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wonderpup

The Moral Primacy Of Debt.

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In his book about Debt David Graeber makes the observation that anyone who tried to implement a policy that would directly lead to the death of thousands of babies would probably not gain the support of most liberal minded western thinkers- but there is one instrument that could be used to achieve this outcome with near moral impunity- that instrument being Debt.

This is the scenario we see playing out in Greece today as it's health service collapses and millions find themselves unable to access healthcare.

Is it not a curious thing that an EU that would be driven into a legislative frenzy over a flawed design in a car baby seat can be utterly indifferent to the young victims of it's own ruthless pursuit of the repayment of a clearly unpayable debt?

Such is the moral power of debt that it seems somehow ok that people in an EU country are left without even basic healthcare while their EU 'partners' demand ever more 'austerity' measures in the name of debt repayment.

Somehow it seems that Debt obligations trump all other moral values- but why is this the case?

Perhaps one answer might be that debt is so important to the functioning of the system that it must have primacy- or the system will founder- should we allow people to repudiate their debt on the basis of hardship would this not create a moral hazard that would be toxic to the system?

Consider also the following; What are 'Human rights?' On the face of it they are a set of laws that protect the individual from mistreatment by others. But there are some interesting limitations to these 'rights'. For example should your employer make you redundant, exposing you to stress, homelessness or even hunger you have no right to sue him under your 'human rights'. On the other hand should you be damaged at work due to some mechanical failure or other your 'human rights' kick in with a vengence- as a damaged entity you have recourse to the full panoply of the legal process, including, if required, your human rights.

So what appears to matter here is not your suffering as such but your integrity as an 'object'. It Turns out that your 'human rights' are oddly reminiscent of a special kind of property rights that can apply to certain type of person- that person being one who is owned by another, and-being the property of another- requires compensation for damage done to that property.

So we have a moral/legal system that-on the face of it- seems strongly orientated to the protection of the individual- but on deeper examination exhibits some curiously suggestive attributes. The two prime legal/moral constructs in our society appear to be the imperative to repay ones debts and the right of redress for damage to the person- both of which seem to be derivatives of an historical debt serf relationship in which the surf was to some degree or another considered the property of his owner/creditor.

In a way it's blindingly obvious that human rights are completely incompatible with Capitalism because in a capitalist society those rights will come into conflict with the competitive basis of a system in which there will always be losers as well as winners. So what we seem to have created is a modified model of the debt surf construct in which the most defended paradigms are the obligation to repay one's debts and the maintenance of the physical capability to do so.

Our right to sue those whose negligence or malice has inflicted damage upon our person may in the last analysis have less to do with our 'human rights' and more to do with our value as debt servicing agents in a system that seems designed to ensure that most of us will remain in debt until old age.

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You fundamentally misunderstand capitalism. Capitalism can work to the advantage of everyone, but it requires the overall material wealth to increase. So long as this is the case, then the wealth of those at all levels can increase. One of the functions of a state is to ensure this happens. The trick is to keep the 'cake' growing while redistributing it amongst the population, which means removing some cake from those most directly involved in its production, which can be a disincentive. Not being paid money due to you is inclined to deter you from making further resources available to the debtor.

Your Winners & Losers outlook assumes the cake can only ever be a certain size. History would suggest this is not so.

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Ultimately I would disagree, debt doesn't have primacy nothing does. It can have primacy up to a point and once the tipping point is reached violence ensues. This can be seen in Germany during the 1920's, the debt had primacy, led to great suffering and out of that came Hitler. It's unlikely he would have come to power if it wasn't for the war debt issue.

That isn't to say can't suffering cannot be implemented by debt, but debt is a promise of future income. If that income doesn't exist you cannot pay.

Hammurabi's Code of Laws

48. If any one owe a debt for a loan, and a storm prostrates the grain, or the harvest fail, or the grain does not grow for lack of water; in that year he need not give his creditor any grain, he washes his debt-tablet in water and pays no rent for this year.

Ancient law may have been a lot better than modern laws.

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You fundamentally misunderstand capitalism. Capitalism can work to the advantage of everyone, but it requires the overall material wealth to increase. So long as this is the case, then the wealth of those at all levels can increase. One of the functions of a state is to ensure this happens. The trick is to keep the 'cake' growing while redistributing it amongst the population, which means removing some cake from those most directly involved in its production, which can be a disincentive. Not being paid money due to you is inclined to deter you from making further resources available to the debtor.

