Why is lending a necessity? "Cash on the barrel" is pretty great, in my view; don't spend what you don't have, and that includes other people's money.
The only counter I've thought of is starting a business or factory. Contracts could be negotiated with employees to have their wages be a (small) % of profits instead (or in supplement) of hourly or salary. Harder initial investments like real estate and hardware can be pooled from the funds of cofounders - I'm not convinced that every business must be able to be founded by a single entrepeneur. The difference between this and borrowing money is that the cofounders might actually gain some skin in the game instead of just some rootless cosmopolitan watching numbers in his office. You could try to legislate lenders into becoming cofounders, but it's really not the same because they don't give a shit as long as they get their cut.
The only counter I've thought of is starting a business or factory.
You've fundamentally answered your own question.
You lend money to someone who has the capability of returning on your investment, but does not have the capitol assets to do it themselves. So, you calculate the profits they expect to make, and charge interest on a loan which is your return on your own money. They created wealth by their action, but they would have taken decades to accumulate the capital to even try. So, they give you money for having helped finance them.
It's pretty reasonable.
The difference between this and borrowing money is that the cofounders might actually gain some skin in the game instead of just some rootless cosmopolitan watching numbers in his office.
That's the difference between loaning your money, and loaning other people's money. Our Keynesian system is built to protect the banks from loss and to side against you whenever possible to keep the banks from ever actually suffering consequences. Not only that, they're funding the loans with your money, not theirs. In the end, they never lose anything because the game is intentionally rigged by people who thought that would stimulate economic growth.
Some banks really should go out of business, and really should be forced to gamble their money instead of someone else's.
That's not a problem with lending money & interest. That's a problem with Socialist Economic policies.
That's the difference between loaning your money, and loaning other people's money.
I was overlooking that part of it, for some reason.
I still am not comfortable with charging interest in general, but I'll admit that it can have a beneficial place and so shouldn't be banned altogether. It's just the whole 'making money with no work/risk' thing that bothers me. Perhaps it really would be sufficient to ban the reallocation ("investment") of funds that aren't your own.
It's just the whole 'making money with no work/risk' thing that bothers me.
No risk? Giving you my money and hoping you give it back is incredibly risky. But that's your point:
Perhaps it really would be sufficient to ban the reallocation ("investment") of funds that aren't your own.
Giving you his money isn't really all that risky at all.
Now, I'm not saying we end banking (because what you just suggested kills banking), but it would be more proper to talk about making sure people gave consent to having their money lended out.
Now, I'm not saying we end banking (because what you just suggested kills banking), but it would be more proper to talk about making sure people gave consent to having their money lended out.
Well now I have to ask, what's the actual benefit of banking? From what I can parse from old media, a lot of the promise was that it's risky to secure your own wealth so you let the bank secure your wealth for you (for a fee, I guess, no details ever in these old things). That can't be all there is to it. Is it a natural extension of hiring mercenary guards for the transfer of physical wealth? Or is it more to do with the phasing out of physical wealth in exchange for receipts and the convenience of fast, remote transferral?
Somewhat ironically, I think interest could be used in fixing the non-consentual lending. Anyone who flips the "you may lend my money" switch for their account should get some interest on their deposit, if it isn't possible to get actual dividends like one of those broker things. But this is total nonsense as long as we have forced and planned inflation, because it's bordering on coercion for how we manage our savings.
Like almost everything it's a matter of degree, the question is where you draw the line. Almost every reasonable person who's grounded in reality can agree on the most egregious examples, things like outright scamming people or blatantly predatory actions like truck systems and high double digit (or triple digit) mafia style "payday" loans.
It's close to the normal side of things you start running into problems. Particularly where you have misleading but not outright fraudulent systems, like multi-layered student loans that to a non-accountant seem like you're paying off but in reality you're just paying interest and never any principal.
A lot of this could be solved by regulating the "informed consent" side of things rather than trying to regulate every new insane financial instrument people come up with. If you require lenders to make the terms clear in plain fucking english with clear examples of all contingencies then you'll see a lot less people getting ripped off or making stupid decisions. One of the founding principles of capitalism is that people are making informed decisions with full information. A system where you need a week with two lawyers and an accountant to understand what the fuck is going on for every freaking transaction isn't a healthy free market, it's one filled with rent seekers and deliberate distortions by bad actors.
It isn't as much of a degree as people think. I'm perfectly fine with a triple digit payday loan. (Operation Choke Point is evil)
For example. If you NEED my $10 right the fuck now, but I also need my $10 right now, but slightly less. I might ask you for $20 back because of how much I need the money right now. If you need $10 to make $50 additional dollars, then this is perfectly reasonable. Whatever I need my $10 for, I can stall and then spend it with the extra $10 I made from loaning you money as part of my needs getting filled.
If you want $10 from me just because you want to fuck off with it, and you still promise $20 back right now, I'm going to be pissed at you, and rightfully.
There is nothing immoral about charging even 100% interest. The issue is whether or not the borrower actually understands that. And that's where you get into the 'informed consent' side of things.
Yes, informed consent is a big thing. I'm still struggling to imagine how it could be corrected, because I believe a lot of the obfuscation is directly tied to beaurocratic bloat.
I've been thinking recently, that even for the libertarian ideal, it's essential to maximise 'informed consent'. The ideal of the contract, I'd say, is founded upon maximal understanding of the terms/conditions by all concerned parties. If no one understands the terms, the contract is useless. If only one person understands the contract, it's likely a scam. If all but one person understands the contract, it's predatory.
Having a system set up to demand translators (lawyers) is a big warning sign. Needing professionals to translate jargon is the same.
