7 ms·

History is cool, but this is gross rentier behavior. Perpetual bonds should be banned. Perpetual ownership comes next.

by Ericson2314 4y ago

alpark3 4y ago
Doesn't matter if the other side enters into the transaction willingly, imo.
- leetcrew 4y ago
  I mostly agree, but a 367 year old contract kinda stresses the concept of "other side" and "willingly". I may be missing some subtleties of how dutch water boards work, but they seem to be a sort of quasi-governmental organization that receives tax-payer funds. so in some sense, the people of the netherlands are bound to an american private university by a contract that far predates the birth of any living citizen's great-grandparents. in this case, the interest amounts to only a symbolic amount, but imo it would be pretty unfair if it were a more significant yearly payment. no one alive today consented to the contract.
  - vasco 4y ago
    Nobody alive today consented to a monarchy and we also have plenty of those around. One still in the Netherlands.
    - kergonath 4y ago
      It’s more of an argument against monarchy than for perpetual bonds.
    - kazen44 4y ago
      but people do consent to the monarchy? mind you, the netherlands is a constitutional monarchy in which the king is legally bound by the constitution. Changing the constitution to just absolve the monarchy is a possibility. One that just hasn't happened yet, because the monarchy in the netherlands is quite popular. Also, in the past two decades, the monarch had to resign some roles he still played in goverment. (like appointing the "informateur" and "formateur" during the formation of a new cabinet.) This all happens without his approval, because he doesn't have the power to draft and implement laws. That is done by both chambers of goverment.
  - ghaff 4y ago
    It's not perpetual--it's 100 years--but check out Listerine royalties. https://thehustle.co/the-people-making-millions-off-listerine-royalties/ https://thehustle.co/the-people-making-millions-off-listerin...
- Ericson2314 4y ago
  Anyone can sign any piece of paper. The question is whether the state should spend effort on the enforcement of said contract. Liber(al,atarian) "Freedom of contract" is easily refuted child-philosophy. Society not choosing to spend communal resources enforcing your stupid contract is not an abridgement of individual rights. That is the starting point, then we can get into "contracts made under duress" with the understanding that its not incumbent on society to judge the situation perfectly every time, because ultimately society is extending a favor not a right to the contractees.
Proven 4y ago
Denvercoder9 4y ago
I think the water board can spare ten bucks for interest out of their €130M budget.
- Ericson2314 4y ago
  It is still a waste of administrative labor.
  - htkibar 4y ago
    It has value in terms of being an example of how old these institutions are, not to mention how trustworthy and with lasting power they are. Administrative effort + 10 bucks is _nothing_ compared to that.
  - none_to_remain 4y ago
    Avoiding default is not a waste.
  - hadlock 4y ago
    Paying all and any debts makes it much easier to raise new bonds for future construction and maintenance. News articles like this are like the ultimate letter of credit.
  - Reason077 4y ago
    The legitimate/legal solution would be to buy back the bond and cancel it. But I guess everyone allows to continue because it's a cool piece of history.
rvba 4y ago
You mean stocks should be banned? Conceptyally they are kind of the same thing.
- chordalkeyboard 4y ago
  conceptually they are different. stocks are equity and bonds are debt.
  - ghaff 4y ago
    If you dig into finance theory they're not as different as you might think. And it gets even fuzzier when you consider instruments like convertible bonds.
    - chordalkeyboard 4y ago
      if they weren't different then why would the bond need to be converted from one to the other?
      - ghaff 4y ago
        I wrote they weren't as different as you might think in terms of who has claims on the company etc. At the practical level there are obviously differences between different classes of stock, callable vs. not callable bonds, convertible bonds etc. I'm just saying that equity vs. debt is not binary.
  - rvba 4y ago
