It is an oxymoron, it's an impossible situation. You can come up with all sorts of mental contortions but you can't change the fact. Either the society is libertarian (liberal in the classical sense) or it is not.
A libertarian society cannot have 'communal property', because this demands central planning of some type and this goes directly against the principle of self-determination, it denies the free market. Even if you set it up, within months it will destabilise, people will not agree on things like who and how much is supposed to 'sacrifice' to maintain such a weird concept as 'communal property' within actual free market.
You see, even without the free market but with central planning and with lack of actual due process, lack of real laws, the way things are running today, the system has so called 'common property' but it doesn't actually belong to anybody and thus it's not just neglected, it's abused for the benefit of the special interests, that can buy the politicians who control access to it. The society ends up backing that deal.
So before BP drills in the deep waters, the government sets liability caps of 75 Million USD, which are ridiculously low, given the possible liability lawsuits that can arise from a spill or any other type of disaster. How is it possible to have 'common property' when in fact nobody is the owner of it and nobody actually cares about what happens to it and thus politicians simply sell access to it to the highest bidders, who then use it for whatever and the costs of misuse are dropped upon the tax payers?
You think a libertarian society would not know what this concept you speak of would mean for them? It would mean the beginning of the end of the free market in that system, which is actually the way USA free market ended.
You invested in an opportunity to watch a movie that you think you want to watch. It doesn't come without the risk that you may end up not getting any return on that investment if the movie is not produced after all, but that's what all investments are - risky. Nobody can remove risk from investing and while governments promise this to everybody the end result is disastrous, because without the concept of risk everybody takes all risks regardless of the odds of success.
--
Here is a mental exercise: imagine you are in a casino and the casino owner promises you to cover all your losses. You start with 100 dollars. For simplicity the casino only has one game, it's one roulette wheel with a minimum bet of 10 buck per gamble and if you win you always double the bet.
What is the rational thing to do?
The rational thing to do is to split your 100 into 10 bets, put them on the table covering 10 different possibilities. If originally your chances are 1 in 35 or so, by setting 10 bets on the table you now have your odds of 10 in 35 of winning. But you have 0% chance of losing, because after the wheel is spun and it stops even if you lose on all 10 bets, you now have your 100 dollars covered by the casino.
So you are back to square one with 100 bucks, you repeat the gamble again. In about 3 tries you win once, now you have 110 dollars. In under an hour you have enough money to place bets ON EVERY NUMBER on the wheel!
And it doesn't matter to you that you lose on 37 numbers and you only win on 1 number, the number you bet on doubles the money you bet and the rest is covered by the casino, you get all your money back that you just "lost".
That's the problem with banking today and it really started being this way within the last 100 years, starting with the Fed and other central banks, IRS, FDIC, all of this works to cover the losses for the banks while allowing them to keep the gains.
Yes, I understand that point about not being able to go IPO without meeting various government requirements, and while the gov't will tell you that it is trying to 'protect you from fraud', what actually happens is that investors are being 'protected' from making money, while fraud flourishes anyway, and FB is a good example of that, it's legal fraud, it's done with all the regulations in place and it stole billions from people who bought into the IPO.
As to whether it is possible to build a company like Kickstarter that would provide equity, well, maybe it's possible to have Kickstarter become an ETF, such that putting money into a specific business idea that is presented through Kickstarter would also buy you some of the ETF stock. As I said, it's still a new concept, ideas can be implemented on top of it later on.
Banks do exist that do not charge interest. I'm sorry if that breaks your brain.
- yeah, and the Federal reserve charges no interest rates to the banks that it 'lends' money to. I am saying that not charging interest rate is unsustainable for the economy, not that some people are not doing it. The Federal reserve is not charging interest rates to the member banks as it provides them with all this money, the banks in turn use the money to buy government debt, which then allows the government to keep spending. As I said - this is unsustainable. This practice distorts the market telling it that there are plenty of savings in the system, while in reality no business can get a loan and savers are destroyed or are pushed into other economies.
There is nothing sustainable about it, that's my point, not whether or not somebody argues for it or does it.
Kickstarter allows a startup or an idea to be attempted by somebody, who otherwise has no access to money markets for example via IPO. As to it being an investment, it is an investment. It is an investment in a potential product that the person may want to see developed. Also as I said Kickstarter a first of a kind, if it doesn't allow equity to be shared among investors, then somebody else may attempt building a competitor to Kickstarter where equity could be shared. Kickstarter is not guaranteed to survive with its current business model, it is still premature to be sure what the outcome will be.
However my point is exactly that small investors are prevented from investing in a company that is "not ready" for IPO because of government regulations. My point is that a small company is denied access to small investors who are not investing via VCs and are not 'angel investors' themselves, who may want to be able to invest in say, Facebook 5 years back, but who didn't have that chance.
