Felix

According to the Objectivist Ethics, living is a choice. It's not an imperative "Thou shalt take care of your self-preservation". All the Objectivist Ethics are saying is that if you've decided to live (and that means living in the Objectivist sense, see my post regarding your other question), then you have no choice but to live according to your nature. The Objectivist Ethics' stance on this is very clear on refusing any dogmatic and unfounded imperatives regarding morality. The only imperatives in the Objectivist Ethics are those that derive from biology and physics, like "If you want to live, you have to eat." or "If you want to survive you don't jump off a high building.". But they all come with an if attached to them, because you can always choose not to.

I believed that one, too, once. And it gave me a lot of headache. But this problem is caused by confusing mere survival with living in the Objectivist sense. The latter means that an organism has a specific nature according to which it can function. It has specific needs which derive from the nature of the organism. For animals, including humans, this means that part of this "functioning according to nature" includes sex. At the basis of the Objectivist Ethics stands the premise that a living being exists with a specific nature and that living - to that organism - means living according to that very nature. This would mean that the often cited example of the male mantis, which is eaten right after procreation, simply means that this is part of the nature of that species. The question then becomes: What is the nature of man and which specific needs arise from that? One of the answers is that man needs a code of ethics to provide him concious knowledge of his values as these don't come to him automatically since he possesses free will.

This is what the parrot I talked about could do.

The problem is that your $50 bill only costs maybe a cent in production. Goods are produced, and money is not a good. If it were, why is your $50 bill not worth the cent it costs, but $50 instead? And you don't get gold for it.

It seems to me that birds are seen as at the bottom of the hierarchy in Objectivist Epistemology. Didn't Rand refer to the inability to go beyond the number of 3 as crow-epistemology? Hm. I wonder what this would actually mean in regards to "smarter" animals like dogs or pigs. This also reminds me of this report I've once seen on a parrot who was capable of simple calculations and deductions. But I'll have to research to find it.

They need other people to take on debt to get the money to pay theirs. I'll explain why below. I take the government into account, too. It is a main source of debt. But this is also true if there was no government, or if the government didn't take on debt. To understand this you have to get that this thing works over time. Here's a horribly oversimplified version to get the principle: Person A takes on a debt on 100 only dollars, which are the only dollars in the market then and has to pay $110 back, 10 of which don't exist. He invests it in the work of B (to buy machines, materials or labor) and then tries to sell his products to get the $110 plus $10 for himself. Now the $100 he gave to B are not sufficient. What he needs is C to take on debt to put new dollars into the market, so that A can get his additional $20. Now how do I come to the conclusion that this over-debt is actually the case? Well, if you take a look at the "reserves" of central banks as they are today, you will find that 80% of this is government debt (tendency rising), the rest being other debt. So the cash-bills you have is basically (government) debt. This money is then increased by fiscal money creation, meaning that banks borrow money to other people while keeping the account balances of their customers untouched. This is, in fact, some sort of double booking. But that's how it works. So the money you have on accounts and in the hands of people is debt for others. Either government or private. And a government bond, just as a loan from the bank, usually demand interest payments on top of the borrowed money. This is how I currently see it. But I have to research the specifics of it and I hope that Trudy can help here. Even if the specifics I presented were wrong, the principle would remain the same. But what happens when one takes on debt without the money to pay it back being in existence? This would be a bad deal, no matter who made it. Unless, of course one knows that a) more new debt is on its way. (via inflation for example) or one can beat others in the game by having a better product/service that is so good that people will give you their money (while others will lose out)

The thing is that most can't. At least they couldn't if it were not for the new debt taken. And if not enough new debt is taken this leads to a crash. The current system is an inherently unstable ponzi-scheme. This is what I am saying. The thing is that the economy as a whole is indebted beyond its means of payment because all the money in existence is lent and borrowed and therefore requires interest payments for which money isn't there. And that people just pay back some, which is then again spent, and then used to pay off the debt again, doesn't work. Just because money is paid back to the bank doesn't mean that the bank's customers suddenly spend more. New money only enters the market via new debt. So, basically "don't borrow more than you can pay back" may be true for some individuals who can and do in fact profit in this system. It is very well possible for some. But it's impossible for all. That's why I believe that this system screws up the concept of a trade which benefits both parties, because it's basically about money and value has become secondary. I hold that this is wrong, that this is not as it should be and that because this is the case, economic models which claim that trade always benefits both parties unfortunately don't apply in the current system. Hm. Actually my main point was making this forum aware that there is a problem in the first place, which is still doubted by ... well ... pretty much anybody . I talked to Maarten about this and he said that I was too negative and should focus on a way out, too. The only alternative I can think of would be that debt should also be allowed to be paid for in goods. But this would hinder the economy more than it would benefit it. But I haven't given this much thought, yet. I guess if you are looking for solutions, you'd have to ask Trudy.

