Fairness can evolve by imitating one's neighbor: physicists

Aug 30, 2012 by Lisa Zyga feature
Phase diagram showing dominant strategies as a function of offers (p) and acceptance levels (q). The main finding is that a rich array of single- and multi-strategy phases emerge when p>q. Image copyright: Szolnoki, et al. ©2012 American Physical Society

(Phys.org)—As humans, we have a strong sense of fairness that often causes us to go out of our way to punish an unfair person, even when such an action comes at a cost to ourselves. This desire for fairness is epitomized by the ultimatum game, in which two players must share a sum of money. One player offers a certain nonnegotiable portion to the other player, who either accepts or declines, but declining means neither player gets any money.

Although a rational player – sometimes called Homo economicus – should accept any offer no matter how small so that they at least gain something, experiments show that this is not what happens in reality. Instead, people act more like an emotional Homo emoticus, refusing to accept offers they perceive as too small. Experiments show that people reject offers of less than 33% half the time. But low offers aren't very common in the first place, since about two-thirds of the time the offer made by the first player is very close to a fair 50:50 split.

Researchers have proposed many explanations for the underlying psychology that causes people to demand fairness. Studies have shown that, while models of favor the evolution of the rational Homo economicus who accepts anything and offers little, arranging the game spatially can lead to the evolution of fairness. In spatial games, players have restricted connections with other players and can only interact with players in close proximity to themselves.

In a new study, researchers have used statistical physics techniques to support this idea. They show that, in a spatial ultimatum game in which one player adopts its neighbor's strategy when it has worked better than its own, the fair 50:50 strategy can evolve. Results reveal hidden complexity in the pursuit of fair play, with various strategy combinations dominating in cycles.

The researchers, Attila Szolnoki and György Szabó at the Hungarian Academy of Sciences in Budapest, along with Matjaž Perc at the University of Maribor in Slovenia, have published their study on the results of the spatial ultimatum game in a recent issue of Physical Review Letters.

Examples of the spatial patterns that emerge for different combinations of p and q, where colors represent strategies. Image copyright: Szolnoki, et al. ©2012 American Physical Society

While many versions of the ultimatum game have already been proposed, the new version differs in that it limits the offers and acceptance levels that players can use to discrete values rather than a full continuum. As the scientists explain, this discreteness reflects real life situations, since we often haggle over a price by increasing or decreasing it by certain amount. Accordingly, each player employs one of six strategies, which are characterized by both the offer (p) and acceptance level (q). Five of the six strategies are considered empathetic, where p = q; that is, players accept the same amount they offer. The value of 50% is considered the perfectly fair strategy, while values greater than 50% are considered "superfair" and those less than 50% are considered rational. In the sixth strategy, p and q are chosen arbitrarily.

To begin the game, each player is randomly assigned a strategy. Then a randomly selected player plays the with its four nearest neighbors, acting once as proposer and once as responder with each neighbor. Then one of the four neighbors engages in the same interactions, and the payoffs of this player and the first randomly selected player are compared. One player will adopt the other's strategy with a certain probability depending on which player performed better. After many iterations, the idea is that better-performing strategies will grow in popularity and come to dominate the game.

What the researchers found, however, was not a single strategy emerging to dominate. Instead, as the game evolved, one strategy might dominate for a time, then an alliance of two or three strategies would arise and dominate for a time, then one of these strategies would dominate single-handedly, only to be taken over later by one or more other strategies. Although the fair 50:50 strategy could survive and occasionally co-dominate, it never dominated by itself, suggesting that the evolution of fairness is rather because the fair strategy elevates the survivability of the other strategies. Another highlight was the survival and occasional co-domination of the "superfair" strategy, in which a player offers and accepts amounts greater than 50%.

"Although it has been reported before that spatial structure can promote the evolution of fairness, the discreetness of strategies introduced in our case reveals just how many paths to this particular scenario there are," Perc told Phys.org. "Pattern formation can be crucial for the outcome of human bargaining, and we present many different solutions, including up to three-strategy dominance cycles and self-organizing spatial patterns, such as traveling invasion fronts and rotating spirals, that are representative for the studied system. While spatial structure is already established as a means for resolving social dilemmas, it has thus far not been considered so crucial in the context of human bargaining. We show that the discreteness of strategies changes this rather drastically, as it unleashes the full complexity of human bargaining. From experience, everybody knows that bargaining can be a rather complex undertaking. Our work accounts for this complexity."

By modeling fairness in a realistic way, the study could provide insight into the nature of fairness and human bargaining in real life.

"The importance of fairness really cannot be overstated," Perc said. "Just as the evolution of cooperation, the evolution of fairness is one of the central pillars of successful human societies. Accordingly, we need all the insights we can get to understand how fairness emerges, what promotes it, and what prevents it from vanishing from our moral compass. In addition to these rather practical reasons, there are further incentives as to why study this. As some experimental works already reported, our brain 'rewards' fair behavior and also makes us 'punish' immoral acts by not accepting unfair offers. Such brain activity, which 'drives us' to a globally more successful solution, is probably a result of an evolutionary process of human interactions. A theoretical work like ours helps to understand and reveal the evolutionary origin of this behavior."

Explore further: Tabletop experiment could detect gravitational waves

More information: Attila Szolnoki, et al. "Defense Mechanisms of Empathetic Players in the Spatial Ultimatum Game." Phys. Rev. Lett. 109, 078701 (2012). DOI: 10.1103/PhysRevLett.109.078701

Journal reference: Physical Review Letters search and more info website

4.3 /5 (11 votes)

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Noumenon
3.6 / 5 (78) Sep 01, 2012
No one seeks "fairness" unless it is they who are the "victim" of unfairness. Further, everyone acts accordingly to their own best interest, irrespective of their economic standing as compared to others.

This is a Natural mechanism which is at core intrinsic to the survival of man, and in modern times results in the success of capitalism and modern standards of living and life expectancy. Individualism and Egoism, not bed-wetting "evolutionary fairness & cooperation".

Despite such naive drivel and convoluted interpretation of "fairness", relying on voluntary social cooperation or forced fairness, is never fair and never works as it cuts across the grain of human instinct, and is the reason that historically such social engineering governments have failed over and over.

It's no coincidence that a far leftist like Obama uses the phrase "fairness" frequently,.... he means Forced fairness and government control over human behavior. This is the epitome of Unfairness and anti-freedom.
animah
5 / 5 (1) Sep 03, 2012
a far leftist like Obama
Hehe I take it you've never heard a speech by a real European far leftist politician like Arlette Laguiller.
Noumenon
3.7 / 5 (74) Sep 03, 2012
The context that matters to me is in the USA. I know their are socialist and commies elsewhere.
antialias_physorg
5 / 5 (2) Sep 03, 2012
should accept any offer no matter how small so that they at least gain something, experiments show that this is not what happens in reality. Instead, people act more like an emotional Homo emoticus, refusing to accept offers they perceive as too small. Experiments show that people reject offers of less than 33% half the time.