    Stocks are equity that (at least in theory) allows you to have perpetual dividends. Of course most companies fail in longer time frame, also modern stocks are kind of a modern concept, but there are some really old companies here and there. Most dont pay dividends but conceptually they could. Also in 100 years people will probably still drink wine/beer, eat salt or will want to go to some respected restaurant or a traditional hotel near a japanese wellspring. https://en.wikipedia.org/wiki/List_of_oldest_companies https://en.wikipedia.org/wiki/List_of_oldest_companies
OscarCunningham 4y ago
A perpetual bond has a finite present value. It's no more or less exploitative than a bond with finitely many payments and the same present value.
- AnimalMuppet 4y ago
  And, given a finite present value, I'm pretty sure Yale has the money to buy it back if they want to...
  - kgwgk 4y ago
    Yale holds the bond and is being paid ~$30 per year. Apparently someone has to bring it to Amsterdam every couple of decades to collect the payments and keep the bond alive. They are losing money - I guess Yale has enough to do it just for fun, I mean, for the historical interest (pun intended).
    - t0mas88 4y ago
      Not just to Amsterdam, Stichtse Rijn is further south (around Utrecht). It includes the area where the 16th century rich people from Amsterdam would build their out of town mansions. Traveling there by boat, on a water system that has been managed for over 900 years. So this 367 years is old, but the organisation paying has existed in some form for more than twice that.
    - akavi 4y ago
      If someone gifted me the bond, I’d happily pay many multiples of the interest payments in airfare to go collect, and I have far less money than Yale. It’d be fun story and a cool bit of financial history, and keeping it “alive” is definitely worth a few grand every 10 years or so.
      - Ericson2314 4y ago
        It is fun cool history. I would have fun doing the trip with the document, not going to lie. But this ritual is also Proganda for capitalism. I don't mean that in a conspiracy way --- no one at Yale was like "yeah let's do this it makes finance looks good", but it clearly reflects someone having positive associations about this and the history of finance. It's kind of like how keeping around powerless monarchs is harmless in one sense, but a cosplay to uphold a classist society in another. I would not try to go for records with the longevity of either, I would abolish the monarchy and force all perpetual bond holders to sell them back to the issuers.
micromacrofoot 4y ago
As another commenter pointed out upthread, there are actual cases of perpetual ownership (Harvard being the example), though they're equally as rare as this 367 year old bond.
- max-ibel 4y ago
  I believe you can set up "dynasty trusts" in some US states today that basically live forever: https://trustandwill.com/learn/dynasty-trust https://trustandwill.com/learn/dynasty-trust
- ghaff 4y ago
  Going back to the Dartmouth College case: In the opinion for the Court, Chief Justice John Marshall wrote that by establishing a corporation, Eleazar Wheelock had created “an artificial being, invisible, intangible, and existing only in contemplation of the law.” He explained that “by these means, a perpetual succession of individuals are capable of acting for the promotion of the particular object, like one immortal being.” (Also, by the way, corporate personhood is nothing new.)
s1artibartfast 4y ago
Banning Perpetual ownership just reduces everyone to being a surf with leased land and possessions. I have very little interest in a return to a feudalism where higher authority owns the product of my labor
- Ericson2314 4y ago
  1. It's spelled "Serf" 2. Serfs were indefinitely tied to the land. Heritable Fiefs were also indefinite. In general you are exactly backwards, indefinitely arrangements are a holdover from Feudalism. Getting away from them is getting further from Feudalism.
  - s1artibartfast 4y ago
    All humans are indefinitely tied to land and property. They need it to live. The question is simply if they ever have a chance of owning it themselves. You propose taking that away.
    - Ericson2314 4y ago
      That's nuts. The only problem with renting is landlords --- someone else owning. Look up LVT. If it's "rent all the way down" --- the land rent is ultimately disbursed back to the people, then there is no issue.
      - s1artibartfast 4y ago
        Why would I want my land rent distributed back to other people opposed to owning the land outright? Why would I want other people to be able to raise my rent until they squeeze out every dollar I make?
        Ericson2314 4y ago
        They can't squeeze you without squeezing themselves.

