Reputation Isn't Good Enough

[Guest Ethan Glover]

I wrote an article on why reputation can't sustain a justice system and why its an unreliable go to factor. It can be found here.

[ProfessionalTeabagger]

Good article. You mention the creativity of scammers and also some examples of how reputation may fail today as a deterrent but maybe not enough about the creativity of anti-scammers (who will have the advantage) and that the examples are within the context of a statist system. Anti-Scammers will have access to most of the resources and money as the majority will be supporting them. Reputation is not particularly effective with debts today because unless the law's coming after you few people will consider your rep to be that bad. Take the state away and there'll be lots of incentive to come up with solutions. Not having a criminal record will no longer be much of a guarantee that you are a reliable person to lend to. Lenders will HAVE to check people's rep.

Saying we MUST solve issues now may be falling into a trap. We CAN'T solve these issues now because any ideas we come up with cannot be sufficiently tested and the statist apologist knows that.  They do not stay statists because WE have failed to solve things anymore than theists stay theists because atheists have failed to show a belief in god is not justified. Ultimately it's morality that will sustain a justice system. 

[Guest Ethan Glover]

Well thanks for putting some consideration in your thoughts.

 

The entire article is indeed set to the tone of an already free society, its why Ireland was an important example. Today scams are put out through e-mails or done in person. You can talk about solutions to these things, but the free market is probably already doing it. The effectiveness of those programs is far from the point. Contracts are legally binding. You can't take money from someone and give a legal promise to pay it back, and then refuse to do so. No private court is going to say that it is the creditors fault for loaning the money in the first place. As is mentioned, this gets rid of both commercial and private incentive for loans in the first place. If the contract isn't just right, if it's not "professionally written" (by some arbitrary standard) that signature doesn't mean anything?

 

Saying lenders have to check people's reputation doesn't say anything, they already do. It misses the point that you can literally con someone (such as "family" or "friends"), steal their money and never see any repercussions. You can go your whole life being a thief and never be called a criminal as long as you balance things right. And, once you become a serial criminal (because that's OK) you'll probably mess up at some point, and your reputation will be very heavily damaged, forcing more crime. This was the entire point brought up by the leftarchist. The idea doesn't work. Incentive to come up with "other" solutions doesn't matter, you're still allowing crime to happen and placing special rules on things. It's like how Batman won't kill anyone, so Joker keeps upping the ante just because he can. You can do all you want, but unless you get to the core of the problem, all you're doing is challenging scammers, and because they will always exist, you will never win unless you make sure you're not just playing games. Theft is wrong, period, no exceptions.

 

When I say you must solve an issue, I mean it's not effective to ignore the current victim and pass on the responsibility of punishing this person to the future. I even outlined exactly how this has been solved in the past and can be solved in the future.

 

In short, I don't think any of the points you brought up actually address the article. It's closer to the original claim that it already answers and it doesn't adapt to the new points at all.

[Guest Exceptionalist]

Yeah, right. I found a realy good taobao agent - alsotao.com - and the site provides all necessary information, including that they charge shipment by actual weight. A guy was bitching about a surcharge for overweight, although he could have known it beforehand, so he complained about the fact to the service team and tried to get his way by blackmailing them to write an article on a "customer complaint site." They refused and the article exist. No article gets deleted on this site but no sane person would assume that the customer is allways right either, just because he is bitching about something on a "reputation blog." Not to mention downvoting based on conformation bias.

[LifeIsBrief]

You seem to be arguing that debt is good and acceptable.  What I would argue, though I may not be a traditional ancap, is that only trusted friends and associates should lend anyone money.  The entire concept of banking is suspect, and to call banks "victims" as you do, is a bit insane.  Not lending money to people unworthy of credit is part of your responsibility as a lender.  "Debtors prison", is about using tax dollars to bail out banks that make bad choices.  People should lend money to friends and family, or invest in organizations (currently called banks) if and only if, they do incredibly exhaustive background checks.  "Banks" designed specifically to cater to "low reputation" debtors, will offer insane interest rates, constantly be ripped off, and most will go out of business.  They will be a bad investment.  In our current statist society, however, they are a great investment, because the government and taxpayer will bail them out.