OTOH a guy like Peter Thiel could invest in Facebook while there was a significant upside to investing in it, he put in half a million and earned a billion on it. The reason he could do it and small investors couldn't is because he was doing a private deal rather than a public one and most people do not get the chance to participate in deals like this.
You are saying "No company wants to take on thousands of small investors who really bring nothing to the table" - this is just not true.
Are you sure you want to try and prove a negative? AFAIC Kickstarter is the proof positive that you are wrong on this. Many companies would love to be able to access the public for initial funding but they cannot.
I think though that if Kickstarter (or a competitor) comes up with the business model that allows a small investor actually to own part of the business they are investing in, there will be government intervention, because government protects the banks and the banks will see this as a huge competition to their IPO business model. That business model gives all the upside to the banks and initial investors and owners and first employees in the company while putting all of the downside on the public that eventually buys into the IPO.
Not necessarily, I already replied to a similar remark. Kickstarter may be just first of a class of new businesses that help companies to raise money, whether it means that the money provided is a loan or not is immaterial, it's an investment regardless even of you being able to hold equity in the company you give money to. Maybe to you it's an investment even if you don't own part of the company simply because you want to see the product developed and to be able to use it, so it's like a front payment.
Also if you are talking about bank loans - those cannot be made without interest. In fact interest is absolutely essential to be able to secure loans. You can't expect a saver to give you money without interest.
Kickstarter may fail actually in a short period of time, they are still proving the concept, it's not a business model that will necessarily succeed, but there will be adjustments, there will be other types of similar ideas implemented and eventually there will be a working formula found.
As to interest being unsustainable - that's economic illiteracy, and yes, most 'economists' today are economically illiterate, including most of the economists who either teach in universities or work for governments.
I suggest this video with Jim Rogers for a little insight on economics. As to interest - would you loan your savings out without getting something for it? How do you differentiate risk? How do you set prices? How do you figure out what is worthwhile vs what is a waste of time? There are all these questions and more, that are answered by market interest rates. Of-course today the interest rates (price of money) are heavily manipulated by the governments and central banks, all the 'money printing' (counterfeiting), which is inflation (or more appropriately, it's theft), distorts the system. Inflation and low interest rates signals to the market that there are plenty of savings and nobody wants to save. Actually it is the policy of the central banks like the Federal reserve, to cause people to take more risks, to spend more and not to save at all. This means though that businesses have extremely difficult times securing loans all while the credit that is available is not real, all of it goes from central banks to the commercial banks, who then buy government debt. This is a vicious circle that prevents all economic activity other than government spending, and government spending reduces the production. Government spending increases consumer spending, which means in USA spending on foreign goods. Since USD is 'reserve', many other countries peg their currency to it, using it as a 'backing', but the USD is not backed by anything, so it can be printed in unlimited quantities. This shifts the inflation form the consumers in USA to producers elsewhere, but eventually it will stop.
In fact NOT having interest, having 0% interest makes economy unsustainable, which is the exact opposite of your statement and which is the case right now in USA.
I don't actually know if you get equity via Kickstarter offerings, is anybody prevented from offering something like that on Kickstarter? IPO is about investing into companies, but more importantly it's about raising money to build a new business and what I am really talking about is that - being able to raise money outside of the official IPOs and various 'normal' channels of getting investment money.
As to actual equity, the investment, dividends and such, if Kickstarter doesn't allow this by contract somehow, then it just means I was correct saying that this is a *quote*
Kickstarter is a good first idea that allows people to invest into businesses
- you can still see putting money into a business proposal on Kickstarter as an investment. Whether you are getting equity, that's a question that can be answered by Kickstarter or some other business that can expand on Kickstarter's business model, but putting money into a proposal can be considered an investment anyway. Maybe you are just interested in seeing a product and for you the dividend is not as important as actually being able to access that product later on, if it is successfully developed.
This comment is on the issue of the market solving the problem of government meddling with raising funds with this kickstarter project. I do not know if all companies can benefit from kickstarter, but surely some can. Today trying to get a business loan is an exercise in futility as the government crowds out all of the real credit, so none is available to the small firms, startups. The startups have to rely on VCs, friends, family, angel investors, but the rest of the market (almost all small time investors) are prevented from investing in companies while there is a potential for a real upside. The government regulations surrounding IPO prevent small investors from being able to get into businesses while there is actual upside, instead it is VCs (and underwriter banks) that mostly gain from IPOs and the IPO becomes a way to cash out instead of a way to try and grow a new business.
Kickstarter is a good first idea that allows people to invest into businesses before they could ever qualify for IPO money. Of-course there is risk in using kickstarter to try and invest, but there should be risk, people should be evaluating risks instead of blindly jumping into the casino that the inflation turned the stock market into.
What is nonsense is your entire comment. Everything costs more when it is in the hands of government, not less. Phones? PHONES? Ha ha ha, yeah, with AT&T being the monopoly nobody could even own a phone. Today everybody has multiple cellphones.
