And as for contracts being obeyed, I’m not sure where you ever got that. Contracts can be broken for all sorts of reasons.
As a counter to your “bitch better have my money” perspective. I invest money in startups and they fail. Is it a moral failing on their part or mine that that happened? Sometimes they don’t fail. Is that due to our morals? It’s a bet on an outcome and people. Sometimes the bet doesn’t go my way. Sometimes it does. Why read morals into what is in a lot of ways a game of chance? I’ve also been a landlord & had people try to screw me out of rent checks. Sure that’s shitty of them to do and it frustrates me but everyone has their struggles.
EDIT: And I didn’t shift all blame on lenders. I just said that usury like payday loans should be way more regulated than it is in the US.
> Sure there can be positive social results to certain kinds of lending. If you’re investing for that purpose though (to improve someone’s situation), why are you looking to be punitive and enforce that you get a return?
Certainly there are people and organization that invest with aim to help the other party. But aren't most people investing to make profit? And isn't this kind of investing (for profit) beneficial for society as well? You provide capital early to others, and since you can't use it now for your consumption you get interest in return.
I don't think why you imply that I want to hold power over people. All I'm saying is that if I don't get any protection, then likely I won't invest at all. And who would if there's no protection?
> Is it a moral failing on their part or mine that that happened? Sometimes they don’t fail. Is that due to our morals?
If a company defaults on obligations then by the law it's going to be liquidated, and both bond holders and stock owners will be paid from that. That's the risk I'm willing to bear. But if the company would have the choice to renege on its obligations and keep on existing, would you invest? Would anybody?
Yes. Chapter 11 bankruptcy
I’m not saying the book is good or bad as I haven’t read it. I’ve just read up on the history of bankruptcy and why it was introduced, how it helped form the modern economy, and why morally and ethically it’s problematic. Additional research into modern times of the problems with payday loans and their ilk. Money is a tool but it’s also used as a kudgle by the wealthy and powerful when deployed at scale. often has to be because otherwise the overhead of managing the wealth becomes too great (but that’s an externality they push onto society).
You say
> I think there’s this unhealthy association between lendees not paying and it somehow being a moral failing on their part. No. It’s the fault of the lender for not vetting their investment properly.
You know what? If that's how I'm going to be treated as money lender then screw it, I'm not lending anybody. They need money to jump start their economy? Screw them. If I'm supposed to invest in detailed research with zero return, I'll be at loss in the end even if the huge risk turns out in my favor. I'm keeping my money safe, let them starve! Now obviously I'm not seriously that evil, but you get the point. When there's no protection for money lenders, when society treats them as evil (as this book does), they're not going to lend anybody, and poor economy won't have the capital to build from in first place. And then money owners will be vilified for hoarding money! You can't really win this game unless you give away money for free, can you?
EIDT: I agree that usury is evil. Obviously investor protection should go only so far, but shifting all blame for failed projects on money lenders is just wrong. Contracts should be obeyed.