City Tutoring Discussion Forum

One of the dogmatic articles of faith in the American enterprise is the idea that "time is money", i.e. that usury, charging of interest on a loan, is an essential part of the economy. But this statement applies especially to those who have large sums of money and who are collecting interest on this money.

If we accept the idea that usury is an inevitable aspect of any economy, then this results in a fundamental change in what money is. Ordinarily, money exists as a means to the end in a goods-based economy, where money can be seen as a conventional, man-made, addition to the natural order to facilitate man's participation in creation. If there were a prudential way to justly achieve this end, then money as an entity could be done away with.

But, in the economy that elevates usury, money becomes the end. This must be the case, because if real goods and services (e.g. food, housing, etc.) were the true end of the economy, then usury would be a grave violation of that end. This is because someone could only charge money on a loan if it was the case that the money that they are loaning could rightly be used for the expressed purpose of obtaining more money, so that the borrower would be obligated by justice to repay the lender for his "opportunity cost".

So if money is the natural end of the economy, then we can see why honor as a public virtue has essentially been totally erased, and instead all of the people that are admired are just whoever has the most money. It also makes sense why there are many elderly people who are completely destitute of wisdom, and whose children show a clear mark of their inadequacy as a parents and people in general, but nevertheless are glorified by many for the fact that they are wealthy (albeit implicitly). In this scheme, sitting on the couch and watching TV for years on end becomes diligent and "productive", so long as one is collecting interest on his principle that he amassed in his youth (e.g. retirement).

And if one is to affirm atheism, so that morality is a means to the end of peaceful society, the economy becomes the highest instantiation of this idea in public society, and the economic order becomes the one that demands the utmost adherence to its doctrines. For this person, then, money, per se, becomes the end of the totality of human life, as the natural end of that which bears the greatest demand on his conscience. Time is money, and money is the end of the economy, and economy is the proper end of life, therefore time, per se, is good. It becomes good to exist within time, existence becomes the highest virtue.

Please share your thoughts on these things.

lowkey i think you're onto something.

Once money stops being a tool and starts becoming the thing we're all optimizing for, everything else gets flattened into "economic value." suddenly your worth is your net worth, relationships become networking, free time has to be "productive," and even rest feels like a moral failure.

the weird part is that we all know this is happening, but we treat it like it's just common sense. Two guys at my old job got literally fired because they took a break that was 5 mins longer than expected...so ridiculous.

if wealth can endlessly create more wealth while people who actually make society function are barely getting by, then maybe the problem isn't just individual greed. maybe we've built an economy that rewards owning more than contributing.

a healthy society should measure itself by whether people can live with dignity, care for each other, create beautiful things, and actually become wiser, not just by how efficiently capital compounds.

money should serve people. people shouldn't serve money.

The argument you might hear justifying interest is that the person offering the loan is taking a risk that they won't be paid back and that interest is compensation for said risk. Mind you, this argument falls apart when we talk about student loans, where the borrower cannot default, or predator loan businesses that receive most of their revenue from late payment fees and interest.

On a macro level, fractional reserve lending is a scam. Let's say you deposit $100 in the bank that holds 10% of deposits in reserves. Shortly after a customer gets a loan for $90, and now only $10 is left in the vault. How much money do you think exists at this point?

In a sane world, you would say exactly $100, but under fractional reserve lending there is now $190 in existence. Note that the customer with the $90 loan will likely deposit money in another bank, where 90% of that deposit will be lent out. If all banks had a 10% reserve requirement, you'd increase the money supply 10x (i.e. the money multiplier effect is the reciprocal of the interest rate). Note: this textbook example assumes a reserve requirement. The U.S. actually has no reserve requirement for banks. They can create as much money as they want, and if they're short they can borrow the reserves.

You may wonder what happens when you pay back a loan. In that instance you are destroying the money supply. If everyone attempted to pay back their loans at the same time, you'd have an economic depression. This is why central banks are terrified of deflation, and why inflation is so persistent. Banks continue to create money out of thin air, and to stop would be disastrous. I don't think this will continue indefinitely.

On a positive note, the state of Texas has an official bullion repository where they claim to be working with a vendor to create debit cards for account holders. Sometime in 2027 customers will be able to use their deposits as currency, because the debit cards will be able to convert gold/silver amounts to cash based on the current spot price. Personally, I have some physical gold and silver saved and I'm waiting to hear news about the debit card before I open an account. Also you don't have to live in Texas to open an account, so have some hope for the future. There is a way out.