Your Winners & Losers outlook assumes the cake can only ever be a certain size. History would suggest this is not so.

I don't think many honest capitalists would agree with that. It's primarily the other way round - removing cake from those least involved in its production, which is an incentive. Not being paid money that's not due to you is inclined to deter you from sponging on others' resources and efforts.

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As we are born as property of one state, should this be any surprise?

We are passed as property between states, only when the trade suits the new owner. At which point, we are forced to repay the debts of our new masters.

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I don't think many honest capitalists would agree with that. It's primarily the other way round - removing cake from those least involved in its production, which is an incentive. Not being paid money that's not due to you is inclined to deter you from sponging on others' resources and efforts.

That's a very odd view of capitalists. I think they are are solely concerned with increasing their own wealth - unless they are sadists. Undoubtedly these exist, but I would suggest there are at least as many who are charitably inclined. Ultimately though, this is not their concern. Getting richer is the name of the game. Part of government's remit is to spread the riches about a bit.

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That's a very odd view of capitalists. I think they are are solely concerned with increasing their own wealth - unless they are sadists. Undoubtedly these exist, but I would suggest there are at least as many who are charitably inclined. Ultimately though, this is not their concern. Getting richer is the name of the game. Part of government's remit is to spread the riches about a bit.

It's odd because it's wrong or because you don't agree?

1) 'An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market'.

2) '[A system that] can work to the advantage of everyone, but it requires the overall material wealth to increase. So long as this is the case, then the wealth of those at all levels can increase. One of the functions of a state is to ensure this happens. The trick is to keep the 'cake' growing while redistributing it amongst the population, which means removing some cake from those most directly involved in its production, which can be a disincentive.

One of those statements reads more like a call to personal enrichment in an environment of productive competition, free from monopolies and systemic sponging than the other.

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Wrong, because capitalists are not concerned with taking wealth from others. That might be so, but it's not their aim (as capitalists). Their aim is to increase personal wealth. Government's function should be to facilitate this while simultaneously increasing the wealth of everyone else.

Edited by cock-eyed octopus

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Consider also the following; What are 'Human rights?' On the face of it they are a set of laws that protect the individual from mistreatment by others. But there are some interesting limitations to these 'rights'. For example should your employer make you redundant, exposing you to stress, homelessness or even hunger you have no right to sue him under your 'human rights'. On the other hand should you be damaged at work due to some mechanical failure or other your 'human rights' kick in with a vengence- as a damaged entity you have recourse to the full panoply of the legal process, including, if required, your human rights.

So what appears to matter here is not your suffering as such but your integrity as an 'object'. It Turns out that your 'human rights' are oddly reminiscent of a special kind of property rights that can apply to certain type of person- that person being one who is owned by another, and-being the property of another- requires compensation for damage done to that property.

So we have a moral/legal system that-on the face of it- seems strongly orientated to the protection of the individual- but on deeper examination exhibits some curiously suggestive attributes. The two prime legal/moral constructs in our society appear to be the imperative to repay ones debts and the right of redress for damage to the person- both of which seem to be derivatives of an historical debt serf relationship in which the surf was to some degree or another considered the property of his owner/creditor.

In a way it's blindingly obvious that human rights are completely incompatible with Capitalism because in a capitalist society those rights will come into conflict with the competitive basis of a system in which there will always be losers as well as winners. So what we seem to have created is a modified model of the debt surf construct in which the most defended paradigms are the obligation to repay one's debts and the maintenance of the physical capability to do so.

Our right to sue those whose negligence or malice has inflicted damage upon our person may in the last analysis have less to do with our 'human rights' and more to do with our value as debt servicing agents in a system that seems designed to ensure that most of us will remain in debt until old age.

Where does the excuse giving end and personal responsibility begin?

No one is dragging anyone into taking on debt. I am not in debt. Quid pro quo - one thing for another. You buy your house with a mortgage, outbidding others, you repay the mortgage. As I understand it the true value of Greece's debt has been written down by 1/3rd.. creditors willing to forgo some €100 Billion.

Hammurabi's Code of Laws

48. If any one owe a debt for a loan, and a storm prostrates the grain, or the harvest fail, or the grain does not grow for lack of water; in that year he need not give his creditor any grain, he washes his debt-tablet in water and pays no rent for this year.

