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0 pointsThrustVectoring3y ago0 comments

> What we need is a way for all that unproductive capital used to directly fund the businesses of the young, growing the real economy (rather than the financial).

You're conflating financial "capital" with real productive capital here. In real terms, non-productive financial assets simply do not matter; whether landlords extract a billion or a trillion dollars makes not a whit of difference in the real goods and services the economy produces.

If you redirect financial assets from bidding up the value of housing to bidding up the value of small businesses, you've simply moved the siphon from cost of rent to the cost of owning your own business and/or suppressing wages.

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coxmichael3y ago

Again, there’s the idea that wages and businesses produce nothing. They don’t.

ThrustVectoringOP3y ago

Yes, businesses produce actual value. The problem is in what you're diverting from, the ground rents extracted by artificial housing supply constraints. Whether you pay your landlord $X or $Y has zero direct effect on the total amount of real goods and services produced and consumed by the economy as a whole, it's purely redistributive. So if you reduce the total amount of rents paid to landlords, you are enriching renters at the expense of landlords without changing the total size of the real economy, and there's no real goods and services freed up to then be productively used by businesses to generate actual value.

coxmichael3y ago

Apologies here, my previous comment was a little flippant (I was at the pub…).

There's absolutely an argument here that rents, as a basic dead-weight cost of all people within a society, don't affect the real economy or productivity.

This could be true, but only if the access to finance is distributed across society relatively equally, with a positive effect on productivity. My understanding of, at least in the UK, is that it's not.

The relationship between financial capital and other forms is lossy at the moment — the purpose of financial capital is the creation of new goods and services, and we've spent 40-odd years making sure it goes largely into something that already exists (housing).

In that process, funding for new stuff, for non-rent economic activity, hasn't been properly funded.

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coxmichael3y ago

Exactly, it’s redistributive to the public good. That is, productive.

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coxmichael3y ago

Again, there’s the idea that wages and businesses produce nothing. They don’t.

ThrustVectoringOP3y ago

coxmichael3y ago

Apologies here, my previous comment was a little flippant (I was at the pub…).

There's absolutely an argument here that rents, as a basic dead-weight cost of all people within a society, don't affect the real economy or productivity.

In that process, funding for new stuff, for non-rent economic activity, hasn't been properly funded.

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coxmichael3y ago

Exactly, it’s redistributive to the public good. That is, productive.

j / k navigate · click thread line to collapse