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>debt is a social construct As opposed to what? A carbon based life form? A monster truck? Yes literally every thing that humans interact with that isn't cons

by anm89 4y ago

>debt is a social construct As opposed to what? A carbon based life form? A monster truck? Yes literally every thing that humans interact with that isn't constructed of atoms is a social construct. Contracts, agreements, trades, transactions. Every single concept in finance and economics. This isn't a profound statement

dredmorbius 4y ago
Contrast with, say, physical or natural phenomena: the size of the Earth, solar insolation, the prevalence of various chemical elements within the Earth's crust, their organisation (or lack) into ores, their cycling through the biosphere, net primary productivity, and the like. A debt, by contrast, is a socially-recognised and generally legally sanctioned claim on another's wealth or productivity. That is, debt is fundamentally informational, and records a relationship, but that relationship is not fundamentally grounded in any underlying physical reality. As is noted, "debts that cannot be repaid won't", and when the notional fiction runs up against such a reality, the debt is retired. That is, the information is changed. There are numerous cultural, legal, and financial reasons to believe and behave otherwise, but ultimately, debts are a social, not a natural or intrinsic construct. Their behaviour is ultimately more a symptom than a cause of a larger growth or collapse. Debt wants growth, but need not have it. The principle challenge is that the modern monetary system based on central banks and fiat currencies was developed in a world of rapid economic growth. It need not be limited to such a world. Currency sovereigns can both retire debts and introduce new liquidity to maintain a flow which supports commercial transactions. A major problem to date has been that new liquidity introductions tend to be to the wealth-holding classes rather than those requiring currency to pay for current and essential demand and consumption. Again, there are historical reasons for this, but they are still cultural and notional, not some underlying Law of the Universe.

by anm89 4y ago

dredmorbius 4y ago

Contrast with, say, physical or natural phenomena: the size of the Earth, solar insolation, the prevalence of various chemical elements within the Earth's crust, their organisation (or lack) into ores, their cycling through the biosphere, net primary productivity, and the like. A debt, by contrast, is a socially-recognised and generally legally sanctioned claim on another's wealth or productivity. That is, debt is fundamentally informational, and records a relationship, but that relationship is not fundamentally grounded in any underlying physical reality. As is noted, "debts that cannot be repaid won't", and when the notional fiction runs up against such a reality, the debt is retired. That is, the information is changed. There are numerous cultural, legal, and financial reasons to believe and behave otherwise, but ultimately, debts are a social, not a natural or intrinsic construct. Their behaviour is ultimately more a symptom than a cause of a larger growth or collapse. Debt wants growth, but need not have it. The principle challenge is that the modern monetary system based on central banks and fiat currencies was developed in a world of rapid economic growth. It need not be limited to such a world. Currency sovereigns can both retire debts and introduce new liquidity to maintain a flow which supports commercial transactions. A major problem to date has been that new liquidity introductions tend to be to the wealth-holding classes rather than those requiring currency to pay for current and essential demand and consumption. Again, there are historical reasons for this, but they are still cultural and notional, not some underlying Law of the Universe.