Payday Lenders

[Smiling Buddha]

There's a difference between usury and money lending per se.

Of course. The moment that interest is involved, however, many great thinkers have contended that usury begins.

To make money from labour, or from inventiveness, is one thing. Commendable.

To make money from having money? It doesn't take a genius to see where that ultimately ends up.

Especially since we have history to tell us where it ends; other societies have expelled their money-lenders.

For very good reason. It corrupts everything. Socially, politically, economically.

25 years of labour to own a modest house, even in a relatively wealthy nation? Hahahahaa, what a joke.

Except the joke is on us. For now.

 

[Catfish Alley]

Houses are cheap actually. It's the land prices that will get you. That's probably a good thing because if land was cheap you'd have big corporations and international investors buying it all up...

Oh wait

 

[kickazz]

Of course you think it is reasonable: you have been raised in a system where that is the prevailing paradigm.

No, you are wrong. I think it is reasonable based on my reasoning.

If I had money (which I traded for my labour, by the way) to lend, particularly on a large scale to several people I do not know, I would like to know what percentage of it I am likely to get back, statistically. I would want to understand my risk. Knowing this, I would probably want to charge everyone a rate of interest to cover for this. Now the question is - would I want a rate that meant I ended up square, or would I allow myself a small profit? Well, I would probably go for the profit, becasue why on earth would I want to do all of that for nothing, when I could have instead used the money in the first place to buy a machine or business that could also make me money (and maybe even employ people directly/indirectly) in the process.

I get what you are saying that making money out of money is wrong - I feel that way with people who inherit a lot sometimes. But remember that capital is also your personal store of the value of your labour. An frankly, without people maing money out of their capital then us plebs would not be able to trade our labour for capital and would be stuck in a life of subsitance and very primitive trade.

Houses are cheap actually. It's the land prices that will get you. That's probably a good thing because if land was cheap you'd have big corporations and international investors buying it all up...
Oh wait

Yes land, in particular residential land, is expensive because there is an artificial scarcity created to ensure certain parties can continue to make money out of the whole scheme. I'm well and truly with the conspirators on that one.

 

[moses]

Wasn't there a thread on this a couple of weeks back?

I started one on Nimble Loans - one of these scum companies.

 

[Smiling Buddha]

kickazz It is highly unlikely that anything I type in response to your post will change your mind.

We are up against, what, twenty years (?) of constant reinforcement (via school, msm, and the society they influence) of those notions you just regurgitated.

I will say this: you speak about what you would do if you had the money to lend. What is in your apparent interest. Well, if that were all that mattered, why would you be against individuals selling their organs, or using addictive recreational drugs, or selling themselves into slavery? If you are not against these things, and would never support your government stamping them out, then at least your position is internally consistent (which is a start).

But most people are against some or all of these things. They can see the damage that allowing people to act purely in 'self interest' might do their communities, even if not directly to them. This is one reason why so many great thinkers have been against usury: not because they themselves feared personally going into debt bondage, but because they could see what affects this has on the society around them.

And make no mistake, most every ill you see in society today can be traced back to the power to lend money at interest. The military industrial complex, big pharma, corrupt education, the list goes on. Those with the money, if allowed to make money from having money, will eventually control everything. It is a logical inevitability.

The end result will be a society of people raised from the day they are born to think that debt bondage is not only okay but good for them and good for society. They will defend the system that binds them to servitude. Many of them will even think that anybody who questions this orthodoxy is crazy, an 'idealist', name your epithet.

I don't take it personally, because I can see why people think the way you do. I used to as well. But deep down something nagged at me. No matter how well-versed I became in modern 'free market' (lol) economic orthodoxy, something about it never sat right with me. Some of the early posts in this thread reveal that something about it doesn't sit right with others, too, even if it is only the extreme forms of usury which they are willing to criticise publicly.

If you ever do your own research into usury and money-lending, I suspect that your own opinions might change as well. More likely, though, you will (in your mind) discredit me as a [insert epithet], get a mortgage, raise a family, send your son off to uni where he will accumulate perhaps $100,000 (of today's money) worth of debt (at interest), and then once he secures a job, encourage him to purchase a house via a 30-year mortgage because, as they say on tv, that is the path to 'financial security'.

 

[Catfish Alley]

Where do you live SB? Avoiding a mortgage or rent is pretty difficult.

 

[Long Live HFC]

And make no mistake, most every ill you see in society today can be traced back to the power to lend money at interest.

Bollocks. Countries with under or undeveloped financial/banking systems are a “who’s who” of poverty, unemployment and hopelessness. The ability to efficiently allocate capital is a cornerstone of economic growth, social mobility and opportunity.

That said, banks are still campaigners.

 

[Gough]

Isn't lending money for interest forbidden by the Koran? You could argue that that hasn't helped Muslim countries too much, plenty of ills in their societies.