It's not really surprising, as in every game it is not how much absoluet chips/coins/score you get but how much IN RELATION TO the other player. So accepting any sum isn't a winning strategy. Only accepting sums close to the 50/50 split are acceptable (i.e. incur only a small loss and still put you ahead of any possible 3rd party players). So the behavior that is observed seems rational, rather than emotional, to me.

No one seeks "fairness" unless it is they who are the "victim" of unfairness.

So you are firmly opposed to a judicial system and would rather have a "might makes right" type of society?
Noumenon
3.7 / 5 (74) Sep 03, 2012
No one seeks "fairness" unless it is they who are the "victim" of unfairness.
So you are firmly opposed to a judicial system and would rather have a "might makes right" type of society?


How did you arrive at that conclusion? I speak of natural instincts of man. Survival of the fittest is a natural mechanism of good.
antialias_physorg
5 / 5 (5) Sep 03, 2012
Survival of the fittest is a natural mechanism of good.

Survival of the fittest is a natural mechanism. 'Good' (or bad) is something that humans invented.

And 'fittest' does not always mean 'strongest'. It can also mean 'most cooperative' (as is evinced by many organisms - even humans - forming groups/societies...which arguable makes the members of a society 'fitter' to survive than those that do not partake of the benfits a society grants)

Extreme capitalism is a parsitic growth on society (those that want all the benefits but give less -or nothing- back). You can see for yourself that it can't work indefinitely. Concentrating ever more assets in the hand of ever fewer people is a model that can't exist for long.
Noumenon
3.7 / 5 (73) Sep 03, 2012
Extreme capitalism is a [parasitic] growth on society (those that want all the benefits but give less -or nothing- back).


The exact opposite is the case. The top 5% pay 53% of the income taxes received from the government, and the top 10% pay over 70%. Further, the wealthy employ people via businesses, invest money into businesses, and buy things which in turn employ more people. So, the notion that the top wealthy give nothing back is utter rubbish.

The bottom 50% pay around 2% in income taxes and employ no one.

If something is unsustainable then by definition it is unsustainable inclusively, and thus doesn't require regulating. IOW, within capitalism itself there are self regulating mechanisms.

General income and wealth inequality is a purely natural inevitability in a free society. Wealth is something generated, not mined for distribution. So, if you confiscated all the money on the planet and distributed it evenly to every person, no one would generate the needed money.
Telekinetic
3.2 / 5 (13) Sep 03, 2012
"So, if you confiscated all the money on the planet and distributed it evenly to every person, no one would generate the needed money." -Noumenon

Actually, no one would die of starvation, but who cares, certainly not you. And your figures of 2% taxed income on the working classes is pure fiction you made up. The wealthy exploit the poor, that's how they GOT rich. I think you've blended Ayn Rand, Mein Kampf, and Reagan's Voodoo Economics into a loathsome frothing at the mouth. You're the bed-wetter, by the way.
antialias_physorg
5 / 5 (5) Sep 04, 2012
The top 5% pay 53% of the income taxes received from the government

Are you aware that money is an artificial system?

The exact opposite is the case. The top 5% pay 53% of the income taxes received from the government, and the top 10% pay over 70%

The top 5% also own 63.5% of the wealth in the US. The top 10% own more than 70% (depending on where you look it up more than 80%) of the wealth.

So you can see BY YOUR OWN NUMBERS: They're parasites. They're not even pulling their fair share.

If oyu own x% percent but give back less than x% then over time money flows from the bottom to the top. As you yourself already mentioned: 50% are down to only 2% of the wealth. They cannot sustain these parasites forever. Either the system breaks down or the disenfranchised will take what is rightfully theirs by force eventually.
kochevnik
3 / 5 (2) Sep 04, 2012
Survival of the fittest is a natural mechanism of good.
Ferrel capitalism isn't evolution. It's outright war.
Noumenon
3.7 / 5 (74) Sep 04, 2012
The top 5% also own 63.5% of the wealth in the US. The top 10% own more than 70% (depending on where you look it up more than 80%) of the wealth. So you can see BY YOUR OWN NUMBERS: They're parasites. They're not even pulling their fair share.


You're not making any sense. Do you understand how economies work?! The vast majority of government revenue come from the top 10% either via personal taxes or business,... plus the top wealthy invest their money into business and buy things all of which employ people.

The top wealthy pay an inordinate amount to the government given their small numbers, while the bottom 50% pay very little. It's the bottom 50% who are not pulling their "fair" share because they pay little or nothing in income taxes, nor do they employ anyone.

So, if you tax the rich into non-existence,... no one is going to be employed.
antialias_physorg
5 / 5 (4) Sep 04, 2012
while the bottom 50% pay very little.

They pay more (as a percentage) than what they get. The richest pay less (as a percentage) of what they get. How is this not clear? It's YOUR numbers.

If person A gets 2% and person B gets 98% yet person A pays 4% of their earnings and person B pays 96% of their earnings then person B will grow richer and richer (by comparison) while person A will grow poorer and poorer (by comparison).

Fair would be: If you get 98% of the wealth you SHOULD pay 98% of the taxes.
Social would be: If you get 98% of the wealth you should pay MORE than 98% of the taxes (since there is a minimum amount people need to subsist - so the lowest few percent should be tax free)

This is not taxing the rich into nonexistence. They're still getting vastly more than the poor.
Noumenon
3.6 / 5 (77) Sep 04, 2012
Which brings me back to my original point; This subjective notion of "fairness" and "cooperation" in a free society doesn't exist. That's not how the greatest of all economies came into being.

Two entities who come together to do business are NOT thinking about "fairness" or cooperation for its own sake, they're thinking about how much can I benefit from this, how much can I profit from the other guy. This is the mechanism which results in western civilization.

Only, once this society exist, do bed-wetting, emotionally driven liberals come in with their "fairness" complaining. That's my point above, "fairness and cooperation" for their own sake is NOT the fundamental mechanism which drives free market economies. It is drivel for government control to enforce "fairness and cooperation",.. which is always unfair in a FREE society .
Noumenon
3.7 / 5 (75) Sep 04, 2012
They pay more (as a percentage) than what they get. The richest pay less (as a percentage) of what they get. How is this not clear? It's YOUR numbers.


