidies we develop serious problems. In America the housing, education and health care sectors are victims of this and present yuge problems up and down each sector. It is increasingly impossible for the Average Joe to afford any of these things left to his own means. "Throw more money at it" is the inevitable solution that storms the ballot box, but this only distorts by creating false demand and even higher costs, greater inefficiencies.


And companies cannot seem to resist the allure of California's large markets and deep pockets. They will submit to every crazy demand of the legislature and run roughshod over business interests imperiously. The governments there have scant concept of contractual rights or fair play. To great acclaim from half of the customers there, San Francisco has sued oil companies for selling people oil products in the past, even though it was legal, as an example of the latest madness. If you want to do business in California and increasingly elsewhere in America you've got to estimate how much the government is going to swoop in and stick you for.

A famous case was Microsoft who got hauled up before the apparatchiks in DC. Everybody laughed in amazement when it was discovered at the time that Microsoft had zero lobbyists. "The rubes!" they chortled at cocktail parties in Georgetown, "Don't they know how business works?" What naivety to assume that anybody could slip by without paying protection money!

Blogger Jack (LJCSOGHMOMAS) November 17, 2018 9:59 AM  

I think a big part of the reason capitalism "worked," for a time, in America is that it was mitigated by Christian morality and the high trust nature of northern European societies. If you look at a civilization like China, which is high IQ but low trust, you see that capitalism becomes the means whereby people rip each other off left and right. There has to be a recognition of a moral order to life.

In line with this, in my opinion the Right needs to have a position on usury. E. Michael Jones calls the American economic system "state-sponsored usury." That certainly fits what happened in 2008.

Blogger tweell November 17, 2018 10:06 AM  

Our lord said to not lend at interest, to not require more back than was borrowed. He also said to pay any sum borrowed back to the last penny. So, good Christians shouldn't engage in usury or bankruptcy.
This behavior would make the signals of capitalism, such as pricing versus abundance, work much better.

Anonymous Anonymous November 17, 2018 10:08 AM  

every market is built on exchange. that's not simply true of 'Capitalism', but of every economic system.

otherwise you don't have an economic system or division of Labor or specialization in Production. even if you're simply giving away your excess production, you're still nominally receiving Goodwill 'in Exchange' for it.

i do agree with this though:
"What our entire economy is built on is sales and contracts. It is entirely built upon talking somebody into agreeing to something"

it's just that almost all of our modern economy revolves around roping We the Cattle into various and multitudinous forms of indenture.


also agreed:
"Rational capitalism is based on the idea that all exchanges are to the benefit of the person exchanging, but we know that's not true, we know that's false."

i don't know how it is in Italy, but i'm getting upwards of a dozen robocalls PER DAY on my cell phone some days. trying to sell me on refinancing my student loan ( which i paid off 20 years ago ) or extending the warranty on my vehicle or health insurance sign ups etc.

the common feature for every single one of these sales gimmicks is the recurring monthly billing, for a product which provides little to no positive benefit in my life ... especially if i try to exercise the benefit clauses on something like an extended warranty.

there is obviously a great deal of profit in making billions of robocalls for the <1% chance that some old, senile dowager will pick up the phone and decide that X sounds like a good idea today.


getting five calls from 'Ann' with her chance to sign up for health insurance and three more calls from a 'last chance' vehicle extended warranty in the same day gets a bit aggravating.

and they're spoofing random phone numbers and area codes, so you can't even simply block the number.

Blogger Zaklog the Great November 17, 2018 10:09 AM  

I've picked this up from Stefan Molyneux, but debt does not, in itself, destroy the pricing mechanism. It's government-manipulated debt. This is because, in a free market, debt, in itself, has a price, interest. And this price, again, in an unmanipulated market, is based on how much is saved up at any given point, how likely any given buyer is to repay, etc.

The problem with debt today is that the banks have enormous political power and have warped the system so that the "price" of debt is entirely arbitrary.

Now, I think debt is an evil, on the whole. But it is not as bad an evil, in a free market, as it is when run by the Federal Reserve, the IMF, etc.

Blogger Sam November 17, 2018 10:20 AM  

Yes, if you let people acquire debt, they will go into debt to acquire more expensive status goods to compete with each other. The solution is to prevent most people from borrowing money and/or harsh punishments for failure to repay- typically this ends up as some form of serfdom.

@9
Welcome to reaction. If you haven't read Spandrell's posts on Bioleninism (or why democracy is innately horrible), give it a shot.

@10
Capitalism is a means to create wealth. However, capitalists don't create wealth because they love humanity- they do it because they want wealth and power. What you get is some combination of two outcomes- capitalists use their wealth to join the elite (in the past buying estates and marrying noble women, now creating NGOs to spread the leftist creed) and capitalists use their position to dismantle capitalism (because competition is good for society but bad for them).

If the ruler is strong, this won't be a problem because capitalists doing that will be smacked down. When different factions are competing for power , letting capitalists dismantle capitalism will be one of the promises give to get more funds for their war chest.

Large companies are inevitable, but the firms we see aren't. Think about how Disney managed to destroy the Star Wars brand. That isn't the mark of a firm trying to make money, but one following political directives off a cliff.

Blogger wreckage November 17, 2018 10:21 AM  

Well, debt has a price and that factors in the expectation of repayment. But what happens when repayment becomes optional? Or what happens when the super-new, super-shiny idea of voiding contracts on a whim makes contact with the antimatter of contractually enforced debt repayments?

Crony capitalism isn't capitalism. Consider: it grows in lockstep with SJWism. It is a system of determining who may and who may not benefit from the economy. It's the corrupt market shadow cast by every socialistic system.

I don't consider this a refutation of Vox's point. I think he might underestimate the degree to which the modern economy represents a fundamental transformation of the traditional economy.... the one that was not an "ism" at all, but an outcome, a side-effect, of the application and protection of the Rights of Englishmen.

Blogger Hammerli 280 November 17, 2018 10:26 AM  

I think this comes down to something even more basic.

There are things more important than a damn dollar bill.

The plutocrat wing of the GOP has favored business activity over everything else. They would cheerfully concede social and cultural issues to the Left, just as long as they kept making money. Precisely the sort of people of whom Lenin said, "When it's time to hang the last capitalist, he will sell us the rope."

If we want to win, we need to have something better than greed to offer.

Blogger VD November 17, 2018 10:26 AM  

I've picked this up from Stefan Molyneux, but debt does not, in itself, destroy the pricing mechanism.

You are completely and totally wrong. As is Stefan. Step through your own logic and you should be able to see where you go wrong.

Anonymous Anonymous November 17, 2018 10:28 AM  

2. dumnonia-watchman November 17, 2018 9:15 AM
Ban usury, use honest weights and measures, don't do business with heathens or Baal worshipers.


yes, there actually are Biblical directives with regards to how the Social Economy should function.

and the Usurers hate, Hate, HATE it.


5. Up from the pond November 17, 2018 9:30 AM
Communism and capitalism are two sides of the same shekel. It's about losers becoming "winners" through the looting of labor, whether through expropriation or usury.



you're confusing Capitalism with Usury.

because you're confusing Capital with Debt.

which is a common lie in our modern society. but the fact that almost everyone repeats a Lie ( look how wonderful the Emperor's new clothes are ) doesn't make it True.

the relevant portion of the Darkstream here is where Vox is talking about how Debt permits someone with both LESS DEMAND and LESS CAPITAL to outbid someone who actually NEEDS a Product / Service and who actually has more Capital.

and they can do this because there is no functional difference between Currency derived from Debt and Currency derived from Excess Production.

in the Real World, such a situation could never arise. in the Debt world, the Bankstas can simply fabricate billions in new fiat currency and loan it out to Speculators who corner the market and then sell to those in actual Need for grossly inflated prices.

the Wall Street robo-trading systems which front run all stock transactions nowadays are another example of this.

Blogger John November 17, 2018 10:29 AM  

I think people would still lend money to entrepreneurs even if it was illegal to charge interest, it would just eliminate risky ventures.

The whole idea that people would "consume everything now" if the future value of money was the same as the present value of money is laughably silly. I have a lot of savings even though I know my future money will be worth LESS.

When you're not worrying about ROI, that doesn't mean nobody will invest. It just means you'll be investing for different reasons.

Blogger Lauri Stark November 17, 2018 10:32 AM  

@Sam:

What you get is some combination of two outcomes- capitalists use their wealth to join the elite (in the past buying estates and marrying noble women, now creating NGOs to spread the leftist creed) and capitalists use their position to dismantle capitalism (because competition is good for society but bad for them).

That's the classic "capitalism for the poor and socialism for the rich" -scenario. Banks and corporations will bail themselves out while the masses pay the price. And one point comes to my mind also: what the fuck is private sector anymore? The governments and the corporations are so much intertwined that there is no telling them apart. It's one fucking Leviathan.

Blogger InformationMerchant November 17, 2018 10:35 AM  

These kinds of Darkstreams are always interesting, they also manage to bring out a certain response from the chat which ends up in you playing whack-a-mole. I tend not to think about the Darkstream audience until one of these streams shows up and reminds me there are people there purely for conclusions, people there for ideas, people there to debate you, etc.

The problem with the crowd that will try to head you off before you even get to your thesis or in this case even describing the points you want to be sure of before using those points as a foundation for all future economic ideas is, they do manage to derail things pretty heavily.

It's so difficult to analyze the debt point because the pros and cons are massive. A requirement for so many vital things vs a requirement for some of the most catastrophic. I'm not sure how to compare insane housing bubbles to someone being able to buy the tools they need to work without having to get a different job for 6 months just to buy the things they need to do the job they're trying to do now.

The voluntary exchange point can at least be explored a little easier. Like debt, risk/reward is inherently part of this system. If everything had a 100% refund guarantee for life, the risk/reward part goes out the window.

It's a pity Darkstreams don't go on for hours, it'd have been nice to hear you expand on the topic. I've seen video game tests for private property vs communism but never of a sophisticated debt system vs no interest on loans.

Blogger Lauri Stark November 17, 2018 10:36 AM  

@Hammerli280:

That missing part is the christian foundation. Without it, everything falls apart eventually. Everything regresses to the nearest vice. So whatever virtues capitalism has, it will regress into greed. Whatever virtues socialism has, it will regress into envy. Whatever virtues nationalism has, it will regress into pride.

Blogger Al K. Annossow November 17, 2018 10:36 AM  

OK, let's question an assumption ...

Scenario 1:
Your wife shopped on Monday. Your face appears at the store entrance at 5:30 PM on Wednesday. Based on past family history of purchase quantities and usage, the store raises the price of the items you likely came to pick up on the way home from work. Predatory pricing on a micro level.

Scenario 2:
Based on past history of purchases acrosss many platforms, AI generated custom advertisements (custom extended to showing you using the potential product) become so effective that they essentially create an unfair advantage to the seller. Likewise while buying a car, computer monitoring of your expressions, movements, and temperature cause willingness-to-buy evaluations to flash on whichever screen is behind you to tell even the inexperienced salesman how to adjust the sales pitch. And along with the music, background noise, and wall decorations, the temperature and scent of the air is adjusted. The adjustments also take into account the choices you made while watching movies and playing video games.

Rhetorical but valid question: Is there some point at which transactions stop being based on the buyer's free will?

Blogger Lauri Stark November 17, 2018 10:41 AM  

@23: It's a pity Darkstreams don't go on for hours, it'd have been nice to hear you expand on the topic.

This was indeed an intresting darkstream. Maybe there will be a voxiversity on the subject?

Blogger SupersonicG November 17, 2018 10:45 AM  

@20, Bob, yes they hate it, they hate us, they covet the whole world, they hate Jehovah.

I'd be interested to hear views on what impact the jubilee rules on debts would have on debt distorting the pricing mechanism.

Having read David Graeber's history of debt, it is clear that money itself is debt and always has been, just an idea in one's head of what one is owed, converted into some random 'thing', whether the money is whales' teeth, tally sticks, wampum, horses, gold, paper, or virtual digits. Barter never existed within communities, only 'out on the road' as it were.

So, vital to keep the unit of account stable, hence the euro is a great leap forward for mankind I think.

Blogger The Remnant November 17, 2018 10:45 AM  

It's also worth remembering that the Communist Manifesto praises unrestrained capitalism as stripping society of all familial, religious, historic, and sentimental connections among people. When man is reduced to a mere economic being, the path is wide open to socialism and then communism.

Anonymous Anonymous November 17, 2018 10:48 AM  

If debt allows low demanders to bid up prices then the higher demanders, or at keast a proportion of these, who would have done something productive with the thing being bid on, will not be able to do so.

Therefore debt is not only polluting the price signals, it is actively reducing output.

The curious thing is that this makes debt exactly the same as money printing, one of the most precious bugbears of the libertarians.

I was taught that self-contradiction is a sign that means you’re at least half wrong.

Blogger rotekz November 17, 2018 10:48 AM  

The book 'Barren Metal - A History of Capitalism as the Conflict Between Labor And Usury' by E. Michael Jones looks to cover this ground. It's a bit pricey but on order anyways...

http://www.culturewars.com/Reviews/BarrenMetal.htm

Anonymous Anonymous November 17, 2018 10:52 AM  

@dumnonia-watchman

Re jubilee, the 50 years is pertinent because it is shorter than the human lifespan. Note that there’s a known 70 year cycle in economic history.

So it would prevent the banksters from fostering myths about ruination if debt is written off, because there’s always people alive who remember the last one.

Blogger SciVo November 17, 2018 10:53 AM  

If you want to talk about fundamentally rethinking principles, how about anti-revolutionism? I'm a descendant of the American Revolution, and I see the greatest evil of postmodern times as the American Counter-Revolution of the stool of socialism and its three anti-democratic legs: kritarchy, technocracy, and thuggery.

So I look at something like Angelo Codevilla's article on revolutionary logic and I think, so? What is the problem here? The ratcheting is absolutely necessary from our perspective, because what drives it is the left's Who/Whom delusion in which our verbal heresy is scary dangerous violence, and their physical assaults are necessary re-education. So our rational tit-for-tat will necessarily drive their schizophrenic escalation, and the only alternative is surrender and submission to history's greatest monsters, which would only lead us to the "peace" of the mass grave.

But there is no faster way to get deplatformed than to be a white man engaging in even the most mild, theoretical, philosophical discussion of when violence is and is not righteous. They will let us have our Rudyard Kipling poems while anti-Westerners are allowed assault & battery. And there is an irony there, which is that they have made their fears inevitable by effectively removing every possible avenue for anyone to talk down an American nationalist who has become convinced that violence is necessary.

