In debt the first 5000 years Geaeber makes the case that pure “free market” trade has never really existed in “the west”. The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.
>The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.
How does are bans against consensual financial exchanges close to the "ideal" of the free market? It just sounds like you have an axe to grind about the financial system rather than describing free markets.
What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever
> What makes this view more correct than say, "economies with marketing creates a dynamic where being competitive in production is secondary to marketing" and concluding that nothings a free market until we ban all advertising? After all, you can make a vaguely plausible argument about how marketing isn't really about the merits of the product, and therefore allowing it is antithetical to the free market or whatever
Wait, so your pitch in favor of a debt-fueled market economy is that advertising is awesome and that we wouldn't want to "lose" being smothered in ads all the time?
Cause... sign me up for the non-financialized, non-mass-media-advertising-driven economy please and thank you. I'd even be ok with just nuking billboards and mass-media forms of ads and still allowing more direct forms of marketing, if we must compromise! Likely we could find some compromises around just how much of the debt world we regulate too (this should be obvious?).
(I thought the disconnect between the efficiency of competition and the market as realized in modern economies was pretty well understood and taken for granted, but I guess we all find ways to justify the system we're profiting from... even if that means we have to claim we love the ad breaks)
>Wait, so your pitch in favor of a debt-fueled market economy is that advertising is awesome and that we wouldn't want to "lose" being smothered in ads all the time?
The point is that if add random caveats to what counts as free market, it won't be "free market", only "market I like".
I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.
>I'm flabbergasted that you look at the Chinese property crisis and say "only the West does irresponsible loans." No, 60% of China's economy is state-run companies and the remaining 40% need political officers. China is just as capable of making shortsighted decisions as the US, and they have already made several devastating ones.
While these are hardly shy claims, I don't see anything in them to say "only the West does irresponsible loans"?
> The West is in a state of psychosis with Debt and Monopolies under the illusion of free market.
> The Chinese markets are more free than West, you can just look at the Auto and AI industry.
or the prior post
>Usury and debt based economy creates a dynamic where being competitive in production is secondary to financialistion.
> In short, instead of market being driven by demand and productivity, it is driven by financier curving out monopolies.
> Peak Examples are Uber and AirBnB.
You can throw a rock these days and find a category where the products coming out of China are miles ahead of those coming out of the rest of the world, from a bunch of companies nobody had heard of a few years earlier. And the list is growing pretty steadily.
I would assume plenty of shortsighted decisions are also being made. But I would have a hard time characterizing the state of competition in the west as healthier or more productive when looking at the number of players and the quality of goods being produced in China.
Capital will not be hoarded and stuffed in pillows without Usury. People are happy to take bets for profit and loses, I mean, that is like the entire stock market schtick.
...except Uber STILL faces competition, and I went back to hotels after finding AirBnB too pricy.
It is good and proper that people aim to create monopolies, as long as they want to do that in a productive and legal way! Monopolies are inherently dangerous, but the truth is that acquiring and maintaining one is not straightforward unless you can get the government to ban your competitors.
Debt creates debt crises. Throughout history it’s been a major function of any government to resolve these. Notably this function predates any concept of a market in the modern sense. For the most part markets were created by fiat by the government for its own purpose (usually supporting its armies) rather than springing from the ground organically only to later be regulated.
I’m not advocating for Islamic finance, it’s just a funny artifact of history that the closest thing to a “free market” unfettered by government interest, did not happen in the “western” world most of its advocates come from.
That's not true. Islamic finance forbids indefinitely growing interest. Sharia finance agreements involve fixed fees or equity shares. Late penalties can be collected but must be donated, not profit. In all cases, the borrower never owes to the lender for the lender to keep more an a fixed amount determined at the strat.
Debt is generally cheaper because lenders face lower risk. Because debtors hold priority claims on assets during liquidation and receive guaranteed fixed payments, they demand lower returns. In contrast, equity investors require higher returns for taking on higher risks.
Companies also often prefer debt because it doesn't dilute shareholders which issuing new shares would do.
It is funny that usury is so evil in Islam at the same time Islam very clearly allows men to own and rape female slaves, "those whom your right hands possess" (ma malakat aymanukum).
Those slaves being raped must be so comforted by knowing that Islam forbids cash loans at reasonable interest rates.
a stranger is asking you to risk $100k on his half-baked plan in exchange for nothing, and you say "sure go ahead take my money!"? no. it doesn't work like that in the islamic world.
as a borrower who's not allowed to compensate for your lenders' risk monetarily, your access to loans is severely restricted. Essentially you have to rely on your extended family. and instead of paying for the risk with interest payments, you have to pay with loyalty and subservience.
it restricts social mobility far more than the western model. it incentivizes clan structures. which incentivize cousin marriage.
power concentrates in the patriarchs of a million little family kingdoms. which causes all kinds of economic inefficiencies.
in the US, even if you're born without any family connections, as a healthy 20 year old you can find a job (hard work) that allows you to save $70k per year and invest it. when you're 30 you have $1M and a good credit history, you can easily leverage that to get a $2M loan at low interest rates, which allows you to start any kind of productive venture you want.
and you can do all this without owing your clan's patriarch access to e.g. your most profitable clients, or your daughters hand in marriage to his retarded son, or anything else he wants in exchange for his generosity.
If you don't understand the difference between a loan for 5% interest and 7 freaking percent of your entire company then you really don't understand finance at all.
The only person confused here is you. It is best you don’t take these topics personally and try to understand it from an objective point of view rather personal dogma.
All interest is usury in Islamic Law (and the laws before it such as Christianity and Judaism). There are ways to to put free cash into productive use without exploitation.
If going by the very poor economic performance of Muslim countries I would say interest is a very good thing if limited to reasonable interest rates and fair bankruptcy laws.
Correlation vs causation (post WWI colonization comes to mind, that continues to this day). Historically, there was a period of time when there were no poor people left to take Zakat, everyone paid their share, and no usurious transactions permitted.
Historically, there was a period of time when there were no poor people left to take Zakat, everyone paid their share, and no usurious transactions permitted.
This is worth treating carefully. There are sources like Ibn Kathir and al-Tabari writing centuries later which claimed that Zakat collectors would return with unspent funds because eligible recipients could not be found. Even if we take this at face value, that's a leap from there being no poor people left. Did it apply to the entire empire or only a few regions? How likely was the collector to actually find recipients if they existed in a given region? etc...
In debt the first 5000 years Geaeber makes the case that pure “free market” trade has never really existed in “the west”. The closest to this ideal that’s ever happened was during the Islamic golden age enabled by religious prescriptions against usury.