1) I already used percentage above, so the numbers I gave ARE about percentages. The tax rate is progressive. The lower half pay next to nothing to contribute to the government, in addition they're parasitic by using gov entitlement programs, while a wealthy person pays an absurd amount despite being only one person, AND actually contributing to the economy by providing jobs.

2) We are operating in a FREE society, not a communistic society,.. which means there WILL be income inequality. THAT IS NOT A PROBLEM TO BE FIXED.

You're are being fooled by emotional propaganda; Even is you confiscate EVERY penny of the rich, it wouldn't make a dent in the deficit spending. This is a fact. Obama's propaganda of "fairness" is utterly and mathematically meaningless. It only works on emotionally driven idealistic limp-wristed liberals.
Noumenon
3.7 / 5 (74) Sep 04, 2012
If we went with a flat tax or consumption tax on non-essentials, I'd be all for it. That way the rich can't use loop holes, and the poor contribute as well. It is natural and entirely predictable for the rich to find legal ways to pay the minimum to the government, especially since the government is completely incompetent wrt fiscal responsibility.
DarkHorse66
not rated yet Sep 04, 2012
If we went with a flat tax or consumption tax on non-essentials, I'd be all for it. That way the rich can't use loop holes, and the poor contribute as well. It is natural and entirely predictable for the rich to find legal ways to pay the minimum to the government, especially since the government is completely incompetent wrt fiscal responsibility.
Most countries already do: http://en.wikiped...tion_tax
http://en.wikiped...ax_rates
Note that Australia already does exactly what you are suggesting via the GST. As far as a flat tax is concerned, that would create a problem with tax thresholds. Someone's total income can be so low that it would create even more financial hardship if that didn't exist. Also, even a flat tax will have loopholes.The other thing is that tax deductions are there as an incentive to engage in a particular activity that might provide a service to others but otherwise be costly for the person choosing that.cont
Noumenon
3.7 / 5 (75) Sep 04, 2012
Fair would be: If you get 98% of the wealth you SHOULD pay 98% of the taxes. Social would be: If you get 98% of the wealth you should pay MORE than 98% of the taxes (since there is a minimum amount people need to subsist - so the lowest few percent should be tax free)


LOL. You are utterly clueless about economies. You would absolutely collapse the economy if you taxed the rich much more than is. is the case, mush less 98%. You would kill off the very mechanism which creates such a economy as the USA in the first place.

Ohh, and by the way, it's something like the lower 40% who pay zero income tax, not the lower few percent.

The rich are mathematically irrelevent to anything except using emotional responses from twits to get in power. There simply is not enough rich people to steel from to maintain your doppy liberal idealism.
DarkHorse66
not rated yet Sep 04, 2012
cont...activity. The rich are more likely to have the money for that kind of thing, so they are going to be more likely and able to offset their taxes that way. A deduction free tax system isn't going to work. You would end up screwing the economy, since it would serve as a DISINCENTIVE to invest. Mitt Romney is an excellent example: http://romneyfact...cjtk.php
I assume that you already have some idea about this.
Taxation of income vs goods; you need both in order to maximise getting enough money. Not all people will spend proportionally to their income.
Best Regards, DH66
Noumenon
3.7 / 5 (73) Sep 04, 2012
Someone's total income can be so low that it would create even more financial hardship if that didn't exist.


It would be redundant to apply a flat tax to people on welfare anyway, as that income is from the government.

Also, the point of a flat tax is to greatly simplify the tax system to get RID of tax deductions and loop holes. If it didn't, I would say it was pointless then. It would rid class warfare in politics as well, which should not exist in a free society. It's rather undignified and disgusting (in a country as well off as the USA) to look upon one more wealthily, and cry 'unfair'. The democrats have no dignity playing off such emotional reaction as envy.

In a free society it is no one's business how much wealth another has.
Telekinetic
3.5 / 5 (13) Sep 04, 2012
" That way the rich can't use loop holes, and the poor contribute as well."- Noumenon

The poor are already preoccupied in finding ways to keep a roof over their heads and food for their next meal. Even the creepy Republicans would distance themselves from your maniacal blather. They may THINK the way you do, but they don't say it aloud. You're more Tea Party material- dangerously uneducated.
Noumenon
3.7 / 5 (73) Sep 04, 2012
Are you aware that money is an artificial system?


You will have to explain what you mean. Obviously physical money has value only as relative value and acceptance around the world, and the value of that currancy can be devalued by government over spending, printing and borrowing. This is a form of redistribution of wealth.

@telekinetic, you've said nothing of substance above. I already stated above that the flat tax would not apply to people subsisting off of the government, because obvious their income comes from the government, so it would be pointless to tax government received assistance.
Telekinetic
3.5 / 5 (13) Sep 04, 2012
"In a free society it is no one's business how much wealth another has." -Noumenon

Is that why Mitt doesn't disclose his income taxes? He was once CEO of Bain Capital, which is now under investigation by New York's Attorney General along with other private equity firms for tax evasion. The laws are written in this country by Republicans to give themselves a way out of paying income tax.
Deathclock
4.2 / 5 (5) Sep 04, 2012
Many people confuse fairness in opportunity for fairness in outcome...

What is "fair" is to have an equal opportunity with UNEQUAL outcomes depending on your utilization of that opportunity.

There is nothing unfair about some people being rich and some being poor, particularly in the majority of cases where the disparity lies, at least in part, in individual effort.
Telekinetic
3 / 5 (8) Sep 04, 2012
"@telekinetic, you've said nothing of substance above. I already stated above that the flat tax would not apply to people subsisting off of the government, because obvious their income comes from the government, so it would be pointless to tax government received assistance."- Noumenon

So the poor who subsist off of "government entitlement" programs would be exempt, but the other poor people would have to pay their fair share, because those poor people can afford to. Do you even know what you're writing, or are you just unconscious?
Telekinetic
2.7 / 5 (9) Sep 04, 2012
"It is natural and entirely predictable for the rich to find legal ways to pay the minimum to the government, especially since the government is completely incompetent wrt fiscal responsibility."
Now you're condoning tax fraud, because ill-gotten gains are better in the pockets of tax cheats, since the government will just squander it on liberal programs. There's a place for tax cheats, you know. It's called jail, and that's where many who have offshore and Swiss bank accounts belong.

antialias_physorg
5 / 5 (4) Sep 04, 2012
There is nothing unfair about some people being rich and some being poor, particularly in the majority of cases where the disparity lies, at least in part, in individual effort.