Literally, it cannot even happen here. I'm fairly certain that the discussion itself would get this place nuked by Google.

Anyway, had to get that off my chest, now to watch the rest of the stream.

Anonymous Anonymous November 17, 2018 10:55 AM  

just because Marx said something doesn't make it True.

Marx asserting some hypothetical is actually a pretty good indication that it's False.

as a for instance, Marx asserts in the Manifesto that it is commonplace for Husbands in Capitalist Societies to prostitute their Wives out to other Men.

now, i'm certain that this actually does happen. ON OCCASION.

but is it True in any general sense? were Victorian Husbands regularly sending their Wives out to prostitute themselves? or was such a thing Scandalous and deserving of Social rebuke if not Arrest and Prosecution?

Blogger VD November 17, 2018 10:55 AM  

Therefore debt is not only polluting the price signals, it is actively reducing output.

This really isn't that hard. It's astonishing how many people don't grasp that.

Blogger peacefulposter November 17, 2018 10:57 AM  

Speaking of debt, the US corporate bond market is looking very shaky at the moment. Huge, so-called "blue chip" companies like General Electric are looking very vulnerable. The GE stock price has obviously been in steady decline, but their bonds have also started to fall significantly in price over the last few weeks.

If the US corporate bond market implodes, look out.

Blogger Fozzy Bear November 17, 2018 11:05 AM  

@27 From what I read many years ago, credit would dry up almost completely in the years leading to a jubilee, then would immediately be free and easy again as all the hoarded capital was loaned out. I see bankruptcy as a modern version of the jubilee. Instead of everybody's credit tightening for several years before, the bankrupt sees their credit dry up for a few years after.

Blogger Yordan Yordanov November 17, 2018 11:09 AM  

I think when speaking of Western Wealth - in general - people are often forgetting that The West didn't become rich 20 years ago. It's been rich since the 17th century. This comes often when talking about "Our Liberal Democracies".

The wealth started being build during times of massive protectionism and corporate monopolies, such as the "East India Company". Adam Smith didn't write his work in the poorest country on Earth (at the time), neither did Rothbard.

There is something to be said about Velocity, that is often forgotten.

Anonymous Anonymous November 17, 2018 11:09 AM  

it's actively reducing SOME outputs.

it's artificially inflating other outputs due to the False Demand signal provided by free and easy Debt.

hence, McMansions.

http://mcmansionhell.com/

Blogger Gastguma November 17, 2018 11:09 AM  

Up from the pond:

"Usurious debt works for a moral and religious people? Vox is saying that capitalism is the acceptance of debt, at least from the Rothbardian perspective. And from that perspective, the more economic activity under capitalism, the more debt - debt becomes massive. Perhaps a moral and religious person can refrain from getting hooked on heroin when giant quantities of heroin are being injected into his veins, but it isn't likely.


Capitalism at least requires private property and voluntary exchange. I'm not convinced either of these requires debt, never mind usurious debt. This raises the question of what Captialism is, and to what extent it requires usury or debt in order to exist. This is a question worth considering.

The Christian morality obviously considers indebtedness a condition to be avoided and condemns taking advantage others. My point is that a system where these things are possible will only work if there is another barrier which limits them, i.e., Christian morality.

Blogger Gen. Kong November 17, 2018 11:12 AM  

In this darkstream, Vox did followed through on what he mentioned on Alex Jones: Questioned a long-held assumption of the so-called right (the left doesn't seriously question it either, but that's another subject). Such questioning typically triggers a lot of stupid responses. If you want to see another example, take a look at the latest from the Saker. The boomertards are having a meltdown and behaving like SJWs. He really didn't say anything that hadn't been said eight decades before by Smedley Butler. Ironically, the observations of Butler and Saker actually disprove Saker's own anti-nationalist argument, which strikes me a reactive to Soros' backing of Ukraianian nationalists and Anglo imperialism (hence the "Anglo-Zionist Empire", despite the British Empire having been on the garbage heap of history for some time now). Nationalists aren't the same as imperialists (which is merely another skin of globalism).

Blogger GM November 17, 2018 11:17 AM  

"Debt" is not a unitary phenomenon.

A government liability is a voucher to escape a tax, fee, or fine imposed by the sovereign authority. Some pay interest, some do not (none should).

A loan is the agreement that frames a temporary transfer of property. It can be non-recourse (if the transferred property is not returned, the agreement specifies what other property must be supplied in its place) or full recourse (the borrower is personally liable for return of the transferred property, i.e. the agreement terminates in a person, not other property).

Full recourse loans are what is meant by usury. Usury is always immoral.

See Zippy Catholic on usury. He helped me to understand these distinctions:

https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/

I have to think on whether private non-usurious lending distorts pricing the way Vox suggests. Or whether it is just interest on sovereign debt and bank liabilities (whether usurious or non-usurious) that does the distorting.

Blogger SirHamster November 17, 2018 11:20 AM  

bob kuk mando ( the Chortler's chortler ) wrote:you're confusing Capitalism with Usury.

because you're confusing Capital with Debt.


Speaking of usury and debt, those are separate things. Any sort of borrowing/lending creates debt. But not all debt has interest, and usury is defined as "the lending of money with an interest charge for its use".

Of extra interest here is that according to Zippy Catholic, usury in a Biblical sense is more specific than charging interest. It is charging interest with the borrower as collateral.

Other types of lending make specific property the collateral. So when you fail to pay your mortgage loan, the lender claims your house. That's that, they don't get to claim your car and your stuff and make you a slave.

But something like student loans, where the lender can't claim your education? Where bankruptcy has been removed as an option? The person is claimed as a debt slave.

The specific broken mechanic here is that charging interest makes it possible for the debt to grow, and a growing debt can grow beyond certain individuals ability to repay. With any other type of lending, the growing debt can be terminated by giving up the collateral.

With usury, you can't, so you end up a slave. The practice of usury creates perpetual slavery, and it is profitable to use those profits to "recruit" more slaves to get more profits to get more slaves to ...


Trying to get at the core problem, I think usury is the problem of making it profitable to trade social capital for financial capital. Social capital stripmining ensues.

Blogger SirHamster November 17, 2018 11:27 AM  

The end-state of social capital stripmining is Babylon, where the love of Money exceeds love of God, brother, or neighbor.

That which God promises to destroy.

Blogger tweell November 17, 2018 11:30 AM  

“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.”

― Norm Franz, Money & Wealth in the New Millennium: A Prophetic Guide to the New World Economic Order

Blogger Ominous Cowherd November 17, 2018 11:34 AM  

tweell wrote:Our lord said to not lend at interest, to not require more back than was borrowed.

Chapter and verse, please?

I let you rent my house, I want some rent and I want the house returned at the end. I let you rent my money, I want some rent and I want the money returned at the end. There is no difference. Using the money to buy a house doesn't change usery to not-usery.

Compound interest might be what you are against? Or maybe you are against making the person surety for the debt? Or do you really want to ban rentals?

Anonymous Anonymous November 17, 2018 11:41 AM  

The text has already been referenced about banning usury and using only honest weights and measures. Few consider how these are different aspects of the same thing; if I borrow X but must repay Y then one of us is not using an honest measure, because that would entail paying back only what was borrowed. It’s easier to see this when you ponder a barter economy in which coinage is relatively rare; if I borrow your coat you probably won’t be happy if I try to repay you with a used sandal. Bankers want me to repay a whole suit. Neither is honest.

Blogger D E K November 17, 2018 11:42 AM  

I think that Vox has a valid point: free will transaction can't be all there is to an ideal environment. There is the example of the sales trainer with the knife set. As a salesperson you don't hesitate to sell it to poor persons, because the poor guy will be better off bu spending all his money for the expensive knife set. After all he will have a knife set and hasn't spend his money on horses, alcohol and drugs.
After giving it some thought I come to the conclusion that the free will transaction is the only good economic requirement, but the it works the best with morale and good people. The circle closes once again to a good Christian society. The salesperson for the knive set would not have sold the knives to the poor guy, but would helped out the guy with others.
If we take the free will to an absurd example it shows Vox valid point. A person with down syndrome would be up for sex with a slime ball, but it is obvious at the least not moral to do so.
Would be glad to hear more of Vox mind to that.

Anonymous Anonymous November 17, 2018 11:45 AM  

Trying to get at the core problem, I think usury is the problem of making it profitable to trade social capital for financial capital. Social capital stripmining ensues.

Before we talk about social capital we should agree on what we mean by capital, because adding social to justice means not justice.

The auguries are not good.

Blogger SciVo November 17, 2018 11:46 AM  

Vox Day spoke:I've seen a number of authors -- better authors than me, more talented writers than me -- lose their ability to write, lose their desire to write, simply because they didn't meet the kind of success that they reasonably expected.

You know, I think it's very difficult for a lot of people -- especially those that have a big success with their first book -- I think it's tremendously difficult to accept the fact that their second book is not going to do anywhere nearly as well. It's very very rare to have a big hit; it is even more rare to successfully follow that up with anything that is better than an order of magnitude less.


Well, the "sophomore slump" is just reversion to the mean. In order to do well compared to everyone else, even the great talent must've rolled the dice high by his own standards, so his next roll will probably be much lower. A good pedagogy of statistics would likely reduce the culture of narcissism.

Blogger Quadko November 17, 2018 11:55 AM  

I think freedom, a Christian Godly freedom, is the underlying thread in history and across successful human endeavors. When freedoms succeeds in economics, politics, society, we get good things like the best of capitalism, democratic republics, free enterprise. When freedom is impinged it becomes crony capitalism or central economies.

Anarchy or "'do what you will' is the whole of the law" after some thought isn't freedom, it's a corruption of power in a lying guise of freedom. Maximizing freedom for the individual and the group and reducing all the inefficiencies of centralizing and growing power divides the good and bad paths from each other even when people call them by the same names - capitalism, democracy.

Blogger SirHamster November 17, 2018 11:55 AM  

Resident Moron™ wrote:Before we talk about social capital we should agree on what we mean by capital, because adding social to justice means not justice.

Capital - "Wealth in the form of money or property, used or accumulated in a business by a person, partnership, or corporation."

Social capital isn't money or property. Has something to do with community and trust. Hi trust society has social capital that a low trust one does not.

The decline of America's social institution is linked to the loss of social capital, which has to do with the uprooting and free movement of people with resulting loss of communal unity.

Blogger SciVo November 17, 2018 11:57 AM  

Resident Moron™ wrote:Before we talk about social capital we should agree on what we mean by capital, because adding social to justice means not justice.

I cannot speak for anyone else, but when I say "capital" I mean the means of economic production, and when I say "social capital" I mean the means of civilization production.

For example, family X has deep roots in community Y and uses its wealth to sponsor youth programs in activity Z, which develops talents in people that frankly might otherwise not be so well suited to participate in their own society. And so "everyone knows" that young Mr. X is likely to be eucivilizational, and he strives to meet those expectations.

Blogger tweell November 17, 2018 11:58 AM  

Matthew 5:42
Give to him that asketh thee, and from him that would borrow of thee turn not thou away.
Psalm 15:5
He that putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these things shall never be moved.
Psalm 37:21
The wicked borroweth, and payeth not again: but the righteous sheweth mercy, and giveth.
Proverbs 22:7
The rich ruleth over the poor, and the borrower is servant to the lender.

Blogger VFM 4388 November 17, 2018 12:06 PM  

The texts against usury do specify ingroup preference -- don't lend at interest to a brother. The Theocracy of Israel was not permited usury internally, but not forbidden to use it in their interactions with foreigners. Presumably, then, a functional nation bans usury for its nationals, and Christians shouldn't lend at interest to Christians.

Of course, if you permit foreigners to lend money in your country, that's an issue and a half on its own.

Blogger tweell November 17, 2018 12:11 PM  

Deuteronomy 23:19
Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:
- My Note: Usury was permitted to strangers in this section, but Christ expanded on this by saying that all that follow him are essentially family.
Proverbs 28:8
He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor.
- My understanding of this (as a human and sinner): Sometimes you may have to borrow, but do it as little as possible. Lending should likewise be rare, and interest on that lending should be as little as possible.

Anonymous Anonymous November 17, 2018 12:12 PM  

@SciVo

Thanks.

Perhaps an unfortunate choice of terms.

Blogger maniacprovost November 17, 2018 12:12 PM  

What WSJ Republicans call "Capitalism" is a hodge podge of different things.

I prefer what I think is the oldest and most precise definition of capitalism: the phenomenon whereby capital accumulates exponentially, concentrating power in the hands of the capitalists.

Free markets do not necessarily involve capital, or if they do they don't necessarily lean toward that definition of capitalism. There are several other factors that can overwhelm the effects of "Capitalism," depending on circumstances. Technological progress is one, because it creates new sources of capital and obsoletes old ones.

The second comment I have is on something Vox addressed- the inefficiencies that exist in the market due to debt, stupidity, ignorance, sin, etc. The WSJ types like to pretend that the market is perfectly efficient. We know that's not true. It's just that economists have apparently decided not to study and quantify the sources of inefficiency like irrationality, imperfect knowledge, misinformation, etc.

Blogger maniacprovost November 17, 2018 12:21 PM  

I missed my own followup which is this: The free market is inefficient, but in order to substitute something else, like protectionist trade policies, you need to understand the source of the inefficiency and how your solution addresses it.

In the case of Chinese consumer goods we think we have some understanding of how the inefficiency works: consumers purchase based on price, not total cost, and certainly not on cost of production. Skewed capital markets result in lower gross margins on Chinese goods. The perceived value is also skewed by a combination of haphazard quality and big box display skills.

Blogger SciVo November 17, 2018 12:36 PM  

maniacprovost wrote:The second comment I have is on something Vox addressed- the inefficiencies that exist in the market due to debt, stupidity, ignorance, sin, etc. The WSJ types like to pretend that the market is perfectly efficient. We know that's not true. It's just that economists have apparently decided not to study and quantify the sources of inefficiency like irrationality, imperfect knowledge, misinformation, etc.

That study exists, but the establishment right has no interest in it. One of the things that Obama did right was to elevate behavioral economists, who make simple observations like "uh, you know, you can get more of a thing without the social violence of mandating it per se if you just make it opt-out instead of opt-in." And they're not wrong, but it's a shame that he used them in the service of unfreedom.

Blogger Doktor Jeep November 17, 2018 12:48 PM  

Can't help but notice our billionaires, almost all of them except for Trump, funding socialism, degeneracy, gun control, and open borders.
Can't help but notice how free speech has been used to destroy freedom.