It doesn't matter that Paris Hilton didn't herself do something to earn the inheritance except being born into the right family.
That money was created by her folks. Conrad Hilton was her great-grandfather, it doesn't matter that Paris herself didn't create the hotel chain, she inherited the hotel chain. The hotel chain was still created by her family and thus the wealth was created by somebody in her family.
You are jealous of some kid getting inheritance? Well, what else is new, people are jealous of each other.
- it means you have produced something useful to the people. How do you think wealth is created? Somebody has to produce something initially to create the wealth, and that's a business.
it is based on being a part of society
- that's about as insightful as saying that living is part of Universe. Of-course living is part of Universe, but it's your effort, it's what YOU do with your life is what counts.
therefore you should pass most of it back to society
- first of all every business that makes somebody rich is giving to society at the moment when the person is getting rich. By the definition, it's a tautology, for your business to make you rich (absent government intervention), you are producing something that the people want, you are GIVING something to the people that did not have until your business gave it to them. The fact that they are paying for it something is a testament to how useful your product or service they find.
I do not see the problem here.
- I can make a bet that you are not somebody who is producing something with his own business. First of all, you would know that business is all about giving to society something it wants, secondly you wouldn't be so cavalier, saying that the entrepreneur must do this or that with their own earnings. It's their money, they can burn it and it's still their money, it's completely moral for them to destroy it or to give it to somebody they wish. If a parent gives his or her children the money that the parent earned, it's their right. If they instead burn the money, it's their right.
If you were taxed sufficiently during your lifetime, you shouldn't have that much left when you die anyway.
- so you are saying that Steve Jobs (always a useful example now, that he is dead), should have been taxed sufficiently that by his end of life, he should have had nothing left.
Well that defines you very well for what you are, a completely ignorant person who thinks that they can tell others how to live their lives, who believes in simple immoral things like theft. I mead what do you call a tax that takes away everything from a person (just by the time they die)? It's theft.
What incentive would a person have to do anything, to start any business, if they were taxed in a way that would steal all of their money away from them?
Also you are ignorant on what wealth is. Most people do not hold CASH, their money is IN their business, which means (again, Steve Jobs is a useful example), they own part of their company.
That's exactly what my point was, as to why the companies are these faceless corporations rather than having most companies being owned by caring businessmen. It's because your ideas are basically implemented in practice. A person dies, then his estate has to pay taxes, if they have possessions, such as companies, the companies will have to be LIQUIDATED (that's why Warren Buffet is so much pro-death tax, his company comes in and buys these businesses at firesale prices after somebody dies, Buffet is a vulture, he feeds on the dead. Well, so is government obviously. Government is a parasite while you are alive and it's a vulture when you die.
The companies have to be liquidated, the heirs are then left with plenty of money to spend, but they are not running the companies, that's how many companies become 'faceless' and without real direction. That's how generational knowledge about running successful businesses is lost.
Actually if you look at the thread, my comment was the first to mention risk, and I was very specific about what type of risk, I said (you can check, it's easy, it's HTML after all), I said: BUSINESS risk. Risk of investing and losing on that investment. Risk of investing savings, time, effort and not getting any reward for it. That's business. It was a flamebait by some off-topic person who started on the entire 'risk to life' thing, which had nothing to do with my comment.
People who start their companies take a risk.
People who go to war, because a government started one also take a risk.
Those are as different as people getting hired for dangerous jobs and people starting businesses and taking that risk with their time, money and effort.
As I already explained in another comment, this is a strawman, this has nothing to do with what I am talking about.
Money is production. Money is the result of productivity, so talking about money as of 'root of all evil' is only meaningful when you are talking about theft, not about productivity. I guess most people who do not understand what money is and how it is actually created may think that 'money is root of all evil', while the reality is that money is what is created by all people every day.
When you go to work, whatever it is you do, if you are paid for it, it means you likely created something that is greater than the cost of hiring you and keeping you around. If you start your own business, then it's much more obvious. You put in X amount of money, Y amount of time and effort, and after that time passes (maybe 3-6 years of work before you see actual profits), you are actually working to increase the overall wealth in the system. Whatever it is you produce over that time is money but when you finally see an actual profit (money left over after everybody is paid, all the costs are accounted for, including salaries, taxes, purchases, everything), then that is totally new money that you have created, the money that didn't actually exist before. If you are consistently running losses and never end up generating profits and real returns, then you are burning scarce resources, if you generate profits, you are making new wealth, new money. That's the only real money, not the paper that all governments of the world are printing today.
So if you put it that way, then 'love of money' can no longer be considered as 'root of all evil', it's the opposite, it's the root of all good. It's the root of all goods and services that were created in a search for profits and thus it's the root of all things you consume, it's the root of your salary, it's the root of all taxes that can be extracted from the economy as well.
People who take the most businessrisk are not those who accept salaried positions for jobs that somebody thinks to be necessary to make more profit, it's people who take the riskin terms of putting in their own savings, capital, time and effort into a venture that nobody ever guarantees to be a winner.
