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Right out of the gate it makes this claim: > That investors are extractive parasites who weaponize capital to passively extract wealth from the contributor cla
by ggreer 4y ago
Right out of the gate it makes this claim:
> That investors are extractive parasites who weaponize capital to passively extract wealth from the contributor class.
I’m reminded of David Friedman’s explanation as to why this isn’t the case:
> Marx argued as follows: Goods are produced by workers using tools (machines, factories, and so forth). The tools were themselves made by earlier workers. All production is done by workers, either current workers or past workers. But the capitalist claims some of the return from the production. His justification is that he has provided the tools; this is invalid since the tools were actually produced by previous workers. The capitalist who, having contributed nothing to production, takes part of the product is obviously stealing from—exploiting—the real producers, the workers. The trouble with this argument is that it does not recognize that paying for tools today and waiting for years to get the money back is itself a productive activity and that the interest earned by capital is the corresponding payment.
It’s the same for mortgages and renting. If we banned renting and required people to purchase their shelter with 100% cash (no loans), people would live in much worse homes (or be homeless). The investors provide the capital to build the homes much sooner than they otherwise would be, then wait decades before recouping their costs. They also assume quite a bit of risk. A lot can go wrong before they make their money back.
- petra 4y agoThese are theoretical claims and i don't agree with them. And yes we can philosophize all day long. But let's look at an empirical fact: We've seen how easy access to capital(some to investors, some to buyers) has created a global real-estate bubble. Creating easy access to capital for real-estate investments is excatly what this startup does, so the results should be the same if this becomes common.
- pastacacioepepe 4y agoAh yes, Friedman, one of the Chicago boys (same people who happily worked with Pinochet) and proud Anarcho capitalist. Kinda invalidates anything he might argue for, to me.
- cholantesh 4y agoLiterally Milton Friedman's son, so inculcation into the Rand cult probably started at a young age with him.
- pastacacioepepe 4y agoIt's also really creepy how anarcho capitalist always end up arguing for child prostitution or close to that, if given enough time to rant.
- pwinnski 4y agoThis argument is weak for relying on additional factors, and still doesn't make the case it intends. The hypothetical not only bans renting but also mortgages, which is an artificial constraint introduced to make the case stronger. One could, of course, ban renting without also banning mortgages. But even then the argument is insufficient to answer the original claims. Even if we grant that there is a non-zero value in the timing flexibility provided by use of capital, how does this argument answer the claim that the profits flowing to investors are outsized, distorting the housing market? In other words, short of banning renting entirely, one might propose a tight cap on renting profits, putting returns more in line with other investment opportunities. This argument doesn't address that possibility. (And yes, I know some landlords struggle to make any profits at all. This is not the win people who bring it up seem to think it is, because it suggests that some people are distorting real estate markets for no gain at all!)
- readthenotes1 4y ago"Even if we grant that there is a non-zero value in the timing flexibility provided by use of capital, how does this argument answer the claim that the profits flowing to investors are outsized, distorting the housing market?" Does it have to? Couldn't we find another answer? (Like maybe: we humans are driven by our desires and its society's obligation to prevent/reduce/limit the damage we do to others as a result)
- orwin 4y agoEven if you think money the only way to organize future production, it is easy to recognize that the added value is not worth 55% of the production. But that's what the split is right now.