[branchless]

This just seems to lack a coherent narrative. You talk about unions first, then go on to say wages are too low leading to an inability to pay, masked over in the short-term by credit issuance.

Okay, let's imagine we unionised. Unions fight for better pay and they win. Wages go up, labour captures more of the surplus value they add. Disposable income is up.

Are happy days here? No. Our system issues credit against land. People have more money now, they can pay more for land. Banks, literally 2 days after your unions get their victory, start lending more. How do they know how much more to lend? They are going to saturate all that extra income with the cost of carry of debt.

How can we stop this? Land value tax. Tax land not income. Stop the speculators who know that our current system funnels all productivity gains into land.

And in fact if you did this you would let labour save again and they would be able to refuse to work for a pittance or for a bad boss. We would still need unions, but labour would be less oppressed because we have solved the problem at the root rather than seeking to counter a side effect of the main problem: rentiers exploiting a flawed system.

[malandrew]

This. So much this.

My older either used to be a professional chef working at top restaurants in NYC. One day I asked him what the most important thing a restaurant owner can do to be successful. His answer: "own your land or else your landlord takes all the value you create by raising rents to the most they can get before you call it quits."

[branchless]

Not according to HN readers! Guess the SV kidz know more about business? Downvotes abound for questioning the system.

[metaphorm]

> Our system issues credit against land.

as far as I understand it, no, it doesn't. the currency issued against NOTHING except "the full faith and credit" of the Federal Reserve. the only thing backing the currency is the principle that loans made by the Federal Reserve will be paid back, with the stated interest, no matter what.

[bufordsharkley]

That's true for currency from the government itself. But for the stuff we actually use, that's issued from private banks, constrained by partial reserve banking.

It's true that to some extent, their assets are land (real estate is a common collateral). It's not shocking that land busts and banking crises tend to coincide.

[metaphorm]

the land (and house, usually) are used as collateral in home mortgage lending, which is a major category of lending but not nearly as foundational as Federal Reserve lending, which is the basis of the entire fractional reserve banking system.

there are many other categories of credit that rarely use land as collateral. small business loans don't (or almost never do, in any case). corporate bonds don't either. consumer credit (including student debt) is totally non-collateralized.

[branchless]

https://bankunderground.co.uk/2015/06/30/banks-are-not-inter...

Banks create mony when they lend. Fed doesn't constain this.

[rmah]

The "money" banks create when they lend is the same sort of "money" you create when you deposit cash into your checking account. The problem with money conspiracy theorists is that they conflate different types of money (M0, MB, M2, etc) into one pile they call "money".

[mpweiher]

> Banks, literally 2 days after your unions get their victory, start lending more.

Evidence?