So you are going on various tangents that have nothing to do with what I said, thus building a big house of straw you'd like to burn down. Yeah, we all know that straw houses burn down easily.
My many of my ancestors were killed and some just died from various conditions, like hunger and sickness, all of this happened when the new government powers of the former USSR were trying to 'create a new man', I guess by destroying the old man. So I guess it's too bad that not only many older folks but also millions of children were killed in process.
I have no interest in talking about risks that people take when they accept a job with its conditions and keep working there even if they think the conditions are too hard of too difficult or dangerous. I am interested in talking about people who take a risk with their own lives, savings, time, effort to build new businesses. I am not talking about employees, I am talking about employers, which was the point of the comment you replied to with your strawman.
most start-up owners I've worked with were already quite wealthy and/or had a family cushion to fall back on in the event of failure.
- which is a good thing. It proves the point that it takes savings in order to be able to invest. This means that the private sector encourages savings, all while the government encourages spending and more importantly deficit spending. It is a good thing that somebody has a family to be able to survive without actually actively seeking employment while trying to start a business, or is your point that all people must suffer at all times when starting a business?
Being able to survive without having to go to any sort of public assistance is a positive, not a negative, don't you think the society would be much better off if everybody had savings and could keep trying to start a successful business?
Is your other point that the people you speak of are not very efficient, starting the most successful venture on the first try? Because trying to start 3-4 businesses before succeeding in one is just an excellent example of a hard working person, who is looking for something that the market would approve of, it's not an example of somebody leeching off society.
I don't agree with you that a person needs to be absolutely poor in order to become a good businessman or even in order to be a respected businessman, what he needs to be is persistent and successful at some point, so that all that hard work, the attempts at running a business pay off at some point.
What you mean to say is that most people are happy to steal from others and using a government to do it removes the necessity to take the gun into your own hands, because most people wouldn't take guns in their own hands and go robbing people, most people would be too scared to do it on their own, but when a government promises to do so, then it's all OK.
Well, here is the problem, most people, the problem is that you think the system can continue operating that way indefinitely, it cannot. People who have their productivity stolen from them either lose their businesses (voluntarily or not) or move their businesses, and eventually that society falls apart.
I don't know what exactly you mean by that, but governments around the world are destroying the economies and currencies to prop up certain interests, that are of-course private.
As to the debt, the 222 Trillion is mostly SS, public pensions and Medicare. The unfunded part of it means that to pay all of that taxes have to be raised from the future (or this) generation of workers, but of-course nobody can pay that type of money in taxes. Even the reported US GDP is 16 Trillion, 222 to be paid to beneficiaries is impossible from every perspective.
How much of it is private profit? Well, every dollar that was paid in taxes over the years was either paid to somebody as a benefit or it was spent on various government related projects, so you can say that 222 Trillion was spent. Who exactly got that money over the years? Military, various so called 'infrastructure' projects, all sorts of pork type of spending, it's all stuff that government isn't supposed to be doing in the first place (at least if we are talking about USA).
While you, as a single worker, may lose a month of your time, you are not actually risking your credit. Are you so destitute that you cannot afford to live 1 months without getting paid? Somebody who hires other people has to pay them, if he doesn't he'll lose the workers but also he may have a number of lawsuits on his hands. If he is not paying the bills, he is definitely going to lose much more than any individual worker in that business venture. First in line for bankruptcy liquidation are the creditors and workers are also in that list much before the business owner.
Capitalism was a means towards an end, not a driving factor wrt industrialization.
- capitalism was the catalyst necessary to achieve efficiencies, because capitalism provided the necessary savings that were used as investment to acquire tools necessary to automate production, investment necessary to hire and train skilled employees, etc.
Most people weren't food producers prior to industrialization, you have a very romanticized view of pre-industrial society. Most people were tradesmen or laborers. Specialization has existed far longer than industrialization.
OTOH 300 years ago most of workforce was occupied in farming and farming related activities. (open that link and scroll a page down for actual statistics).
--
Of-course specialization existed longer than industrialization and farmers hired unskilled labour, that's true. But it doesn't change the fact that it took capitalism and industrialization to move the numbers (percentage of farming as of the entire economy) from high double digits into 6% today and this happened over the last 200 years.
Slashdot Mirror
You know what? Even 'FacePalm' is a better name than Diaspora.
By the way, the name, Diaspora, it also sucks. Oh, and I don't have an FB account either but it has a better name.
It is an oxymoron, it's an impossible situation. You can come up with all sorts of mental contortions but you can't change the fact. Either the society is libertarian (liberal in the classical sense) or it is not.
A libertarian society cannot have 'communal property', because this demands central planning of some type and this goes directly against the principle of self-determination, it denies the free market. Even if you set it up, within months it will destabilise, people will not agree on things like who and how much is supposed to 'sacrifice' to maintain such a weird concept as 'communal property' within actual free market.