However there is something unfair in instituting a system that will make the rich richer and the poor poorer even if effort is equal on both parts. Such a system is one that taxes the poor (and the middle class) proportionally higher than the rich as compared to their incomes.
Telekinetic
3.5 / 5 (13) Sep 04, 2012
"With any luck we'll get them rioting in the streets ala Greece.... then I can put on some classical music and watch news reels of police beating them like they did in the sixties."- Noumenon July 23rd 2011, in response to a prediction of mass unemployment.

Like I said- Dangerously uneducated.
kochevnik
3 / 5 (2) Sep 04, 2012
You would absolutely collapse the economy if you taxed the rich much more than is. is the case, mush less 98%. You would kill off the very mechanism which creates such a economy as the USA in the first place.
US prosperity grew the most under exactly such a scenario, you fool.
Noumenon
3.7 / 5 (73) Sep 04, 2012
Many people confuse fairness in opportunity for fairness in outcome...

What is "fair" is to have an equal opportunity with UNEQUAL outcomes depending on your utilization of that opportunity.

There is nothing unfair about some people being rich and some being poor, particularly in the majority of cases where the disparity lies, at least in part, in individual effort.


Exacttly correct!!!!

The far left liberal mentality desires redistribution of wealth and regard "income inequality" as a problem to be fixed by the government, but it is a natural inevitability of free society, not a problem.
Noumenon
3.6 / 5 (77) Sep 04, 2012
There is nothing unfair about some people being rich and some being poor, particularly in the majority of cases where the disparity lies, at least in part, in individual effort.

However there is something unfair in instituting a system that will make the rich richer and the poor poorer even if effort is equal on both parts. Such a system is one that taxes the poor (and the middle class) proportionally higher than the rich as compared to their incomes.


That is factually incorrect as I pointed out several times to you. We have a progressive tax system, which means the more you earn, the higher the PERCENTAGE. The "poor" pay a PERCENTAGE that is a lower tax bracket, than the "rich". Also, you can't tax wealth, only movement of money, say on investments like capital gains,... which obviously the "poor" pay zero.

Also, if the gov gets the vast majority of its income tax revenue from the rich, people like you on government cheese, should want the rich to get richer.
kochevnik
1 / 5 (1) Sep 04, 2012
@Telekinetic Even the creepy Republicans would distance themselves from your maniacal blather. They may THINK the way you do, but they don't say it aloud. You're more Tea Party material- dangerously uneducated.
GOP Party Platform of 1956: "We are proud of and shall continue our far-reaching and sound advances in matters of basic human needs—expansion of social security—broadened coverage in unemployment insurance —improved housing—and better health protection for all our people. We are determined that our government remain warmly responsive to the urgent social and economic problems of our people."
jakack
2.6 / 5 (5) Sep 04, 2012
@Telekinetic - You are either mal-informed or intentionally misleading. It is not illegal to go through legal avenues of paying fewer taxes! Swiss bank accounts is just a catch-phrase that the uninformed, envious types use in their fight against the wealthy. When in reality, even President Obama has Swiss bank accounts and other offshore accounts in an effort to diversify currency holdings. Nothing illegal about it.
Telekinetic
3.2 / 5 (11) Sep 04, 2012
@Telekinetic - You are either mal-informed or intentionally misleading. It is not illegal to go through legal avenues of paying fewer taxes! Swiss bank accounts is just a catch-phrase that the uninformed, envious types use in their fight against the wealthy. When in reality, even President Obama has Swiss bank accounts and other offshore accounts in an effort to diversify currency holdings. Nothing illegal about it.

It is Romney who has the Swiss bank account, not Obama. It is you that is being deliberately misleading. The Swiss banks received Nazi gold, fully knowing that it was plundered from murdered victims of the Holocaust, so that the German High Command had a safe place to retrieve it after the war. The Swiss banks have long been a haven for depositors with much to hide. Look it up so you don't embarrass yourself.
Noumenon
3.7 / 5 (74) Sep 04, 2012
"With any luck we'll get them rioting in the streets ala Greece.... then I can put on some classical music and watch news reels of police beating them like they did in the sixties."- Noumenon July 23rd 2011, in response to a prediction of mass unemployment.


Like I said- Dangerously uneducated.


LOL, that comment from a year and a half ago was not about mass unemployment you dishonest twit,... it was about government austerity measures and the left wing reaction (as in Greece).,... not to mention it was obviously a joke.

You seem to like to misrepresent what another says to make it seam ridiculous,... like above I never justified tax cheats. Tax loop holes and other legal means of reducing tax bill is NOT illegal. You're dishonest.

That's at least the 2nd time you deliberately misrepresented my words.
Telekinetic
3.2 / 5 (11) Sep 04, 2012
"In 10 days the Republican/Libertarian plan is to start the automatic defunding which will mean that 15 million Americans will immediately find themselves unemployed, with another 15 million soon following due to economic multiplier effects. Mission to the moon, mars, asteroid? Are you people nuts?- Vendicar Decarian July 23, 2011

"With any luck we'll get them rioting in the streets ala Greece.... then I can put on some classical music and watch news reels of police beating them like they did in the sixties."-Noumenon July 23rd 2011

Read it and weep, liar. Not even a drunkard would joke like that. You meant it.
Noumenon
3.7 / 5 (73) Sep 04, 2012
"With any luck we'll get them rioting in the streets ala Greece.... then I can put on some classical music and watch news reels of police beating them like they did in the sixties."-Noumenon July 23rd 2011

Read it and weep, liar. Not even a drunkard would joke like that. You meant it.


Excuse me for not remembering the context from a YEAR AND A HALF AGO. I thought it was the Greece austerity thread. Just having some fun with VD.

In any case, that WAS in fact a joke.

It was from the Simpsons,... In a take on the movie "Logan's Run" , where old man Simpsons request of final hours is watching old film of police beating hippies while listening to classical music.

That you would take that seriously, proves my point above.
Telekinetic
2.8 / 5 (9) Sep 04, 2012
You clearly use the word "I" in the context of enjoying the newsreels of the unemployed being beaten, not an old man from a cartoon. The reference to it doesn't preclude your fantasizing about it. I have a sense of humor, but it's not in the least bit funny especially coming from a hardcore right winger. You've been revealed and now we know what you are.
Noumenon
3.8 / 5 (72) Sep 04, 2012
You clearly use the word "I" in the context of enjoying the newsreels of the unemployed being beaten, not an old man from a cartoon. The reference to it doesn't preclude your fantasizing about it. I have a sense of humor, but it's not in the least bit funny especially coming from a hardcore right winger. You've been revealed and now we know what you are.


Yep, I guess you caught me and now you found out that I love seeing gross smelly unemployed people being beaten into submission by police. Did I mention that republicans eat puppies,... yea, I think I told you that in the other thread.

You continue to construct caricatures of right-wingers, in an effort to lower the bar to your level, to make it easier for you.