Yeah, I'm ready to re-think. Because I have been. For years now. Hoppe's "physical removal" comes to mind or as we say, "Libertarian social order will not be achieved with libertarianism".

Blogger James Dixon November 17, 2018 12:52 PM  

> My question about capitalism is that, are big corporations and monopolies an inevitable outcome of capitalism.

Interesting question. Corporations as we know then are government created entities, so I'd have to argue the answer there is no. Without the limited liability governments confer, I don't think giant corporations would exist.

Monopolies, otoh, I think are. At least within a limited geographical area.

> Our lord said to not lend at interest, to not require more back than was borrowed. He also said to pay any sum borrowed back to the last penny. So, good Christians shouldn't engage in usury or bankruptcy.

That assumes a sound currency, which fiat money most assuredly isn't. You have to at least account for inflation in your debt payments.

The system he espoused also had periodic forgiveness of debts, so I think it would be hard to argue that forgiving debts in non-Christian.

> There are things more important than a damn dollar bill.

"For the love of money is the root of all evil." 1 Timothy 6:10

> That missing part is the christian foundation.

Yep.

> I'm not convinced either of these requires debt, never mind usurious debt.

And what exactly defines debt versus usurious debt? That's something we're going to have to define eventually. I don't know of any biblical standard we can use. Does anyone else?

> Full recourse loans are what is meant by usury. Usury is always immoral.

Ah, ask a question and get an answer before it's even asked. I'll have to think about this.

Blogger Ominous Cowherd November 17, 2018 12:53 PM  

tweell wrote:Matthew 5:42
Psalm 15:5
Psalm 37:21
Proverbs 22:7


I see nothing there which prohibits charging rent, for money-as-gold or for money-as-house.

If we talk about economic systems, we're just avoiding the real issues. The economic system you wind up with is driven by culture, which is driven by race and relationship with God.

High trust, governable, smart, Christian races are likely to wind up with mostly free markets - because individuals annd families can govern themselves, they don't require a tyrant to maintain order. E.g., England in the time of Adam Smith.
Low trust, governable, smart races with no connection to God are going to end up with mostly centrally planned economies - since they cannot restrain themselves, eventually a tyrant will impose order. E.g., China today.
Low trust, stupid, violent, impulsive races with no connection to God will have economic activity alternating between autarchy and theft - with capacity for neither self restraint nor external restraint, they are going to wind up living in squabbling tribal groups like packs of baboons. E.g., Somalia.

Like culture, economic systems are a racial construct.

Blogger justaguy November 17, 2018 12:53 PM  

There is so much paternalism going on here that this sounds almost like Vox, not VD. Some people are too stupid to know what is best for them -- their better will have to think for them. The Left is full of starting at that point and filling piety on piety until you get Mao or Che, for your own good of course.

As for biblical usury and such guides- I think we should stick to the New Testament and not try to become Pharisees applying the Law. But that is my own theology. Rules that work for a moral/Christian people can be different than ones for amoral society. I don't think we have fully transitioned from rules and morals for an intelligent Christian vast majority White homogeneous population (think 1880 and earlier with all of the great awakenings) and what we have now which is a very now mixed different and lower IQ population that is certainly not Christian in main or in law. Remember Presidents like Wilson despised the constitution and tried their best to destroy it (when were all the big amendments?) long before Roosevelt, Kennedy and Obama. What amendments did they have added? YMMV.

Blogger Chesapean November 17, 2018 12:54 PM  

RE: "What I realized that we need to do is we need to fundamentally question our assumptions and ideals..."

OK, I'm looking for help with the concept of nations.

It seems obvious to me that humanity self-organizes by family, clan and nation, but only family and clan have unambiguous biological definitions. If a geographical territory contains biologically distinct groups of people who don't freely intermarry, can it be a nation? Are nations _only_ or _purely_ political organizations?

If someone asks you, What is a nation? how do you answer?

Blogger Doktor Jeep November 17, 2018 12:54 PM  

Oh and I should add, and this if for you Vox. I follow your ideas and I also listen to Alex Jones and I see that Jones clings harder to the "muh democracy" and "muh diversity" concepts a little harder than most. What I'm getting at is, there needs to be a debate about this, about demography and identity. And I would like to recommend that it happens with you, Jones, and a few others on the right side of "the right".

And I think it needs to be pushed, hard, and it needs to happen soon. Because if it does not, there will still be a debate: but instead with Richard Spencer, any random stormers, or fake opposition and demagogues. Complete with a ring of mainstream media around them to catch it all in it's deleterious splendor. WE - royal "we" as in our people - need to do this before "they" do it.

And so for that I have hoped, since you have been on Jones' show more often, that this debate would happen. I don't know what I could possibly do to help it happen but if there was anything I could do, please say so. I don't think I'm alone on this - for never having had an original thought in my life anyway.

Blogger SirHamster November 17, 2018 12:55 PM  

Ominous Cowherd wrote:I see nothing there which prohibits charging rent, for money-as-gold or for money-as-house.

Houses are not money. Interest is not rent.

Blogger Behemoth November 17, 2018 1:18 PM  

@Resident Moron™

Except there is no reason to assume that the person winning the bid will not themselves engage in productive activities with the thing being bid on, and so no reason to assume debt reduces output at all. As far as I can tell, the error lies in the assumption that the capacity to take on debt is not, itself, a part of human capital. In a modern sense, we might consider that a credit rating, but more broadly this ties into trustworthiness and the estimated ability to repay.

This entire presumption relies upon the premise that the capacity to debt allows 'whose demand is lower than someone else's suddenly have the ability to outbid those who have a higher level of demand and a greater ability to pay,' but this is simply not true, because the capacity to take on debt is, itself, an ability to pay. It does not warp price signals at all, it is merely part of the price signalling. It can be considered as both part of the overall price as well as a quality itself, IE: the demand is such that individuals of X standing are willing to engage in lines of credit to finance it.

Debt is not, in fact, printing money, either. The issue of printing money is in the debasing of currency. Debt is not the debasing of currency, be it with or without interest, because it's apples and oranges. The issue of printing money is that it reduces the value of the currency already in circulation, causing inflation. Debt is not this at all, its a contractual agreement for repayment, potentailly with interest, of something that was given at an earlier date. It does not inflate the money supply or cause inflation. The an entity with control over a currency that it is contractually obligated to pay in can use that power over inflation to pay off or reduce debts, but that is not an issue with debt, it's an issue with a contract with an entity that controls the stipulated currency. In our modern sense, because the currenct is 'state' controlled and we are restricted in what currencies we MUSt pay in, the state can engage in this behavior.

The capacity for credit and debt quality that can be improved through various means in and of itself, is tied into the very thing Vox correctly states is the basis for this: sales and contracts. Debt is nothing more than itself a form of contract, in which one is exchanging promised capital over time for something else, most likely a thing delivered at the time of the contract being signed.

It's simply wrong to say that debt destroys pricing information, just as it is wrong to say debt warps pricing information. And it would have to be one or the other, either it destroys it, which is present in a planned economic system without markets becuase they have no price signals, or it warps it, which is the issue in situations such as we have with the Fed and fiat currency. But these are not the same, and debt itself has neither issue.

The issue is what Vox has mentioned before, and touched on here too, which is the issue of the breakdown of contract law. Which is itself tied to the debt crises, but as a cause of those crises, because debt as a function of economics in contract law only works when you have actually enforced contract law, and contracts made in good faith. But the very nature of the debt crises is that they were built largely on contracts made in bad faith; the housing crash was a key example of this, created by the perverse incentives that the government created in conjunction with the banks due to Fed insurance, regulation, and bailouts. Student Loans are a similar one, because they are not being made in good faith; they are extending lines of credit to people who have no capacity and would not be granted that credit otherwise, thus creating issues, because the intent has nothing to do with actual repayment.

In short, it's not the debt, it's the contracts.

Blogger SciVo November 17, 2018 1:19 PM  

Chesapean wrote:It seems obvious to me that humanity self-organizes by family, clan and nation, but only family and clan have unambiguous biological definitions. If a geographical territory contains biologically distinct groups of people who don't freely intermarry, can it be a nation? Are nations _only_ or _purely_ political organizations?

No and no. Land is the Country, people is the Nation, and government is the State.

Chesapean wrote:If someone asks you, What is a nation? how do you answer?

A nation is a people, and in fact that is often what Native American tribe names mean; "the Navajo Nation" is basically "the People People." So a nation is a linguistic, genetic, and cultural group. You can tell them at a glance by "I wish he were my brother" or "thank God she isn't my sister because damn."

Blogger VD November 17, 2018 1:23 PM  

There is so much paternalism going on here that this sounds almost like Vox, not VD. Some people are too stupid to know what is best for them -- their better will have to think for them.

Do you believe people should be able to sell legal ownership to their bodies?

Blogger VD November 17, 2018 1:24 PM  

Except there is no reason to assume that the person winning the bid will not themselves engage in productive activities with the thing being bid on, and so no reason to assume debt reduces output at all.

First, you're wrong. Second, you don't understand economic theory or the concept of market equilibrium.

Blogger VD November 17, 2018 1:25 PM  

It's simply wrong to say that debt destroys pricing information, just as it is wrong to say debt warps pricing information.

You are both wrong and ignorant.

In short, it's not the debt, it's the contracts.

Incorrect. Both are serious problems.

Blogger maniacprovost November 17, 2018 2:00 PM  

Observing that people are dumb and their decisions on their own behalf are often dumb, and always economically inefficient, does not imply that someone else should be appointed to make dumb decisions on their behalf.

We are at a point where there are about 6 billion regulations distorting global commerce. Taking away one or modifying another does not necessarily increase or decrease the total quantity of statism/socialism/paternalism.

The whole concept of trying to maximize economic efficiency through free trade or libertarian principles is self-contradictory, because Austrian economics says that your goal is to maximize your own utility. Global utility is entirely subjective and none of your business.

The question, then, is what can we ethically do to help ourselves.

Blogger Matthew November 17, 2018 2:06 PM  

There is nothing about debt that forces the decay of contract law, and there is nothing about debt that destroys pricing information. Communism destroyed pricing information because the State set all production quotas and prices. It destroyed pricing information because there were no prices being defined by the least competent buyer and the most competent non-buyer.

Lending someone money does not destroy pricing information. This is a fundamental misunderstanding of either what debt is, what prices are or quite possibly both. If I add to the effective demand of apples because I buy apples, and then one day I lend a bunch of money to you and cut back on my apple consumption, this reduces effective demand for apples. You, being a fan of bananas, take what I have lent you and buy yourself some delicious yellow fruit, thus increasing the effective demand for bananas.

The result will be downward pressure on apple prices and upward pressure on banana prices. This will lead to more inputs being put into banana production and few into apple production, which will come about because of the change in prices.

This is exactly what the market is supposed to do. The price changes mean something: there is less demand for apples and greater demand for bananas. The market responds to this by reconfiguring inputs for those two fruit products, and it does this precisely because of the change in price.

That's not destroying information from prices, that's the market allocating resources like it always does.

Blogger Sam November 17, 2018 2:14 PM  

There are plenty of people who are too stupid to be allowed to make decisions for themselves. Handing them over to the state is not the answer because the government provides power without responsibility. The traditional method was various legal statuses, cultural and social restrictions and a state church to help enforce them. In short either people in your community, your family or the person in charge of your community made those decisions.

It is mostly academic now because stable organic communities attract the eye of Soros and get muds dumped into them until they die.

Blogger Chesapean November 17, 2018 2:18 PM  

RE: "What is our economy fundamentally built on?"

I have wrestled with this question a lot. For what it's worth the best I can come up with is:

* An economy is based on the cycle of consumption/production that sustains our survival.

* We use money as the instrument to manage the cycle.

* The cycle requires management because of Gresham's Law (bad money drives out good (meaning "good money" or "goods," equivalently)).

At any given instant, there's a totality of money in the world and a corresponding totality of goods. You can think of the money as the price of the goods, and of the goods as the value of the money, both as totalities and as fractions. But the instant in time where the equivalence conceivably occurs is infinitesimally small and unobservable. Also, in the next instant, the equivalence may change: with more, less or the same totality of money standing in relation to more, less or the same totality of goods. This is important because as the totalities change in relation to one another, so do the fractions, affecting our ability to obtain with money the goods we need for our survival.

Along these lines debt would be "bad money" when it inflates the totality of money in relation to the totality of goods.

Blogger Ominous Cowherd November 17, 2018 2:21 PM  

SirHamster wrote:Houses are not money. Interest is not rent.

How does transforming money into house transform interest into rent?

Again, if you want to rent my property, there is no difference between renting the house and renting the pile of gold that buys it.

As others said upthread, usury is not merely charging rent for property. Renting my house doesn't distort price discovery. Renting a ledger entry from a bank in a debt based fiat money system does, and I suspect that's what you are trying to argue against.

Blogger Rory November 17, 2018 2:32 PM  

Vox, are you versed in Islamic banking law at all?

Blogger Mark Stoval November 17, 2018 2:37 PM  

"One popular delusion is that America operates under an economic framework of capitalism. One where businesses, and their finances, are free to succeed and fail based on their economic merits. In reality, America hasn’t had a truly capitalist economy since the 19th century."

https://www.zerohedge.com/news/2018-11-17/intolerable-scourge-fake-capitalism

The above being published just as VD does his post is fortuitous. Take a read.



As an aside:

Much like "anarchy" in the AnCap sense being different than most people understand the word; the idea of "capitalism" and even "money" is distorted by people whom enjoy benefits from the distortion of terms or from total ignorance. Defining terms is important in real thought on hard topics.

While I both agree with parts of the discussion here today, and disagree with parts here today; I think economics is an important topic that VD should revisit often.

Blogger VD November 17, 2018 2:41 PM  

That's not destroying information from prices, that's the market allocating resources like it always does.

Whoosh!

Blogger Matthew November 17, 2018 2:46 PM  

VD: Whoosh!

As stunning a refutation as that was, I'm still going to stick with my point, that debt does not destroy price information. Because it doesn't. For the reasons I gave. Even if we take "Whoosh!" into account.

Nor does it "warp" demand curves. One can only go into debt if someone else goes into credit. One can only spend on credit if someone else saves. There's nothing inherently wrong with that.

Going into debt for consumption is stupid, of course, but this doesn't make the concept of debt an insuperable problem for capitalism.

And just in case you say "Whompf" as a reply, allow me to anticipate that with a "Swish!" of my own.

Blogger Balkan Yankee November 17, 2018 2:50 PM  

Capitalism without failure is like religion without sin.