You see, even without the free market but with central planning and with lack of actual due process, lack of real laws, the way things are running today, the system has so called 'common property' but it doesn't actually belong to anybody and thus it's not just neglected, it's abused for the benefit of the special interests, that can buy the politicians who control access to it. The society ends up backing that deal.
So before BP drills in the deep waters, the government sets liability caps of 75 Million USD, which are ridiculously low, given the possible liability lawsuits that can arise from a spill or any other type of disaster. How is it possible to have 'common property' when in fact nobody is the owner of it and nobody actually cares about what happens to it and thus politicians simply sell access to it to the highest bidders, who then use it for whatever and the costs of misuse are dropped upon the tax payers?
You think a libertarian society would not know what this concept you speak of would mean for them? It would mean the beginning of the end of the free market in that system, which is actually the way USA free market ended.
It's no different for paying for a meal, day trip, holiday or a massage. None of them are investments.
- that's not true, unless all of your payments go like this:
"I am going to put money into this business idea that may or may not build a massage studio here and if they do, I may get my massage."
In all normal transactions you exchange money for a product not for a promise of a possible product, thus it is an investment when you do that.
You invested in an opportunity to watch a movie that you think you want to watch. It doesn't come without the risk that you may end up not getting any return on that investment if the movie is not produced after all, but that's what all investments are - risky. Nobody can remove risk from investing and while governments promise this to everybody the end result is disastrous, because without the concept of risk everybody takes all risks regardless of the odds of success.
--
Here is a mental exercise: imagine you are in a casino and the casino owner promises you to cover all your losses. You start with 100 dollars. For simplicity the casino only has one game, it's one roulette wheel with a minimum bet of 10 buck per gamble and if you win you always double the bet.
What is the rational thing to do?
The rational thing to do is to split your 100 into 10 bets, put them on the table covering 10 different possibilities. If originally your chances are 1 in 35 or so, by setting 10 bets on the table you now have your odds of 10 in 35 of winning. But you have 0% chance of losing, because after the wheel is spun and it stops even if you lose on all 10 bets, you now have your 100 dollars covered by the casino.
So you are back to square one with 100 bucks, you repeat the gamble again. In about 3 tries you win once, now you have 110 dollars. In under an hour you have enough money to place bets ON EVERY NUMBER on the wheel!
And it doesn't matter to you that you lose on 37 numbers and you only win on 1 number, the number you bet on doubles the money you bet and the rest is covered by the casino, you get all your money back that you just "lost".
That's the problem with banking today and it really started being this way within the last 100 years, starting with the Fed and other central banks, IRS, FDIC, all of this works to cover the losses for the banks while allowing them to keep the gains.
Yes, I understand that point about not being able to go IPO without meeting various government requirements, and while the gov't will tell you that it is trying to 'protect you from fraud', what actually happens is that investors are being 'protected' from making money, while fraud flourishes anyway, and FB is a good example of that, it's legal fraud, it's done with all the regulations in place and it stole billions from people who bought into the IPO.
As to whether it is possible to build a company like Kickstarter that would provide equity, well, maybe it's possible to have Kickstarter become an ETF, such that putting money into a specific business idea that is presented through Kickstarter would also buy you some of the ETF stock. As I said, it's still a new concept, ideas can be implemented on top of it later on.
Banks do exist that do not charge interest. I'm sorry if that breaks your brain.
- yeah, and the Federal reserve charges no interest rates to the banks that it 'lends' money to. I am saying that not charging interest rate is unsustainable for the economy, not that some people are not doing it. The Federal reserve is not charging interest rates to the member banks as it provides them with all this money, the banks in turn use the money to buy government debt, which then allows the government to keep spending. As I said - this is unsustainable. This practice distorts the market telling it that there are plenty of savings in the system, while in reality no business can get a loan and savers are destroyed or are pushed into other economies.
There is nothing sustainable about it, that's my point, not whether or not somebody argues for it or does it.
As others have said, Kickstarter has no relation to an IPO as it isn't even an investment.
I already responded to that
Kickstarter allows a startup or an idea to be attempted by somebody, who otherwise has no access to money markets for example via IPO. As to it being an investment, it is an investment. It is an investment in a potential product that the person may want to see developed. Also as I said Kickstarter a first of a kind, if it doesn't allow equity to be shared among investors, then somebody else may attempt building a competitor to Kickstarter where equity could be shared. Kickstarter is not guaranteed to survive with its current business model, it is still premature to be sure what the outcome will be.
However my point is exactly that small investors are prevented from investing in a company that is "not ready" for IPO because of government regulations. My point is that a small company is denied access to small investors who are not investing via VCs and are not 'angel investors' themselves, who may want to be able to invest in say, Facebook 5 years back, but who didn't have that chance.
