1. IBM
2. AT&T
3. Kodak
4. GM
5. Standard Oil of NJ
6. Texaco
7. Sears
8. GE
9. Polariod
10. Gulf Oil
Not a single one of these companies is in the top 10 today. (Edit: correction, one is: Exxon.) Many of the current top 10 didn't exist at all 50 years ago. Thankfully our economy seems to be dynamic enough that companies must continue to compete or lose marketshare organically.
1. https://en.wikipedia.org/wiki/List_of_largest_companies_in_t...
Something like that could counter a lot of financial games that are played to the detriment of so many, which is why some societies had things like dept jubilees.
We can see this market mechanism play out in the corporate lending market where companies with high credit risk must pay double or more interest rates. A debt jubilee would simply raise the default risk on all of society and thus increase rates to compensate.
I would think the bigger effect would be to dissuade lenders from lending more than the borrowers could repay before the debt forgiveness date. Also certain things that are inflated due to finance (like housing, cars, college) might see an adjustment to more affordable prices, or maybe some things would cycle, going up when people could borrow, and going down as the debt forgiveness event approached.
It's an interesting idea, to think about the pros and cons.
I also don't agree that a jubilee date won't increase rates. The default risk is simply much higher now and therefore the rates must go up to compensate for the added risk. In the current system, debt isn't forgiven when repayments are late, which allows for lower rates since the default risk is lower. If late repayments automatically implies default due to the jubilee date, then rates must be higher.
I look at it as mostly a thought exercise, questioning the way we currently handle debt. I think there is a lot of room for improvement. Maybe debt jubilees would act as a check on out-of-control debt, which seems to be a thing lately.
Take student loans. Politicians are talking about forgiving those debts. Maybe it's not such a crazy idea? But then again what they plan on doing will amount to just giving the banks the money, either inflating the money supply or treasuries that future generations have to pay back. Ugh.
Or maybe like in other countries, the price of housing would decrease to a three year loan instead of thirty.
Of course it is different in that it follows you around for a while, but there also isn't a weird enforced lending cycle (and carrying lots of debts into a jubilee might not officially follow you around, but it would follow you around).
Forest fires are good for forests over the long term. They remove large old trees that are full of rot, dead wood, and parasites. Those old giants aren't using the sun's light and other resources efficiently, but they block too much light for smaller trees in the understory to grow tall enough to compete. A forest fire clears those out, returns the nutrients in them to the soil, and provides a level playing field for smaller trees to grow and compete.
I wouldn't go full Fight Club Project Mayhem, but I'd love something like a cleansing fire that periodically breaks up or disbands all corporations above a certain size.
Forest fires reset competition at the ground level while mostly maintaining the status quo for large, established trees.
You read my mind: this is exactly what is needed! I could not think of the right phrasing (because i, too, agree that a societal reset might not be the right thing here)...and the forest fire cleansing is an apt metaphor here. So thanks for sharing this thought!
Corporations are legal fictions through which their owners operated. If ownership of corporations can’t be inherited, it doesn’t make “corporations” more powerful, it just distributes power over corporations (presuming that the absence of inheritance means that assets escheat to the State, and that the State itself is fundamentally democratic.)
The dead person's estate is responsible for paying back creditors, even if that means liquidating the estate to do so.
Not quite. You should have life insurance and something the bank can seize to be able to get financing. So even if you die the bank can recover some of the principal. You can also file Chapter 11; that's actually a reset.
I think it's better for people to stop working when they get pretty rich, like $20mil. People should stop working when they get rich enough to pay for an awesome life, and give someone else the chance. And if they actually enjoy working, they can do it pro bono.
I do not trust the uber rich to mind their own business and stay out of other people's lives.
Making money is generally a positive sum endeavour as long as you're not generating unpriced externalities such as carbon pollution, and as such I don't like the idea that rich people stop working after they're rich. As long as they're not creating externalities we want them to continue building and contributing to society. It's a much better alternative to them relaxing on a yacht somewhere, which contributes nothing.