Blogger maniacprovost November 17, 2018 3:03 PM  

One can only spend on credit if someone else saves.

False.

If Bob offers me $200,000 for a farm, and you offer me $250,000 on an IOU, then the price changed and the outcome changed compared to a debtless society. The only saving that occurred was me saving the farm.

If credit is equally available to everyone, then the entrepreneurs who underestimate their costs or otherwise screw up will tend to get the resources because they will bid higher than competent farmers.

Blogger VD November 17, 2018 3:08 PM  

As stunning a refutation as that was, I'm still going to stick with my point, that debt does not destroy price information.

Stick with it all you like. You're still hopelessly wrong.

Blogger Noah B. November 17, 2018 3:08 PM  

In a debt based money system, the result is always that the average person is a debtor. Sure, you can save up $300,000 in cash to buy a house. But if your competitors are taking out loans to buy houses today, thereby artificially increasing present demand, you may well find that the house you wanted now costs $400,000 by the time you've saved what you thought would be enough. In our debt based money system, a loan isn't simply a reallocation of resources from one market sector to another. It's money conjured out of thin air. This leads to inflated present demand, misallocation of resources into nonproductive assets, and decreased future demand.

Further, because government has taken on the role of propping up lenders, there is strong political motivation to inflate asset prices through monetary expansion. So there are multiple mechanisms by which debt based money warps prices and decreases price stability.

Blogger Francis Parker Yockey November 17, 2018 3:09 PM  

Debt is not, in fact, printing money, either.

https://infogalactic.com/info/Fractional_reserve_banking

See also:

https://infogalactic.com/info/Money_supply

Blogger Rory November 17, 2018 3:10 PM  

Matthew - in you Apple/Banana example, we're assuming the lending there involves interest, yes (otherwise what you're saying is irrelevant)?

Well, what happens to Apple demand when you, with your love for Apples, get the interest you were owed? And what happens to Banana demand when Vox has less money for Bananas coz he paid you the interest?

Anonymous Anonymous November 17, 2018 3:10 PM  

80. Matthew November 17, 2018 2:46 PM
Nor does it "warp" demand curves. One can only go into debt if someone else goes into credit


this is flatly False in a Fractional Reserve lending regime such as we have right now.

if i put up a bankroll of $100,000 and open a Credit Union and then i subsequently issue Debt totaling $900,000 there is $800,000 of newly created Fiat Currency
WHICH HAS NO CAPITAL NOR CREDIT BACKING IT.

Blogger The Course of Empire November 17, 2018 3:11 PM  

This comment has been removed by the author.

Blogger The Course of Empire November 17, 2018 3:12 PM  

The excessively usurious capitalism we have today isn't the capitalism that existed (at least to this degree) back when Adam Smith wrote his work. I recall years ago speaking with one of my history profs who said that there was a school of thought that when Smith spoke of the 'wealth of nations' , it was within the context of the British Empire (which, at that point, still included the American colonies, since his book came out in 1776). At the very least, it would be within the Christian west, as he also spoke (in his second most well known book) of the need for a strongly grounded morality, which (although he wasn't a Christian per se) was greatly founded on Christian ideals (though he also reference Classical Greek and Roman ones, too- regardless, all of it was within the parameters of the western, Christianized ethos). We've veered so far from that to what we have today.

Blogger Matthew November 17, 2018 3:19 PM  

@82

Saving is refraining from consumption. If you lend the money out, you are not consuming with it. If you use it for consumption, then you no longer have it to lend. Therefore, if you lend it you must refrain from spending it. Therefore, one can only borrow if someone else saves.

"If Bob offers me $200,000 for a farm, and you offer me $250,000 on an IOU, then the price changed and the outcome changed compared to a debtless society. The only saving that occurred was me saving the farm."

This does not appear to make any sense. How did you save the farm, exactly? Your example is about selling it, right? And this IOU you speak of is just a payment plan that you worked out with me. What's the problem? Other than that you're an idiot for not getting a bank to accept the risk. Bob offered you $200,000 today, I offered you $250,000 to be paid over a period of... well, whatever terms we come to.

"the price changed and the outcome changed compared to a debtless society"

So what?

"If credit is equally available to everyone, then the entrepreneurs who underestimate their costs or otherwise screw up will tend to get the resources because they will bid higher than competent farmers."

Tape yourself saying that, then watch the tape and see if it strikes you as particularly stupid. You just said that entrepreneurs who underestimate their costs will tend to get the resources. Uh, yeah, for a brief moment in time before they become insolvent.

Again, human stupidity is going to be a part of any system. Someone who is a jackass in the market will be a jackass in the people's republic. Debt itself is not the problem.

Blogger Matthew November 17, 2018 3:21 PM  

@83

Except that I just demonstrated to you why you were wrong and you could only come back with the sound of the wind blowing in your right ear and coming out your left.

Blogger Rory November 17, 2018 3:27 PM  

BTW, since people keep bringing up FRB, and defending Vox's argument by bringing up FRB, can I ask: is Vox's argument invalidated if debt cannot be printed?

My understanding of his argument was that it's deeper than that. That even if a bank has gold coins to lend me to help me purchase something (at a price higher than other bidders), the allowance of interest still perverts prices, since it makes possible a transaction that wouldn't have otherwise happened (and has knock on effects, since I have to find the money from elsewhere to pay back the debt, which means I'm cutting costs elsewhere).

I mean, it's more limited without FRB, but the principle is still the same.

Makes me wonder about alternatives though, which is why I asked about Islamic banking above. They offer schemes that are essentially lease-to-own. You pay monthly, like rent (except you're liable for upkeep, maintenance, bills, etc), and you own the house at the end. It's the opposite of a failed mortgage, where the bank takes the house. They already possess it, and you don't own it until you finish paying the agreed number of rent payments.

Although materially, doesn't it become the same thing? You're not paying "interest", but you're still paying a monthly amount which is the price of the house, plus a bit extra. And the bank only agreed to buy the house because you wanted it. Is there difference maybe that you have an option to walk away if you can't pay, versus interest where you're stuck with it?

Blogger Behemoth November 17, 2018 3:30 PM  

@Francis Parker Yockey
Except that would be something else entirely, namely fractional reserve banking, which is not just 'debt.' It's a specific thing, and some would argue its a form of fraud, but that is its own discussion. All that really matters is that it is not the entire concept of debt that is the issue.

It's a misdiagnosis issue: it's not debt, it's specifically the money regime in place, and the breakdown of contract law.

@VD
I understand both economic theory and market equilibrium, and literally laid out why the assumption was wrong in the post.

Blogger Chesapean November 17, 2018 3:37 PM  

@68. SciVo

RE: "a nation is a linguistic, genetic, and cultural group."

That's the standard definition, or at least one of them. VD, however, recommends questioning our assumptions, and the standard definition of "nation" is on the list.

Language and culture seem to me to be non-rigorous as characteristics that define a nation. An SJW recently told me that America is a melting-pot nation because everyone here speaks the same languge and eats the same food. I had no way to disabuse him of his fantasy, except to point out that we don't marry each other's women at particularly high rates. His response? Jazz, PizzaHut and Taco Bell make us a definable nation, no matter who marries whom.

To use VD's terms, language and culture may make us a _civic_ nation, but not a _natural_ one.

But neither can genetics, I'm told. So, I'm stumped for a rigorous definition. What does the Nationalist Right say a nation is?

Blogger Mark Stoval November 17, 2018 3:39 PM  

While in High School in '67 I needed a job. I could get one working as labor in an egg processing plant if I could get transportation. I got a loan for buying a used car.

This loan allowed me to work, save money, and to save for college. I paid for college on working part time and in summers.

I guess that loan may have disrupted all of the economy of the USA as many here would have me believe. Besides loans to boomers ruined the Empire. Damn, damn, damn.

As an aside and reply to the boomer hater up-thread, the first boomer was 15 when the 60's started. He and the other 15 year olds really controlled the politics of the '60s??? My God, they were some powerful dudes! (or, you are an idiot)

Blogger Noah B. November 17, 2018 3:48 PM  

There is more utility in receiving a farm today than in receiving the same farm in five years because receiving ownership of the farm now will give me five years of additional income from it. So if I'm able to borrow money to buy this farm, I would be willing to pay a higher price for it today than in the future, all else being equal.

There's the price distortion, which is present regardless of whether fractional reserve banking is being practiced.

Blogger justaguy November 17, 2018 3:50 PM  

I think that austrian economics has covered much of the debate here as it passed beyond VD's initial thoughts. Mises Theory of Credit and Money (downloadable for free) covers the credit and money issues but not VD's initial question on debt because he is asking about what is beyond current modern econ theory with some good thoughts were modern theory doesn't hold up.

Blogger VD November 17, 2018 3:54 PM  

Except that I just demonstrated to you why you were wrong and you could only come back with the sound of the wind blowing in your right ear and coming out your left.

You're impressively stupid. First, you did nothing of the kind. Second, given the specific books I have published, it is obvious that I am capable of coming back at what passes for your argument with considerably more than I am.

The reason I am not bothering to do so is because your argument is so risibly and obviously wrong that I have no need to refute it. It would be the equivalent of arguing with a child who says "because purple". You observably don't even possess the wherewithal to begin arguing the topic.

Blogger Ominous Cowherd November 17, 2018 3:54 PM  

"My understanding of his argument was that it's deeper than that. That even if a bank has gold coins to lend me to help me purchase something (at a price higher than other bidders), the allowance of interest still perverts prices, since it makes possible a transaction that wouldn't have otherwise happened (and has knock on effects, since I have to find the money from elsewhere to pay back the debt, which means I'm cutting costs elsewhere)."

Rent a house, rent the pile of gold that buys the house - is there any difference in the effect on price discovery?

If you rent a pile of fake gold to buy the house, that changes the price of houses in terms of gold. Creating fiat via debt is where debt ends market efficiency.


I've been saying that working out terms to trade current goods or services for other current goods or services doesn't distort price discovery, even if one of the goods is the numeraire and is called money.

"I'll gladly pay you on Tuesday for a hamburger today" definitely distorts the market. Especially if J. Wellington Wimpy has no intention of paying on Tuesday.

Blogger Yordan Yordanov November 17, 2018 4:02 PM  

The best part about this comment section is that you know Vox is going to dedicated half an year to explaining how bad loans are.

Blogger VD November 17, 2018 4:05 PM  

I guess that loan may have disrupted all of the economy of the USA as many here would have me believe. Besides loans to boomers ruined the Empire. Damn, damn, damn.

Your Boomer Butthurt is showing again, Mark. Look, the generations that succeeded your generation hate what you collectively did and the world you are collectively leaving to them. That is their right, just as it was your right to believe you were the most importantest generation ever. So deal with it.

Blogger DonReynolds November 17, 2018 4:05 PM  

John Best wrote:My cousin was scammed the other week, it was a voluntary transaction, however they were pretending to be her bank when they weren't. In economic terms if was voluntary exchange. They got away £120 I bet they were disappointed.

No...in economic terms,
it was not voluntary exchange....it was theft by deception, deceit, impersonation, and fraud. Should the scammers turn out to be bank employees, then we can add embezzlement as yet another crime.

Capitalism has nothing to do with violating the law or going to jail. In fact, capitalism would prefer you didn't.

Capitalism is naturally occurring among people who believe in private property. Without the right to private property, the rest of capitalist economics is an empty game that never ends and nobody keeps score.

I say capitalism is naturally occurring because even small children can understand it. Unlike the other ideologies, capitalism does not hope to change man but simply describe what is man's rational behavior. Capitalism does not expect men to grow horns or become altruistic or imagine that every free person is homogeneous somehow.

Blogger Mark Stoval November 17, 2018 4:12 PM  

Ah bullshit Vox.

The main destruction of Western Civilization was by that idiot Wilson who ruined the end of WW1 which was in stalemate when that bastard tipped the scales. The first "progressive" president. That led to WW2 and that led to the USA Empire.

The next blow was the 1960s. The "Greatest Generation" was in charge. The boomers were barely able to vote. That was the cry by those drafted -- "we can be drafted but we can't vote".

Now, blame boomers for a lot of things and I'll agree. I have always hated God Damn F'ing Yankees, so I understand the feelings. But let us remember it took a lot of factors to destroy the USA.

By the way, can we start blaming gen Z for everything since they are already 15?

Anonymous Anonymous November 17, 2018 4:19 PM  

103. Mark Stoval November 17, 2018 4:12 PM
The first "progressive" president.


Theodore Roosevelt was proud to call himself a Progressive, you doofus.

https://infogalactic.com/info/Progressive_Party_%28United_States,_1912%29

and Progressives have been ascendant in American Culture since the Radical and Progressive Republican Party won the Civil War. they were so ascendant from the 1890s to WW1 that practically every person of consequence considered themselves to be 'Progressive'.

https://en.wikipedia.org/wiki/Progressive_Era

we got Prohibition, Women's Suffrage and the Federal Reserve thanks to Progressives.

Blogger Crew November 17, 2018 4:24 PM  

I have always been unhappy with personal debt and am now happy to be debt-free.

However, I think it is an important insight that debt, especially perhaps the sort of excessive debt we have seen in the last approximately 20 years, destroys the demand process.

I have also found this book obliquely criticizes Capitalism:

https://www.amazon.com/gp/product/B00K7SKKJQ

However, it is not as serious idea as your criticism.

However, which is the more destabilizing debt? Corporate debt, personal debt for things like cars, college degrees, houses etc? Or are they all just as bad?

Blogger Mark Stoval November 17, 2018 4:29 PM  

@104

Yes, I need to edit better. I was writing "first PhD progressive president" and just fucked it up.

Thanks for the correction. We doofuses need help sometimes.

Blogger SciVo November 17, 2018 4:31 PM  

Chesapean wrote:Language and culture seem to me to be non-rigorous as characteristics that define a nation. An SJW recently told me that America is a melting-pot nation because everyone here speaks the same languge and eats the same food. I had no way to disabuse him of his fantasy, except to point out that we don't marry each other's women at particularly high rates. His response? Jazz, PizzaHut and Taco Bell make us a definable nation, no matter who marries whom.

And he says that while agitating for Mexifornia to secede, because SJWs always lie.

Look, it's not complicated. Americanism is only invisible to angsty, delusional wannabe-Americans. Literally everyone else in the world knows what it is because they know what they're not, and while cheeseburgers are part of it, they aren't all.

No matter how much Fake Americans love Buffalo Wild Wings, you still can't get them to fly the Stars & Stripes, because they know it stands for Not Them.

Blogger justaguy November 17, 2018 4:33 PM  

If we want to beat on the Boomers and blame them for everything- why don't we move it to another thread.