 

If people "desperate for a second chance" find it difficult to get loans, that is a good thing.  Will that extremely small number of people turn to crime?  Probably... that's why a well armed populace that respects self defense is important.  Those people will get killed for trying to force people to give them money.  That's life... Am I missing something?  Are you really saying "Those poor criminals who refuse to work for a living will get shot trying to steal money"?  There aren't many people who will take up that lifestyle, and they're not "poor", in the sense of "you should feel sorry for them".  They're cruel.

[Guest Ethan Glover]

Loans and investments are what built society and what will continue to build it. Friends don't build multi million dollar businesses. (And no, not everything can start small.)

[LifeIsBrief]

That's where community banks can come in, or community investing.  Why will a bank invest your money, more prudently than you will?  Doesn't your self interest, trump theirs?  Maybe bankers are just smarter than everyone else?... I don't think so.  I'm not saying that investment and loans should cease to exist, I'm saying that people should have a personal stake in them, and only make them after actually getting to know someone.  Giving strangers money, didn't build society.  As to "no, not everything can start small"... prove that.  A large portion of the worlds largest businesses turned a small profit, then looked for venture capital, also known as personal loans, because the banks didn't want to fund anything "risky".

[Guest Ethan Glover]

It's not realistic to "personally get to know" everyone that you contribute loans to. The reason things like banks and Lending Club works is BECAUSE its passive, and you don't have to be a professional. Yes, giving strangers money did build society, don't fool yourself. I'm not going to reply anymore because I either you're not taking this seriously, you're not thinking at all about what I'm saying, or this is really... "THAT easy" which I don't believe for a second.

[LifeIsBrief]

Those aren't arguments.  I'm taking this very seriously.  It is entirely realistic for 99% of the people, to spend time getting to know people they plan to invest money in, because they don't have much to invest.  Even if what you are saying is true, it would not be more passive, and you have to be an even greater professional.  Being able to decide which investment firm, is the better professional, requires much more expertise, than investing in people you know.  Large investment firms don't decrease complexity, or making investing more passive, they actually make it more complex and challenging.  Instead of being a "professional" investor, you need to be an expert in comparing and contrasting different professional investors, if you want to have success.

 

Finally, "I want passive income", can easily be rephrased "Give me free money, because... Magic!".  It's not an investment strategy, it's a strategy for self destruction.

[Guest Ethan Glover]

Funny, 2 years of Lending Club has been one of the best investment decisions I've ever made. I didn't even have to ring any doorbells or ask personal questions. No bringing bottles of wine to the house, treats for the pets, presents for the children. Just a few clicks and I go about my life. Hell, now that I've made so much I've gained prime membership where they do the work for me. I don't even have to click. Amazing! I didn't even have to shake any hands!

[Wesley]

I also do a similar thing with Prosper.com. I set up an auto-investment profile for how much I wanted to invest with which type of person and then it just auto-invests. All I need to do is transfer some savings to Prosper, and the rest is done for me.

 

There are limits by credit rating, term of loan, amount borrowed, and many other things. I can also diversify my P2P holdings by putting a small amount in each one and then factor in an expected loss rate to my expected yield.

 

In general, it has been a fairly easy way to consistently and painlessly make a decent return.

 

My riskier money goes into bitcoin, but that's a bit of a different animal.

[Guest Ethan Glover]

Same here, Lending Club is an easy 5% with no thinking really. I use CloudHashing for Bitcoin and for my savings account I go with BullionVault. Gotta' love the internet, so chaotic, so beautiful. lol While banks are getting 0.00000001% returns on CD's we're actually getting proper rates.