So mostly, in dath ilan, they don't have banks as such; people invest in equities, which automatically get sold off in fractions whenever they buy a pair of shoes.
But if you showed a dath ilani your current banking system and asked us for the nearest fix, we'd say that the… Show more
Conversation
Example of a correct solution / actually stable social structure out of dath ilan: Assets are overwhelmingly equities that actually vary with their market-expected value, rather than fixed-rate 'loans' or 'bonds' which have no visible variance 95% of the time and blow up 5% of the time. Rapidly buying and reselling those equities doesn't have tax consequences because dath ilan runs mainly on land taxes. (Wacky experimental cities with higher taxes have property or consumption taxes; dath ilani know that if you try to tax paper ownerships rather than physical stuff, the paper will twist up into strange shapes.)
People who can't afford to buy things in cash will usually rent them rather than buying them on loan. "Mortgages" are not a thing. "Car loans" are not a thing because the roads are entirely automated and transportation is a service. Most people don't need student loans because education is not a guild monopoly on credentialism, but the few who do want expensive training offer Income-Sharing Agreements whose market price is then a signal of whether the market thinks you'll be able to learn that job. The whole economy is systematically less leveraged compared to Earth: there's a class of people who made a lot of money and now need to invest it, and a class of people who are starting new companies and need a lot more money than they have; but the average human being in dath ilan is not in debt, and mostly holds shares of bundles of mundane capital assets and concerns like a city waterworks.
There is then no concept that the various sources of investment (which then form equities rather than illusionary-fixed-rate 'loans') are places where you would "keep" your shares of asset bundles (index funds), any more than a Silicon Valley company keeps their liquid assets in a complicated custodial arrangement with the venture capitalist who funded them.
It's fair to say that dath ilan doesn't have banks. Lots of investors and asset-holders, but few loans, and no banks.
Patchwork solution to insurers going bust: Reinsurers, govt can sell up to 90% of the reinsurance so long as a supposedly bonafide licensed regulated private reinsurer is selling at least 10% of the reinsurance at an apparently bonafide market price. This being Earth, people… Show more
Quote Tweet
Replying to @ESYudkowsky
Wouldn't this simply result in insurers going bust during financial crashes, AIG-style?
2
2
26
On paper, the FDIC is funded by banks. In practice, the Federal Reserve and ultimately the US Treasury stands as a backstop to systemic crises that could break the FDIC, which is a subsidy. Also see en.wikipedia.org/wiki/Savings_a.
Quote Tweet
Replying to @ESYudkowsky
> The FDIC receives no Congressional appropriations - it is funded by premiums that banks and savings associations pay for deposit insurance coverage.
fdic.gov/about/what-we-
1
3
37
Renting + fractional ownership (purchase or sale) is pretty much chris cook's open capital concept. Asset based finance. Also reminiscent of the old Islamic finance concept of declining Musharakah.
2
> Assets are overwhelmingly equities that actually vary with their market-expected value, rather than fixed-rate 'loans' or 'bonds' which have no visible variance 95% of the time and blow up 5% of the time.
Sir your yeshiva roots are showing
1
Interesting ideas. Without commercial banks, would you have a central bank offer deposit accounts to ordinary people, for transactional money holdings? The average person does not want to have to choose between investments whenever they buy something or get paid.
1
1






