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It's not really a concern so long as they are engaged in nonzero economic activity, in which case no money is permanently trapped within the vehicle. Money flow

It's not really a concern so long as they are engaged in nonzero economic activity, in which case no money is permanently trapped within the vehicle. Money flows continuously in an economy and is only at rest in certain places such as bank reserves, mattresses, etc. But there is a very low incentive for it to remain at rest because our monetary system is inflationary. It certainly can be channeled into inefficient or unproductive economic activity (and often is), but the system ultimately keeps moving. To get more concrete, if you have a charitable trust of the kind described in this article, then it will pay out salaries to employees and purchase various kinds goods and services. The recipients of those money flows will in turn put that money to work for their own ends: supporting a family with food, shelter, etc, paying other employees further along the value chain, acquiring other goods and services, and so on. If someone accumulates this much wealth, they are well within their right to put it to work however they please. And doing so does not induce some permanent dysfunction in the system. In this case, I would argue that what the Patagonia founder has done is immensely commendable.

kinnth 4y ago
I think he/she more specifically means assets like land or IP. Those assets, especially land/buildings could become stagnant.
- rebelos 4y ago
  People and corporate entities do not truly own land. That is a convenient illusion and a rhetorical trick we endure for perhaps no other reason than the momentum of precedent. People and corporate entities rent land from governments and we call the rental rate 'property tax'. Furthermore, eminent domain is in part meant to defend against adverse situations of the kind you're describing. IP law is designed to prevent indefinite squatting.
  - quickthrower2 4y ago
    Not sure what practical difference that makes except in extreme circumstances like war. At an individual level government interference with your land can be devastating. But in general land owning companies pretty much own that land. The government bit is a technicality and some tax.
  - bombcar 4y ago
    “The dead cannot bind the living, only mildly inconvenience them.”
strken 4y ago
> If someone accumulates this much wealth, they are well within their right to put it to work however they please. We let them do whatever they want with it, because doing so has been advantageous for the rest of us. At the end of the day, rights are recognised by law, law is created and upheld by people, and people can change their minds. I can imagine a future where we say "actually, this multigenerational NGO shouldn't use this much wealth to carry out this flawed mission, let's do something about it." Doing something wouldn't even have to mean taking their money by force: consider how the work of the Ford Foundation differs from the views of Henry Ford himself, and how that could have happened.
- iroh2727 4y ago
  I completely agree with you that, at the end of the day, it's the actions and choices of people that determines our rights and laws and society as a whole. But at the same time, it sounds like you are acknowledging the agency of others, while at the same time absolving yourself of agency. I mean, of course other people in the future can change things. But what about today? (Not to diss, I just found your phrasing about "advantageousness" a bit odd. For example, it seems like any historical regime could've used the exact same logic, even those that we would absolutely in hindsight not consider "advantageous". To be more concrete: yes it's true that, taking a Martian view, problems are likely to "fix themselves". But at the same time, as history shows, problems "fix themselves" in many different ways. Sometimes relatively smooth or peaceful ways and in other times in ways that involve massive war and genocide. And this too is up to people to decide. If, for example, the fascists act, organize, and spread their opinions more aggressively than non-fascists, they may come out on top, etc.)
WatchDog 4y ago
> It's not really a concern so long as they are engaged in nonzero economic activity, in which case no money is permanently trapped within the vehicle. On the contrary, unspent money has no impact on the real economy. If money is permanently trapped in some bank account somewhere, it simply serves to mildly reduce inflation. If the organisation spends it's money, and it's allocation of money is "bad", then it has a negative impact to the real economy. Those employees could be working on something else productive, those goods and services could be applied to some other useful task.
- rebelos 4y ago
  > It certainly can be channeled into inefficient or unproductive economic activity (and often is), but the system ultimately keeps moving.
NotYourLawyer 4y ago
Over the long run, investments beat inflation. A trust with a sufficiently large endowment could survive and grow indefinitely.
- rebelos 4y ago
  Yes it could but that still wouldn't have some sort of deleterious effect on the broader system. Money is economic kinetic energy. Assets are economic potential energy. And, by and large, any institution attempting to store and grow wealth through asset allocation will need to conduct continuous exchange operations back and forth between economic kinetic energy and economic potential energy, which is another way to describe investing. This is, of course, a useful activity because it facilitates the transmutation of human self interest into productivity and social value. And, to the extent that such a system gives rise to negative externalities, it is the job of government to correct for that.
- bombcar 4y ago
  If that were true then eventually it would be worth more than all everything ever, which is clearly impossible. At some point something would hamper or destroy it.
  - NotYourLawyer 4y ago
    Human nature, usually.
hackerlight 4y ago
Perpetually unspent money is as if that money was burnt. You're effectively donating it pro rata to all the other holders of cash.
- rebelos 4y ago
  Yup. I should have noted this in my comment. That is an excellent way to conceptualize it.
- bombcar 4y ago
  This is why Scrooge McDuck’s money bin is deflationary unless he were to spend it (a Barks comic covers this https://inducks.org/story.php?c=W+WDC+126-02 https://inducks.org/story.php?c=W+WDC+126-02 )

kinnth 4y ago

I think he/she more specifically means assets like land or IP. Those assets, especially land/buildings could become stagnant.