Mark,

Don't even bother trying to justify-- each generation has the right to hate the one before it for not producing utopia. Except maybe the millennials-- they really aren't producing an American generation so the next generation for them will just hate whites and old fashioned Americans.

Blogger Snidely Whiplash November 17, 2018 4:37 PM  

Dear God, the stunning innumeracy, inability to challenge one's own premises, inability to even make distinctions between goods and money, it's disheartening.
"Most people are idiots" means all people are idiots most of the time. We have to state it gently so commenters like the ones we see today won't go into gamma spaz-shock and start SKREEEEing.
Anyway, I know MPAI, but could some of you, particularly Cowherd, Sam and Matthew, stop comparing what Vox is saying to your economic doctrine you learned at Free Republic or Mises.org and actually engage your brains for a few minutes?

Start with the assumption that one, just one, of your dogmas is incorrect. Which one, and why?

Blogger John November 17, 2018 4:38 PM  

@94 So, I'm stumped for a rigorous definition. What does the Nationalist Right say a nation is?

There is no quantitative definition of a nation, but a nation is the people who share a common national identity. National identity is inherited from your parents: language, religion, culture, tradition, history, value system, land, civic loyalty, ancestors, family (immediate and extended), and genetics (especially facial characteristics, skin color, etc) are some of major characteristics of national identity. Nationality is both learned and biological. What God has joined together, let not CivNats separate.

@95 This loan allowed me to work, save money, and to save for college. I paid for college on working part time and in summers. 

TELL US MORE ABOUT THE GOOD 'OL DAYS, DAD.

@102 Capitalism is naturally occurring among people who believe in private property.

You can believe in private property without believing in debt. What, in theory, is wrong with leaving the buying to people who actually have the cash (or assets)?

Redistributing demand to people who have less cash/fewer assets is not necessary for economic growth any more than free trade is necessary for economic growth.

Obviously, if your moral theory prohibits charging interest, that significantly reduces the incentive to make loans, especially long-term ones. But that does not mean you cannot simply hire an entrepreneur or whatever to invest your own savings for you.

(Thank you Vox for hosting the most interesting blog on the internet.)

Blogger Rory November 17, 2018 4:40 PM  

"Rent a house, rent the pile of gold that buys the house - is there any difference in the effect on price discovery?"

Aren't you leaving out the third option? "Buy the house"? Unless I'm getting this wrong, the idea is that there's someone who is willing to buy the house outright. The value of the house should be the $100k he's willing to pay for it. But it sells for $200k because the bank knows you're willing to "rent" it from them (to use your term), whereby they ultimately get $300k back from you.

That's the point I think Vox is making. There is someone who actually has the money to buy something, and then there's someone else who has a friend who'll buy it for them, so long as they get the cost plus interest every month. The price of the item is set by the bank's faith in someone's ability to pay back every month. It makes no difference to the seller - hey, they're getting their cold hard cash either way - but it makes a difference to the market, in that suddenly that class of item is now worth a lot more, even though there aren't suddenly more people with the actual ability to buy... just more people with confidence in the future earnings of those people.

I'd say a better phrasing of what you're saying is: be a person who buys a house to extract ROI on it, or be a bank who buys a house to extract ROI from your debtor - is there any difference in price discovery?

Well, yes, there's a difference in price discovery in the price arrived at, and in what that price actually reflects. There's also a significant difference in impact on the economy, since the higher price means the debtor has to work harder to pay off that extra amount. But, crucially, there's an impact on resale value. Suddenly this home is "worth" $200k (in fact, it needs to sell for $300k to break even, given what he paid the bank). But it's only worth that much coz that guy was able to get a loan to buy it. So to sell it on again, the kind of guy who was willing to buy it upfront before must have thrice as much demand for it (which he might, but only because the price is being distorted), or else someone else has to get a loan... and so the cycle continues.

Or maybe I'm completely missing a clue here. This shit is hard. I'm doing my best to keep up, lol.

Blogger Crew November 17, 2018 4:51 PM  

Perhaps the other issue with debt is debt slavery ... but that is a social issue.

Blogger SirHamster November 17, 2018 4:59 PM  

Ominous Cowherd wrote:Again, if you want to rent my property, there is no difference between renting the house and renting the pile of gold that buys it.

Rent is paid in money. Occupancy of home for money. The house continues to exist and can be returned, with insurance protecting against destruction.

What is the pile of gold rented with? If the gold is spent, and rent is not paid, what are you getting back, and how?

Blogger Ominous Cowherd November 17, 2018 5:02 PM  

Snidely, have I contradicted Vox's points? I didn't think I was.

Rory, I think the distortion arises when instead of you renting my money to buy the house, leaving me unable to buy it, a bank issues counterfeit currency to you and others, making more demand.

If you rent existing wealth, all that changes is who spends it. If you rent counterfeit "wealth," that's a different kettle of fish.

Blogger Snidely Whiplash November 17, 2018 5:04 PM  

Ominous Cowherd wrote:I see nothing there which prohibits charging rent, for money-as-gold or for money-as-house.
So, everything is money to you? Home and hearth, wife and child? Dear God, what a worthless existence.


justaguy wrote:Look forward to someone without an agenda in the now to put forward big thoughts.
And when they do, you'll be blathering about how you don't look down on anybody, but by God, we need to punish those feckless debtors.

@Matthew, sneering is not an argument. Vox has told you plainly that you entirely missed the point he was making. You then proceed to double down. What a moron.

As to your'argument', you assume that the market adjusting prices is prima facie correct, no further examination needed. That is false. When Vox says "warping market information" he is assuming precisely this happening. Looking beyond your simplistic example, let's take a real-world example. McMansions on postage-stamp lots are a blight on the land, but in most markets they are literally the only new-built home you can buy. Even here in my little town in the middle of hay fields, the only new construction is a housing development of $400,000, 5000ft2 homes on 1/8 acre lots. Why? Because it's all that builders want to build. Why is that? Because the market has been distorted by the pricing pressure of absurd quantities of absurdly cheap credit.

@justaguy
I'm as old as you are. I just don't hate my grandchildren. What's that, you don't have any? How could I guess?

Blogger Crew November 17, 2018 5:06 PM  

@114: Are you saying it's the combination of debt and fractional reserve banking that is evil?

Blogger John November 17, 2018 5:11 PM  

@111 Aren't you leaving out the third option? "Buy the house"? Unless I'm getting this wrong, the idea is that there's someone who is willing to buy the house outright.

Imagine if, instead of embracing the merits of Interest-Paying-Loans, our ancestors had used their savings to simply buy houses for their kids. This reminds me of the Christian tycoons who actually built stuff with their savings, like schools, libraries, hospitals, churches…

This is fascinating. Parents give stuff to their kids all the time anyway. And arguably, any permanent infrastructure is basically an intergenerational gift. Making it illegal to charge interest doesn't magically change people's preference for underconsumption and/or preference for building things that will outlast them, and/or desire to build more factories.

Blogger Noah B. November 17, 2018 5:15 PM  

It speaks to how brainwashed people are that they can't even imagine an ownership society where practically everyone has some savings and loans are generally not necessary.

There are always going to be those who are so irresponsible that they become destitute. But if we choose not to give banks a free hand to pillage, there will be a lot fewer genuinely poor people.

Blogger Snidely Whiplash November 17, 2018 5:18 PM  

@Ominous Cowherd,
When talking about a market, the topic cannot be reduced to just the buyer and seller. The market consists of everybody who wants to buy, everybody who wants to sell, everybody who produces, everybody who consumes, and critically, in this discussion, everybody who holds or wants to hold debt on the items in the market or like items. All of these people provide information which the market mechanism uses to set a price. By introducing another, very oversized, player, the pricing mechanism is of necessity distorted.

Take a look at a car dealership advertisement. Chances are that prices are stated in terms of a monthly payment rather than an all-in price on the good being sold. If you can't see that as primary proof of market distortion, you're either a true believer or a moron.

By looking at it only from a perspective of the two people involved in an individual transaction, you are ENTIRELY missing the point.

Blogger Ominous Cowherd November 17, 2018 5:19 PM  

Hamster, you are arguing against making the borrower the surety. We can avoid that by specifying some collateral, like the house he's going to purchase with the gold. It's a solved problem.

We could make the renter the surety for the house, if it burns down. The problem isn't unique to renting gold.

Blogger Ominous Cowherd November 17, 2018 5:22 PM  

@119 Snidely, if someone rents my gold, he's paying me for the privilege of spending it himself instead of me. No new purchasing power. Different tastes and preferences in the market, I suppose.

Blogger Snidely Whiplash November 17, 2018 5:22 PM  

John wrote:magine if, instead of embracing the merits of Interest-Paying-Loans, our ancestors had used their savings to simply buy houses for their kids.
That's for practical purposes illegal in this country.

Blogger Snidely Whiplash November 17, 2018 5:23 PM  

Ominous Cowherd wrote:Snidely, if someone rents my gold, he's paying me for the privilege of spending it himself instead of me. No new purchasing power.
Moron then. Good to know.

Blogger DonReynolds November 17, 2018 5:29 PM  

The nature of exchange in economics is based on certain assumptions...the exchange is voluntary and both parties are acting in their own self-interest.

So the exchange revolves around the idea that both parties value the good or service differently from the other, even before introducing the idea of a money exchange. Psychologically, both parties must think they are getting the better end of the deal. The seller knows what it cost him to acquire or produce it and the buyer knows what it is worth to him.

For many people, money is one of the least desirable things they have, because they are willing to give up money to get something else. Fortunately, the seller values the money much more than the good or service.

Blogger Ominous Cowherd November 17, 2018 5:39 PM  

Enlighten me, Snidely. How do I spend my gold before it's repaid?

I'm drawing a distinction between loaning current assets and creating new, counterfeit assets out of thin air.

Blogger Noah B. November 17, 2018 5:42 PM  

Eliminating debt doesn't require any heavy handed government interference. We just need the government to do less.

Purely private enforcement of contracts is practically nonexistent today. A pawn shop or bank can seize loan collateral that it physically possesses, but essentially all other modern enforcement of contracts is done by government. If the contract enforcement stops, so will the lending.

Blogger Francis Parker Yockey November 17, 2018 5:45 PM  

@93
The way our economic system functions in the current year, creating debt = expanding the money supply = functionally equivalent to "printing money."

You may not like that fact about the real world as it exists today; you may prefer your own theoretical system; you may choose to imagine a world where debt functions differently...

But as it stands today, it is factually incorrect to claim that increasing debt does not increase the money supply.

Anonymous Anonymous November 17, 2018 5:47 PM  

106. Mark Stoval November 17, 2018 4:29 PM
Yes, I need to edit better. I was writing "first PhD progressive president" and just fucked it up.
Thanks for the correction. We doofuses need help sometimes.



still wrong.

ONLY.

https://www.washingtonpost.com/news/answer-sheet/wp/2015/02/12/which-u-s-presidents-didnt-earn-a-college-degree-two-of-them-are-on-mount-rushmore/?utm_term=.cba317c5b065

Blogger DonReynolds November 17, 2018 5:49 PM  

It is a common problem in the USA for the leadership of both sides of an issue to basically agree on solutions that the ordinary Americans would find horrible.

Immigration is one of those issues. On the one side of the negotiation are the RINO, Country Club, Ripon Society, Republicans who became rich and fat with cheap coolie labor. On the other side, we have the Leftist, Liberal, Radical Democrats who count every "New American" as another democrat vote. The public is opposed to flooding the country with foreign riff-raff, they are opposed to being subsumed and replaced by foreign trash, and they tire of paying higher state and local taxes to support them.

WE simply do not have anyone at the negotiating table who represents the public will. No, it does not matter if the immigration is legal or illegal. We have to say that because the Democrats would simply declare ALL immigration to be legal, which leaves the CivNats out in the cold.

Blogger John November 17, 2018 5:49 PM  

@121 Snidely, if someone rents my gold, he's paying me for the privilege of spending it himself instead of me.

Maybe you should just give him the gold. If you don't care about spending the principle right now, why would you care about spending the dinky little bit you get in interest right now? If my dad loans me $500k at 3% interest, and then later dies, who (theoretically) would be inheriting the interest I paid him, if not me?

And if you have bunch of people (entrepreneurs) lobbying you to loan them all money, competing over how much interest they'll be willing to pay…again, why would it not make more sense to simply hire them as employees (stewards) to manage your assets on your behalf?

@122 That's for practical purposes illegal in this country.

Curious.

@124 Psychologically, both parties must think they are getting the better end of the deal.

That's definitely not true. I don't buy under the assumption that I am getting the better end of the deal. That thought rarely crosses my mind, and when it does I naturally feel a sneaking suspicion that some kind of scam is taking place, or that I am profiting from someone else's error. For example, when you buy marked down halloween candy the day after, or assets being sold off in a bankruptcy.

What I do think about is the tradeoff between quality and price.

Blogger DonReynolds November 17, 2018 5:56 PM  

John.....Still assuming that the trade is voluntary, why would you enter into a bargain to exchange, without thinking you got the better end?

Also....higher price may not guarantee higher quality. Price discrimination is a fascinating subject.

Blogger Azure Amaranthine November 17, 2018 6:12 PM  

"Therefore debt is not only polluting the price signals, it is actively reducing output."

Initially I was going to argue that the person borrowing to purchase said resource has a potential to use it constructively which offsets the inability of the non-borrower to purchase it.

However, this is not an equivalent offset. The person with the ability to purchase without borrowing only has that ability because of their prior good management of their resources and skills, whereas the person borrowing must, in all likelihood, borrow because of their ill-management of their prior resources and abilities.

It is more often than not putting the resources into the hands of people who will use them poorly.

"The curious thing is that this makes debt exactly the same as money printing, one of the most precious bugbears of the libertarians."

Ahh, no, that's not quite correct. It's not the same as money printing because the money involved came from somewhere rather than being illusively conjured from nothing. Specifically, it came from someone with financial resources to spare.

Effectively, this ends up being a means of harnessing the less responsible to compete with their more responsible brethren, all for the edification of the lender. It's a financial "win-more" mechanism for those already on the top of the pile to compete again via proxy-slave with those they have already out-competed, siphoning more of the overall system output to themselves.

The correct use of surplus finance or resources over ability to utilize them would be to "water the earth" with it by investing in your relatives or friends. If they too have surplus then let "the rain" water the local community.

Seen as a method of circumventing natural limits on individual ability/time, usury is legalized theft of ability/time output from those who do not properly recognize its value.

Vampirism.

