4 ms·

Usury

25 points by rzk 4y ago

u801e 4y ago
Before the advent of fiat currency, inflation wasn't really much of an issue, so loaning someone X amount of money and getting paid back the same amount of money didn't result in a loss. With inflation, interest at a minimum would need to match inflation to not lose money.
- readthenotes1 4y ago
  My understanding is that you are wrong. At least in the United States it had a dual metal standard and use that to provoke inflation. Ignoring before the Fed, we have https://observationsandnotes.blogspot.com/2011/03/100-years-of-inflation-history.html?m=1 https://observationsandnotes.blogspot.com/2011/03/100-years-...
- rexpop 4y ago
  It's very difficult, in my recollection of Graeber's 5,000 Years of "Debt"[0], to find a period of time "before fiat currency," during which "loaning someone money" was even possible. As I recall, what we recognize as currency has been, throughout most of history, minted exclusively by states in order to furnish armies. Before that, what passes for currency doesn't, largely, function in any way analogous to our use, today. 0. https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years
recursivedoubts 4y ago
If you want to know why wealth tends to concentrate over time, followed by a collapse, this is it. The Habsburgs had the gold and silver wealth of the New World pouring into their treasury, and the sympathetic catholic Fugger's loaning them money at what were then considered Christian rates, and they still collapsed within a century.
- AstralStorm 4y ago
  Just one of the reasons. The other mathematical reason is gambler's ruin. A person with larger pot by chance or design can gamble riskier investment much longer and can diversify it more. Poorer people play a martingale, rich people play a multi-armed bandit. The less of a backstop in the society, the bigger the difference in outcomes. Rich play with armies and even if they lose they are well off. Poor play as soldiers and have nothing, not even their life, when they lose.
  - recursivedoubts 4y ago
    True. And, of course, now we have socialism for the rich (see SVB) and bootstrap-pulling for the poor (see Palestine, Ohio).
- kaskakokos 4y ago
  >>If you want to know why wealth tends to concentrate over time, followed by a collapse, this is it. Hi, do you mind to elaborate this a bit? I do not understand why before we have concentration and collapse later.
yamrzou 4y ago
Was this flagged? I don't understand why it suddenly went from position 24 on the front page to position 58 and then to the third page.
- recursivedoubts 4y ago
  Nobody wants to talk about usury because the concept is an old timey superstition that went away after the Reformation or Vatican 2, according to tastes. Also, it's how the elites extract surplus value from the economy, and they let just enough of the top 20% in on a much smaller bit of the grift that most people who matter can't conceive of it being morally wrong.

25 points by rzk 4y ago

Before the advent of fiat currency, inflation wasn't really much of an issue, so loaning someone X amount of money and getting paid back the same amount of money didn't result in a loss. With inflation, interest at a minimum would need to match inflation to not lose money.

readthenotes1 4y ago
My understanding is that you are wrong. At least in the United States it had a dual metal standard and use that to provoke inflation. Ignoring before the Fed, we have https://observationsandnotes.blogspot.com/2011/03/100-years-of-inflation-history.html?m=1 https://observationsandnotes.blogspot.com/2011/03/100-years-...
rexpop 4y ago
It's very difficult, in my recollection of Graeber's 5,000 Years of "Debt"[0], to find a period of time "before fiat currency," during which "loaning someone money" was even possible. As I recall, what we recognize as currency has been, throughout most of history, minted exclusively by states in order to furnish armies. Before that, what passes for currency doesn't, largely, function in any way analogous to our use, today. 0. https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

recursivedoubts 4y ago

If you want to know why wealth tends to concentrate over time, followed by a collapse, this is it. The Habsburgs had the gold and silver wealth of the New World pouring into their treasury, and the sympathetic catholic Fugger's loaning them money at what were then considered Christian rates, and they still collapsed within a century.

AstralStorm 4y ago
Just one of the reasons. The other mathematical reason is gambler's ruin. A person with larger pot by chance or design can gamble riskier investment much longer and can diversify it more. Poorer people play a martingale, rich people play a multi-armed bandit. The less of a backstop in the society, the bigger the difference in outcomes. Rich play with armies and even if they lose they are well off. Poor play as soldiers and have nothing, not even their life, when they lose.
- recursivedoubts 4y ago
  True. And, of course, now we have socialism for the rich (see SVB) and bootstrap-pulling for the poor (see Palestine, Ohio).
kaskakokos 4y ago
>>If you want to know why wealth tends to concentrate over time, followed by a collapse, this is it. Hi, do you mind to elaborate this a bit? I do not understand why before we have concentration and collapse later.

yamrzou 4y ago

Was this flagged? I don't understand why it suddenly went from position 24 on the front page to position 58 and then to the third page.

recursivedoubts 4y ago
Nobody wants to talk about usury because the concept is an old timey superstition that went away after the Reformation or Vatican 2, according to tastes. Also, it's how the elites extract surplus value from the economy, and they let just enough of the top 20% in on a much smaller bit of the grift that most people who matter can't conceive of it being morally wrong.