OTOH a guy like Peter Thiel could invest in Facebook while there was a significant upside to investing in it, he put in half a million and earned a billion on it. The reason he could do it and small investors couldn't is because he was doing a private deal rather than a public one and most people do not get the chance to participate in deals like this.
You are saying "No company wants to take on thousands of small investors who really bring nothing to the table" - this is just not true.
Are you sure you want to try and prove a negative? AFAIC Kickstarter is the proof positive that you are wrong on this. Many companies would love to be able to access the public for initial funding but they cannot.
I think though that if Kickstarter (or a competitor) comes up with the business model that allows a small investor actually to own part of the business they are investing in, there will be government intervention, because government protects the banks and the banks will see this as a huge competition to their IPO business model. That business model gives all the upside to the banks and initial investors and owners and first employees in the company while putting all of the downside on the public that eventually buys into the IPO.
Crowdfunding replaces a bank loan
Not necessarily, I already replied to a similar remark. Kickstarter may be just first of a class of new businesses that help companies to raise money, whether it means that the money provided is a loan or not is immaterial, it's an investment regardless even of you being able to hold equity in the company you give money to. Maybe to you it's an investment even if you don't own part of the company simply because you want to see the product developed and to be able to use it, so it's like a front payment.
Also if you are talking about bank loans - those cannot be made without interest. In fact interest is absolutely essential to be able to secure loans. You can't expect a saver to give you money without interest.
Kickstarter may fail actually in a short period of time, they are still proving the concept, it's not a business model that will necessarily succeed, but there will be adjustments, there will be other types of similar ideas implemented and eventually there will be a working formula found.
As to interest being unsustainable - that's economic illiteracy, and yes, most 'economists' today are economically illiterate, including most of the economists who either teach in universities or work for governments.
I suggest this video with Jim Rogers for a little insight on economics. As to interest - would you loan your savings out without getting something for it? How do you differentiate risk? How do you set prices? How do you figure out what is worthwhile vs what is a waste of time? There are all these questions and more, that are answered by market interest rates. Of-course today the interest rates (price of money) are heavily manipulated by the governments and central banks, all the 'money printing' (counterfeiting), which is inflation (or more appropriately, it's theft), distorts the system. Inflation and low interest rates signals to the market that there are plenty of savings and nobody wants to save. Actually it is the policy of the central banks like the Federal reserve, to cause people to take more risks, to spend more and not to save at all. This means though that businesses have extremely difficult times securing loans all while the credit that is available is not real, all of it goes from central banks to the commercial banks, who then buy government debt. This is a vicious circle that prevents all economic activity other than government spending, and government spending reduces the production. Government spending increases consumer spending, which means in USA spending on foreign goods. Since USD is 'reserve', many other countries peg their currency to it, using it as a 'backing', but the USD is not backed by anything, so it can be printed in unlimited quantities. This shifts the inflation form the consumers in USA to producers elsewhere, but eventually it will stop.
In fact NOT having interest, having 0% interest makes economy unsustainable, which is the exact opposite of your statement and which is the case right now in USA.
I don't actually know if you get equity via Kickstarter offerings, is anybody prevented from offering something like that on Kickstarter? IPO is about investing into companies, but more importantly it's about raising money to build a new business and what I am really talking about is that - being able to raise money outside of the official IPOs and various 'normal' channels of getting investment money.
As to actual equity, the investment, dividends and such, if Kickstarter doesn't allow this by contract somehow, then it just means I was correct saying that this is a *quote*
Kickstarter is a good first idea that allows people to invest into businesses
- you can still see putting money into a business proposal on Kickstarter as an investment. Whether you are getting equity, that's a question that can be answered by Kickstarter or some other business that can expand on Kickstarter's business model, but putting money into a proposal can be considered an investment anyway. Maybe you are just interested in seeing a product and for you the dividend is not as important as actually being able to access that product later on, if it is successfully developed.
This comment is on the issue of the market solving the problem of government meddling with raising funds with this kickstarter project. I do not know if all companies can benefit from kickstarter, but surely some can. Today trying to get a business loan is an exercise in futility as the government crowds out all of the real credit, so none is available to the small firms, startups. The startups have to rely on VCs, friends, family, angel investors, but the rest of the market (almost all small time investors) are prevented from investing in companies while there is a potential for a real upside. The government regulations surrounding IPO prevent small investors from being able to get into businesses while there is actual upside, instead it is VCs (and underwriter banks) that mostly gain from IPOs and the IPO becomes a way to cash out instead of a way to try and grow a new business.
Kickstarter is a good first idea that allows people to invest into businesses before they could ever qualify for IPO money. Of-course there is risk in using kickstarter to try and invest, but there should be risk, people should be evaluating risks instead of blindly jumping into the casino that the inflation turned the stock market into.
What is nonsense is your entire comment. Everything costs more when it is in the hands of government, not less. Phones? PHONES? Ha ha ha, yeah, with AT&T being the monopoly nobody could even own a phone. Today everybody has multiple cellphones.