"it's actively reducing SOME outputs."

It's actively reducing total output.

"I have to think on whether private non-usurious lending distorts pricing the way Vox suggests."

Yes, any borrowing/lending distorts the system, though it cannot do so quite as egregiously as lending with usury.

"and when I say "social capital" I mean the means of civilization production."

The attribute of civilization is, so far as I can discern, a metric for how many people may be coherent in a super-organism. Higher forms of civilization can efficiently serve/utilize larger numbers of people.

Greater trust/trustworthiness is the single most important attribute of eucivic persons.

As to Vox's original post:

If you see non-usurious lending/borrowing as distorting markets, you also have to see things like accrued sexual market capital, which being stratified-in/propagated-to the next generation distorts the sexual market. Things like inheritances also distort the market in favor of your children.

The key difference between lending/borrowing and inheritance is that inheritance is a transformation, meaning the lender is never getting that type of "lending" back, or at least not in the same form.

"So, everything is money to you? Home and hearth, wife and child? Dear God, what a worthless existence."

Something something something *cough*parableofthetalents*cough*. Of whom much is given much is demanded.

You can certainly analyze everything like a market. There's nothing wrong with that. If anything, people should try more to analyze things by comparison to the systems and pattern's they're most familiar with. It helps in spotting lies and deceptions.

Really though, we don't charge kids rent because we expect for them to be taking care of us in our old age like we did them in their youth. That debt can be paid back.

Blogger Mark Stoval November 17, 2018 6:16 PM  


The thing that always gets me about the people at this site is that they hardly ever mention the US Government's impact on damn near everything. The fact that the FED props up fractional reserve banking and that plus Government borrowing has destroyed the value of the dollar through inflation. Then there are millions of laws, codes, and other mandates out of D.C. that distorts the market.

We have NEVER had laissez faire capitalism in this country. But we were a lot closer at the beginning. Debt caused by the multitude of Government actions certainly distorts the market. That may have been Vox's point or perhaps it was not. But it is the truth.




@128

The New York Times and the Guardian of London along with countless others called Obama the US's FIRST black president. Yet there has never been another one yet. I suggest you brush up on your grammar Nazi stuff.

Blogger pdwalker November 17, 2018 6:17 PM  

Sounds like a topic that could be covered in more depth in a Voxiversity video someday.

Blogger VD November 17, 2018 6:23 PM  

You're still wrong, Matthew. And now you're banned. It's bad enough putting up with nonsense like yours even after you've been repeatedly told how completely off-base you are, but I never, ever, tolerate anyone telling me what to do on my own blog.

You're done here, Matthew. Don't ever try to comment here again.

Blogger VD November 17, 2018 6:24 PM  

Still assuming that the trade is voluntary, why would you enter into a bargain to exchange, without thinking you got the better end?

You're hungry? You need to get somewhere by a certain time? You need to pay your bills?

Blogger Azure Amaranthine November 17, 2018 6:26 PM  

"Still assuming that the trade is voluntary, why would you enter into a bargain to exchange, without thinking you got the better end?"

Opportunity cost. You don't have to get the better "end" of "the bargain", you just need to get a better "end" for yourself compared to what you traded. This isn't hard. A loaf of bread will be actually worth a bag of gold to the right person.

Blogger FP November 17, 2018 6:43 PM  

@133

"The thing that always gets me about the people at this site is that they hardly ever mention the US Government's impact on damn near everything."

Uh, what? Have you been reading here long or did I miss a reference to some other blog?

Blogger Azimus November 17, 2018 7:01 PM  

The primary failure of capitalism is assuming that profits are used for one of three things: 1) investing back into the business to enhance future margins, 2) the pleasure of the owners, or 3) disinterested benevolence of philanthropy. Market Capitalism hasn't come up with an answer yet for a 4th option which would be social engineering.

Blogger Snidely Whiplash November 17, 2018 7:03 PM  

Ominous Cowherd wrote:Enlighten me, Snidely. How do I spend my gold before it's repaid?

If you're a bank, you add $2,000,000 to a current account and hope someone buys the note off of you.
Which is precisely beside the point. As we've already determined, you are only capable of thinking about economics in terms of simple-minded, dishonest Libertarian "thought experiments." You don't understand the topic today, you don't understand what Vox is trying to communicate, your only desire is to justify to yourself in childlike analogies, your extraction of the wealth of our neighbors and their children by means of interest payments.

Blogger Matthew November 17, 2018 7:03 PM  

This comment has been removed by a blog administrator.

Blogger VD November 17, 2018 7:24 PM  

Gamma confirmed. Color me shocked.

See, Gammas, this is why no one likes you. Seriously, no one can stand this kind of thing, not even your fellow Gammas. You know when you ask yourself on sleepless nights why you don't have a girlfriend, or any good friends upon whom you can rely?

This is why. It's just not pleasant or enjoyable to have you around.

Blogger Unknown November 17, 2018 7:34 PM  

One thing that needs to be questioned by free thinkers on the right that is just "accepted as fact", is corporations. Our founders had experienced the tyranny of big government (the monarchy) and the tyranny of the big banks, corporations like they had in England, and feudal lords, and they wanted something very different for the citizens of the new republic that they were forming. When American colonists declared independence they also freed themselves from control by English corporations that extracted their wealth and dominated trade. After the revolution they wisely limited corporations exclusively to a business role. Corporations were forbidden from attempting to influence elections, public policy, and other realms of civic society. For a LONG TIME in the US, the privilege of incorporation was ONLY granted very selectively by passage of bills in the legislature, and for a very limited time and only for a single event in order to enable activities that directly benefited the public, such as construction of roads or canals. Enabling shareholders to profit was seen as a means to that end. They were also subject to oversight by the legislature and their corporate charter could be revoked at any time. When the 1900's came around and corporations were allowed to be created at will is when the US economy was utterly changed for the worse.

FA Hayek wrote in "Road to Serfdom" and predicted nearly 100 years ago that markets would become dominated by large corporations the bigger that government became. The bigger the govt the more large corps and the fewer small businesses. He explains why central planning leads to this sort of market, and he did it before hardly any corporations even existed.

Big government is all about controlling the economy, controlling the people, and controlling the means of production. The central planners and socialists love corporations. In this market, with a few big corporations they only have to arm twist, make back room deals with a small handful of large entities to much more easily achieve their central planning and control.

If the market was made up of many smaller independent businesses it would be almost impossible for them to exert so much control over the marketplace. They can't control that, too many mom and pops would tell the socialist planners to fck off.

In an actually FREE market(not the fake ones people call free markets today), there is NO need or corporations to exist. Corporations are totally 100% created by the government by their interference into the free market. Without all the special legal rights and privileges given to corporations by the government through their charter which entrepreneurs and partnerships do not have, they would not exist.

Anonymous Anonymous November 17, 2018 8:07 PM  

138. FP November 17, 2018 6:43 PM
Uh, what? Have you been reading here long or did I miss a reference to some other blog?



hush.

the Boomer is Boomering.

ie - it would be perfectly proper to denote Wilson as the "first" PhD president ... contemporaneous with his administration.

however, it is now well more than a century since Woodrow was first elected and numerous other men have been elected POTUS since. drawing the distinction between 'first' ( implying that there may be others ) and 'only' ( specifying his unique attribute ) is now a useful qualification.

your formulation would be quite likely to induce an honest but ignorant reader to assume that there had been several Doctoral presidents.



131. DonReynolds November 17, 2018 5:56 PM
Still assuming that the trade is voluntary, why would you enter into a bargain to exchange, without thinking you got the better end?


why would you give a man $16,000 of gold nuggets and not receive anything in compensation apart from a car rental?

https://www.youtube.com/watch?v=XkERvczuz80

Blogger wreckage November 17, 2018 8:20 PM  

A quick point in VDs favour. The fact that debt is an inferior way to run your economy, given the choice, in simple micro-economics: Cost of Finance. In business, excepting perverse tax incentives, it is always, always, always superior to run from cash, not credit. Cost of Finance accrues then to the capitalist, not the financier, AND risk is lowered - in most cases, depending on the definition of risk, it simply disappears.

Another point is the question: what is it when the Fed reduces interest rates to zero or negative, but tacit admission that a weak economy cannot afford Usury?

As often happens, I'm not entirely sold on Vox conclusion, but as always, if he makes an observation and you don't quite agree, it's absolutely worth squinting at it REAL hard until you at least see how his observation and consequent idea mesh.

Blogger Azure Amaranthine November 17, 2018 8:35 PM  

"A quick point in VDs favour. The fact that debt is an inferior way to run your economy, given the choice"

Not just inferior. Infernal. If usury is akin to vampirism, what is debt-based fiat currency, which is ubiquitous compound usury? I'd argue it's a decent corollary to ritualistically slaughtering and eating children, from a societal standpoint.

Blogger Hammerli 280 November 17, 2018 8:48 PM  

I'll add another thought. People born after around 1935-ish are accustomed to living in perpetual debt. A mortgage at minimum, frequently with car loans and consumer credit on top. Debt is something they take for granted.

Me? I'm unusual, in that I carry no debt. Home is paid for, car is paid for, credit card is paid clear every two weeks. It means a certain degree of frugality...but even more, it meant fending off efforts by my parents to get me shackled up to a mountain of debt for a larger home. I'm not sure they ever understood how terribly proud I was to pay the mortgage off on my humble condo and stand a freeholder, and no banker's slave.

But it is this accumulation of capital that builds wealth. We've created a culture that no longer thinks of the future, only of the immediate appetites. It's not a good thing.

Blogger Dirk Manly November 17, 2018 8:52 PM  

@11

"A famous case was Microsoft who got hauled up before the apparatchiks in DC. Everybody laughed in amazement when it was discovered at the time that Microsoft had zero lobbyists. "The rubes!" they chortled at cocktail parties in Georgetown, "Don't they know how business works?" What naivety to assume that anybody could slip by without paying protection money!"

Using Microsoft as an example of a victim of government is really a mistake. The company was literally founded on theft (Their original product, BASIC interpreters were, were based on code which Gates and Allen dumpster-dived out of their employer's (HP) trash. One of the smoking guns is that Microsoft BASIC doesn't use the ASCII EOF as End of File, but instead, uses Ctrl-Z, just like HP's internal BASIC interpreter at that time. Then there were such things as misleading Spyglass into thinking Microsoft intended to pay them money for their browser code ("Oh, we didn't tell you? We're GIVING IT AWAY".. while they made it a free download, it was obviously just to get around paying Spyglass), and outright theft of Stacker's compression code (continuing to put it into MS's products after the license from Stacker expired). I can go on and on about Microsoft. They should have been been dragged into court under RICO laws.

Blogger Dirk Manly November 17, 2018 8:56 PM  

@14

"and they're spoofing random phone numbers and area codes, so you can't even simply block the number."

... more than likely with the (criminal?) cooperation of their telephone service carrier.

Blogger Dirk Manly November 17, 2018 9:09 PM  

@22

"That's the classic "capitalism for the poor and socialism for the rich" -scenario. Banks and corporations will bail themselves out while the masses pay the price. And one point comes to my mind also: what the fuck is private sector anymore? The governments and the corporations are so much intertwined that there is no telling them apart. It's one fucking Leviathan."

As an old friend who was an army Intel NCO (and the only enlisted man on some federal level armed services sommittee) once wrote: "The democrats have studied the Nazis so long that they have become them."

The "you own the company (i.e. are responsible for its bills, but we in government are going to micromanage how you run it" model comes directly from the Nazis. And just like in Nazi Germany, the regulations on business were actually developed and sold to the government by the country's largest businesses. In both cases (here, 1930's Germany), the purpose (from the big business-man's perspective), is to gain advantage over small businesses, who become swamped in disproportionate overhead costs to hire extraneous people who do nothing other than make sure that the business is in compliance with the ever-changing laws. When you have 10,000 employees, adding 1 or 2 more to do such things is no big deal. When you have 10, it can put you into bankruptcy quite quickly.

Blogger cloom November 17, 2018 9:50 PM  

It would be a mistake to say a return on equity capital is like usury interest on debt, not that anybody said that here.

I generally agree with the argument against debt, although I can see some benefit to young people and retired people making a debt deal for entry and exit, to/from equity ownership respectively by needs of their ages, and I can see IOUs for wages are a kind of debt, and vendor financing for a capital good like an expensive bulldozer is easier than arranging a collective of equity investors in my construction business and me losing control. Debt ideas blossomed beyond those modest benefits into something very bad.

The interest rate has to be closely matched to the rate of return on equity, especially not erring too low, but maybe that rate is unknowable.

Markowitz, Modigliani and Miller 1950s capital structure and portfolio theories are driving CFOs and fund managers to debt extremes when interest rates are too low. So finance is likely not thinking about macroeconomics.

Blogger Ariadne Umbrella November 17, 2018 10:43 PM  

The horror of Austrian court Jews is that they knew so much, that they didn't realize there were things they did not know, had not seen, and could not comprehend. They literally could not comprehend Northeastern European farmers and factories.

They thought the ground was fertile just because, not because it had been cultivated, enriched, cared for, for over a thousand years. That it had been cut out of the forests, then fertilized, aerated, legumes and cabbages grown, animals set loose, night soil from cities fermented and worked into it. No clue.

No clue that governance and justice had been hewed out from common experience for literally thousands of years. That this was painful work.

No clue that monks' prayers rebuilt their brains into instruments to perceive God's good world in ways that no one else could see: calculus and chemistry are from these devotions.

Their wisdom is wickedness unable to comprehend goodness and holiness.

Blogger Behemoth November 17, 2018 11:08 PM  

So, lemme take a step back then and ask, if we accept debt as the problem, how would you prevent it without undermining the other things that are key? We accept that robust and consistent contract law necessary, and I'd also state robust and consistent property rights are, but I am unsure if VD or others would agree.

However, on that premise (and correct me if I'm wrong, then), how would one prevent debt on a voluntary basis without undermining the free disposition of property and of contracts between two parties?

@132
I don't agree with everything, but one thing in particular stands out, which is the assertion that a person with resources without borrowing to pay for a thing has better skills than a person that must borrow, which could be true but also simply could be the case of a younger person that has not had time to accumulate wealth, among other reasons.

Blogger The Depolrable Podunk Ken Ramsey November 17, 2018 11:13 PM  

Dirk Manly wrote:Using Microsoft as an example of a victim of government is really a mistake.

The point made was irrelevant to Microsoft's guilt or innocence. The important thing was the incredulous reaction in Washington to the fact that Microsoft had no lobbyists. They just could not believe that nor that MS had grown to such a size without it. How could this have happened, DCites wondered, didn't they know that they must pay or else the business rules would be changed on them?