Ancient law may have been a lot better than modern laws.

For the debtors yes. I couldn't care less for the California prime who've been outbidding others by fortunes for prime real estate if the drought gets more serious and impinges on values / jobs. It creates opportunity for others. And not having to pay back but keeping, denies others opportunity. Also if all banks offered that you might as well be asking for a doubling in house prices, where debtors can relax. There's insurance, not borrowing more than you can afford to repay if your circumstances change (eg paycut.. still afford mortgage because you didn't pay £750,000 for your house but £200,000 instead).

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Wrong, because capitalists are not concerned with taking wealth from others. That might be so, but it's not their aim (as capitalists). Their aim is to increase personal wealth. Government's function should be to facilitate this while simultaneously increasing the wealth of everyone else.

Do you mean 'concerned with' as in 'intend to'? If so then re-read what I wrote...

'It's primarily the other way round - removing cake from those least involved in its production, which is an incentive. Not being paid money that's not due to you is inclined to deter you from sponging on others' resources and efforts.'

...and tell me where I said the aim of capitalists is to take wealth from others. It's you who introduced the concept of a capitalist system that also incorporates a hybrid redistribution by then removing cake from those most directly involved in it's production. Where that occurs it's not capitalism.

(In reality I think capitalism is a nonsense word bandied about by one group of people trying to justify taking stuff that isn't theirs or that they played no part in creating. I think similarly of most other -isms, but this is for the sake of my trying to understand what others think things mean).

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There is no "moral" obligation. None at all.

That's why every debt carries a credit risk and an interest rate. To protect (in aggregate) the lender from default.

Nobody forces a lender to price and enter into a contract with a debtor. He wins some, he loses some. There's no incentive for a creditor to attempt to recover money which is unrecoverable. It just costs them time, money and prevents them lending recovered capital to better prospects.

Nothing poisonal, just bizness.

Edited by R K

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There's every right to pursue where debtor can pay, even though it means debtor tightening their belts, restructuring, downsizing.

Some thought it perfectly ok to take big mortgage and send email an email with typed digits in it to 'pay it off in full' because banks 'make debt out of the air'.

Truth is subjective. Obviously such a debtor loves that.. they'd get a house for nothing, above others who saved/will repay.

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There's every right to pursue where debtor can pay, even though it means debtor tightening their belts, restructuring, downsizing.

Some thought it perfectly ok to take big mortgage and send email an email with typed digits in it to 'pay it off in full' because banks 'make debt out of the air'.

Truth is subjective. Obviously such a debtor loves that.. they'd get a house for nothing, above others who saved/will repay.

Lenders' capital structure and risk management policies allow only for a modest percentage of deadbeats and/or scofflaws at any one time. Beyond that the doors immediately close and never re-open. After the dust settles, significantly higher borrowing costs for everybody else.

Fool me once, shame on you. Fool me twice...

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In a way it's blindingly obvious that human rights are completely incompatible with Capitalism because in a capitalist society those rights will come into conflict with the competitive basis of a system in which there will always be losers as well as winners.

Wow, this so wrong.. clearly no losers in crony capitalism/socialism systems, nobody been forced into a hardship thru the last decade in the blighty owing to reckless fiscal/monetary policies?

That's the whole point that markets left to work where they can work will always satisfy more people than central planners, and cheaper, by the way. No, capitalism is not your answer to all problems, but it is surely way more efficient than central planning and its corollary of dealing with unintended consequences that bring people ever closer to serfdom. It's OK if the government wants to participate in the market - let it compete in the market place, say, for health and education services by letting people decide whom they pay.

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Wrong, because capitalists are not concerned with taking wealth from others. That might be so, but it's not their aim (as capitalists). Their aim is to increase personal wealth. Government's function should be to facilitate this while simultaneously increasing the wealth of everyone else.

Perception of wealth is determined by comparison with other people rather than some form of absolute (at least once most of the people are out of real poverty, i.e. don't have any genuine survival concerns). If you increase the wealth of everyone then nothing's changed in that perception, although you're still engaged in a resource-consuming unstable must-keep-rushing-forward-just-to-stay-still game.