It was an episode of the Simpsons, look it up. That's where I got the joke. Why WOULD I reference the Simpsons in that thread?

Checkmate.
Noumenon
3.8 / 5 (72) Sep 04, 2012
,.. Vendicar_Decarian is known for making way over the top ridiculous posts,... that's probably why I responded with the above over the top response.

I've been a member at this site since Nov 2007,... maybe you can find something better than that.
Telekinetic
2.3 / 5 (9) Sep 04, 2012
"@Pinky, That's true, but there must be poor people. It's really intrinsic in a free society that there are what you're calling "poor" (which probably means only one flat screen and basic cable). This model is closest to nature as man is not created equal, and everyone has a different work ethic, makes different mistakes, etc. Communism resulted in millions dead and everyone poor." - Noumenon Oct.22 2010

How's this one- "closest to nature as man is not created equal".
Under what rock did you crawl out from- the Antebellum South?
Noumenon
3.8 / 5 (72) Sep 04, 2012
I'm not going to look through that thread to determine the context of the discussion, it is six pages long and two years old.

From your own quote it appears that we are discussing the existence of poor people in a free society, in the USA. Indeed, not all men are created equal, as clearly some have more abilities and motivation, education, etc, than others. This is a fact. What is your objection?
Noumenon
3.8 / 5 (72) Sep 04, 2012
You don't have anything better to do than look up two year old quotes in a said attempt to ruin the "career" of a anonymous username, then attempt to validate such lame efforts with your "lite" sock-puppet?
Telekinetic
3 / 5 (10) Sep 04, 2012
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness"- Declaration of Independence

How stupid can you be, Noumenon? If you had checked my rank page before, "lite" also pasted me with "ones". I don't know about you, but I've never had any other representative on this forum besides myself- TELEKINETIC! And now I know you've been disgraced by your attempt to divert attention away from your foulness. Checkmate.
Noumenon
3.8 / 5 (72) Sep 04, 2012
All men should be treated equal under the law (which is what that quote means), but as everyone knows in reality not all men are equal in abilities or work ethic,... thus in a free society, it is an inevitability that there will be wealth inequalities.
Telekinetic
3 / 5 (10) Sep 04, 2012
" Indeed, not all men are created equal,"- Noumenon 1 hr. ago

You don't even realize how stupid you are. Should I feel pity for you? Naah.
Noumenon
3.8 / 5 (72) Sep 04, 2012
I see "lite" gives you all 5's and me 1's. I see no 1's to you from "lite". Furthermore who else would be crazy enough to be following our banter so closely as lite?

" Indeed, not all men are created equal,"- Noumenon 1 hr. ago

You don't even realize how stupid you are. Should I feel pity for you? Naah.


What is your objection to that fact?
Telekinetic
3.2 / 5 (9) Sep 04, 2012
I think "lite" is really disgusted by you, and I can't say I blame him. His "one" votes on my rank page have been wiped out by this thread. Lucky for me, eh?
Noumenon
3.8 / 5 (72) Sep 05, 2012
Then lite is an intellectual coward not to debate, or not able to. Probably a 14 year old who knows nothing, so can only click on ones, like that means anything.
Noumenon
3.8 / 5 (69) Sep 05, 2012
Extreme capitalism is a parsitic growth on society [..]. You can see for yourself that it can't work indefinitely. - antialias_physorg


It's remarkable how wrong-headed you are.

Free market capitalism is the reason for the existing standards of living in the west,.... it's the exact opposite of parasitic,... it's growth as even Obama is forced to admit....

"I believe the free market is the greatest force for economic progress in human history" - B. Obama

- One in 7 Americans are now on Gov food stamps, historically unprecedented.

- In 1980 35% of Americans where receiving government benefits,.. now nearly half.

- Entitlements have increase 7 times in the last half century.

- Obama has increase the national debt more in 3 years than G.W. Bush did in 8 years,.... Obama alone adding 1/3 to the debt, $5 trillion.
Noumenon
3.8 / 5 (71) Sep 05, 2012
So, what is parasitic to an economy is entitlement spending and size of government, which mathematically can't increase indefinitely. What is unsustainable in any society is liberalism.

The strength of the USA is on a decline directly in relation to government dependency.

The Republicans are guilty as well as the Democrats. This is about liberalism vrs conservatism.

http://online.wsj...542.html
antialias_physorg
5 / 5 (2) Sep 05, 2012
So, what is parasitic to an economy is entitlement spending and size of government,

I think you will find no one who disagrees with that.
How 'liberalism' equates to entitlement spending or increased size of governmnet is a bit of a poser.

If you think social security is entitlement spending then: yes, of course.
But consider that there would be no society if there was no benefit to anyone. Social security is one of the many benefits that modern society has achieved.
The strength of the USA is on a decline directly in relation to government dependency.

Which is directly related to the unsustainable idea of making vew very rich richer (thorough tax codes in their favor) at the expense of making a lot of poor people poorer.

Yes, I think you have understood now that that is really the problem.
Make people pay their fair share and you will get less poor (and consequently have less people who have to rely on social security). Simple, isn't it?
Noumenon
3.8 / 5 (71) Sep 05, 2012
How 'liberalism' equates to entitlement spending or increased size of governemnet is a bit of a poser. Care to explain?


Liberalism (political) is about increased size of government all the way, regulations, entitlements, the welfare state, collectivism, and control of human behavior, which is to say some social engineering to effect "social justice".

Conservatism, is about self-reliance, limited government, fiscal accountability, individualism, and liberty.

If you think social security is entitlement spending then: yes, of course. But consider that there would be no society if there was no benefit to anyone. Social security is one of the many benefits that modern society has achieved.


No, I don't include SS as gov entitlements, as that is paid into by individuals,... even though it is another progressive-liberal mathematically unsustainable idea.
Noumenon
3.8 / 5 (71) Sep 05, 2012
Which is directly related to the unsustainable idea of making vew very rich richer (thorough tax codes in their favor) at the expense of making a lot of poor people poorer. [..]. Make people pay their fair share and you will get less poor (and consequently have less people who have to rely on social security). Simple, isn't it?


You don't make any factual sense, nor do you listen. That the "rich get richer" is meaningless non-sense. You're falling for left-wing political propaganda engineered to invoke an emotional response.

If there was a unchanging constant amount of income distributed amongst everyone, then you would make sense,.... but there isn't. Wealth is created and economies grow.

The lower 45% pay no income tax, while the top 10% pay 70% of all income tax received by the government. What part of fairness do you not understand.

