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santiago:
  1. Redistribute society's resources by giving priority to some claims over others. (Which leads to a stampede to get the highest priority claim on resources possible -- US treasuries.) or,

  2. Grow the amount of real resources so that the claims can be transferred to the future and made good then.

Or in fact


3/ Change the nature of the claim

In this case from a dated debt obligation issued by a credit middleman, aka a bank, to an open undated credit obligation issued by a producer of "money's worth" in value.


"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 23rd, 2009 at 11:48:17 AM EST
[ Parent ]
Changing the nature of an existing claim is just another form of politically coerced redistribution.
by santiago on Mon Mar 23rd, 2009 at 12:38:53 PM EST
[ Parent ]
Not if it's something people agree to do without reference to the government.

That's what a partnership approach entails. Two way agreement.

To replace dated secured debt with undated Units of revenues leads to a better outcome both for the financier and for the user of the finance.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 23rd, 2009 at 01:19:53 PM EST
[ Parent ]
Government is just one of many possible forms of collective action.  It's not an agent by itself -- it's a result of the agency of people.  If two people engage in a two-way agreement, they have, themselves, formed a form of their own "government" for their own narrow purpose, just like a marriage, or a contract to buy a home in expectation of future payments. In all of these examples, power  -- the imposition of one party's interests over those of another's -- is still an important factor. So the word "government" is a red herring here.  

Doesn't replacing dated secured debt with undated units of revenues lead to a better outcome for the financier only if the value to the financier of having a more certain payment sooner is lower than the value of having a less certain payment in the future? All sorts of things can modify the magnitude and certainty of either form of reward for taking risk, but what determines whether or not someone is injured or benefited by the change is their own personal preferences, not the structure of payments themselves.  So anything that changes how people are rewarded for the risks they take when engaging in partnerships for profit necessarily results in losers as well as winners.  The only question is the number in each category, and that's still pretty ambiguous.

by santiago on Mon Mar 23rd, 2009 at 03:24:47 PM EST
[ Parent ]
santiago:
Doesn't replacing dated secured debt with undated units of revenues lead to a better outcome for the financier only if the value to the financier of having a more certain payment sooner is lower than the value of having a less certain payment in the future?

What it does is transform the risk of non-payment to the risk of not finding a buyer. If a Unit is redeemable for production, rather than revenue, then there is the option of actually using the production.

IMHO Units redeemable in energy or land rental value score highly in terms of their use value to the owner/investor.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 23rd, 2009 at 03:40:38 PM EST
[ Parent ]
What you're proposing to do is to allow remuneration for risk even when a market does not exist for a commodity, and you're right that it does provide a lot of benefits to some people who would be most susceptible to deprivation if a market for a commodity failed or didn't exist.  In Amartya Sen's terms, you're providing an exchange entitlement to something that is not as dependent upon markets, so you can smooth people's consumption patterns during periods of uncertainty or market volatility.

However, you still can't escape the issue of differing personal preferences for risk just by changing how risk is compensated.  Some people will always be more averse to risk and some will be less so, so just changing how risk is compensated necessarily rewards some and injures others.  One of the limits of your system appears to be that fragmented lending is done away with -- people can't go around anymore with the same claim on the same resource, both of them independently believing it will be there for them whenever they need it.  In a time like now such a limit seems like a really good idea because there were obviously too many claims upon the limited resources available.  However, although the risk of a period like now occurring always exists, the truth is that most of the time it's perfectly alright -- indeed, much more efficient -- to allow two or more people to walk around believing they each have entitlement to the same thing while they are not using it.  If this is the case, then societies which allow such higher risk but usually more efficient ways of organizing resources to occur can be expected to outperfom, economically, and thus politically, those societies which choose to limit themselves to a more conservative, albeit more stable, way of determining who has access to what resources, like your innovative idea does, right?  It's the ever reappearing revenge of the dismal, it seems to me.

by santiago on Mon Mar 23rd, 2009 at 04:27:23 PM EST
[ Parent ]
One of the interesting qualities about what I like to call "Open" Capital ("nth's") and Credit (redeemable Units) is that the securing of supply may be entirely distinguished from the securing of price. So you can make a supply contract, and then pay for it either conventionally or by redeeming a Unit the supplier had issued previously, and which you had bought on the open market to secure price.