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Perception of wealth is determined by comparison with other people rather than some form of absolute (at least once most of the people are out of real poverty, i.e. don't have any genuine survival concerns). If you increase the wealth of everyone then nothing's changed in that perception, although you're still engaged in a resource-consuming unstable must-keep-rushing-forward-just-to-stay-still game.

That's only true for some people, some capitalists - shallow and insecure people imo - comparing their positions vs other greater wealth, and caught up in trying to outdo each other for ever greater excess. Hopefully pursuit of that excess with lead to the HPC, Serpico-style, with his new Bentleys, mansion, live-in staff, racehorses, private plane... then the sob story at losing high position into a recession, blaming Maggie.

Some of us are content with our positions (savings-income). Other than for housing costs.

Given opportunity to afford a small humble house in this general area, and basic position for earnings/basic wealth, I wouldn't feel the need to keep rushing-forward-just-to-stay-still-game.

I do feel the need to work-harder/compete more, at the moment simply vs year-on-year-on-year HPI, at 12% bubble-on-bubble.

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You fundamentally misunderstand capitalism. Capitalism can work to the advantage of everyone, but it requires the overall material wealth to increase. So long as this is the case, then the wealth of those at all levels can increase. One of the functions of a state is to ensure this happens. The trick is to keep the 'cake' growing while redistributing it amongst the population, which means removing some cake from those most directly involved in its production, which can be a disincentive. Not being paid money due to you is inclined to deter you from making further resources available to the debtor.

Your Winners & Losers outlook assumes the cake can only ever be a certain size. History would suggest this is not so

I think you overlook the obvious short cut to gaining the largest share of the cake- which is to take control of the bakery. The most logical way for a capitalist to behave is to subvert the rules of capitalism in order to bend them in his favor, thus maximizing his profits.

What all capitalists secretly yearn for is a variant of socialism in which the state controls the market and they in turn control the state- which is why you often see 'free market' businessmen go all misty eyed as they contemplate the degree of control that the People's republic of China seem able to exercise over their population- most of these capitalists would ditch democracy in a heartbeat if it meant they could have access to this kind of power.

So there is nothing inherently liberal or democratic about Capitalism- and why should there be? After all the name of the game is to maximize your gains, not produce a fair or equitable outcome.

If you doubt me just acquaint yourself with the vast sums spent on lobbying and political donations by the corporations- they understand that 'free markets' are just a fairy story in any universe in which state power is the deciding factor.

Look closely at the shape of your 'human rights' and you will find an excision there the shape of which precisely matches the reality that in a capitalst society you have no actual rights to such basic things as food, shelter or medical care if you cannot pay for them- which is quite odd- after all what could be more basic to your existence than food, shelter and medical care?

Yes there is 'welfare'- but that too is not a 'human right'- if it were the current demolition of Greek civil society would be a de jure crime against humanity- but no one is calling it such.

So what exactly is it that your 'human rights' protect? Well they mostly protect your value as livestock, in the sense that if I damage you I may be liable to pay for that damage- you, as a kind of property- are well defended in law.

So what your 'human rights' primarily celebrate and defend is your value as an asset to whichever employer or creditor currently profits from your existence.

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Perhaps one must separate "Debt" of real specie, from "Debt" related to Credit Money Creation: i.e. illusory "money"?

In the case of "Money" created by sleight of hand, rather than from honest toil and real measurable growth, (e.g. money borrowed from friends, parents etc), then Mickey Mouse money aint money!

And this is surely the core problem?

The Western financial fiat monetary system has been created by a mix of venality and chicanery and urgently needs to collapse, that social order might be returned.

Otherwise, we face revolution, anarchy and a complete collapse of ordered society.

Or indeed, a takeover of Europe (and eventually, the USA) by Asia.

Since it is now only Asia which creates real new primary wealth: as against imagined "Wealth" based upon speculative and transitory possession, mainly of debt instruments.

(n.b. I leave out Gulf State et al "Wealth" since it again is transitory and a fast diminishing natural resource-based asset.)

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Hey Wonderpup can I borrow your car? I really need to drive to the hospital in the next town to visit my dying granny.

Sure, of course, but you have to give it back to me tomorrow.

Of course I will, my word is my bond.

...tomorrow comes... Hey Erat Forte, can I have my car back now?

No sorry it's mine now.

But you promised to give it back!