History is cool, but this is gross rentier behavior. Perpetual bonds should be banned. Perpetual ownership comes next.

alpark3 4y ago

Doesn't matter if the other side enters into the transaction willingly, imo.

leetcrew 4y ago
I mostly agree, but a 367 year old contract kinda stresses the concept of "other side" and "willingly". I may be missing some subtleties of how dutch water boards work, but they seem to be a sort of quasi-governmental organization that receives tax-payer funds. so in some sense, the people of the netherlands are bound to an american private university by a contract that far predates the birth of any living citizen's great-grandparents. in this case, the interest amounts to only a symbolic amount, but imo it would be pretty unfair if it were a more significant yearly payment. no one alive today consented to the contract.
- vasco 4y ago
  Nobody alive today consented to a monarchy and we also have plenty of those around. One still in the Netherlands.
  - kergonath 4y ago
    It’s more of an argument against monarchy than for perpetual bonds.
  - kazen44 4y ago
    but people do consent to the monarchy? mind you, the netherlands is a constitutional monarchy in which the king is legally bound by the constitution. Changing the constitution to just absolve the monarchy is a possibility. One that just hasn't happened yet, because the monarchy in the netherlands is quite popular. Also, in the past two decades, the monarch had to resign some roles he still played in goverment. (like appointing the "informateur" and "formateur" during the formation of a new cabinet.) This all happens without his approval, because he doesn't have the power to draft and implement laws. That is done by both chambers of goverment.
- ghaff 4y ago
  It's not perpetual--it's 100 years--but check out Listerine royalties. https://thehustle.co/the-people-making-millions-off-listerine-royalties/ https://thehustle.co/the-people-making-millions-off-listerin...
Ericson2314 4y ago
Anyone can sign any piece of paper. The question is whether the state should spend effort on the enforcement of said contract. Liber(al,atarian) "Freedom of contract" is easily refuted child-philosophy. Society not choosing to spend communal resources enforcing your stupid contract is not an abridgement of individual rights. That is the starting point, then we can get into "contracts made under duress" with the understanding that its not incumbent on society to judge the situation perfectly every time, because ultimately society is extending a favor not a right to the contractees.

Proven 4y ago

Denvercoder9 4y ago

I think the water board can spare ten bucks for interest out of their €130M budget.

Ericson2314 4y ago
It is still a waste of administrative labor.
- htkibar 4y ago
  It has value in terms of being an example of how old these institutions are, not to mention how trustworthy and with lasting power they are. Administrative effort + 10 bucks is _nothing_ compared to that.
- none_to_remain 4y ago
  Avoiding default is not a waste.
- hadlock 4y ago
  Paying all and any debts makes it much easier to raise new bonds for future construction and maintenance. News articles like this are like the ultimate letter of credit.
- Reason077 4y ago
  The legitimate/legal solution would be to buy back the bond and cancel it. But I guess everyone allows to continue because it's a cool piece of history.

rvba 4y ago

You mean stocks should be banned? Conceptyally they are kind of the same thing.

chordalkeyboard 4y ago
conceptually they are different. stocks are equity and bonds are debt.
- ghaff 4y ago
  If you dig into finance theory they're not as different as you might think. And it gets even fuzzier when you consider instruments like convertible bonds.
  - chordalkeyboard 4y ago
    if they weren't different then why would the bond need to be converted from one to the other?
    - ghaff 4y ago
      I wrote they weren't as different as you might think in terms of who has claims on the company etc. At the practical level there are obviously differences between different classes of stock, callable vs. not callable bonds, convertible bonds etc. I'm just saying that equity vs. debt is not binary.
- rvba 4y ago
  Stocks are equity that (at least in theory) allows you to have perpetual dividends. Of course most companies fail in longer time frame, also modern stocks are kind of a modern concept, but there are some really old companies here and there. Most dont pay dividends but conceptually they could. Also in 100 years people will probably still drink wine/beer, eat salt or will want to go to some respected restaurant or a traditional hotel near a japanese wellspring. https://en.wikipedia.org/wiki/List_of_oldest_companies https://en.wikipedia.org/wiki/List_of_oldest_companies

OscarCunningham 4y ago

A perpetual bond has a finite present value. It's no more or less exploitative than a bond with finitely many payments and the same present value.