Another aspect is that ownership and control may also be distinguished in new ways. Unlike in a Corporation, where it's typically one share, one vote.

"Property" is not in fact, as most people think, an object. It is the relationship between the subject (individual, or collective of them) and the object (eg land). ie land is the object of a man's property, or something which is proper to the man.

This property relationship consists of a bundle of rights and obligations, and I believe that by packaging the whole relationship up within the legal concept of an open "Corporate" we may actually then share out these rights and obligations optimally in an extremely simple but effective "co-ownership" framework agreement.

Limited Liability is a red herring.

Indeed, if you bring all the stakeholders "inside the box" - as I did with a film - then there is really no need to limit your liability at all since the people you would be protecting yourself against are now all your partners....


"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 23rd, 2009 at 05:00:41 PM EST
[ Parent ]
Property is not a relationship between an object and and person.  Rather, it is a relationship between people.  The object in question is proper to some and not to others -- this is the relationship that rights to property establishes.  

But more generally still, is it really possible to bring ALL the stakeholders inside the corporate box?  Even in a film, for example, the collective can be sued or otherwise attacked by an outside party who feels materially offended by the film.  Or did you find a way to include that possibility too?  It would seem that in any collective action, particularly a commercial, political, or artistic one, there will always be stakeholders who you want to exclude precisely because they have a stake in the outcome that is contrary to your own.  How do you allow for that?

by santiago on Mon Mar 23rd, 2009 at 06:02:33 PM EST
[ Parent ]
santiago:
The object in question is proper to some and not to others -- this is the relationship that rights to property establishes.  

I give you that property rights necessarily involve relationships between people individually and collectively, but the legal protocols set out the relationship between object and person, and I am surprised you think otherwise.

In fact, when you say "proper to some" you are recognising that a relationship exists.

santiago:

But more generally still, is it really possible to bring ALL the stakeholders inside the corporate box?  Even in a film, for example, the collective can be sued or otherwise attacked by an outside party who feels materially offended by the film.

The logical conclusion is for the viewer to join a "viewers club", and contract out of such nonsense by participating on the basis of alternative dispute resolution. But as it was a ten minute black and white comedy, we never got that far.

My point is that there is no reason why a consensual protocol cannot transcend all others.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 23rd, 2009 at 06:31:08 PM EST
[ Parent ]
I don't agree on the property question.  Laws and other social norms pertain to human interactions and do not define a relationship with an object but rather a relationship between people regarding exclusive use of an object.  Without such a law or social norm, people could still use the object like it is, but just not exclusively, so it's the social relationship that is specified by the social rules not the relationship between person and thing.

On your main point, I think that it could be entirely possible that a consensual protocol like you are describing could transcend all others, but in order to do that it would have to provide benefits to a certain class or classes of powerful people who have an interest in seeing it happen, just like every other historical change in the way society has been ordered.  That's the part I don't quite see yet, although even without that, I do see the possibility of it becoming an additional organizational tool in the capitalist toolbox such as limited liability and traditional cooperatives.

A key benefit of limited liability, however, is that there are still lots of reasons for people to want to be excluded from risks but still participate in a collective enterprise, including many non-economic reasons, which means that it still might be more efficient do so even if there is an ongoing externality problem, which is what your system goes a long way toward solving.

by santiago on Mon Mar 23rd, 2009 at 11:54:34 PM EST
[ Parent ]
santiago:
Laws and other social norms pertain to human interactions and do not define a relationship with an object but rather a relationship between people regarding exclusive use of an object.

I think my only difference with you is semantic.

For me, a protocol defining a relationship with an object and a protocol defining a relationship between people regarding exclusive use of an object both necessarily include reference to both the subject individual(s) and the objects(s).

ie

<subject><relationship><object>

And it is the potential of consensual protocols for defining the property relationship that interests me.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Mar 24th, 2009 at 01:14:14 PM EST
[ Parent ]

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