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Just a reminder that anyone can issue credit. A composition notebook and a pencil is all it takes to keep record. 1. Pay by the end of the month and it doesn’t

Just a reminder that anyone can issue credit. A composition notebook and a pencil is all it takes to keep record. 1. Pay by the end of the month and it doesn’t effect me. No interest. 2. Otherwise, 1% to 1.5% of the balance in interest month over month. You have to pay at least the interest every month. 3. If I need to borrow, I can do it on the strength of my accounts receivable and my ability to collect interest payments reliably. 4. If I don’t get payed back, I can take someone to court when things are back to normal and yes, the court will side with me. 4.b There's always ways to create incentives to pay debts. It has worked this way for hundreds of years in parts of Latin America and other areas of the world with fluctuating infrastructure.

digi_owl 9y ago
And likely thousands of years before that, until the economists and their fairy tales came around.
- trendia 9y ago
  Are you saying the switch from paper ledgers to computerized ledgers was the result of economists? If so, I'd argue that the switch is the result of convenience and accuracy.
  - digi_owl 9y ago
    No. What i am saying that anthropological findings suggests that some kind of debt tracking was the default mode of transactions within a village in ancient times, not the barter fantasy that economics cling to.
    - maxerickson 9y ago
      A fun hybrid example: https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones Ownership of the stones was maintained by oral history rather than by possession.
      - jacobush 9y ago
        A public, distributed ledger updated in consensus by the nodes repeating and storing it? With the proof of work that you could retell the full owner history, checksummed by verse.
    - MrRadar 9y ago
      I'm assuming you're referencing David Graeber? His book on this subject, Debt: The First 5000 Years, is a very good read (and very good food for thought) but as a non-expert in both anthropology and economics I'm not sure how much veracity to assign it.
    - JumpCrisscross 9y ago
      > not the barter fantasy that economics cling to What’s your source for economists clinging to the barter hypothesis? Even my high school economics taught the barter hypothesis was an incorrect assumption of Adam Smith’s, and that credit is the father of modern money.
      - tomjakubowski 9y ago
        Judging by my own high school economics teacher, the textbook we used for that course, and the free "core econ" textbook that was recently published online, yours may have had unorthodox views for a high school economics teacher. "Core Econ", chapter 10.1 "Money and wealth" Money makes more exchanges possible because it’s not hard to find someone who will be happy to have your money (in exchange for something), whereas unloading a large quantity of apples could be a problem. This is why barter plays a limited role in virtually all modern economies Amusingly, they cite Graeber's Debt Ch 2, despite implying exactly the thing that chapter argued against: that barter was the primary vehicle for exchanging goods in pre-money societies.
        JumpCrisscross 9y ago
        > yours may have had unorthodox views We read Greg Mankiw's Principles of Economics [1]. It's the Harvard undergraduate text--orthodox as they come. Saying barter plays a limited role in virtually all economies, modern and historic, is different from saying it was money's progenitor, as Adam Smith wrongly speculated. The former is true. The latter is not. TL; DR Money and banking isn't always taught in introductory economics. The "bartering noble savage" myth is not something economists cling to. [1] https://www.amazon.com/Principles-Economics-7th-Mankiws/dp/128516587X/ref=sr_1_1?s=books&ie=UTF8&qid=1506804133&sr=1-1&keywords=greg+mankiw https://www.amazon.com/Principles-Economics-7th-Mankiws/dp/1...
maxerickson 9y ago
Of course cash is still useful to those that the keeper of the notebook doesn't choose to issue credit.
- JumpCrisscross 9y ago
  One can model “money as a primitive form of [distributed] memory. [1]” [1] https://www.minneapolisfed.org/research/sr/sr218.pdf https://www.minneapolisfed.org/research/sr/sr218.pdf
  - digi_owl 9y ago
    Ah yes. I recall hearing about the idea that the basic economy need 3 entities. A buyer, a seller, and an accountant to record the transaction to ensure there is no double spending. In effect money of any kind replace the accountant by making sure that the buyer do not double spend by handing over the tokens that allow him to buy in the first place.
sigmar 9y ago
Though "4" doesn't scale well for small transactions. I'm not going to sue the 200 individuals that purchased $25 of water and aren't returning my calls.
- betterunix2 9y ago
  There is also the alternative: telling everyone that someone is a deadbeat (i.e. a delinquent debtor's credit rating is harmed). If you are operating at a small scale e.g. one involving a notebook, presumably you know all your customers and their friends etc...
Animats 9y ago
You can let people pay by signing a note with their name, contact info, "IOU X amount", and their thumbprint. That's a binding contract. Once systems are back up, you mail or email them a copy along with a bill. The ones who don't pay up, you nag a few times, then send the note to a debt collector.
- JadeNB 9y ago
  > The ones who don't pay up, you nag a few times, then send the note to a debt collector. Doesn't one need to pay the debt collector? It seems like this wouldn't be too useful if many people owe a small amount of money.
  - freehunter 9y ago
    I've only ever known one experience with a debt collector (My dad runs a business and had to contract one to recover payments once) but he actually sold the debt to the debt collector. If the debt was $2000, he would sell it to the debt collector for 50%, the collector paid him $1000, and then ran off to collect the full $2000. So yeah if it was $15, you might be hard pressed to get a debt collector to care.
fiatjaf 9y ago
4a: You can't be sure of that. The court can always decide (and I've seen many analogous situations in which it did) that your debt is not valid, it was oppressive, it abused the customer needs etc. and so you lose. 4b: Of which incentives are you talking about? The other points you've mentioned are trivial, this is the only point that has problems. If you solve 4b somehow someday you'll be making a huge benefit to the world, a revolution greater than Bitcoin.
- 21 9y ago
  4b: big men with clubs? that was the traditional incentive to pay
- matt_wulfeck 9y ago
  > 4a: You can't be sure of that. The court can always decide (and I've seen many analogous situations in which it did) that your debt is not valid, it was oppressive, it abused the customer needs etc. and so you lose. Most people who take loans in situations like this are members of the community and are grateful for the opportunity. There’s always a level of write-off, but the system doesn’t need to guarantee total repayment.
KGIII 9y ago
You may want to check with your local laws. A business class I once took made it a point to mention that store issued credit can't last longer than 90 days. Anything longer and it must be backed by a lending institution. If you look at the bottom of ads, you'll sometimes see the resulting legalese. They get around this by things like layaway and larger chains will actually have their own insured lending institution. This will vary by jurisdiction, as not all countries are the same. I am going to speculate that Puerto Rico is the same, as it is a US territory, but that's speculation.
matt_wulfeck 9y ago
a centralized system of credit that’s built on trust and uses no cryptography? You’ve just described the nightmare scenario of the HN crowd!
beefield 9y ago
>Just a reminder that anyone can issue credit. This is what annoys with me with all the cryptocurrencies. They try to recreate the economics of gold as a money, a money whose supply is fixed. Modern money is a ledger who owes how much. That has no fixed supply. So we would need a cryptocurrency whose supply is not fixed but what anyone can create. Of course, there are challenges there to make it work...

