von Mises says:
This is similar to the phenomenon of building material codes. Once there is a government enforcement of building codes, and usury to collect power in ever fewer hands, the big boys begin to design the materials, own the patents, write the codes that all builders must follow. This monopoly is necessarily lower quality products, which then make for costs dropping due to subpar while prices rise due to inflation. Small builders create profits (rents) for the big boys by at once paying higher interest rates and being forced to include materials in construction in which the same big boys turn a profit. Further, the meager profits of the small boys are taxed to pay for enforcement, while the big boys pay no taxes whatsoever, with the government concessions for the big boy projects. The introduction of government supervision of health and safety leads to a downward spiral in health and safety and community wealth. The small quality builder is forced to build junk, but on the other hand, he need only be slightly better than the horrors produced by the big boys in order to earn a living.
Education saw the same thing. As govt supervision of education increased, public education went very far downhill fast. Private schools need only be slightly better to charge a super-premium price. Private schools today would be disgrace in the 1950s, but that does not matter. The comparison is what sells.
As to Mises comment, a Moslem would ask "Why not just invest in the hotel, instead of lending money at usury?" And certainly Christianity teaches the same thing: don't invest at interest (usury), invest as a participant in the profit and loss.
But we live in a system in which it is acceptable to lend in which you are guaranteed a return no matter what happens to the other. Since some small players can and do benefit, we all accept a system that overall impoverishes most of us.
I would never say outlaw usury, I would say just do not make us pay to enforce usurious contracts. they is necessary, and sufficient to end it.
Feel free to forward this by email to three of your friends.
We cannot even think of a world in which originary interest would not exist as an inexorable element in every kind of action.True, if you presume a world in which usury is acceptable. In the section cited, he compares an investment in a hotel in which the interest (usury) paid calculation prices out the project as untenable, to another location where the costs are lower to the interest rate works out, by all calculations. And indeed, if and when interest is universally charged, it becomes a necessary consideration in overall calculations. Thus, interest (usury) once allowed, becomes a necessary consideration since competitors will avail themselves of such factors.
This is similar to the phenomenon of building material codes. Once there is a government enforcement of building codes, and usury to collect power in ever fewer hands, the big boys begin to design the materials, own the patents, write the codes that all builders must follow. This monopoly is necessarily lower quality products, which then make for costs dropping due to subpar while prices rise due to inflation. Small builders create profits (rents) for the big boys by at once paying higher interest rates and being forced to include materials in construction in which the same big boys turn a profit. Further, the meager profits of the small boys are taxed to pay for enforcement, while the big boys pay no taxes whatsoever, with the government concessions for the big boy projects. The introduction of government supervision of health and safety leads to a downward spiral in health and safety and community wealth. The small quality builder is forced to build junk, but on the other hand, he need only be slightly better than the horrors produced by the big boys in order to earn a living.
Education saw the same thing. As govt supervision of education increased, public education went very far downhill fast. Private schools need only be slightly better to charge a super-premium price. Private schools today would be disgrace in the 1950s, but that does not matter. The comparison is what sells.
As to Mises comment, a Moslem would ask "Why not just invest in the hotel, instead of lending money at usury?" And certainly Christianity teaches the same thing: don't invest at interest (usury), invest as a participant in the profit and loss.
But we live in a system in which it is acceptable to lend in which you are guaranteed a return no matter what happens to the other. Since some small players can and do benefit, we all accept a system that overall impoverishes most of us.
I would never say outlaw usury, I would say just do not make us pay to enforce usurious contracts. they is necessary, and sufficient to end it.
Feel free to forward this by email to three of your friends.
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