[p2p-research] negative interest at NYT

[Patrick Anderson]

On Mon, May 18, 2009 at 10:03 AM, Ryan Lanham <rlanham1963 at gmail.com> wrote:

> If you have a shovel and are not using it, you can lend it to me.
> I use it and gain value.
> What is the problem for compensating someone for such value?


I'm glad you made this comparison.  It's much easier to understand why
someone would pay to rent a physical tool.

So the Renter should pay the Rentier, just as the Consumer pays the
Owner, and as the Owner pays the Worker.

But if these transactions are 'perfect', then where is the problem in
Capitalism?


Rent is composed of 2 separable concepts:

1.) Real costs including initial purchase costs (and any interest that
owner had to pay), maintenance, insurance, storage, even "opportunity
loss"

2.) Economic-Rent is the amount a user pays *above* those costs.  This
is also called "Profit".


The "partially correct" nature of these transactions make them
difficult to analyze since people tend to oversimplify.

Physical Sources such as shovels degrade over time.  If owners did not
collect enough rent to at least cover costs, the users would slowly
destroy the shovel with no funds to fix or replace it.

That would be no good.  Even the users don't want to be without shovels.

Most users are willing to pay rent if it is not too clumsy to do so,
but if the rent gets too high, they begin to feel as though they are
being "taken advantage of".  Are they?  Is Rent, Profit or Interest
ever *too* high?  What would that even mean?  Is it a magic number?
Why do we artificially cap the amount of interest a 'Bank' can charge
with usury laws and such?


The Labor Theory of Value (LTV) claims the Price above Cost
(exchange-value) arises because of the amount of labor expended during
it's production.

But if that is the case, then why does scarcity effect price at the
point-of-sale, long after production is complete?

Why will nobody consider the plight of the Worker **while acting as a
Consumer**?  For it is during this transaction that profit occurs.

Capitalism makes a small impact on Monopoly, but does not eliminate it
completely.

In fact, Capitalism cannot function at ALL under conditions of perfect
competition, for in that case Profit would be Zero since Price would
equal Cost.


Hmm...

So paying rent is OK for covering Costs.

And paying rent *might* be OK for growth beyond Costs (say purchasing
even more shovels to be rented simultaneously because demand is
currently too high to meet that demand).

But if we are going to grow in this manner, my question is "who will
be the owners of those new shovels"?

Will it be the current owners ~ causing Capital to accumulate further
and further into the hands of the few?

Or maybe it should be the property of the people who PAID for it = the
users who paid price above cost?


Sincerely,
Patrick