rebelos 4y ago
People and corporate entities do not truly own land. That is a convenient illusion and a rhetorical trick we endure for perhaps no other reason than the momentum of precedent. People and corporate entities rent land from governments and we call the rental rate 'property tax'. Furthermore, eminent domain is in part meant to defend against adverse situations of the kind you're describing. IP law is designed to prevent indefinite squatting.
- quickthrower2 4y ago
  Not sure what practical difference that makes except in extreme circumstances like war. At an individual level government interference with your land can be devastating. But in general land owning companies pretty much own that land. The government bit is a technicality and some tax.
- bombcar 4y ago
  “The dead cannot bind the living, only mildly inconvenience them.”

strken 4y ago

> If someone accumulates this much wealth, they are well within their right to put it to work however they please. We let them do whatever they want with it, because doing so has been advantageous for the rest of us. At the end of the day, rights are recognised by law, law is created and upheld by people, and people can change their minds. I can imagine a future where we say "actually, this multigenerational NGO shouldn't use this much wealth to carry out this flawed mission, let's do something about it." Doing something wouldn't even have to mean taking their money by force: consider how the work of the Ford Foundation differs from the views of Henry Ford himself, and how that could have happened.

iroh2727 4y ago
I completely agree with you that, at the end of the day, it's the actions and choices of people that determines our rights and laws and society as a whole. But at the same time, it sounds like you are acknowledging the agency of others, while at the same time absolving yourself of agency. I mean, of course other people in the future can change things. But what about today? (Not to diss, I just found your phrasing about "advantageousness" a bit odd. For example, it seems like any historical regime could've used the exact same logic, even those that we would absolutely in hindsight not consider "advantageous". To be more concrete: yes it's true that, taking a Martian view, problems are likely to "fix themselves". But at the same time, as history shows, problems "fix themselves" in many different ways. Sometimes relatively smooth or peaceful ways and in other times in ways that involve massive war and genocide. And this too is up to people to decide. If, for example, the fascists act, organize, and spread their opinions more aggressively than non-fascists, they may come out on top, etc.)

WatchDog 4y ago

> It's not really a concern so long as they are engaged in nonzero economic activity, in which case no money is permanently trapped within the vehicle. On the contrary, unspent money has no impact on the real economy. If money is permanently trapped in some bank account somewhere, it simply serves to mildly reduce inflation. If the organisation spends it's money, and it's allocation of money is "bad", then it has a negative impact to the real economy. Those employees could be working on something else productive, those goods and services could be applied to some other useful task.

rebelos 4y ago
> It certainly can be channeled into inefficient or unproductive economic activity (and often is), but the system ultimately keeps moving.

NotYourLawyer 4y ago

Over the long run, investments beat inflation. A trust with a sufficiently large endowment could survive and grow indefinitely.

rebelos 4y ago
Yes it could but that still wouldn't have some sort of deleterious effect on the broader system. Money is economic kinetic energy. Assets are economic potential energy. And, by and large, any institution attempting to store and grow wealth through asset allocation will need to conduct continuous exchange operations back and forth between economic kinetic energy and economic potential energy, which is another way to describe investing. This is, of course, a useful activity because it facilitates the transmutation of human self interest into productivity and social value. And, to the extent that such a system gives rise to negative externalities, it is the job of government to correct for that.
bombcar 4y ago
If that were true then eventually it would be worth more than all everything ever, which is clearly impossible. At some point something would hamper or destroy it.
- NotYourLawyer 4y ago
  Human nature, usually.

hackerlight 4y ago

Perpetually unspent money is as if that money was burnt. You're effectively donating it pro rata to all the other holders of cash.

rebelos 4y ago
Yup. I should have noted this in my comment. That is an excellent way to conceptualize it.
bombcar 4y ago
This is why Scrooge McDuck’s money bin is deflationary unless he were to spend it (a Barks comic covers this https://inducks.org/story.php?c=W+WDC+126-02 https://inducks.org/story.php?c=W+WDC+126-02 )