It's also inaccurate to think that making money by building crowds out other people from doing so. The opposite is the case. It's the same mindset behind the "immigrants took our jobs" train of thinking.
I'm not worried about making money being zero sum. I'm worried about uber rich people doing uncalled for things with too much money. No one should have that kind of power.
> No one should have that kind of power.
I fundamentally disagree. I strongly prefer that Bill Gates gets to spend his money the way that he sees fit rather than it go to the federal government. Just the same with Elon Musk and Warren Buffet.
You'll certainly remove their clout over society but I think you also need to consider the significant downsides to this proposal. Maybe you would be better off finding ways to limit the power of rich people over society (eg political contribution laws) instead of trying to ban being rich?
1. Have real practical advantage over other people in their community 2. Have real practical power to shape their community
For #1 that's mostly the middle class, who want better schools for their children, and safe pleasant environments for their families. Actions that remove that incentive, make the middle class irrelevant. Very few people are willing to work 9+ hour days during the start of their career, just so they can have more toys, and not a larger house in a good neighborhood later in life.
For #2 that's mostly the elite. If they're denied influence via money, they'll simply go into politics or religion where we'll end up with a society shaped by lucky charismatic people, and not necessarily anyone who has any skill. At least we can say non-hereditary wealthy people are lucky, and skilled as opposed to just being lucky.
What about just charging income tax on inheritance (but allowing deferral of tax recognition of windfall income over a period of, say, up to 10 years from the date of receipt.)
https://www.sanders.senate.gov/newsroom/recent-business/a-pr....
Likewise individuals; for anyone who doesn't own land at the start of the system, is there a path to land ownership?
I agree that a reset on the extravagantly wealthy is needed...but that can also just take the form of, say, a wealth tax, without also raising questions on how new people enter the system fairly.
We aren't living in ancient times, and the distribution of wealth and debt in the world isn't what it used to be. Debt isn't "our crop failed and my family is going to starve this year" anymore.
Ideas of large social changes always sound good in the abstract, but once you propose a real plan the devil is always in the details. In the US, we can’t even agree to let the government forgive student loan debt it already owns — but somehow completely reworking corporate debt and property will work/help/ever possibly happen?
Because those who's great great great great great grandfather did well out of knowing Henry 8th don't already get enough headstart in life?
Land shouldn't be owned by the people, with rent paid yearly to the people based on its unimproved value.
I think the problems you’re trying to address with this need to be addressed in a more fundamental and continuous way.
I hope I never see a societal reset.
Let's say you wipe out debts. And let's say that my pension was invested in those debts. That's going to be a bit problematic.
Let's say you reset companies. Including, say, Intel and AMD. The CPU monopoly is wiped out. Oh, yeah, and Microsoft. But next month I want to buy a computer. Can anybody make me an x86 chip? Can I get Windows, assuming that I want it? Or do I have to run Linux on a public-domain chip?
It's not going to be easy to maintain continuity of supply while shaking up firms that dominate important markets.
But maybe it would be better to reset in a cascading fashion, rather than all at once.
When you're 18, you're about halfway through. If you work hard for 10 years to accumulate wealth, add value, whatever, by the time you're ~40, it's about to all get taken away. What's the point?
No debt. Just gifts or charity.
In the Old Testament God commanded the israelites that every 7th 7th year (or every 49 years basically) was to be a year of jubilee. Included among the instructions for the year of jubilee was the requirement that all debts be forgiven and all land revert to it's ancestral owners. Basically the financial system gets reset every 49 years.
It seems to me that there are great things that can be done when a business has the right resources but at a certain point business stop competing and start regulating or burying their competition out of existance. Now of course we can't due it exactly how the bible outlines things but I've been increasingly interested in the idea of a regular societal reset on a half a century or so basis. This creates enough time for large firms to grow innovation to happen and wealth creation to happen. Whilst at the same time it prevents eternal dominance by a handful or large players .
What would y'all think of a societal reset?