When I wrote about how to establish Jubilee, I appealed to a comparison between Jubilee and another hypothetical town called Stolypin, initially assumed to be like Jubilee in all relevant respects except that land ownership in Stolypin is permanent. I argued that market forces would tend to cause Jubilee to grow in circumstances when Stolypin wouldn’t; essentially, I argued that Jubilee and Stolypin weren’t in equilibrium, so changes would occur to push them closer to equilibrium.
So what would the world be like if Jubilee and Stolypin were in equilibrium? We might try to imagine a situation where residents of each town prefer to stay where they are, rather than move to the other, but such decisions would be influenced by the costs involved in moving, as well as the relative attractiveness of each town. So, we could also keep in mind an immigrant choosing between Jubilee and Stolypin; under what circumstances would the average immigrant be indifferent as to which of the two towns to choose? Continue reading Jubilee in equilibrium
There was a young man, just entering adulthood. His father died in an accident while working. His mother had already died years ago of an illness.
They weren’t rich parents, so the young man wasn’t expecting to inherit much. It turned out that his father was in debt, so he inherited nothing at all.
He knew a local landlord, not much older than himself, who owned large estate. He approached the landlord, saying, “Sir, you have inherited plenty of land, and some of it is barely used; I have none. Please let me use a portion of it. I’ll build my own house on it, and grow my own food.” Continue reading A story of landlessness
The efficient market hypothesis (EMH) seems to have numerous definitions, but the general idea is that the current prices in a market (such as a stock market) reflect all available information, and that, therefore, you can’t make risk-adjusted profits in excess of the (purely theoretical) risk-free rate of return by (for example) analysing the past prices of stocks and anticipating their future movements.
The intuitive idea is this: if anyone could easily predict future prices of stocks, they would do so and attempt to profit by buying stocks that are likely to rise, and selling stocks that are likely to fall. But by doing so, such people would bid up the value of stocks that will rise, and bid down the value of stocks that will fall, moving their prices to the prices they’re predicted to have in future. So the present price should reflect the expected future price.
So if the EMH predicts that expected excess profits are impossible, it certainly predicts that guaranteed excess profits are impossible, which poses a puzzle when considered alongside this surprising guarantee. Continue reading An efficient market from different points of view
My previous article, about Ripple and its currency attracted some criticism from some in the Ripple community. And it deserved it, so here I’m going to correct and clarify what I said earlier. Continue reading Corrections and clarifications: gateways and the value of XRP
In my previous article, I talked about a potential peer-to-peer money transfer system, and the problem of how to get such a system started: Why would you be the first of your friends to join such a system? It wouldn’t be useful until you had well-connected friends to connect to the network through. I suggested that this problem might be alleviated by strapping such a money-transfer system onto pre-existing decentralized social networks.
Well, since then, I’ve read more about the recently rejuvenated Ripple, and I’ve discovered that they have a different, very clever solution to this problem. Their solution has other benefits, too, including a currency that I argue isn’t necessarily backed by debtors, as every country’s fiat currency seems to be. Continue reading Ripple and its currency
At the moment, most of your income and expenditure probably goes through your bank (or, perhaps, banks). Here in New Zealand, only a handful of banks dominate the market, and I think the processing of EFTPOS and credit card transactions involves even more market concentration.
This centralization of money transfers has several downsides. Fewer players means less competition, greater risk of fraud by employees of the big companies, and obvious targets for malicious hackers. So how could we decentralize money transfers? Continue reading Money transfer via social network
When I wrote about how a profit-seeking entrepreneur might establish Jubilee, I ended by wondering where the extra value came from, to give the entrepreneur their profit. Today, I’m revisiting that question, and hope to describe a way in which it might be answered. Continue reading Externalities and location value per capita
You’d heard plenty about Jubilee — the way your cousin Frank enthuses about it, you could hardly have avoided it —, but you hadn’t really thought of moving there until things started getting difficult at work.
Julie, the new girl at work, really winds you up; you’re sure she does it deliberately. You’ve talked to your boss about it, but although she doesn’t exactly take Julie’s side, she doesn’t rein her in, either. She says you ought to be able to cut hair without all this bickering. Continue reading A Jubilee story
In my previous article, I defined class servitude as a situation where a class of people largely serve the interests of another class of people. This happens not because no individual can improve their situation, but because (in the case of at least some members of the class) when they do improve their situation, they indirectly make life harder for other members of the class. So each individual in the class can and does improve their productivity to make their lives better, but because everyone does so, no-one is much better off, and their extra work benefits other people.
This article argues that landless workers can be subject to class servitude. Continue reading The class servitude of landless workers
Slavery is bad for all sorts of reasons. The most extreme form of slavery is chattel slavery, where one person is considered to be the property of another, and the master can do anything they want with or to the slave.
I want to concentrate on one particular feature of slavery that appears in other contexts. Because it doesn’t involve the full horror of chattel slavery, I’m going to use a different word to distinguish it: servitude. Continue reading Class servitude