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Thread: Value Added to Society by Idle Shareholders and Landlords

  1. #76
    Spanish_Vicente sledger's Avatar
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    Quote Originally Posted by Uppercut View Post
    Haha whaaat. You’ll need to elaborate. This opinion has blown my little economist mind.
    Haha, I am mainly baiting. But generally I am very suspicious of things done on the basis of the "public good". It's another notion, like "justice", that is used by people as a synonym for "what I want to happen".

  2. #77
    cpr
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    Quote Originally Posted by weldone View Post
    In my discussion with harsh earlier in this thread, I have hinted upon a system where all people working for a Company own the Company. In such a system, your father would earn much more from his job and would be less dependant on pension.
    Possibly true if the company is succeeding. What happens if the company is struggling? Surely under that model the staff would take the hit.
    In my fathers case, he's worked as a truck driver for a number of years, and has seen a few redundancies in the last 25 years due to higher haulage costs (fuel taxes etc) and overseas competition (deliveries from Europe being brought over by their drivers not shipped then UK hauled). Its quite likely in that model he could easily lose a job because of outside influences (as a very simple man, he's no interest in business management, just wants to turn up, get a decent wage, and then go home), and probably have suffered months of decreased wages in the lead up. In the current system, shareholders take that risk, leaving him to earn a steady wage without the pressures of business he doesn't care for

    He'd also be less dependant on a pension if he didn't **** away so much each month - honestly the guys really comfortable off in life (no mortgage/debts etc, wage over the national ave), but having a good pension just means he doesn't need to slow down his drinking when he retires.
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  3. #78
    Hall of Fame Member Ikki's Avatar
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    Quote Originally Posted by weldone View Post
    They have invested in products or services with the goal of benefiting from other people's hard work.
    Those people's hard work benefitted from their investment. They made a mutually beneficial arrangement. No one is getting fleeced. If I have a 100 million dollar idea, unless someone gives me a shitload of money I can't get it off the ground without investment. Without that investment, I'm just a man with an idea rather than a 100 million dollar company that employs people and gives value to society.

    Their correct estimations and consequent success allows them to make more investments so that they can get benefited more from other people's hard work.
    See above.

    Do you know anyone who has put all their money in one Company? In my experience, any investor who has an iota of sense invests in a diversified portfolio. Yes in theory they can lose all their money (just like anybody else) but in reality the 99.9%ile worst case is losing a chunk of their money.
    You misunderstood me. I am not saying they put all their money in one company, although they can. The point is if all they are is an investor (essentially, the worst POS in your theoretical world), they can lose all their money risking it by investing in other people. Would you rather they just bought Picassos and played Polo all day?

    Ultimately, it is a good thing and if you don't concede that then there is no point discussing how much of a good thing it is because that is the only debatable thing here. Without capitalism, investment in capital, the world would be a poorer place. Because of capitalism, human poverty has been reducing at a world-changing rate enough so that people forget that 99.9% of people used to be dirt poor.

    As I said earlier in the thread, if landlords aren't allowed to buy properties to rent out, the property prices will go down sharply. Houses will become much more affordable. "Those that cannot afford to buy one" in the current system will be able to buy by paying less monthly mortgage payment than their current monthly rent.
    It's the very opposite of what you suggest.

    If landlords continue to buy properties to rent out, it will increase the supply of rented properties which means rent prices will go down sharply due to competition. The more landlords do this, the more properties are supplied and property prices will go down. This is econs 101.

    P.S. what you're arguing is the nonsense Communists argue.

    Quote Originally Posted by weldone View Post
    In my discussion with harsh earlier in this thread, I have hinted upon a system where all people working for a Company own the Company. In such a system, your father would earn much more from his job and would be less dependant on pension.
    It already exists: capitalism.

    People don't have this arrangement, unless they're forced, because it mostly will end in abysmal failure.

    I don't have any issue with landlords - they are regular people like you and me. I have issue with a system that rewards landlords for just "assuming the risk" rather than using their body and brain for purposes to quicken progress of human civilization.
    They are using their brains. Just building houses to let out is not a fail-proof strategy. Even the building of houses in itself is a managerial task that most people cannot do. Doing a difficult thing with your brain > doing something physical in the grand majority of cases, it's not really close.
    Last edited by Ikki; 07-03-2019 at 04:53 AM.
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  4. #79
    cpr
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    Quote Originally Posted by Ikki View Post

    If landlords continue to buy properties to rent out, it will increase the supply of rented properties which means rent prices will go down sharply due to competition. The more landlords do this, the more properties are supplied and property prices will go down. This is econs 101.
    Not really, unless there is a continuing build of new properties to match the number being bought to let. Otherwise rented properties will just become a larger percentage of the properties in an area, limiting house sales to those looking to get on the ladder (especially as most rental properties tend to sit at that end of the market), increasing the number of people needing to rent, potentially leading to price rises as demand increases.

    A property I rented for £580pcm 5 years ago recently let out for £750pcm. A nice 30% increase in 5 years is pretty much crippling for those in the rental market out of necessity rather than choice.

