>This is particularly useful for those who aren't born into wealth: Credit is practically the only way for normal folks to access productive capital
Look at studies on credit it results in bias against minorities. It’s one of the reasons behind the deregulation’s leading to 2008 real estate crisis, the fact that these biases were showing up in home ownership and they tried increaseing homeownership amoung minorities.
That “experiment” greatly failed proving your point, that in a credit based system, a credit rating based on factors such as assets, income, existing liabilities is necessary in determining how much to lend and the risk/interest. I definitely don’t dispute the way the system works, just I think it’s a bad system.
For every rich person who benefits with access to capital they can manage and payback, or normal person who gains a house they struggle with paying for 40 years or more; the otherside, is indebtedness an evil of society (put the 1M defaulted student loan people in this category - the will effectively be paying for that house for 40 years only not for an asset that at least historically will appreciate, but a sunken cost) and what I mentioned before which is a statehood of nearly second class citizenship where one will never gain access to banking services much less credit.
I see your point baby/bath water...why get ride of the system instead of fix the problems. I’d say the credit system creates those problems, and that’s definitely not to say the same bias in homeownership rates/percents wouldn’t show up in more of a cash/capital based system with no credit. But at least those unnecessary and IMO evil classes of society (bad credit/no credit) wouldn’t exist. At minimum I’d be curious about two such systems in the US side by side, and with all the talk/interest in startup cities maybe a non credit based city could be tried - though I can’t solve how it could be created fairly within the existing national system of credit.
Look at studies on credit it results in bias against minorities. It’s one of the reasons behind the deregulation’s leading to 2008 real estate crisis, the fact that these biases were showing up in home ownership and they tried increaseing homeownership amoung minorities.
That “experiment” greatly failed proving your point, that in a credit based system, a credit rating based on factors such as assets, income, existing liabilities is necessary in determining how much to lend and the risk/interest. I definitely don’t dispute the way the system works, just I think it’s a bad system.
For every rich person who benefits with access to capital they can manage and payback, or normal person who gains a house they struggle with paying for 40 years or more; the otherside, is indebtedness an evil of society (put the 1M defaulted student loan people in this category - the will effectively be paying for that house for 40 years only not for an asset that at least historically will appreciate, but a sunken cost) and what I mentioned before which is a statehood of nearly second class citizenship where one will never gain access to banking services much less credit.
I see your point baby/bath water...why get ride of the system instead of fix the problems. I’d say the credit system creates those problems, and that’s definitely not to say the same bias in homeownership rates/percents wouldn’t show up in more of a cash/capital based system with no credit. But at least those unnecessary and IMO evil classes of society (bad credit/no credit) wouldn’t exist. At minimum I’d be curious about two such systems in the US side by side, and with all the talk/interest in startup cities maybe a non credit based city could be tried - though I can’t solve how it could be created fairly within the existing national system of credit.