I'd say that there are two groups of people responsible for this: The software guys who engage in self-serving overengineering and lack a feeling for customer needs and the marketing guys who want the software on the market yesterday and don't understand the need for good testing. And, of course, each group blames it on the others.

Wow, there's been a lot of activity since the last time I've been here. Sorry for the late answer, but I only had limited computer access over the weekend. Well, here it is. You named two scenarios: This legal action ends in bankruptcy. If you are piled in debt and are unable to pay it off, you go bankrupt and your goods are sold, usually at a loss. Now remember: What we talked about was an entire economy where there wasn't enough money to pay off all the debt. This means that for everyone who can pay off his debt with interest, there's in average someone who can't, i.e. who goes bankrupt. Again, remember that we actually have to include profit in addition to interest, which makes this even more likely. Now picture an economy where a large group of businesses and people go bankrupt. That's a crash, isn't it? And if you think that's not enough, this is just the beginning. What's worse is that this initial crash results in debt unpaid. If you are bankrupt, you usually don't only owe money to the bank, but to lots of other businesses as well. If this happens on a big enough scale, and if there's not enough money around it does, then this initial crash will drive other businesses into bankruptcy, because suddenly they can't pay their bills, because the money they expected to get from the bankrupt business doesn't come. This drives prices down because money that was accounted before (the debt which remains unpaid) doesn't come, and has to be deleted, lowering the actual sum of accounted money. This alone has to result in lower prices, as the total amount of money in the economy is going down. This sudden lack of liquidity puts additional pressure on the remaining businesses, forcing them, who are trying to do the impossible under time pressure already, to lower their prices to speed up the sales process and even to minimize losses. This, of course, drives other businesses into bankruptcy and so on and so forth until new debt is issued to pay off the interest of the remaining old debt which has survived the crash, which is when the whole thing starts anew, waiting for the next crash to come in the future. This extension, as you said it yourself, only extends and in the end worsens the problem.

This is true for all interest. They do it. They do it, too. To have enough new money in the market you would need new debt, the paid-off debt usually enters the market again as new debt. It is not just spent. This can always happen, no matter if my theory is correct or not, as it is dependent on the debtor's performance. Some can only pay off their individual debt with interest with other people's debt. The problem is that it can't "balance out". It's a constant falling forward, a constant struggle against bankruptcy. There is no balance. Also note that what we were describing was nothing but just breaking even. We haven't even started talking about making a profit, yet. Yes it does coincide everywhere. It's a description of the current system. I'm the first one to describe it as on the verge of sheer insanity. But still it is true. The problem I am having describing this is that everyone tries to argue that this is insane and could therefore not be. My point is that it is insane and will therefore end in a crash. It should not be, I agree with that completely. I am not arguing for it. I am arguing against it. But I am certain that "my" theory which describes it is right.

I don't attack trade on moral grounds. I don't even attack the concept of trade. It's fine. The aim of my attack is the currency-system. Actually it's not. You need a constant rise in debt to provide enough corresponding money to pay the interest on the old debt. This is the basic problem of the current system. You need to carry 5% more currency back to the bank to pay the debt you have. Please wait a little bit more. I'm currently researching to write my treatise.

Congratulations!

Ryanair is great. I knew that they charge close to nothing. But completely free is great! I'm looking forward to using it.

You're welcome.

