How does putting people in prison get the creditors paid? I guess if it’s a paid work prison, but I don’t think you’ll have many supporters for a system with that kind of indenture. AnCap is an awesome thought experiment, and a nice way to point out that there is no underlying moral justification for governments. But the consequentialist argument is VERY strong—as un-justified equilibria go, modern liberal democratic states have pretty good results. They’re starting to sag under their own weight and may not last much longer without a major reboot, but hey, the Singularity might get here first.
How does putting people in prison get the creditors paid?
It doesn’t, it just provides an opt-in mechanism for discouraging nonpayment in the first place, in more ways than one. The current system is one where borrowers can just say “I don’t have the money, I spent it all on alcohol” and basically nothing happens to them except the rates on future credit cards goes up. When people propose raising the stakes for our all-in-one bankruptcy mechanism or allow people to examine credit histories >7 years in the past they are accused of being too inconsiderate. We solve this partially with credit scores, but that’s hard to rely upon without prior borrowing history, and some people literally can’t find it within them to honor prior commitments to faceless financial institutions unless the consequences for doing so are as severe as jailtime. With this system people can just agree on severe-enough consequences for nonpayment. You could honestly do something similar with venture capital, even.
In the days when it was still powerful, the mafia provided a similar service. Contrary to popular belief and lurid tales at the time, virtually everybody that borrows money from a criminal organization with a reputation for violence manages to pay it back. They do so because the consequences of not paying are salient enough psychologically to motivate them to do so.
How does putting people in prison get the creditors paid? I guess if it’s a paid work prison, but I don’t think you’ll have many supporters for a system with that kind of indenture. AnCap is an awesome thought experiment, and a nice way to point out that there is no underlying moral justification for governments. But the consequentialist argument is VERY strong—as un-justified equilibria go, modern liberal democratic states have pretty good results. They’re starting to sag under their own weight and may not last much longer without a major reboot, but hey, the Singularity might get here first.
It doesn’t, it just provides an opt-in mechanism for discouraging nonpayment in the first place, in more ways than one. The current system is one where borrowers can just say “I don’t have the money, I spent it all on alcohol” and basically nothing happens to them except the rates on future credit cards goes up. When people propose raising the stakes for our all-in-one bankruptcy mechanism or allow people to examine credit histories >7 years in the past they are accused of being too inconsiderate. We solve this partially with credit scores, but that’s hard to rely upon without prior borrowing history, and some people literally can’t find it within them to honor prior commitments to faceless financial institutions unless the consequences for doing so are as severe as jailtime. With this system people can just agree on severe-enough consequences for nonpayment. You could honestly do something similar with venture capital, even.
In the days when it was still powerful, the mafia provided a similar service. Contrary to popular belief and lurid tales at the time, virtually everybody that borrows money from a criminal organization with a reputation for violence manages to pay it back. They do so because the consequences of not paying are salient enough psychologically to motivate them to do so.