The tipping point for me here was EULAs. What a load of shit these are. "By clicking agree, you agree to this 40 page document of fine print", with the subtext always being that you may not use the product without clicking agree. We could do without this, at the least. It should not be possible to sign away your rights without understanding that you're doing so AND it should not be a respected contract when you're effectively coerced into it.
Why is lending a necessity? "Cash on the barrel" is pretty great, in my view; don't spend what you don't have, and that includes other people's money.
The only counter I've thought of is starting a business or factory. Contracts could be negotiated with employees to have their wages be a (small) % of profits instead (or in supplement) of hourly or salary. Harder initial investments like real estate and hardware can be pooled from the funds of cofounders - I'm not convinced that every business must be able to be founded by a single entrepeneur. The difference between this and borrowing money is that the cofounders might actually gain some skin in the game instead of just some rootless cosmopolitan watching numbers in his office. You could try to legislate lenders into becoming cofounders, but it's really not the same because they don't give a shit as long as they get their cut.
You've fundamentally answered your own question.
You lend money to someone who has the capability of returning on your investment, but does not have the capitol assets to do it themselves. So, you calculate the profits they expect to make, and charge interest on a loan which is your return on your own money. They created wealth by their action, but they would have taken decades to accumulate the capital to even try. So, they give you money for having helped finance them.
It's pretty reasonable.
That's the difference between loaning your money, and loaning other people's money. Our Keynesian system is built to protect the banks from loss and to side against you whenever possible to keep the banks from ever actually suffering consequences. Not only that, they're funding the loans with your money, not theirs. In the end, they never lose anything because the game is intentionally rigged by people who thought that would stimulate economic growth.
Some banks really should go out of business, and really should be forced to gamble their money instead of someone else's.
That's not a problem with lending money & interest. That's a problem with Socialist Economic policies.
I was overlooking that part of it, for some reason.
I still am not comfortable with charging interest in general, but I'll admit that it can have a beneficial place and so shouldn't be banned altogether. It's just the whole 'making money with no work/risk' thing that bothers me. Perhaps it really would be sufficient to ban the reallocation ("investment") of funds that aren't your own.
No risk? Giving you my money and hoping you give it back is incredibly risky. But that's your point:
Giving you his money isn't really all that risky at all.
Now, I'm not saying we end banking (because what you just suggested kills banking), but it would be more proper to talk about making sure people gave consent to having their money lended out.
Well now I have to ask, what's the actual benefit of banking? From what I can parse from old media, a lot of the promise was that it's risky to secure your own wealth so you let the bank secure your wealth for you (for a fee, I guess, no details ever in these old things). That can't be all there is to it. Is it a natural extension of hiring mercenary guards for the transfer of physical wealth? Or is it more to do with the phasing out of physical wealth in exchange for receipts and the convenience of fast, remote transferral?
Somewhat ironically, I think interest could be used in fixing the non-consentual lending. Anyone who flips the "you may lend my money" switch for their account should get some interest on their deposit, if it isn't possible to get actual dividends like one of those broker things. But this is total nonsense as long as we have forced and planned inflation, because it's bordering on coercion for how we manage our savings.
Like almost everything it's a matter of degree, the question is where you draw the line. Almost every reasonable person who's grounded in reality can agree on the most egregious examples, things like outright scamming people or blatantly predatory actions like truck systems and high double digit (or triple digit) mafia style "payday" loans.
It's close to the normal side of things you start running into problems. Particularly where you have misleading but not outright fraudulent systems, like multi-layered student loans that to a non-accountant seem like you're paying off but in reality you're just paying interest and never any principal.
A lot of this could be solved by regulating the "informed consent" side of things rather than trying to regulate every new insane financial instrument people come up with. If you require lenders to make the terms clear in plain fucking english with clear examples of all contingencies then you'll see a lot less people getting ripped off or making stupid decisions. One of the founding principles of capitalism is that people are making informed decisions with full information. A system where you need a week with two lawyers and an accountant to understand what the fuck is going on for every freaking transaction isn't a healthy free market, it's one filled with rent seekers and deliberate distortions by bad actors.
It isn't as much of a degree as people think. I'm perfectly fine with a triple digit payday loan. (Operation Choke Point is evil)
For example. If you NEED my $10 right the fuck now, but I also need my $10 right now, but slightly less. I might ask you for $20 back because of how much I need the money right now. If you need $10 to make $50 additional dollars, then this is perfectly reasonable. Whatever I need my $10 for, I can stall and then spend it with the extra $10 I made from loaning you money as part of my needs getting filled.
If you want $10 from me just because you want to fuck off with it, and you still promise $20 back right now, I'm going to be pissed at you, and rightfully.
There is nothing immoral about charging even 100% interest. The issue is whether or not the borrower actually understands that. And that's where you get into the 'informed consent' side of things.
Yes, informed consent is a big thing. I'm still struggling to imagine how it could be corrected, because I believe a lot of the obfuscation is directly tied to beaurocratic bloat.
I've been thinking recently, that even for the libertarian ideal, it's essential to maximise 'informed consent'. The ideal of the contract, I'd say, is founded upon maximal understanding of the terms/conditions by all concerned parties. If no one understands the terms, the contract is useless. If only one person understands the contract, it's likely a scam. If all but one person understands the contract, it's predatory.
Having a system set up to demand translators (lawyers) is a big warning sign. Needing professionals to translate jargon is the same.
The tipping point for me here was EULAs. What a load of shit these are. "By clicking agree, you agree to this 40 page document of fine print", with the subtext always being that you may not use the product without clicking agree. We could do without this, at the least. It should not be possible to sign away your rights without understanding that you're doing so AND it should not be a respected contract when you're effectively coerced into it.