Again, how much someone else has, is none of your business in a free society. Wealth is not taxed in this country.
antialias_physorg
5 / 5 (2) Sep 05, 2012
That the "rich get richer" is meaningless non-sense.

Wealth is realtive - not absolute. If you have people with more wealth then businesses will adapt theior prices to a higher range, because it will mean more profit (which is the natural way to go for a business). So even if poor people nominally make the same amount of money they will get absolutely poorer if the rich get richer (because their ability to buy stuff declines. Number of dollars doesn't matter in your bank account. It's what you can do with it that matters.)

while the top 10% pay 70% of all income tax received by the government. What part of fairness do you not understand.

If the top 10% pay 70% of taxes but get 80% of all wealth generated then that leads to the issue elucidated above.

Again, how much someone else has, is none of your business in a free society.

It does impact all of society. As explained above.
Noumenon
3.8 / 5 (71) Sep 05, 2012
If you have people with more wealth then businesses will adapt theior prices to a higher range, because it will mean more profit


Business generally make money by volume selling,... meaning it's better to sell many cheaply than a few expensively. Also, profit margins are relatively constant. The rich aren't stupid, they buy more expensive things, but those things are more expensive to produce, not more so on account of increased profit margin.

If the top 10% pay 70% of taxes but get 80% of all wealth generated then that leads to the issue elucidated above.a


As I already explained three times, wealth is not taxable in a free society. That the gov would confiscate personal wealth is an entirely different form of government altogether.
Noumenon
3.8 / 5 (74) Sep 05, 2012
The free market already has mechanisms in place that Naturally regulate your (artificial) concerns. If the non-rich get poorer, there is less consumption, which means less possible profit for businesses and investors.

If you mandated via your socialist government that everyone's pay shaw double starting tomorrow,... in the end it wouldn't make a rats ass difference. You would simply devalue the dollar, and relative wealth would stay the same.

If you took 80% of wealth of people making more than say 1 million per year, you would incur catastrophic loss of tax revenue (so you could't support your liberal idealism with gov money), loss of motivation to create business and take investment risks. This directly translates to loss of employment for the masses.

Making the rich pay even more will not solve the debt crisis. The existing unsustainability is in government spending and size, the increasing welfare state, the increasing disability comp crisis,... not in tax revenue.
Noumenon
3.8 / 5 (74) Sep 05, 2012
Economies grow because people a) work, b) spend, c) seek profit by starting businesses and/or invest.

Economies collapse if more and more people claim disability entitlements, or go on welfare and food stamps, or are otherwise dependent of government for subsistence or work.

That's the direction the USA is headed, all the stats clearly show increasing dependence on government. THIS by all rational definition, is parasitic on the economy.

Capitalism, egoism and natural instinct for profit creates wealth and employees people, which in turn creates consumers, which feed back into the economy again to make it stronger. Everything else outside this feedback loop, is parasitic.

The rich spend money and invest it, which employ people. Plus they run businesses which employ people. The poor employ no one. The rich do their fair share by virtue of being rich, wrt paying the majority in taxes and employing people.
Deathclock
2.3 / 5 (6) Sep 05, 2012
Noumenon knows what he is talking about
Deathclock
2.6 / 5 (5) Sep 05, 2012
The problem is not with the rich not paying their fair share, it's with the poor not paying their fair share and the government squandering it's own income or losing large quantities of it to corruption.

I personally know physically capable people on welfare/unemployment who REFUSE to look for work, or in some cases make more from welfare than they would taking a low wage job. This is a problem both with individual ethics and with the welfare system.

The only "fair" system is a flat income tax rate. This tax rate is ALREADY scaled to your income, if you make more you pay more at 25% than if you make less... how is anything else more "fair"?

I put quotes around fair because it's almost a meaningless concept, it is entirely subjective, there is no golden rule of fairness.
Thrasymachus
1.8 / 5 (5) Sep 05, 2012
Arguing political economics on comment threads is like trying to stuff a pig into a prom dress; you'll shred the dress, piss off the pig, and likely hurt yourself.

I do find it rather interesting though that it's the conservatives who are arguing for a fundamental irreality to basic morality. Talking about income taxes without mentioning payroll taxes paid only by those who earn a wage (mostly the poor), or the various state and local taxes, makes a big difference, and leaving them out of the discussion is deceptive. In fact, once all taxes and deductions/loopholes are factored in, the richest and poorest quintiles pay roughly similar tax rates, while the middle three pay substantially more, as a proportion of their incomes. This is only in general, however, because there's wide variance within quintiles. An investment funds manager like Romney can get away with a total effective tax rate of less than 20%, which is much lower than the average of his quintile.
Thrasymachus
1.8 / 5 (4) Sep 05, 2012
And history does not bear out the obsession with Laffer-style tax policy. The wealthy don't create jobs or resources for anybody else without effective demand they can profit from meeting. But effective demand doesn't exist without well-paying jobs and a robust distribution of resources. During Eisenhower's administration, the nominal top tax rate was 91%, with an effective tax rate in the upper 70's for most of the top quintile, and deficits as a percentage of GDP had just come off a period that blows today's deficits away as insignificant, and were still very comparable. That period also saw the fastest non-war related economic growth in American history.

The conservative rhetoric is dead backwards. Higher taxes on the wealthy spurs economic growth, as the wealthy seek to avoid those taxes by actually utilizing their wealth more effectively, instead of merely renting out their wealth to others in a risk-free way.
kochevnik
3 / 5 (2) Sep 05, 2012
Noumenon knows what he is talking about
Not really. The USA is not a capital driven system. It is a debt driven system. Debt slaves are obligated to work to pay interest on their loans, meanwhile falling deeper into slavery. Some opt out of the system alltogether, perhaps realizing the futility of driving themselves deeper into debt to the Rothschilds Bank of England. The system continues in perpetuity because the banksters have most everyone enslaved with debt. Debt is a banker's only product and they peddle it incessantly. The best debt generator is war, which is why the US spends half it's tax proceeds on the military: more than the rest of the world COMBINED
kochevnik
1 / 5 (1) Sep 05, 2012
Noumenon knows, at least on an unconscious level, that his bankster masters could pull the plug at anytime. They would do that by simply calling loans: demanding real property (consideration) for their loans, even while the banks have no consideration for their loans because they just make the numbers up in a computer! He knows his masters built a house of cards and only by their greed do they not smash the entire construct. Thus he vehemently advocates zionist neoconservatism to entrench bankster mercantilism and debt slavery in every corner of the globe, hoping against hope that they will see his worth and not toss him to the sharks.
Deathclock
2.6 / 5 (5) Sep 05, 2012
Noumenon knows what he is talking about
Not really. The USA is not a capital driven system. It is a debt driven system. Debt slaves are obligated to work to pay interest on their loans, meanwhile falling deeper into slavery. Some opt out of the system alltogether, perhaps realizing the futility of driving themselves deeper into debt to the Rothschilds Bank of England. The system continues in perpetuity because the banksters have most everyone enslaved with debt. Debt is a banker's only product and they peddle it incessantly.


