Antal Fekete

Hadn’t heard that name for a while, but he’s mentioned here.

Apparently he’s been busy saving the world himself.  He wants to start with Greece, Italy and Spain, and it has something to do with “gold bonds“.

I’ll study it and get back to you.  Initially it looks like it has some similarities to what I have proposed, absent those remedial and transition-easing measures, such as a five year moratorium on evictions for non-payment.

That moratorium thing seems to be growing in importance as we think this thing through.  You can always tell you’re onto something when a fairly intelligent and informed commenter says you’ve gone “off the rails“.

If we’re going to change the monetary system around, starting with a jubilee – and at this point that’s the proposal not just from me but from Steve Keen and maybe even some others – you’re talking about something that is very chaotic in implementation.  The basic problem is that nobody is going to know what anything costs for while.  The measures will have completely changed.

In the meantime people need to eat and they need a place to live.  They need some stability in otherwise stormy seas.  This is what the eviction moratorium is about.

Beyond that, though, I wonder if it shouldn’t be that way always.  I don’t think the threat of homelessness hanging over everyone’s head all the time is healthy.  It doesn’t lead to good economic decision making; it leads to desperate economic decision making.

So I’m thinking no real estate taxes either.  No mortgages, no rent, no real estate taxes.  You get a place to live by buying it, and once you buy it no one can take it from you.  I think this is consistent with property rights, but also consistent with some of what socialists advocate, though not for the reasons or in the way they advocate it.

You can do things like this with the law.  Economists don’t get that.  Not even Antal Fekete.

 

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2 Comments

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2 responses to “Antal Fekete

  1. Ryan

    I’m still intrigued by your proposal for a debt jubilee. It reminds me of the ending in Fight Club.

    That said, I also still disagree about the desirability of an eviction moratorium. It would diminish the quality and quanity of available housing and make people less mobile. Not to mention the administrative costs—for example, how do you keep a black market in leases from developing or deal with people who charge visitors a small fee for staying in their home while they’re away?

    Anyway, I feel like I should add something non-critical to the discussion, so how about a proposal.

    I suggest abolishing the central bank, counting up all the gold and silver held by the federal government, and then turning the amount of dollars currently in circulation into receipts. Each receipt would give the holder a claim to a share of the available gold and silver in proportion to the number of dollars in circulation at the time. To this I would add two caveats. First, no foreign government would get to redeem their dollars for gold. This would increase each individual’s and business’s share and prohibit the federal government from immediately running up more debt (since no foreign country would lend to it). Second, to achieve a sense of rough justice, the institutions that had access to the Fed’s discount window or acted as a primary dealer for the Fed would get a reduced share, say, one equal to one-tenth of that received by everyone else. This would ameliorate the effects of their previously enjoyed privileges (such as access to cheap credit and the right to create money using fractional reserves) on the distribution.

    From there, people would relatively quickly re-value assets. Sure, there’d be uncertainty but it would likely be far less than expected. Just look at Zimbabwe today—people are doing better now using the dollar than they ever did under their government’s currency. It didn’t take them long to figure out a workable system to that end.

    • I also still disagree about the desirability of an eviction moratorium. It would diminish the quality and quantity of available housing and make people less mobile. Not to mention the administrative costs—for example, how do you keep a black market in leases from developing or deal with people who charge visitors a small fee for staying in their home while they’re away?

      Nice to hear from you Ryan.

      You have to remember there are trade offs no matter which way you go here. The jubilee itself has tradeoffs – big ones. The question isn’t whether there is some downside to what is done, but rather whether the downside of doing it is better or worse than the downside of not doing it.

      It’s interesting you brought up the non-payment eviction moratorium because it’s kind of a late addition, but I like it more every day. Notice that any real estate could still be bought or sold. It could perhaps even be rented or mortgaged but that wouldn’t happen much because the ultimate enforcement mechanism of such arrangements – a government conducted eviction by force – would be prohibited. I was very specific about that: renting or leasing isn’t prohibited per se, just the government’s force through an eviction.

      I’m not so sure there would be any discernible effect on either the quantity or quality of available housing, or mobility either. Need to move? You sell the place you’re living in and buy one where you want to go. Seems pretty simple. Housing will appear where there’s a market for it, in whatever quality demand dictates. The difference is that it will almost always be owned and not rented.

      Would there be a black market in renting, with the possibility of some ugly “self-help” if things go wrong? I imagine there would be. Could be smallish or not so small, it’s hard to tell. It would be a small price to pay given the social benefits on the flip side.

      There is also a deeper discussion in here about the difference between property and contracts. I think the right to property, especially as it pertains to a place to live, has never been realized as fully as it should be. The idea of it is that people should be secure in their abode, be it humble or lavish. In my opinion that is a worthy goal. The situation we have now is that whereas in theory, property rights are sacred and contract rights are always less exalted in the law, the practical reality is the reverse: people’s most onerous contracts – the purchase money loan for their very dwelling – encumber that dwelling for virtually their entire lives, trumping their right, their supposedly sacred property right, to their own home. This is an inversion of the way it should be. We can put a stop to that through the law, because it is a problem that has been created by the law. And I think we should. I’m now thinking that the moratorium is the way it should be all the time.

      I can’t deal with your other points right now but I’ll try to get back to you soon.

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