digi_owl 9y ago

And likely thousands of years before that, until the economists and their fairy tales came around.

trendia 9y ago
Are you saying the switch from paper ledgers to computerized ledgers was the result of economists? If so, I'd argue that the switch is the result of convenience and accuracy.
- digi_owl 9y ago
  No. What i am saying that anthropological findings suggests that some kind of debt tracking was the default mode of transactions within a village in ancient times, not the barter fantasy that economics cling to.
  - maxerickson 9y ago
    A fun hybrid example: https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones Ownership of the stones was maintained by oral history rather than by possession.
    - jacobush 9y ago
      A public, distributed ledger updated in consensus by the nodes repeating and storing it? With the proof of work that you could retell the full owner history, checksummed by verse.
  - MrRadar 9y ago
    I'm assuming you're referencing David Graeber? His book on this subject, Debt: The First 5000 Years, is a very good read (and very good food for thought) but as a non-expert in both anthropology and economics I'm not sure how much veracity to assign it.
  - JumpCrisscross 9y ago
    > not the barter fantasy that economics cling to What’s your source for economists clinging to the barter hypothesis? Even my high school economics taught the barter hypothesis was an incorrect assumption of Adam Smith’s, and that credit is the father of modern money.
    - tomjakubowski 9y ago
      Judging by my own high school economics teacher, the textbook we used for that course, and the free "core econ" textbook that was recently published online, yours may have had unorthodox views for a high school economics teacher. "Core Econ", chapter 10.1 "Money and wealth" Money makes more exchanges possible because it’s not hard to find someone who will be happy to have your money (in exchange for something), whereas unloading a large quantity of apples could be a problem. This is why barter plays a limited role in virtually all modern economies Amusingly, they cite Graeber's Debt Ch 2, despite implying exactly the thing that chapter argued against: that barter was the primary vehicle for exchanging goods in pre-money societies.
      - JumpCrisscross 9y ago
        > yours may have had unorthodox views We read Greg Mankiw's Principles of Economics [1]. It's the Harvard undergraduate text--orthodox as they come. Saying barter plays a limited role in virtually all economies, modern and historic, is different from saying it was money's progenitor, as Adam Smith wrongly speculated. The former is true. The latter is not. TL; DR Money and banking isn't always taught in introductory economics. The "bartering noble savage" myth is not something economists cling to. [1] https://www.amazon.com/Principles-Economics-7th-Mankiws/dp/128516587X/ref=sr_1_1?s=books&ie=UTF8&qid=1506804133&sr=1-1&keywords=greg+mankiw https://www.amazon.com/Principles-Economics-7th-Mankiws/dp/1...