Contrary to popular belief most people are not deeply in debt... debt allows people to own homes and cars... the vast majority of laborers would not be able to have these things without debt and most people would be MUCH worse off without the ability to borrow against their future prosperity.

Debt is not a bad thing, debt/loans are an INTEGRAL component of a healthy economy.
Deathclock
2.6 / 5 (5) Sep 05, 2012
I mean, how old are all of you? Would you really want to live with your parents until your mid-thirties while saving up $100,000 to buy a home? Most people would rather be able to buy a home earlier in their life by borrowing money at a marginal interest rate... there is nothing at all wrong with this, in fact it is GREATLY beneficial to quality of life in developed nations.

The idea that debt=evil is held mostly by those who have abused the privilege.
Thrasymachus
1.6 / 5 (5) Sep 05, 2012
Current total private debt load is almost 3 times GDP. The fastest growing period in the post-WWII US economy, 1945-1965, saw average private debt levels of less than 50% of GDP to somewhat less than 100% of GDP. It should also be noted that financial sector leverage, i.e. banks borrowing from banks, was a minuscule fraction of the overall national debt load in that period. Today, financial sector borrowing dominates all other forms of borrowing. This year, private banks and financial investment firms will borrow more than three times as much as the Federal and State governments combined.
Deathclock
3 / 5 (6) Sep 05, 2012
I'm going to say it again, I don't care if you give me a 1 vote... the ability to borrow against expected future gains is NECESSARY and GOOD for a modern society in which individuals can have any semblance of the quality of life that we enjoy in America.

What exactly would you do if you were not able to borrow money and you weren't born rich? You wouldn't be able to go to college, you wouldn't be able to get a car without first saving money for YEARS and you wouldn't be able to get a house without first saving money for DECADES. You would live half your life with your parents, the good half I might add, doing nothing but working to save money to afford your own life with your own house and your own family... that or you would forever live in poverty.

Loans allow people to secure the quality of life that they will eventually be able to afford immediately... and in doing so they DRASTICALLY improve the quality of life of those who do not abuse them.
Thrasymachus
1.6 / 5 (5) Sep 05, 2012
Nobody is disputing that lending is a useful and necessary activity in any broadly market-based economy such as ours. The point is that the current financial structure gives all the advantages to the lending institutions, shielding them from any risk their borrowers are exposed to as a result of attempting to engage in productive enterprise. Lending money for other's use should be a risker business than using one's own money to fund one's production. Saving, which is what lending amounts to since all savings are lent, should not be more profitable than investing, where you use your money to buy real resources like property, buildings, equipment and workers. The current financial system inverts this.
Deathclock
3 / 5 (4) Sep 06, 2012
Lending money for other's use should be a risker business than using one's own money to fund one's production.


Says who? Lending money is very risky, bankruptcy laws in this country are very lenient and the penalties for such are practically non-existent besides a bad credit rating.

Saving, which is what lending amounts to since all savings are lent, should not be more profitable than investing, where you use your money to buy real resources like property, buildings, equipment and workers. The current financial system inverts this.


What are you talking about? Saving is absolutely not more profitable than investing unless you have no idea how to invest. My investments have beaten inflation by about 10% year over year on average since I began investing.
Thrasymachus
1.6 / 5 (5) Sep 06, 2012
The benchmark for savings is the return on US Treasury bonds, not the inflation rate. Nobody saves by burying their money in their backyard. You put it in a savings account, or you lend it to Uncle Sam through buying T-notes. Savings in a savings account is lent to Uncle Sam, various municipalities, business and financial borrowers, and individual borrowers, and the interest earned split between the owner of the savings account and the bank that does the lending. So, with individual accounts guaranteed up to $150k, there's an effective floor for savings "earnings" equal to the interest paid by Uncle Sam, which has always averaged higher than inflation, and it's effectively risk-free, which means guaranteed earnings.

Investments are spent, and therefore risked. Money invested may give higher returns than money saved, if you buy the right things and use them the right ways, but you might lose your investment instead. That can't happen with savings.
Thrasymachus
2.2 / 5 (6) Sep 06, 2012
Also, you can't really credibly claim that lending is the central mechanism for the poor to get money to invest in themselves or their businesses, and then claim that the destruction of one's credit, i.e. their ability to borrow money because of a prior bad investment decision isn't onerous. It's harder than ever for a person to get out from under credit card debt or student loan debt with any kind of usable credit rating thanks to Bush-era legislation.
kochevnik
1 / 5 (1) Sep 06, 2012
Lending money for other's use should be a risker business than using one's own money to fund one's production.


Says who? Lending money is very risky, bankruptcy laws in this country are very lenient and the penalties for such are practically non-existent besides a bad credit rating.
What risk does the bank take? They borrow money at about 0% interest. 16 trillion since 2008. They simply add 90% of the loan out of thin air. The FED bank makes 90% of that out of thin air in turn: A number in a computer. At MOST 1% of the lended funds are backed by real property. The bank has no consideration to make the loan. Mortgages have been ruled invalid because judges know about the fractional reserve system. Since the bank put nothing up, the homeowners aren't obligated to offer any consideration to repay the loan.

Remember you're backing a mafia that took out a lead witness in Vegas who was to testify about robosigning the MERS scam.
antialias_physorg
not rated yet Sep 06, 2012
What exactly would you do if you were not able to borrow money and you weren't born rich? You wouldn't be able to go to college,

Most western countries allow you do go to college without paying for it (or paying such a minimal fee that you can easily earn it on the side)

you wouldn't be able to get a car without first saving money for YEARS

Correct. If you don't have the money to buy something then don't buy it. Save up (and no, it doesn't take years to get the money for a second hand car. If you want your first car to be a shiny new one then you SHOULD be prepared to save longer)

and you wouldn't be able to get a house without first saving money for DECADES.

Correct. If you don't have the money to buy something then don't buy it. So save for decades. Where's the problem?

This 'gimme now' - even though I haven't earned it - kind of attitude is somewhat puzzling.
antialias_physorg
5 / 5 (1) Sep 06, 2012
There's really two issues being conflated here:
1) inequality in taxation
2) squandering of taxes by the government

Both are real problems worldwide (to differing degrees in different countries), but they are not related. Both need to be addressed. Separately.