Look, Wonderpup, are you saying there is some moral obligation on me to give you a car? I have Human Rights you know. Bye.

Edited by erat_forte

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Hey Wonderpup can I borrow your car? I really need to drive to the hospital in the next town to visit my dying granny.

Sure, of course, but you have to give it back to me tomorrow.

Of course I will, my word is my bond.

...tomorrow comes... Hey Erat Forte, can I have my car back now?

No sorry it's mine now.

But you promised to give it back!

Look, Wonderpup, are you saying there is some moral obligation on me to give you a car? I have Human Rights you know. Bye.

Cute but beside the point- I'm not arguing that you actually have human rights in any valid sense, I'm arguing that the human rights you are deemed to have are actually more akin to property rights or are at best derivations of the idea that a slave is the property of his master and so is to be protected from damage.

For example should you owe your creditors a mortgage payment their right to assert their debt claims against you will trump your right to shelter and you will be evicted- this could not occur if in fact you had a basic right to shelter- but of course you don't.

So while we fondly imagine we all have these 'human rights' we don't- the most we have is a peculiar kind of status that means-like private property- we cannot be damaged maliciously or via negligence- your car has similar 'rights' of redress in law.

So as an object you have rights- but as a human? Not so much. Our system will always take the side of the creditor even if this means you wind up homeless and freeze to death as a consequence.

What counts here is not your wellbeing but the legal context of the damage inflicted on you- thus your unfortunate demise via homelessness is entirely acceptable but a black eye as the result of an assault in the street is not- after all we can't have the livestock inflicting damage on itself, it's unproductive.
Edited by wonderpup

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I think it's impossible to know you would be content and wouldn't want to keep rushing forward. I think many of those who have a few million and are used to it and want another few million initially felt the same way. Maybe some people are hyper-rational but the rest of us probably don't have a very good grasp of our motivations or what causes them to change.

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I think it's impossible to know you would be content and wouldn't want to keep rushing forward. I think many of those who have a few million and are used to it and want another few million initially felt the same way. Maybe some people are hyper-rational but the rest of us probably don't have a very good grasp of our motivations or what causes them to change.

I think it's possible for me to know myself and my own motivations and attitude to risk - and remaining rational/safe to having savings - not being exposed to high leverage debt positions, where one can cascade on the other, and leave me homeless/skint/bankrupt.

I'm not doing the victim-dance for those chasing ever more money/profit/never-enough... like so many people who've gone bust. I'm looking forward to it about to occur, to pick up a house at a distressed price, in a turn of the market.

For some reason first person I thought of was that boyband singer.

http://www.dailymail.co.uk/news/article-2159045/Westlifes-Shane-Filan-declared-bankrupt-property-empire-crumples.html

Think of his Human Rights will ya. Send your donations directly to him, along with all those set to fall into a HPC/market turn.

Not another bailout - protect the innocence of reckless decisions / over-reach / never got enough money / ever more risk.

Maybe a market-change/crash will bring some focus on to motivations of ever more £millions chasers, as they go from millionaire property portfolio owners (or whatever) to margin calls, and bankruptcy and renters themselves.

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Wonderpup, I think you are right about how our markets work, but there is a large government sector which does enforce human rights, as long as you are currently in the system.

You have a right to shelter, as long as you currently have shelter!

If someone is actually at risk of homelessness that's a disaster, and then there is emergency accomodation.

If people are in substandard accomodation (sheds in beds, overcrowded unlicensed HMOs etc.) there is an outcry.

But those who are actually sleeping on the streets don't really matter. I don't understood why people who care so much about benefits don't seem so keen on helping out those in much worse trouble.

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Of course it's possible! What I meant was it's impossible to know with certainty.

How many people do you think just aim to maximise wealth from a young age? Probably very few.

How many people graduate, get a good job within a few years, then get used to a relatively high income, then a pay rise, then get used to that, and so on? Probably most. And if you look at them over time, they may look like they're trying to maximise wealth and income.

I think I'm unusual because my spending habits have hardly changed. Pay rises just change the amount I save. But I don't think I know my motivations perfectly and I can't see the future. What if I develop expensive tastes? I think you and I will be in the minority if we don't.

I had a similar conversation with a girl once about divorce. She was fairly sure she wouldn't get divorced. Don't you think all those divorcees thought the same thing when they wed? I'm different to them and will work harder at marriage.

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