Blogger tz November 17, 2018 11:52 PM  

Debt can only work if there is greater wealth created. Right now it is not wealth creation but wealth EXTRACTION. Which isn't much better than wealth destruction.

The libertarians think the free market fairy will provide everything good but nothing bad.

The main error is we are both producers and consumers. We produce wealth and use it to save or consume. The nonsense is when economists split it so "consumer goods" are cheaper - but in terms of what? If I have to work 15 minutes to afford something, then it is outsourced and my job removed, and it takes me 2 hours to make enough to afford the same thing, I'm 8x worse off.

The other problem with debt is Fiat currency, fractional reserves, and all the evils Rothbard would decry, are merely forms of debt. The banks owe $X but have only $X/10 on hand. The government demands payment in something so you are in debt in that fiat currency - and they may or may not be in debt in other ways with things like Greenbacks if not actual debt.

Even the "savings" rate. Gold in a safe at home is saving and with progress tends to have a gentle deflation so increases in value over time.

Consider Bob who knows John isn't a good farmer so wouldn't loan him a dime, but Bob deposits money, and that bank loans it to John and he fails. If I wanted to invest, I would, but the bank wants to be in debt to me so they can turn around and find a greater fool.

We can't call things what they are. When I have risk, and wish part of the profit or loss, I'm investing, not loaning and the investee isn't going into debt. Except for the evil of limited liability, consider that most economists will say debt and equity are the same, but the profound difference is the equity investor "owns" part of what is being invested in.

Blogger Dirk Manly November 18, 2018 12:39 AM  

@36

" I see bankruptcy as a modern version of the jubilee. Instead of everybody's credit tightening for several years before, the bankrupt sees their credit dry up for a few years after."

Talk to someone who has gone through bankruptcy.

Since the person who declared bankruptcy now has no outstanding debt, the banks fall all over themselves extending NEW credit cards and other loan instruments to someone who has just proven that they bite off more credit than what they can chew.

It's literally insane.

Blogger Dirk Manly November 18, 2018 1:49 AM  

This comment has been removed by the author.

Blogger Dirk Manly November 18, 2018 1:50 AM  

@60

"For years now. Hoppe's "physical removal" comes to mind or as we say, "Libertarian social order will not be achieved with libertarianism". "

Unfortunately, Libertarian social order can't be maintained with libertarianism, either. AND it only works with things, such as the network of right-of-ways known as "the roads" have already been secured by a pre-Libertarian government... which a Libertarian government would piss away in a heartbeat, forcing all planning to ship goods from point A to point B to also involve negotiations with every single land-owner between A and B across whose property the no-longer right-of-ways lay.

Blogger Dirk Manly November 18, 2018 2:06 AM  

@76

"How does transforming money into house transform interest into rent?"

A house is tangible.
Money is intangible.

[Yes, the paper that a dollar bill is printed on is tangible... that's just a manifestation for non-bank involved transactions. The dollar-amount in your bank or any other financial account is 100% intangible]

Blogger wreckage November 18, 2018 2:34 AM  

@158, Libertarianism ignores the fact that, faced with this situation, people will effectively "buy" a roads monopoly, duopoly, cartel or authority, in order to lower transaction costs. If you really believe in hands-off, what do you do when people deliberately and voluntarily build local, state or federal governments? What magic is it that makes that transaction immoral?

Blogger Dirk Manly November 18, 2018 2:42 AM  

@95

"
As an aside and reply to the boomer hater up-thread, the first boomer was 15 when the 60's started. He and the other 15 year olds really controlled the politics of the '60s??? My God, they were some powerful dudes! (or, you are an idiot)"

You must have forgotten that by 1968, there were millions of you in the streets, screaming, and the politicians were literally willing to do anything to get the streets clear that didn't involve what was really necessary to prevent recurrance of the same -- public whippings. While locked in stocks, if need bed.

When I was 3 years old in 1968, and getting my first taste of Boomertardism, I didn't see many people much over the age of 25 in those riots, and I saw the OVERWHELMING MAJORITY of the participants were baby boomers.

Riding in the car, looking out the window.... TV news footage. Photos on the front page of the newspapers and magazine covers... Where were all of these non-Boomers in those riots?? Because I've never seen any of them, other than (((Abbie Hoffman))) and (((Jerry Rubin))).

Blogger cloom November 18, 2018 5:14 AM  

Except for the evil of limited liability

Risk of losing everything because of a large organization corporation mistake is high. So if limited liability did not exist, then the only large organizations would be run by those who would take the risk: It is akin to Chinese entrepreneurs such that they know they can get their corporation taken from them or they are kidnapped and disappear, like has happened recently.

Those organizations would still exist, but they would be led by extreme personalities, the biggest risk takers, fewer of them, less competition, much higher profits, and thus a less free market.

Blogger Boomer55 November 18, 2018 5:18 AM  

If a person saves money, it means they are delaying/decreasing purchasing power now in order to increase purchasing power later. The opposite is true with holding debt. Debt AND Savings certainly changes the short term demand curve, and, I guess, can warp it. But I was thinking, long term, one cancels out the other, and to save, you are holding someone elses debt.

I don't see any problem, unless there is a central bank actually printing cheap money, meaning the price of money (short term interest rate) is below the market rate.
The macro economic mainstream models are all over the place. The fed is still "printing money" based on the classic Taylor rule, which meaning the short term rate should be at least 3%, not 2.25%.

Blogger cloom November 18, 2018 5:35 AM  

how would one prevent debt on a voluntary basis without undermining the free disposition of property and of contracts between two parties?

I saw that problem from another angle: If debt was completely prohibited then savings would be represented as equity ownership, and commodity ownership, and soon after somebody would invent a futures contract of that equity for a fixed price repurchase in the future to avoid the fluctuating value, and that fixed price would mimic debt instrument savings including interest, just as futures contracts of hard, easily stored commodities have a spread price difference related to interest rates, and stock futures already exist to also make spreads at fixed future prices. Could we ban sales agreements with future repurchases attached; repos?

Anonymous Anonymous November 18, 2018 5:54 AM  

maniacprovost wrote:The WSJ types like to pretend that the market is perfectly efficient. We know that's not true. It's just that economists have apparently decided not to study and quantify the sources of inefficiency like irrationality, imperfect knowledge, misinformation, etc.

Well they couldn't write all that fancy math and pretend it's a science if they did that.

Blogger Behemoth November 18, 2018 6:06 AM  

@164
I mean, by what authority? That's sort of what I'm getting at, by what authority are we going to operate under to ban any given form of contract or debt, and in doing so, are we not empowering an entity with a great amount of control over economic matters which, to my eye, is the source of so many problems in the first place.

Like, the core point too is that debt has a clear economic function, has been used for literally thousands of years, and there is no real way to get rid of it without a massive centralized power to do so, and even then its unlikely.

And that's even if debt itself is the issue.

Blogger Azure Amaranthine November 18, 2018 6:07 AM  

"How does transforming money into house transform interest into rent?"

Because rent involves the property in question degrading due to both time and natural wear (even apart from accidental or malicious damage). The property must be maintained at a certain level by the owner in order to even be worth renting. The owner is necessarily losing value by renting it out, unless they collect rent. They make a profit by either effectively being a handyman for the people they rent to, or organizing and employing other handymen as a sort of proxy for the people they rent to.

Lent money, on the other hand, has no innate decay (assuming a non-fiat system without inflation). Nothing must be done to maintain it except to not spend it. No value is created whatsoever, it's simply transferred and then more value is demanded back after a set time. It's almost the opposite system from renting property.

"to save, you are holding someone elses debt."

No you're not. Not unless someone else is lending out your savings whether you want them to or not. You can save without putting that money in a bank.

Blogger Boomer55 November 18, 2018 6:13 AM  

@167
Yeah, I mean, "classic savings," in a bank. The problem is, since central banking is biased towards subsidizing the "price of money," you lose money simply holding it in a safe. This is why people will mention gold, commodities, etc.

Blogger Azure Amaranthine November 18, 2018 6:13 AM  

"I mean, by what authority? That's sort of what I'm getting at, by what authority are we going to operate under to ban any given form of contract or debt"

Simple. Disallow takebacksies. Any money that changes hands apart from trade for material goods or services (financial "services" excluded) is either a gift or a theft.

John comes to the government and says that Steve owes him money? Impossiburu! Stop complaining about people not giving your gifts back to you, John! If he wants it back he'll have to claim that Steve stole it, which will carry burden of proof.

Blogger D E K November 18, 2018 6:26 AM  

Please help me to understand. Your assumption is that the demander financed with debt is a low demander and will produce automatically a lower output. Why do you think the debt demander is worse than the one with money? Maybe he has a higher demand but no capital and maybe he can be more productive than the one with own capital?

Or is it that you assume that the higher demand will produce higher prices, so that as whole minus the debt service the purchased amount is less and so the output?

Thx in advance

Blogger Azure Amaranthine November 18, 2018 6:44 AM  

"Why do you think the debt demander is worse than the one with money?"

Because he doesn't have money. It's that simple.

"Maybe he has a higher demand but no capital and maybe he can be more productive than the one with own capital?">

The one that has capital has it because he or his relatives produced it. He has more of a record of being productive than the one without. He may not be more productive every time, but more often than not he's going to be more productive than the person who has produced precisely nothing in the first place.

Blogger Behemoth November 18, 2018 9:19 AM  

@169
Again, you say 'disallow,' but by what authority? I don't think you're getting my point, which is that to do so, you have to actively make it illegal to do so, which means giving that power to a state, which is a terrible idea.

Given the arguments presented on why debt is the problem itself have been weak, I'm particularly not sold on the idea that the state should have that sort of power.

Also, your assumption that a person taking on debt is will do worse with the money ignores many possible circumstances that might lead to someone taking on debt.

Blogger Azure Amaranthine November 18, 2018 12:17 PM  

"Again, you say 'disallow,' but by what authority? I don't think you're getting my point, which is that to do so, you have to actively make it illegal to do so, which means giving that power to a state, which is a terrible idea."

Wrong on all counts. You don't have to give authority to anyone, you just have to take away the authority of lenders to seek legal reparations when debt is not repaid. If they try to go door to door to break kneecaps extralegally they'll suffer a rate of shotgun casualties.

"Also, your assumption that a person taking on debt is will do worse with the money ignores many possible circumstances that might lead to someone taking on debt."

No it doesn't, idiot. I said precisely what I meant to say, and it was correct. I'm not talking about specific individual circumstances. You don't legislate based on rare individual circumstances. You legislate based on the norm. I'm talking about generalities because that's how sane people legislate.

Blogger Unknown November 18, 2018 12:23 PM  

Vox, you missed the " after the Alex Jones quote, so I read the whole transcript hearing Alex Jones' voice on my head.

Got to the bottom and realised I had take the words more seriously.

Blogger tz November 18, 2018 12:31 PM  

The key is the shallowness of thinking of "voluntary". The lens of Christianity says man is fallen, and even the greatest saint might not break even (The Just man falls seven times each day).

The opioid crisis is "voluntary exchange", but it is the "will" of an addict going through withdrawal or someone in excruciating pain.

Bishop Fulton J Sheen had in one of his lectures the description of "freedom" - which goes to the heart of this and other matters.

Freedom to do what we please? No. But here is where a lot of talking point libertarians literally get confused when I ask WHICH do they want, a(n amoral) Free Market OR the NAP/UPB, etc. I usually give the example of hiring an assassin, which they say would violate the NAP, but then the NAP is limiting a voluntary exchange. But they will protest they still believe in unencumbered trade.

Freedom to do what we must - this was Sheen's second option, which is what you have under communism and socialism.

He nails Christendom's solution which preserves both freedom and morality:

Freedom to do what we ought

Christians engaging in voluntary exchange take into account that "voluntary" means the high, untempted, uncoerced, informed "free will". Somethings are not for sale - prostitutes and mercenaries are the evil of wives and soldiers. Marriage is a voluntary exchange of equal things persons.

Same with contracts. Christians won't write or enforce "screw you" contracts and will (or used to) ostracize and condemn the avarice of someone who tries to write one. The contracts, and the old common law of contract (and property with easements, rights of way, adverse possession, etc.) were all derived and only work in Christendom.

Even Usury was seen in this context and why it was seen as evil. Above I noted that every "innovation" the same libertarians complain about the money supply like fractional reserves and Fiat currency is the poison plant you get once the seed of Usury sprouts. I can invest, or help someone not expecting something back, or just know the recipient will pay it back or forward.

The libertarians and tech want to try to create a robotic, algorithmic credit system. But all will fail and be gamed - Asians are particularly good at this. Christians (not churchians) can be trusted and won't game things anyway. But they are trying to put trust in Fair Isaac FICO instead of Jesus Christ.

Blogger tz November 18, 2018 12:40 PM  

To summarize, TL;DR version:
A Christian society recognizes "voluntary" as narrow since we are fallen and our will is often darkened and such exchanges can't violate other moral principles. So they don't trade in prostitution, usury, porn, addictives, etc. (((who does?)))
They won't write one sided gotcha contracts, nor agree to, enforce, or honor them. Mostly they are for clarification and rules.
Even the Consitution was an iteration of government for Christians that didn't need zookeepers.

As usuall, the blessings of liberty, the free market, property rights, contract law are downstream from a serious and practicing Christian culture.

Why should anyone fear a Christian who owns guns, including hand guns and AR-15s?

Blogger tz November 18, 2018 12:55 PM  

@160 - the key is that they would force the libertaran to buy the government service.

But they go to absurd lengths to construct a private tyranny.

See the podcast - no vid by Molyneux, FDR3255, 50 minutes in where he goes on to explain if you don't buy at least a DRObamacare bronze "insurance" plan - no coercion! totally voluntary!), they will cut off your utilities, and lay seige to you until you starve - which seems more like the FBI at Waco than liberty. Tom Woods and Bob Murphy imply the same thing - oh, if someone tried to get a nuke they would lose their insurance, but they don't explain why anyone should care about not having insurance in an ancap society, except see the above, so it would be as bad or worse than the Iran and earlier Iraq sanctions that they condemned, but it's ok when the DRO insurance security "voluntary" consortium does it.

@162, then either the liability laws are wrong, or you should take PROPORTIONATE risk. One law error is joint and several, so if BigCorp has a billion dollar liability, and I own a billionth through stock, I can be assessed the full billion instead of one dollar.

See my comment below, 175? - so it is only a free market if I can hire an assassin to kill you? A free market cannot make liability disappear, which is what you seem to want.