 

[Scotland]

ITT: Long bows drawn.

I would contend that there are greater problems in the financial system caused by the ability to create money out of thin air than there are from being able to lend it at interest.

I would also contend that the main drivers behind housing affordability in Australia are govt policy (income taxation/negative gearing availability of land) and a cultural obsession with real estate wealth.

 

[Long Live HFC]

I would contend that there are greater problems in the financial system caused by the ability to create money out of thin air than there are from being able to lend it at interest.

It’s not money they create, it’s credit, but regardless of the semantic differences, you’re wrong.

 

[kickazz]

kickazz It is highly unlikely that anything I type in response to your post will change your mind.

We are up against, what, twenty years (?) of constant reinforcement (via school, msm, and the society they influence) of those notions you just regurgitated.

I will say this: you speak about what you would do if you had the money to lend. What is in your apparent interest. Well, if that were all that mattered, why would you be against individuals selling their organs, or using addictive recreational drugs, or selling themselves into slavery? If you are not against these things, and would never support your government stamping them out, then at least your position is internally consistent (which is a start).

On the 'if' part, my answer in No. I believe in win-win. Conversely, it would be foolish to think we could ever have the world act completely out of the common good, self interest will always have its role to play. So I think I can skip past the rest of the irrelevance in that paragraph.

But most people are against some or all of these things. They can see the damage that allowing people to act purely in 'self interest' might do their communities, even if not directly to them. This is one reason why so many great thinkers have been against usury: not because they themselves feared personally going into debt bondage, but because they could see what affects this has on the society around them.

You may not have changed my mind, but I already agree with you pretty much all of that paragraph. Predatory lending aimed at keeping people in unmanageable debt is not a good thing. The parallels to slavery migh seem over the top to some, but I'm with you on that too. There are people who have to go into debt bondage simply to pay for vital medical treatment (for themselves or others) as an example. It is disgusting.

I think the key thing, and where we may probably see things differently, is where does the concept of debt bondage stop and the motivating power of debt to drive us to work and create better prodcuts and services start? The old question, what makes the world go round - love, money? I heard someone once say that it was debt. Admittedly that guy was an economist. ;-)

Big pharma is a two-word slogan that immediatley conjures up evil thoughts, and yeah we could talk for ages about the drugs we get pushed that we don't really need. But I have a personal research story for you - people close to me, with inoperable cancer, should be dead now. Luckily they have responded well to relatively new drugs. These drugs cost a fortune. A combination of the PBS, and, wait for it, private investment, with the promise of initerest/dividends has given these companies the resource they need to create things.

And make no mistake, most every ill you see in society today can be traced back to the power to lend money at interest. The military industrial complex, big pharma, corrupt education, the list goes on. Those with the money, if allowed to make money from having money, will eventually control everything. It is a logical inevitability.

I would believe the opposite. The ability to lend money at interest frees up the movement of capital from a state of idleness to usefulness.

The end result will be a society of people raised from the day they are born to think that debt bondage is not only okay but good for them and good for society. They will defend the system that binds them to servitude. Many of them will even think that anybody who questions this orthodoxy is crazy, an 'idealist', name your epithet.

You are right that we are bound to servitude (unless we are from Old Money). I choose to defend the system, because I thnk from society's perspective, it is the best option we have seen that effectively makes use of everybody's skills/labour. What are the alternatives? Subsitance / Bartering? Communism? In the case of the former, sure you are free, but I think you have a poorer qulaity of life. And for the latter, well the unavoidable inevitibility of 'self ineterst' has shown that system to unfortuntely be less productive.

A lot of what I say is predicated on higher productivity=good for society. Some will dispute this given what crap counts as productivity these days, but I think by and large enough good is produced for that assumption to hold true.

I don't take it personally, because I can see why people think the way you do. I used to as well. But deep down something nagged at me. No matter how well-versed I became in modern 'free market' (lol) economic orthodoxy, something about it never sat right with me. Some of the early posts in this thread reveal that something about it doesn't sit right with others, too, even if it is only the extreme forms of usury which they are willing to criticise publicly.

If you ever do your own research into usury and money-lending, I suspect that your own opinions might change as well. More likely, though, you will (in your mind) discredit me as a [insert epithet], get a mortgage, raise a family, send your son off to uni where he will accumulate perhaps $100,000 (of today's money) worth of debt (at interest), and then once he secures a job, encourage him to purchase a house via a 30-year mortgage because, as they say on tv, that is the path to 'financial security'.

It nags at me too - I'm sure there is a better way, and to be honest I'm taking an approach to life where I won't take on too much debt, because I do see some of the parallels you draw an I don't like it. As a pragmatist though I do see the place for debt and reasonable interest. I think that whilst it does enslave us somewhat, it can also collectively provide us with the higher standard of living we enjoy today.

