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by TheOtherHobbes
3359 days ago
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Piketty and others have covered this. Debt is primarily a political obligation - in the sense that it's a reified power imbalance in which one person with power "lends" it to another in the hope of making a bet that increases the status and influence of the lender. It may or may not increase the status of the borrower at the same time. As long as the lender's status and standing are increased, either outcome is acceptable. But if the status of the borrower increases while the status of the lender is decreased - because of a "default", or some other outcome that damages the lender - the transaction is considered morally offensive. Banks are simply professional lenders. If the transaction were purely numeric and not political they'd be peripheral to the economy instead of central to it. |
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This is question begging to say the least. Political obligation [0] is "the moral duty to obey the law". Debt is money owed to someone [1]. Is that a political obligation? Yes, if the laws concern themselves with debts. But what if the law didn't concern itself with debts do you cease to owe money to someone? Not if they are able to enforce the contract of the debt in some other manner.
> Banks are simply professional lenders. If the transaction were purely numeric and not political they'd be peripheral to the economy instead of central to it.
Yes, state intervention in money markets is of monumental importance in achieving the system we have now. But it wasn't always like this and those systems were far from peripheral [2]. Free banks put themselves in debt every time they issued currency and the state was absent from the interactions.
To clarify, I'm not advocating against the state's importance in defending debt money. The free banking days of multiple competing notes was one of volatility and disastrous crashes. What we have now is strictly better than before. But to say that fiat currency "comes from the state" as OP did is simply not a historical fact. Period.
0: https://plato.stanford.edu/entries/political-obligation/ 1: https://en.wikipedia.org/wiki/Debt 2: https://en.wikipedia.org/wiki/Free_banking