Even though this is funny, I doubt that it is helpful. You have to accept that she denies the self-evident when she sees it fit, or better: not fit. I'd bet she honestly believes that you have no understanding of what she believes and therefore all your hints are perceived as hostility. Try this, if you really want to reach her mind: Try to explain to her what you think she believes. Don't be hostile. Try to repress judgement. The key here is to make her see that you fully understand her position. Take the time. Don't say what you think of it all. Focus on understanding only. The key here is not to know it all already before she has even started. Listen and display understanding of her points. This doesn't mean that you accept her points or even that you think that they are consistent. The goal is to make her understand that you understand. Then, and only then, try to show her in one aspect where problems arise. Again, do it in a non-hostile way. This approach may get you somewhere. The goal here is to keep her from shutting down her mind by believing that you just don't understand and that it's pointless to talk to you. The reason to be so careful here is because this is a highly emotional issue. It goes down to her definition of her identity. You can't just change that with a simple remark about keys. So if you want to really get to her instead of just making fun of her, give it a try.

Here's the Zen-buddhist version of it: What is the sound of one lip kissing ass? If you answer this question correctly on our surrealistic game show, you can win a million dollars, but even before you get the prize you won't want it. Would you like some tea? And here's the Objectivist version: Screw Hank and Karl! I can make my own million dollars... right after I kick both of their asses.

Hm. She could try getting an internship.

Thank you! This is hilarious!

Then maybe we could get that Matrix-plug after all.

Yeah! Go, RoboChick, go! I just love hearing stuff like this.

If most businesses fail, it would suggest a deflation. Then borrowing money becomes extremely risky. And then it is nearly impossible to pay back even a 0% debt, because prices are falling over time - rapidly. Which would be why a mass-failure of businesses would occur in the first place. I doubt that banks would raise interest rates. They would be happy if someone would actually borrow at least something. I think that banks don't lend money to people without a sound business-plan no matter what the current interest rate is. Because without a sound business-plan you lose independent of the current "monetary climate". Lending money at 0% is usually a poor attempt to keep an economy from collapsing into depression. It can work for quite a time, but it is only a way of buying time.

The banks themselves don't increase the money supply. Basically that's the debtors' job. As far as I see it, the interest rate reflects the banks' anticipation of future indebtedness. It is, to a large degree, an anticipation of future productivity. But things like speculation bubbles, government debt and things like the introduction of the credit card also come into play. I doubt, however, that anyone is willing to lend his money at 0%. There's still risk involved. Just because there is theoretically enough money to go around now, the business-plan can still fail in the market.

I'd say that banks don't own all the money. They just manage it for their customers. I don't understand why you would want to create a new currency. The problem would stay the same: Time costs money that isn't there.

Well, so basically you agree that new currency has to be created to make things work. My problems come with this paintings-thing. I don't think that a new barter-currency needs to be introduced before one can have new paper money. I agree that people have values and that money should be backed by such values. And usually when you get a loan, you have to have a collateral of some sort, usually real estate and yes, maybe even a famous painting. If you fail to pay the money, you end up losing your collateral. Before that you usually declare bankruptcy (not good). Usually the bank auctions it off to get money instead of the good. Basically the bank can't accept goods. It borrowed, and then loaned, their customer's money, basically. What will they tell them: Well, no, you can't access your account today, Sir, because we used your money to buy this beautiful painting. Take this instead. The bank would go broke in no time. And banks usually promise monetary profits (interest) to its customers. So the bank itself is under debt-pressure to pay the interest to their customers. And dealing with every single customer about which good he wants for his 4,74$ interest is not very practical for a bank. For this bankruptcy (which would be bad for both the bank and the debtor) not to happen, you seem to agree with me here, one would need new currency. According to debitism this new currency can be created by someone else borrowing money before you have to pay yours back. Then there is enough money in the market for you to pay back your interest. And since you worked for your money, the money (which was previously nothing but fake) is now backed by values. So what happens is that money enters the market and then it is backed by the work of the debtor, because he usually spent that money and has to work to get it back. So what you usually have is a tiny inflation first (fiscal money creation) and then a tiny deflation, (creation of goods to get the money back). In the end prices remain relatively stable. And since the debtor is under extreme time-pressure and pressure to produce something of high enough value to get the money back, usually we end up with better stuff all the time. So all we need for the system to work out is new debtors. And how much new debt we need is defined by the interest rate to be paid on current debt.

Brilliant! Well done!