This is only true if you believe in the conservation of money.

No, it is true as long as economic actors are averse to risk and uncertainty.

Going back to an earlier conservation, money is a decision-making process, not a thing. It's one - extremely poor and rather stupid - way to decide how to steer policy and values.

With a mature social structure, neither 'loss' nor 'debt' have anything useful to contribute as policy concepts. You can certainly have 'mistakes' and 'things that didn't work for some reason' - but you'll always have those.

That may be, but what Chris is proposing is not such a social structure. It's just a return to a more primitive form of money. We tried private money in the 19th century. It was abandoned for a number of unimpeachable reasons.

Critically the concept of loss does nothing to keep them from happening.

That is not the point of considering how losses propagate through the economy. The point of considering the propagation of losses is that people tend to want to protect themselves from losses. For, again, a variety of mostly unimpeachable reasons.

If you have an all-equity financial network, of the sort Chris proposes here, it becomes impossible to protect yourself from the fallout from other people's failures. People don't like eating the fallout from failures they had no part in making.

You may argue that this is a silly attitude, that people should realise that we're all in this game together and support rational collective planning. And that may be a perfectly sound idea. But people will none the less deploy considerable ingenuity towards protecting themselves from the negative consequences of what they perceive as other people's mistakes.

- Jake

Friends come and go. Enemies accumulate.