And as always, there is nothing more expensive than something that government supposedly gives you "for free".
It doesn't matter that Paris Hilton didn't herself do something to earn the inheritance except being born into the right family.
That money was created by her folks. Conrad Hilton was her great-grandfather, it doesn't matter that Paris herself didn't create the hotel chain, she inherited the hotel chain. The hotel chain was still created by her family and thus the wealth was created by somebody in her family.
You are jealous of some kid getting inheritance? Well, what else is new, people are jealous of each other.
If you have accumulated wealth
- it means you have produced something useful to the people. How do you think wealth is created? Somebody has to produce something initially to create the wealth, and that's a business.
it is based on being a part of society
- that's about as insightful as saying that living is part of Universe. Of-course living is part of Universe, but it's your effort, it's what YOU do with your life is what counts.
therefore you should pass most of it back to society
- first of all every business that makes somebody rich is giving to society at the moment when the person is getting rich. By the definition, it's a tautology, for your business to make you rich (absent government intervention), you are producing something that the people want, you are GIVING something to the people that did not have until your business gave it to them. The fact that they are paying for it something is a testament to how useful your product or service they find.
I do not see the problem here.
- I can make a bet that you are not somebody who is producing something with his own business. First of all, you would know that business is all about giving to society something it wants, secondly you wouldn't be so cavalier, saying that the entrepreneur must do this or that with their own earnings. It's their money, they can burn it and it's still their money, it's completely moral for them to destroy it or to give it to somebody they wish. If a parent gives his or her children the money that the parent earned, it's their right. If they instead burn the money, it's their right.
If you were taxed sufficiently during your lifetime, you shouldn't have that much left when you die anyway.
- so you are saying that Steve Jobs (always a useful example now, that he is dead), should have been taxed sufficiently that by his end of life, he should have had nothing left.
Well that defines you very well for what you are, a completely ignorant person who thinks that they can tell others how to live their lives, who believes in simple immoral things like theft. I mead what do you call a tax that takes away everything from a person (just by the time they die)? It's theft.
What incentive would a person have to do anything, to start any business, if they were taxed in a way that would steal all of their money away from them?
Also you are ignorant on what wealth is. Most people do not hold CASH, their money is IN their business, which means (again, Steve Jobs is a useful example), they own part of their company.
That's exactly what my point was, as to why the companies are these faceless corporations rather than having most companies being owned by caring businessmen. It's because your ideas are basically implemented in practice. A person dies, then his estate has to pay taxes, if they have possessions, such as companies, the companies will have to be LIQUIDATED (that's why Warren Buffet is so much pro-death tax, his company comes in and buys these businesses at firesale prices after somebody dies, Buffet is a vulture, he feeds on the dead. Well, so is government obviously. Government is a parasite while you are alive and it's a vulture when you die.
The companies have to be liquidated, the heirs are then left with plenty of money to spend, but they are not running the companies, that's how many companies become 'faceless' and without real direction. That's how generational knowledge about running successful businesses is lost.
Actually if you look at the thread, my comment was the first to mention risk, and I was very specific about what type of risk, I said (you can check, it's easy, it's HTML after all), I said: BUSINESS risk. Risk of investing and losing on that investment. Risk of investing savings, time, effort and not getting any reward for it. That's business. It was a flamebait by some off-topic person who started on the entire 'risk to life' thing, which had nothing to do with my comment.
People who start their companies take a risk.
People who go to war, because a government started one also take a risk.
Those are as different as people getting hired for dangerous jobs and people starting businesses and taking that risk with their time, money and effort.
As I already explained in another comment, this is a strawman, this has nothing to do with what I am talking about.
I did however answer this question in more detail as well.
Money is production. Money is the result of productivity, so talking about money as of 'root of all evil' is only meaningful when you are talking about theft, not about productivity. I guess most people who do not understand what money is and how it is actually created may think that 'money is root of all evil', while the reality is that money is what is created by all people every day.
When you go to work, whatever it is you do, if you are paid for it, it means you likely created something that is greater than the cost of hiring you and keeping you around. If you start your own business, then it's much more obvious. You put in X amount of money, Y amount of time and effort, and after that time passes (maybe 3-6 years of work before you see actual profits), you are actually working to increase the overall wealth in the system. Whatever it is you produce over that time is money but when you finally see an actual profit (money left over after everybody is paid, all the costs are accounted for, including salaries, taxes, purchases, everything), then that is totally new money that you have created, the money that didn't actually exist before. If you are consistently running losses and never end up generating profits and real returns, then you are burning scarce resources, if you generate profits, you are making new wealth, new money. That's the only real money, not the paper that all governments of the world are printing today.
So if you put it that way, then 'love of money' can no longer be considered as 'root of all evil', it's the opposite, it's the root of all good. It's the root of all goods and services that were created in a search for profits and thus it's the root of all things you consume, it's the root of your salary, it's the root of all taxes that can be extracted from the economy as well.
