2006-08-30

In response to Vorlath - Steal The Free (2)

In response to Vorlath's response to my response to his post:

"The majority of people on this planet live in poverty."

If you mean people in undeveloped countries, that's their problem. It is not the responsibility of the western states to develop other countries. Many of these countries cannot even be developed because the average IQ in these countries is below 70 (Race Differences in Intelligence, by Richard Lynn). Civilization is a state of mind in the population. This is inachievable by chimps, and likewise it is inachievable by some humans. We are not equally capable.

"Over 12.6% of the US lives in poverty. They make less than 10K/year."

That's faulty statistics.
  • Lots of these people are just people exploiting the system. Developed countries run a system where it costs to be earning money (in a way that can be measured anyway), but it pays to be poor.

    Hence, people pretend poor. I read that the same group of people in the United States whose measured annual income is below $10k per person have an estimated annual expenditure of $20k per person. There must be some significant additional income here they aren't reporting.

  • $10k per year is $833 per month. That's not poor. People get by well on that kind of money. More so if their actual income is more like $20,000 due to moonlighting and other non-officially measured income.
I know various folks who are officially "poor" in my country, too. It makes sense. It's better to be "poor"; you save a lot of taxes.

"47 million have no health care."

That speaks of a broken health care system in the United States. The cost of operations is exorbitant for various reasons, mostly lack of competition and inefficiency. You can generally get the same medical operations conducted with an equivalent amount of skill in India, Thailand or Singapore. And they will welcome you as a medical tourist. People with no health insurance are going to New Delhi to have a $8,000 heart bypass that would have costed $80,000 in the States. See, the markets are taking care of things, as long as politicians don't obstruct it. Politicians are huge friends of inefficiency, that's their major mechanism of drawing funds and staying in power.

"For most people, the legal system is not an option as it's too expensive."

That disabled single mother I mentioned earlier, she sued someone for $10k and bought herself a big screen plasma TV. In a country reknowned for frivolous lawsuits, I'm not sure that there's a problem with the legal system being inaccessible. Too accessible, I reckon, and possibly for the wrong kinds of things.

"Interest is a horrible instution that is on the same level as slavery. It was outlawed in the UK and most of the world for over 1000 years because of its negative effects."

Interest is crucial to the economy. If interest is outlawed, no one will lend you money except out of the goodness of their hearts - and the stupidity of trusting you blindly. Interest makes it possible to lend money to people even if, realistically, not all of them can be expected to return it. Ever heard of microfinance? A crucial problem of people in the developed world is that they cannot get startup capital for their small businesses because they can't earn it and no one will lend it to them because they're too small and risky. Microfinance means having small community banks that will lend small amounts of money to these people, charging a reasonable amount of interest. It helps people start their businesses and improve lives for themselves and others. Without interest this would not be possible.

I'm guessing that, if you seriously consider it, you would probably prefer that these people can get capital in exchange for paying interest, rather than get no capital and stay poor.

"Now we have tons of credit cards and I heard the other day about a report that says that most people in Canada live at 120% of their income because of credit."

That's every individual's choice. I despise living on credit for no reason. So I don't. You can choose that for yourself as well, and so can all these other people. Their self-discipline is their own problem, and it doesn't impact you in any way.

"Insurance is something started by the Mafia."

Insurance is something started way back when at the origins of trade. Arabs had a system of international insurance for their ships a millennium ago. Insurance is crucial to the survival of a business when the risks it faces may exceed its capital. In this case, it makes a huge amount of sense to pool resources of multiple businesses to spread out the risk. It's stupid to buy insurance if the risk is trivial, though. It is pointless to buy insurance on things which, if you lose them, you can buy again before you'll miss them.

"Maybe the money system or the economy worked at one point, but when you have a system that allows people who have tons of money to be able to get even more money just because of that fact, then you have a very real problem."

You don't understand what I wrote above. I'll repeat: "Profit belongs to the person who invested, because obviously the person can organize things well, therefore more power should go to that person to organize larger things still more efficiently. If the person is unable to do that, they lose the money, they lose the power, and all is well."

You don't just automatically get more money if you have money. You get more money if you can turn that money around sensibly. Your average Joe can't do that. Your Warren Buffett can, and that's why Warren Buffett accumulated billions.

Still, what good are these billions to Warren Buffett?

Money is only spent on billionaires to the extent that they use it for themselves. As long as someone uses money for himself, that part of his money is gone. It's moved to some other person to invest. As long as someone turns money around to make more money, he's not spending it. He's improving the economy by turning the money around sensibly.

Now look at the money that Bill Gates has earned. He's the richest person on the planet, and yet he can afford to spend only a few billion per year lest he depletes it. Now look at George W.acko Bush and his pals congressmen and senators up there. They get to spend $2,500 billion every year without having to actually earn any cent of it. They just take it out of everyone's collective pockets.

What, then, is the bigger problem here?

All the good and bad intentions of businessmen are dwarfed by the power, stupidity, corruption and cluelessness in Congress.

That's why I think that representative democracy is the problem. The money system works just fine as it is.

2006-08-29

In response to Vorlath - Steal The Free

In response to Vorlath's recent post, Steal The Free:

I don't see how there is a money issue in the world that needs fixing. The patent system is broken, yes. We don't have a reasonable solution to the copyright problem, yes. But money works. What makes people poor isn't the money. The money makes nations richer, and it does uplift the poor as it does the rich. This might seem tedious and a cliche, but I have observed it in practice when, several years ago, working as a successful programmer in Slovenia, I earned less per month than a disabled single mother in California and her kid got in social security benefits. They were calling themselves poor while the kid had a digital camera and a laptop. That isn't poor to me. If that's what poor is, then there aren't any poor people in the States. Most people in Slovenia are still satisfied to get that amount of net income, and the prices are no lower here.

There is a tax system problem that needs solving, yes. Look at www.fairtax.org. There is an education system problem that needs solving. The old are incredibly prone to neglect the crucial education needs and how they increase with each new generation. Not treating education as the MOST CENTRAL investment, the health of which is crucial for the long-term well-being of the state, is criminally negligent; it's worthy of contempt. But the money system works. It is neutral. It gives more money to those who have shown themselves capable of making a profit in the past. Making a profit should generally mean organizing things so efficiently, or providing such a valuable service, that not only costs can be covered, but even money can be made. The profit then belongs to the person who invested, because obviously the person can organize things well, therefore more power should go to that person to organize larger things still more efficiently. If the person is unable to do that, they lose the money, they lose the power, and all is well.

Crucial to the health of the economy is that a sentence in the above passage is true: that making a profit indeed means organizing things efficiently and providing a valuable service. This isn't true when a person makes chums with politicians who pass laws in favor of that person's business. Honorable profit is when you adapt your business to the landscape, creating something valuable and new in the process. Dishonorable profit is when you adapt the landscape to your business, destroying and overriding other valuable things. And in this second endeavor, politicans are most often and most certainly involved.

It's the democracy that needs changing, not the economy. I suggest looking at SD-2 - Structured Deep Democracy.