Ow - Your dog bit me! I ended up with a 4 figure ER bill!
Sorry, but it isn't my dog, it is a limited liability corporation's dog, which I own, but whose only asset is the dog, so you can't sue me, you can sue the LLC, but there is nothing other than the dog to seize. Do you want to seize the dog now?

Blogger tz November 18, 2018 1:08 PM  

@164 - Zippy Catholic went into great detail on mutuum v.s. other contracts and what is Usury and what is a valid contract.
See http://whatswrongwiththeworld.net/2015/03/zippy_catholic_on_usury.html

Consider renting a house. Built into the rent is depreciation, but the owner - not the renter - needs insurance if the house burns down.

A loan might be rent of money, so say you are "renting" $1000 for $100 for a year. But you are going to immediately "burn down the house", promising to rebuild it and also come up with $100.

Debt is a way to move both consumption - AND PRODUCTION forward. The economists talk about borrowing to build a factory, but how about SAVING to build the factory. Oh, that's too slow. You could also find some other mechanisms (that would be something like crowdfunding) that doesn't have an interest rate.

Normally some existing saved thing is pleged as collateral - the bankers can seize factory 1 if factory 2 isn't paid off, but then why not just sell factory 1 or mortgage it so the lesees make the profits until factory 2 has paid for itself and he can buy back factory 1?

That said, the Gospels themselves fail to condemn loans per se, and it was a bad servant that buried his 1 talent instead of giving it to the bankers to lend at interest. Conversely, the other parables are about FORGIVENESS of unpaid or unpayable debt, so I think the others above are right that the govenment authorities should have very limited ability to abridge the life or liberty of a debtor. Bankruptcy is one solution, and it should be expanded. But again, the reason it was limited is because we became post-Christian so it was an economic calculation to extract wealth from the banks via debt, then declare bankruptcy (some states allow mansions to be kept), and repeat every 7 years.

You cannot replace Christian morality with technology. You can't redeem the fall and the brokenness of the will and concupiance with algorithms.

Blogger tz November 18, 2018 1:09 PM  

The only thing I don't like about the Darkstream is that it is only available in video, but could also just be an MP3 for almost everything. I have to find a video converter site or program.

Blogger cloom November 18, 2018 1:19 PM  

@177 That dog example is a special case of tiny equity. The corporation has large equity when it commits a large error, and it is fully liable, and it doesn't seem I want any such disappearance of liability. You are trying to escape my point.

Blogger Azure Amaranthine November 18, 2018 1:27 PM  

I've pointed out before that sin and "addiction" are practically synonymous. It's certainly a useful alternate thinking mode.

Blogger cloom November 18, 2018 1:37 PM  

@179 This downloader has audio-only menu options for youtube darkstream videos.
"YouTube Video and Audio Downloader (Dev Edt.)"
Search for it at Firefox mozilla add-ons. I see .opus and .aac fileextensions, not mp3. 18MB is the last darkstream in .opus format. But I am not sure if it is minimizing the download size or automatically converting on my computer from video to audio using ffmpeg.

Blogger jonathan.sirius.centauri@gmail.com November 18, 2018 2:16 PM  

Goods or services must be in an economy of scale in higher civilizations. Tribes and villages can barter, but city states trade with others.
Complexity requires systems to manage them, but systems reflect conditions. There is no such thing as "economics".
Economics is the sociology of accounting. Economists cannot use it to predict demand or future conditions of any market. Its about as useful as astrology and not even half as interesting or fun.
Capitalism is based on central banking. This is bad in and of itself. Like Rothschild said, "Let me control the money and I care not who makes the laws."
Large fortunes and slavery destroyed The Romans and The British. The Patricians became a separate class and the plebeians replaced by barbarians and pushed out of land by slaves.
Balance and order are necessary components to maintain society. Imbalances always cause collapse eventually. Citizens need to own a piece of society if you expect them to care and defend it.
Its human nature to not care about someone else's property, especially if you have nothing to lose personally.

The United States was a Great Experiment. However, Liberty in excess turned out to be as bad as anything else. Moderation is now a dirty word, though not many for letter words cause commotion.

The West is now Babylonian. Destroy and be free. Choose wisely.
The Greedy are never wise. Tyrants are never reasonable.
There is no fair price to negotiate with thieves and invaders.

Billions for defense, not one penny for a border wall?

Blogger tz November 18, 2018 2:22 PM  

@180 - but the root is philosophical libertarianism.

Corpseorations are undead monster bodies animated by Dr. FrankenState. One reason is to have the monster (or it's dog) be able to damage, hurt, or kill, and not be liable.

If your point is we need evil cronyism in order to have megacorps, I'm in agreement.

You didn't comment on my proportional liability.

You will find that the wall street partnerships didn't go full bubble because their income and retirement depended on stability. When they turned into corportations, only extracting the most wealth this quarter mattered.

Also you avoided my comment on broken liability laws, e.g. Coffee! Hot! Don't put in lap in moving car!

Assume we had Christendom sane liability laws. Would you still object to requiring corporations take fewer big risks or pay insurance that would eat into profits and hence dividends?

Blogger cloom November 18, 2018 3:19 PM  

I would quit my work if I was liable to lose my house. So I have skin in the game to prove my argument. The proportional idea is not able to attract me back to work. You can disagree with all of what I said but still acknowledge the discouragement to specialization/transactions of business activity, which is mentioned in the VD video. Maybe we should build our own houses, like the old days, and only be liable to ourselves. In summary, some activities would be diminished, and variety would be less, in the free market.

Also large corporations should only self-insure because insurance companies typically charge 100% mark-up of actual risk and small corps maybe should insure (workers compensation is compelled insurance). We can add barriers to entry typical of leftism, making free market less viable. The no-debt-allowed idea is also a barrier in some circumstances.

Blogger tz November 18, 2018 3:53 PM  

@185 - The question is not whether there are incentives, but are they moral, or to pivot, incentives to be moral or immoral.

You cannot self-insure because it is a contradiction in terms, as insurance is to SPREAD risk, but how can I, myself, spread risk to only myself? If "real" insurance companies overcharge, then the market would allow the creation of insurance companies that didn't, or so the story says.

Blogger tz November 18, 2018 3:58 PM  

TL;DR squared from above:
You can't replace Christians of good will and what they do because their incentives, time preference, and the rest are all about Jesus in Heaven (WWJD).

All else including credit scores are based on "What's in it for me"?

Adam Smith was incomplete. There is the invisible hand of the Devil, tempting you to cut corners, or cheat or worse, but also the invisible angelic hand leading you to do what is good. And the final "invisible hand" that leads to industry and productivity by win-win wealth, but that hand can only be a second hand pulling with the angelic hand.

Blogger Snidely Whiplash November 18, 2018 5:10 PM  

Behemoth wrote:Again, you say 'disallow,' but by what authority? I don't think you're getting my point, which is that to do so, you have to actively make it illegal to do so, which means giving that power to a state, which is a terrible idea.

The same authority the have RIGHT NOW, you nit. We're not talking about some idealized future NAP utopia where people can do anything and nobody is allowed to object. That would be a nightmare anyway.

tz wrote:Freedom to do what we ought


Laura Ingalls Wilder came to the same conclusion in one of the Little House Books, which nicely summarizes Christian liberty.
Freedom of Speech is only of value because it gives us the freedom to speak the truth. Freedom of action is only of value as it enables us to fulfill out duties. Economic freedom is only of value to the extent it allows us to prosper as a society.

Blogger tz November 18, 2018 6:03 PM  

We originally had bond vigilanties that restricted bad behavior on the part of debtors including the government

Today we have Opioid addicts and Junk Bond Junkies, both addicted to their respective things.

Blogger tz November 18, 2018 6:17 PM  

TL;DR III

Christendom can use the powertools of property rights, contracts, and free markets that everyone else ends up with amputations or other cripplinging injuries because the Fallen know they need layers of safety equipment. The Church is OSHA for society.

Blogger Behemoth November 19, 2018 12:14 AM  

@173
So, again, undermine contract law. "You're not allowed to seek reparations for this act, despite it being entirely legitimate, cus we said so."

That won't horribly backfire, I'm sure. It's not like the government having power over economics hasn't been the greatest issue or anything.

And maybe you shouldn't throw around calling folks idiots and acting smug when you can't back it up, because that's not 'rare individual circumstances,' it's the common form. A person taking out a loan to purchase a car is not evidence that the person is bad with money, but rather that they are making a large purchase and are financing it over periods of time. Likewise with a mortgage, and indeed many other forms of buying large purchases. Yeah, recognizing norms and acting off them is important, but the problem is you're wrongly asserting what is the norm, undermining your entire argument.

@188
That's not what the NAP means. Don't use terms you don't understand.

Blogger Snidely Whiplash November 19, 2018 12:43 AM  

Behemoth wrote:That's not what the NAP means. Don't use terms you don't understand.
You need to wake the fuck up Your utopia is a nightmare, first of exploitation and slavery, finally ending mass genocide. I realize you have no functional experience of real humans, but not everybody is a 20-something bro smoking dope in their dorm room.
The fact that you will dismiss this with an airy wave of the hand and a false assertion of superiority only proves you're the second most retarded person here, after justaguy. Maybe 3rd after Northpal.
Honest to god, I am so SICK of you arrogantly useless Libertarians, who would enthusiastically sign up for a world in which you would be ruthlessly slaughtered and EATEN by savages, sneering at people of normal intelligence and foresight as if we were incapable of understanding your shgit-tier philosophy.
I understand it, you pathetic substitute for a normal human. I understood it when you were still wondering why your dad, you uncle and your grampa were all the same guy. I REJECT the NAP as being not only baseless, arbitrary and stupid, I reject it as suicide.

Blogger Behemoth November 19, 2018 2:46 AM  

@192
You really don't know what the NAP means, so you're rejecting something you don't understand. You're talking out of your ass in ignorance, but are sure of your own righteous indignation to such a degree that you don't even care.

And the funny thing is, all I said was 'that is not what the NAP means.' I'm not dismissing you with some false sense of superiority, I'm dismissing you because you literally have no idea what you're talking about. You literally could not describe what the NAP is if you had to do it to save your life.

You are the equivalent of an atheist spouting shit like 'sky daddy' as if it doesn't reveal the sucking vacuum where his brain should be.

Anonymous Anonymous November 19, 2018 7:19 AM  

tz wrote:The only thing I don't like about the Darkstream is that it is only available in video, but could also just be an MP3 for almost everything. I have to find a video converter site or program.

I convert them an listen.
I use this site:
YouTube Converter

There are others if you search, but this one is very fast.

Blogger Azure Amaranthine November 19, 2018 10:15 AM  

"So, again, undermine contract law. "You're not allowed to seek reparations for this act, despite it being entirely legitimate, cus we said so."

That won't horribly backfire, I'm sure. It's not like the government having power over economics hasn't been the greatest issue or anything."


This is literally removing power from the government. But go ahead, keep trying to move the goalposts and pretend words don't mean things. No one notices you're doing it.

"And maybe you shouldn't throw around calling folks idiots and acting smug when you can't back it up"

See above. You're an idiot.

"because that's not 'rare individual circumstances,' it's the common form."

Both unproven and false to logic.

"A person taking out a loan to purchase a car is not evidence that the person is bad with money, but rather that they are making a large purchase and are financing it over periods of time."

You really are an imbecile. The very fact that they do not have the ability to purchase the car outright in and of itself means that they are, on average, worse with money than the person who has enough money to buy the car outright. IF they were not, they would have more available money from savings.

"Likewise with a mortgage, and indeed many other forms of buying large purchases."

Yes, likewise indeed, the exact opposite of what you say.

"but the problem is you're wrongly asserting what is the norm, undermining your entire argument.
"


More lies from a habitual liar. I'm done with you.

Blogger Azure Amaranthine November 19, 2018 10:24 AM  

Let's put it this way. How many people who make large purchases outright with their own money proceed to default on payments? Precisely zero. It literally cannot happen.

On the other hand, how many people default on car payments and mortgages? It's more than zero. Quod erat demonstrandum.

Blogger Snidely Whiplash November 19, 2018 10:25 AM  

Behemoth wrote:You really don't know what the NAP means, so you're rejecting something you don't understand. You're talking out of your ass in ignorance, but are sure of your own righteous indignation to such a degree that you don't even care.


Precisely as predicted. What a useless moron you are.

Blogger August November 19, 2018 11:28 AM  

We live in this oddball economy, wherein I think payments (linked to a good credit score) have become more relevant than the currency they are denominated in, or the goods one expects they will eventually purchase.

Blogger Behemoth November 19, 2018 1:22 PM  

@197
You predicted nothing. You're talking out of your ass, and calling other people idiots. You don't know what the term means. Educate yourself before revealing what an idiot you are by declaring others to be one.

@195
It's not, actually, because its saying the government has the power to stop folks from enforcing contracts they make. It's stating the government can dictate a category of contracts is invalid. This is already a bad thing, and this extends it. No goalposts were moved, you simply seem to be unable to view things outside of your narrow lens.

No, it does not actually mean they are on average worse with money, there is no reason to assume that is the case. There are a multitude of possible, and very common, reasons why this may well not be the case, and the fact you are lacking in any sort of imagination to actually think of them is your problem. To use the mortgage again, a 30 year old entrepreneur may well need to take out a loan to purchase a parcel of land for a business venture because, being younger, they have not amassed wealth enough to purchase it outright, simply based on time and circumstances related to that. A 60 year old who has already amassed wealth may be able to buy it outright, but that does not imply they are better with money at all, on average.

There is exactly zero reason to assume that a person using financing of any form is, on average, worse with money than a person not doing so. Indeed, depending on the terms of an agreement, it may actually be indicative of someone being better with their money to engage in financing and loans, given rates of return.

A young adult may not have access to the amount of wealth to outright buy even a small car. The idea that this makes them 'bad with money' is asinine, and I think you know it is, because you are attempting to declare

You don't know what a habitual liar is either, apparently, because which is it, am I lying, or am an idiot who doesn't know better? To be a liar, I'd have to be knowingly saying falsehoods. If I'm just an idiot who apparently doesn't know, than I'm not lying, I'm just an idiot. That probably speaks poorly of you because if you treat liars as if they are idiots you will have as much issues in life as if you treat idiots as if they are liars.

Of course, I am neither.

Your smug attitude only works if you're actually able to back it up. Which you can't, because you're not half as clever as you think you are.

Blogger Azure Amaranthine November 19, 2018 1:50 PM  

Don't touch the troll poop.

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