Fairness should be that everyone contributes an equal share of what they get. REAL fairness would be that those who get more than the average pay more than their share, to offset those who have, thought no fault of their own, a disadvantage (e.g. being born with a handicap, etc. )
Current practice in most countries is to tax that way until about the middle class and then let it slide for the upper class.So it's really no wonder that people aren't happy with the way they are being taxed (and no, a flat tax rate doesn't work at all mathematically)
Deathclock
3 / 5 (4) Sep 06, 2012
Most western countries allow you do go to college without paying for it (or paying such a minimal fee that you can easily earn it on the side)


This is simply not true... at least in America. I went to a state school for two years, got scholorships, and still ended up borrowing over $30,000 to get my 4 year degree.

Correct. If you don't have the money to buy something then don't buy it. So save for decades. Where's the problem?


The problem is that life does not begin at 45... I know you are from Germany and I am not sure how most people live there, but here in America if you have a good education and get a good job and make a decent living it is the norm to own a house that, if not for loans, you would not be able to purchase outright until the middle (or later) of your life. This is not a bad thing, this INCREASES THE QUALITY OF LIFE OF OUR CITIZENS DRASTICALLY.

Deathclock
3 / 5 (6) Sep 06, 2012
This 'gimme now' - even though I haven't earned it - kind of attitude is somewhat puzzling.


I HAVE earned it, I worked my ass of in school for 12 years, and then in college for 4 more, and then 2 more shortly after that. I have secured a job making a very good wage... why the fuck should I have to wait until I am middle aged to save up to pay in full to own a house that I can afford now if you divide those payments over the 15 years I plan to live there?

I don't know about you, but I would rather be in my nice house NOW, paying for it AS I LIVE THERE, rather than living with my parents or in a cheap apartment for 15 years while I save up the money to purchase the house all while real estate prices are rising and inflation is devaluing my savings...

You Europeans have it wrong, borrowing is not an entitlement, the only reason I could borrow the money I have is due to the EFFORT that I put into my economic standing, and it has given a quality of life rivaled by no other nation.
Deathclock
2.3 / 5 (3) Sep 06, 2012
If some of my peers are abusing this system and ruining it for the rest of us well that really sucks, but I am not them. If corruption in the banking industry is ruining this system then that sucks as well but I am not involved in that either. I am using the lending system the way it was meant to be used, to give you the quality of life that you know you will eventually be able to afford right now without the wait. Life is short, who wants to have to wait to own things that they know they will be able to afford? I KNOW that I would EVENTUALLY be able to purchase my house in full with cash if I put my mortgage in savings each month and lived in a shitty apartment instead, but why the fuck would I want to do that when I can live in my house NOW and pay as I go?

Do cell phone contracts make you pay upfront? NO, you pay each month for the duration of the contract WHILE YOU USE THE SERVICE. Are you telling me everyone in Germany pays their full cell phone contract up front?
Thrasymachus
1 / 5 (2) Sep 06, 2012
It's lovely that you're such a good person, Death, that you're not abusing the financial system and at least happily unconcerned with the abuse heaped upon others just like you but for unhappy chance. Unfortunately, laws, systems and regulations have to be written with those who would commit abuse in mind, and they must be concerned with everyone under their jurisdiction. If men were angels, no government would be necessary. But no one is morally perfect in either knowledge or intent, and to pretend or insist that anyone is, including oneself, is a denial of reality that hinders dealing with that reality.

And just so you know, the "work" you do in school and college doesn't "earn" you anything except the education you get, and who knows how much that's worth until you can use it to get a job. Doing that work to get an education doesn't entitle you or anyone to a house or a car or anything else.
Deathclock
2.3 / 5 (3) Sep 06, 2012
And just so you know, the "work" you do in school and college doesn't "earn" you anything except the education you get, and who knows how much that's worth until you can use it to get a job.


"I HAVE earned it, I worked my ass of in school for 12 years, and then in college for 4 more, and then 2 more shortly after that. I HAVE SECURED A JOB MAKING A VERY GOOD WAGE."

Doing that work to get an education doesn't entitle you or anyone to a house or a car or anything else.


Who the fuck is talking about entitlements? A loan is a private agreement between two parties wherein one party provides capital to another party who in turn agrees to repay the full amount borrowed plus interest.

Conflating this with an entitlement is not disingenuous, it is moronic.

Where do you live? Are you telling me that you paid the full $2,000 or whatever for your cell phone contract up front? Do you seriously make no monthly payments on anything?

Hypocrites, all of you, you know you borrow too.
Thrasymachus
2.3 / 5 (3) Sep 06, 2012
Of course we've borrowed. As you yourself has pointed out, it's next to impossible to even try to succeed in the modern economy without borrowing money. That's why it's worth paying attention to how lending actually works. And the fact that you have a good paying job now or for a couple of years after you get your education doesn't entitle you to a house now either. It takes years or decades of earnings at average levels to afford a house. And that's what your demand to be eligible to borrow money to buy a house amounts to, the demand that you are entitled to enjoy the benefits of having a house now based on your potential for future earnings. But your own philosophy demands that only your real, present earnings can confer an entitlement to just those things your earnings can buy. People are only entitled to the things they can produce or trade for themselves. But lending allows people to get things they aren't yet entitled to based on a potential that may not be realized.
Noumenon
3.8 / 5 (75) Sep 06, 2012
But your own philosophy demands that only your real, present earnings can confer an entitlement to just those things your earnings can buy. People are only entitled to the things they can produce or trade for themselves. But lending allows people to get things they aren't yet entitled to based on a potential that may not be realized.


Horseshit.

Banks invest in a persons earning potential, which has Real Economic Value*. There is no concept of unearned entitlement involved here at all **. It is the purchase of Value for a return on investment, like any other capitalistic transaction.

* obviously a home is a secured loan.
** except when democrats pressure banks to lend to those who would otherwise not qualify, sub prime.
Thrasymachus
2.3 / 5 (3) Sep 06, 2012
A potential like that doesn't have a real economic value, it has a price, which is not the same thing. Things with prices are not always things with values, which is reflected by the fact that the prices change over time and as more information is accrued. A jug of Mississippi River water doesn't have any value worth speaking of, nonetheless, prior to policing and regulation of trade by states and the feds, lots of people managed to fix a price to it and sell it as a snake oil. That's all the incentive the banks needed to make sub-prime loans, the equivalent of river-water, was other suckers willing to buy them, which they found in abundance in each other, and all they needed was an abundance of low interest loans from the feds to keep the thing going so they could keep making, buying, selling and insuring such loans, and charging pure-profit fees at every step. Now, tell me why Uncle Sam couldn't have made those loans to the people in the first place, at the bank's interest rate?

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