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Nobody’s holding a gun to their heads. This is a voluntary transaction. Even if we paternalistically shake our heads at the interest rates and the way these co
by egdod 7y ago
Nobody’s holding a gun to their heads. This is a voluntary transaction.
Even if we paternalistically shake our heads at the interest rates and the way these companies do business... they are giving people an option that did not exist before. Those people are strictly better off for the existence of that option, since they are free to turn it down.
- vitro 7y agoSo exploiting people's ignorance or lack of knowledge and/or experience is ok, you say?
- dvtrn 7y agoIt takes an unfathomably myopic worldview to read this article and just wave it off as “voluntary transactions” while conveniently ignoring the several disparities of exploitative economic power on display between the people making these apps, which are CLEARLY and blatantly taking advantage of people without the financial literacy of those raised in comparatively more developed economies and the people using them. And yet I’m not at all surprised to see it.
- errantspark 7y ago> financial literacy of those raised in comparatively more developed economies Wellll, we still have payday loans and the like so I wouldn't really put too much stock in the financial literacy of the developed world.
- dvtrn 7y agoI don't quite understand whatever counterpoint you're making, can you help me grok your response a bit better?
- swagonomixxx 7y agoI think he's trying to say that even in the developed world there are people taking out loans with ridiculous interest rates, so that this phenomenon of taking out loans you can't pay isn't exclusively a "developing world" thing. Money Mart and the like come to mind, and I'm sure there are many other loan shark companies out there that do similar things.
- dvtrn 7y agoAh, okay. Thank you. I guess I don't recall taking the position that predatory loans was an exclusively developing world thing, but if something I said gave that impression, it's on me to be more precise with how things are phrased next time. Comparatively speaking, more people in comparatively more developed economies tend to have more resources available to them to make informed financial decisions as individuals. I call this financial literacy. The comment previously made was not intended to suggest these more developed economies are uniquely affected or affected somehow differently than say, for example, African nations (like the one in the article) are from predatory lending programmes.
- Spooky23 7y agoThat's a more recent phenomenon in the US, which had usury laws in place in most states to prevent predatory lending. Payday lending was the province of the mafia in my lifetime. In 1980, congress passed a law that neutered state usury laws, and prompted banks to change their charters and re-domicile in places like Delaware, South Dakota and Utah, especially for credit cards. The supreme court further weakened state regulatory authority in the 90s by defining fees as interest, and thus outside of the scope of state authority.
- errantspark 7y agoWow, I learned my really depressing fact for the day. My knee jerk reaction is that usury should be outlawed entirely, though I suspect that would be harmful in other deep ways. Writing good laws is like writing bug free code I guess.
- Spooky23 7y agoEven more depressing, credit card interest was deductible until 1986!
- egdod 7y agoBut it is voluntary. The power disparity doesn’t force anyone to do anything.
- Ozzie_osman 7y agoI mean, that's a deep philosophical question that depends on how libertarian you lean, how rational you think we are as humans, and whether people have access to perfect information. There are plenty of "voluntary transactions" that society has found necessary to either ban or at least regulate. High-interest loans are regulated in many countries, precisely because they can be predatory, but so are things like drugs. Even legal drugs are pretty heavily regulated for many reasons, including making sure consumers are aware of both the benefit and harm/side-effects that can occur.
- jfk13 7y ago> Those people are strictly better off for the existence of that option... Not if they lack the knowledge to make an informed decision regarding what is in their best interests. (And let's not forget that they're individuals up against an industry that is happy to spend vast sums of money manipulating people's desires and perceptions, in order to grow -- or create -- its "market".)
- wmeredith 7y ago> Nobody’s holding a gun to their heads. This is a voluntary transaction. By this logic would should allow heroin to be sold at 7-11's
- mschuster91 7y ago> By this logic would should allow heroin to be sold at 7-11's This would at least eliminate many overdoses due to incredibly varying strength or contaminations, especially fentanyl.
- sp332 7y agoThat would only happen if there were regulation of the legalized drug. If we kept letting the same people make the same crap-quality drugs, people would keep dying.
- whatshisface 7y agoBayer would probably put the Zetas, or whoever is making Heroin, out of business with their six-sigma warehouse controls, meetings, and use of powerpoint.
- catalogia 7y agoIf Bayer weren't regulated, would you still trust their product?
- whatshisface 7y agoIt depends, does the society we're imagining have a working liability system, or does money always win in the courts? FDA regulations come along with protection from liability, so you could imagine two adjustment knobs: one setting Bayer's control over the FDA through regulatory capture, and the other setting Bayer's control over the courts, through procedural loopholes and lawyers outsmarting judges. If both knobs are turned up, drugs will poison you no matter what. If the courts are less controlled than the bureaucracy, then when the bureaucracy awards protection from liability it will be making the drugs more dangerous. If the bureaucracy is less controlled than the courts then you will depend on it to hold back against the companies who know that hurting people will be pure profit if they can sneak through the approval process. If both knobs are turned down, it doesn't matter who is protecting you because you'll be protected.
- duxup 7y agoIt really doesn't sound like they're better off based on the interest rates. Usury Laws and such came about because it is straight up bad to have people fall into these debt cycles.
- egdod 7y agoIf they don’t like the interest rates, they’re free not to take out a loan. They’re strictly better off in the sense that they now have an option they didn’t have before, and they can choose whether or not to exercise the option.
- duxup 7y agoIf it is a dead an option... that's not better. It's just a bad option. The impact of having folks in a debt cycle is obviously bad.
- egdod 7y agoThe point is they’re not worse off for the existence of an option that they can choose not to exercise.
- duxup 7y agoThey are if they choose it, and even if they don't friends and family choosing it they could be worse off... People in a debit cycle don't only impact themselves. Like I said Usury Laws exist for reasons.