maxerickson 9y ago

Of course cash is still useful to those that the keeper of the notebook doesn't choose to issue credit.

JumpCrisscross 9y ago
One can model “money as a primitive form of [distributed] memory. [1]” [1] https://www.minneapolisfed.org/research/sr/sr218.pdf https://www.minneapolisfed.org/research/sr/sr218.pdf
- digi_owl 9y ago
  Ah yes. I recall hearing about the idea that the basic economy need 3 entities. A buyer, a seller, and an accountant to record the transaction to ensure there is no double spending. In effect money of any kind replace the accountant by making sure that the buyer do not double spend by handing over the tokens that allow him to buy in the first place.

sigmar 9y ago

Though "4" doesn't scale well for small transactions. I'm not going to sue the 200 individuals that purchased $25 of water and aren't returning my calls.

betterunix2 9y ago
There is also the alternative: telling everyone that someone is a deadbeat (i.e. a delinquent debtor's credit rating is harmed). If you are operating at a small scale e.g. one involving a notebook, presumably you know all your customers and their friends etc...

Animats 9y ago

You can let people pay by signing a note with their name, contact info, "IOU X amount", and their thumbprint. That's a binding contract. Once systems are back up, you mail or email them a copy along with a bill. The ones who don't pay up, you nag a few times, then send the note to a debt collector.

JadeNB 9y ago
> The ones who don't pay up, you nag a few times, then send the note to a debt collector. Doesn't one need to pay the debt collector? It seems like this wouldn't be too useful if many people owe a small amount of money.
- freehunter 9y ago
  I've only ever known one experience with a debt collector (My dad runs a business and had to contract one to recover payments once) but he actually sold the debt to the debt collector. If the debt was $2000, he would sell it to the debt collector for 50%, the collector paid him $1000, and then ran off to collect the full $2000. So yeah if it was $15, you might be hard pressed to get a debt collector to care.

fiatjaf 9y ago

4a: You can't be sure of that. The court can always decide (and I've seen many analogous situations in which it did) that your debt is not valid, it was oppressive, it abused the customer needs etc. and so you lose. 4b: Of which incentives are you talking about? The other points you've mentioned are trivial, this is the only point that has problems. If you solve 4b somehow someday you'll be making a huge benefit to the world, a revolution greater than Bitcoin.

21 9y ago
4b: big men with clubs? that was the traditional incentive to pay
matt_wulfeck 9y ago
> 4a: You can't be sure of that. The court can always decide (and I've seen many analogous situations in which it did) that your debt is not valid, it was oppressive, it abused the customer needs etc. and so you lose. Most people who take loans in situations like this are members of the community and are grateful for the opportunity. There’s always a level of write-off, but the system doesn’t need to guarantee total repayment.

KGIII 9y ago

You may want to check with your local laws. A business class I once took made it a point to mention that store issued credit can't last longer than 90 days. Anything longer and it must be backed by a lending institution. If you look at the bottom of ads, you'll sometimes see the resulting legalese. They get around this by things like layaway and larger chains will actually have their own insured lending institution. This will vary by jurisdiction, as not all countries are the same. I am going to speculate that Puerto Rico is the same, as it is a US territory, but that's speculation.

matt_wulfeck 9y ago

a centralized system of credit that’s built on trust and uses no cryptography? You’ve just described the nightmare scenario of the HN crowd!

beefield 9y ago

>Just a reminder that anyone can issue credit. This is what annoys with me with all the cryptocurrencies. They try to recreate the economics of gold as a money, a money whose supply is fixed. Modern money is a ledger who owes how much. That has no fixed supply. So we would need a cryptocurrency whose supply is not fixed but what anyone can create. Of course, there are challenges there to make it work...