Sure, if the system was different we could be truly free, and have a lower standard of living - but would we know or conceive of any better? I can see how one would support this.

 

[kickazz]

Isn't lending money for interest forbidden by the Koran? You could argue that that hasn't helped Muslim countries too much, plenty of ills in their societies.

It is, but they have workarounds in the modern world.

Also forbidden by Jews, but technically only when lending to other Jews. The fact that they were the only ones that could lend at interest to the masses at one time is a key moment in the history of Anti-Semitism.

 

[Smiling Buddha]

I would contend that there are greater problems in the financial system caused by the ability to create money out of thin air than there are from being able to lend it at interest.

If one is lending at interest, where does the amount used to pay the interest come from?

I would also contend that the main drivers behind housing affordability in Australia are govt policy (income taxation/negative gearing availability of land) and a cultural obsession with real estate wealth.

So you no longer believe in supply and demand?

The more demand there is, ceterus paribus, the higher the price of goods.

And when people no longer need to save money to purchase things, there is more money floating around for the same items.

What logically follows from that?

An increase in prices.

 

[courtjester]

In the majority of cases thats self inflicted. Not counting things like medical emergencies etc.

Once again. Not all low socioeconomic people utilise these services. Many manage their limited money properly and are able to get by because they resist the urge to buy the latest iPhone/TV/gaming system every 3 months.

I don't mean to say you don't know what you're talking about, but you don't...

 

[Smiling Buddha]

Also forbidden by Jews, but technically only when lending to other Jews. The fact that they were the only ones that could lend at interest to the masses at one time is a key moment in the history of Anti-Semitism.

Fancy that. Communities of people whose cultural values teach them that usury is wrong, developing negative feelings towards a distinct group of people who also agree that it is wrong to lend money at interest but only amongst themselves, because their cultural values teach them that other humans are inferior to them.

How irrationally prejudiced.

 

[Long Live HFC]

If one is lending at interest, where does the amount used to pay the interest come from?

the money to pay interest comes from your future earnings obviously. This popular “meme” that there isn’t enough money in circulation to pay off the interest is just silly.

 

[Smiling Buddha]

the money to pay interest comes from your future earnings obviously.

And where does that money come from?

 

[Catfish Alley]

It comes from your pay. It's a payday loan for something unexpected. Not an ongoing expense.

 

[Long Live HFC]

And where does that money come from?

you should really have watched that lecture bunk moreland posted a few days ago. what you're really talking about (ie what happens in the real world) is called a deleveraging and it explains in some detail the associated risks and economic issues (notably, recession).

Basically though, interest paid doesn’t just get swallowed by the banks and “destroyed” or whatever you wish to call it that happens to the loan asset. The interest that is paid to banks is spent back into the economy, just like any other business might- salaries, shareholders, cleaners, losses, fines etc. think of it just like a big washing machine with all of the interest just spinning around from debtor to lender to creditor and back again.

 

[Long Live HFC]

It comes from your pay. It's a payday loan for something unexpected. Not an ongoing expense.

No, SB is referring to the fact that most money in existence is created by banks through lending, but since the banks don’t create money + the interest to be paid on the loan, then loans can never be repaid without further loans being created. It’s a common misconception of those that oppose lending generally.

 

[Catfish Alley]

Ah ok. Thread has taken a turn from the title.

 

[Syrah]

SB is just pissed off because the interest free period on the laptop he bought from Harvey Norman has just expired.

 

[Smiling Buddha]

Yeah, that doesn't even try to answer the question and, as usual, you are trying to conflate topics.

I have said my piece in this thread. Usury is harmful to society and for that reason wrong, and I am glad to see that some people can see it.

Any discussions on money more generally I am happy to have in the relevant threads.

Especially the thread entitled All Wars Are Bankers Wars which is becoming more pertinent with each passing day.

 

[Scotland]

If one is lending at interest, where does the amount used to pay the interest come from?

The debtor.

So you no longer believe in supply and demand?

The more demand there is, ceterus paribus, the higher the price of goods.

And when people no longer need to save money to purchase things, there is more money floating around for the same items.

What logically follows from that?

An increase in prices.

I'm familiar with high school Economics, thanks.

Of course I believe in supply and demand, but ceteris parabus does not apply to the Australian housing market.

Supply is skewed by unwillingless by govt to release land, allow development etc. Demand is skewed by the fact that under our tax system you're better off hoarding property than you are investing in productive assets.

 

[Smiling Buddha]

If the lending of money did not affect house prices, changes in interest rates would not affect house prices.

But they do, this is undeniable.

The cheaper money is to borrow, the more houses are 'worth'. Why? More money in the system chasing the same number of houses.

Sometimes I suspect economics is made out to be some complicated science to discourage the average person from ever thinking about it.

But this is simple stuff.