People who take the most business risk are not those who accept salaried positions for jobs that somebody thinks to be necessary to make more profit, it's people who take the risk in terms of putting in their own savings, capital, time and effort into a venture that nobody ever guarantees to be a winner.
So you are going on various tangents that have nothing to do with what I said, thus building a big house of straw you'd like to burn down. Yeah, we all know that straw houses burn down easily.
My many of my ancestors were killed and some just died from various conditions, like hunger and sickness, all of this happened when the new government powers of the former USSR were trying to 'create a new man', I guess by destroying the old man. So I guess it's too bad that not only many older folks but also millions of children were killed in process.
I have no interest in talking about risks that people take when they accept a job with its conditions and keep working there even if they think the conditions are too hard of too difficult or dangerous. I am interested in talking about people who take a risk with their own lives, savings, time, effort to build new businesses. I am not talking about employees, I am talking about employers, which was the point of the comment you replied to with your strawman.
most start-up owners I've worked with were already quite wealthy and/or had a family cushion to fall back on in the event of failure.
- which is a good thing. It proves the point that it takes savings in order to be able to invest. This means that the private sector encourages savings, all while the government encourages spending and more importantly deficit spending. It is a good thing that somebody has a family to be able to survive without actually actively seeking employment while trying to start a business, or is your point that all people must suffer at all times when starting a business?
Being able to survive without having to go to any sort of public assistance is a positive, not a negative, don't you think the society would be much better off if everybody had savings and could keep trying to start a successful business?
Is your other point that the people you speak of are not very efficient, starting the most successful venture on the first try? Because trying to start 3-4 businesses before succeeding in one is just an excellent example of a hard working person, who is looking for something that the market would approve of, it's not an example of somebody leeching off society.
I don't agree with you that a person needs to be absolutely poor in order to become a good businessman or even in order to be a respected businessman, what he needs to be is persistent and successful at some point, so that all that hard work, the attempts at running a business pay off at some point.
What you mean to say is that most people are happy to steal from others and using a government to do it removes the necessity to take the gun into your own hands, because most people wouldn't take guns in their own hands and go robbing people, most people would be too scared to do it on their own, but when a government promises to do so, then it's all OK.
Well, here is the problem, most people, the problem is that you think the system can continue operating that way indefinitely, it cannot. People who have their productivity stolen from them either lose their businesses (voluntarily or not) or move their businesses, and eventually that society falls apart.
Can't have an economy based on theft.
the average person has no idea where you are coming from.
I am not even going to use an 'average person' example, here are some 'above average' (I guess) people, they are DNC elected delegates.
I don't know what exactly you mean by that, but governments around the world are destroying the economies and currencies to prop up certain interests, that are of-course private.
As to the debt, the 222 Trillion is mostly SS, public pensions and Medicare. The unfunded part of it means that to pay all of that taxes have to be raised from the future (or this) generation of workers, but of-course nobody can pay that type of money in taxes. Even the reported US GDP is 16 Trillion, 222 to be paid to beneficiaries is impossible from every perspective.
How much of it is private profit? Well, every dollar that was paid in taxes over the years was either paid to somebody as a benefit or it was spent on various government related projects, so you can say that 222 Trillion was spent. Who exactly got that money over the years? Military, various so called 'infrastructure' projects, all sorts of pork type of spending, it's all stuff that government isn't supposed to be doing in the first place (at least if we are talking about USA).
While you, as a single worker, may lose a month of your time, you are not actually risking your credit. Are you so destitute that you cannot afford to live 1 months without getting paid? Somebody who hires other people has to pay them, if he doesn't he'll lose the workers but also he may have a number of lawsuits on his hands. If he is not paying the bills, he is definitely going to lose much more than any individual worker in that business venture. First in line for bankruptcy liquidation are the creditors and workers are also in that list much before the business owner.
Capitalism was a means towards an end, not a driving factor wrt industrialization.
- capitalism was the catalyst necessary to achieve efficiencies, because capitalism provided the necessary savings that were used as investment to acquire tools necessary to automate production, investment necessary to hire and train skilled employees, etc.
Most people weren't food producers prior to industrialization, you have a very romanticized view of pre-industrial society. Most people were tradesmen or laborers. Specialization has existed far longer than industrialization.
- most people were producing food around the world, I said that industrialization allowed the economy to gain efficiencies necessary to shift most people from food production to something else, I didn't talk about any specific locality. Today farming is 1.2% of the reported GDP of USA and 6.1% of the reported world GDP.
OTOH 300 years ago most of workforce was occupied in farming and farming related activities. (open that link and scroll a page down for actual statistics).
--
Of-course specialization existed longer than industrialization and farmers hired unskilled labour, that's true. But it doesn't change the fact that it took capitalism and industrialization to move the numbers (percentage of farming as of the entire economy) from high double digits into 6% today and this happened over the last 200 years.