    (just checked another one, and the flat above one we rented for £650 in 2011 is up on the market for £1050pcm at the moment. Ouch)
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  5. #80
    Hall of Fame Member Ikki's Avatar
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    Quote Originally Posted by cpr View Post
    Not really, unless there is a continuing build of new properties to match the number being bought to let. Otherwise rented properties will just become a larger percentage of the properties in an area, limiting house sales to those looking to get on the ladder (especially as most rental properties tend to sit at that end of the market), increasing the number of people needing to rent, potentially leading to price rises as demand increases.

    A property I rented for £580pcm 5 years ago recently let out for £750pcm. A nice 30% increase in 5 years is pretty much crippling for those in the rental market out of necessity rather than choice.

    (just checked another one, and the flat above one we rented for £650 in 2011 is up on the market for £1050pcm at the moment. Ouch)
    It's contextual and I was simplifying to get to the point. People build new properties or don't for a multitude of reasons. That housing and renting prices go up and down (among a myriad of other considerations) all goes towards the argument that accepting the risk is not just some zero-sum game where someone buys a house and lives off of it in perpetuity. If building properties to rent makes money, people will do it. If it is to sell, people will do it. No one either building the properties or living in them is being taken advantage and it is to the mutual benefit of both that any value is created. An empty property with no one in it is not a good investment.
    Last edited by Ikki; 07-03-2019 at 05:29 AM.

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    Hall of Fame Member harsh.ag's Avatar
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    weldone has a decent argument for those cases where existing landowners lobby and get passed laws which limit supply of new housing. That's a hell of a racket.
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  7. #82
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    Quote Originally Posted by harsh.ag View Post
    weldone has a decent argument for those cases where existing landowners lobby and get passed laws which limit supply of new housing. That's a hell of a racket.
    just call them nimbys
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  8. #83
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    Quote Originally Posted by Spark View Post
    just call them nimbys
    You say that, Spark, but you should see what they did to Hurstville.

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  9. #84
    Hall of Fame Member harsh.ag's Avatar
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    Quote Originally Posted by Spark View Post
    just call them nimbys
    It's not just nimbys though. There are other policies which the nimbys may not (explicitly) support.
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    Hall of Fame Member weldone's Avatar
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    Quote Originally Posted by Daemon View Post
    You must hate REITs weldone
    Any doubt?

    Quote Originally Posted by harsh.ag View Post
    weldone, do you like VCs?
    I don't like anyone owning a part of the company just by paying money. Ideally I want everybody taking part in operations within a Company to have ownership, and anybody who doesn't have day-to-day involvement in ops to not own any %age. They shouldn't have access to the unlimited upside; only people who are actively contributing should have a reach there.

    This will mean a much bigger and more accessible debt market. As startups come with inherent high credit risk, that will get factored into the debt interest rates. 50%+ interest loans will be common for new companies, in case 'the-now-VCs' want to contribute through that route. If someone has a really good idea for a start-up, he won't mind high interest rates. But the others will stay away - driving the failure rate down. But the unlimited upside associated with ownership will lie with those who toil to make the startup a success, not with those who throw necklaces.
    Last edited by weldone; 07-03-2019 at 09:27 AM.
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  11. #86
    cpr
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    Basically you want to go back to eating mud?

    Because ****ing over anyone looking to start a business with a 50% interest loan is an absolute gem way to destroy small enterprise. And large enterprise.

    Maybe in weldoneworld Wonga's business model failed because they were too lenient on the interest rates.

  12. #87
    International Coach ankitj's Avatar
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    Quote Originally Posted by weldone View Post
    This will mean a much bigger and more accessible debt market. As startups come with inherent high credit risk, that will get factored into the debt interest rates. 50%+ interest loans will be common for new companies, in case 'the-now-VCs' want to contribute through that route. If someone has a really good idea for a start-up, he won't mind high interest rates. But the others will stay away - driving the failure rate down.
    That will mean lot of ideas go unfunded, possibly leading to lower employment too. I don't know if failure rate will go down; absolute number of failures may go down but so might absolute number of successes.

    What do you gain in this system though? Just keep some people from getting filthy rich? While risking a situation where there might be lower employment?
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  13. #88
    International Coach ankitj's Avatar
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    Not to mention, conventional debt has more stringent conditions on interest payments. Shareholder profits though can ne reinvested over and over again.

  14. #89
    TNT
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    Quote Originally Posted by weldone View Post
    Any doubt?



    I don't like anyone owning a part of the company just by paying money. Ideally I want everybody taking part in operations within a Company to have ownership, and anybody who doesn't have day-to-day involvement in ops to not own any %age. They shouldn't have access to the unlimited upside; only people who are actively contributing should have a reach there.

    This will mean a much bigger and more accessible debt market. As startups come with inherent high credit risk, that will get factored into the debt interest rates. 50%+ interest loans will be common for new companies, in case 'the-now-VCs' want to contribute through that route. If someone has a really good idea for a start-up, he won't mind high interest rates. But the others will stay away - driving the failure rate down. But the unlimited upside associated with ownership will lie with those who toil to make the startup a success, not with those who throw necklaces.
    Who is going to earn this 50% interest.
    If you nick it walk

  15. #90
    Dan
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    Banks, who are Very Very Good and currently insufficiently profitable. But that means shareholders get higher dividends, which breaks the system. So nationalise the banks and redistribute their profits as UBI. Or something. Only there won't be any profits, because nobody is going to borrow at 50%.

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