AnimalMuppet 4y ago
And, given a finite present value, I'm pretty sure Yale has the money to buy it back if they want to...
- kgwgk 4y ago
  Yale holds the bond and is being paid ~$30 per year. Apparently someone has to bring it to Amsterdam every couple of decades to collect the payments and keep the bond alive. They are losing money - I guess Yale has enough to do it just for fun, I mean, for the historical interest (pun intended).
  - t0mas88 4y ago
    Not just to Amsterdam, Stichtse Rijn is further south (around Utrecht). It includes the area where the 16th century rich people from Amsterdam would build their out of town mansions. Traveling there by boat, on a water system that has been managed for over 900 years. So this 367 years is old, but the organisation paying has existed in some form for more than twice that.
  - akavi 4y ago
    If someone gifted me the bond, I’d happily pay many multiples of the interest payments in airfare to go collect, and I have far less money than Yale. It’d be fun story and a cool bit of financial history, and keeping it “alive” is definitely worth a few grand every 10 years or so.
    - Ericson2314 4y ago
      It is fun cool history. I would have fun doing the trip with the document, not going to lie. But this ritual is also Proganda for capitalism. I don't mean that in a conspiracy way --- no one at Yale was like "yeah let's do this it makes finance looks good", but it clearly reflects someone having positive associations about this and the history of finance. It's kind of like how keeping around powerless monarchs is harmless in one sense, but a cosplay to uphold a classist society in another. I would not try to go for records with the longevity of either, I would abolish the monarchy and force all perpetual bond holders to sell them back to the issuers.

micromacrofoot 4y ago

As another commenter pointed out upthread, there are actual cases of perpetual ownership (Harvard being the example), though they're equally as rare as this 367 year old bond.

max-ibel 4y ago
I believe you can set up "dynasty trusts" in some US states today that basically live forever: https://trustandwill.com/learn/dynasty-trust https://trustandwill.com/learn/dynasty-trust
ghaff 4y ago
Going back to the Dartmouth College case: In the opinion for the Court, Chief Justice John Marshall wrote that by establishing a corporation, Eleazar Wheelock had created “an artificial being, invisible, intangible, and existing only in contemplation of the law.” He explained that “by these means, a perpetual succession of individuals are capable of acting for the promotion of the particular object, like one immortal being.” (Also, by the way, corporate personhood is nothing new.)

s1artibartfast 4y ago

Banning Perpetual ownership just reduces everyone to being a surf with leased land and possessions. I have very little interest in a return to a feudalism where higher authority owns the product of my labor

Ericson2314 4y ago
1. It's spelled "Serf" 2. Serfs were indefinitely tied to the land. Heritable Fiefs were also indefinite. In general you are exactly backwards, indefinitely arrangements are a holdover from Feudalism. Getting away from them is getting further from Feudalism.
- s1artibartfast 4y ago
  All humans are indefinitely tied to land and property. They need it to live. The question is simply if they ever have a chance of owning it themselves. You propose taking that away.
  - Ericson2314 4y ago
    That's nuts. The only problem with renting is landlords --- someone else owning. Look up LVT. If it's "rent all the way down" --- the land rent is ultimately disbursed back to the people, then there is no issue.
    - s1artibartfast 4y ago
      Why would I want my land rent distributed back to other people opposed to owning the land outright? Why would I want other people to be able to raise my rent until they squeeze out every dollar I make?
      - Ericson2314 4y ago
        They can't squeeze you without squeezing themselves.