[Spaceships] Islamic Banking and Financing Spaceships Purchases

[vicky_molokh]

Originally Posted by malloyd

Do you actually want an economic system to reduce the problem to an un-notable one? Because to the extent you do, you inevitably reduce the willingness of people to loan anybody money. That's largely the point of relaxing the religious bans on usury in the first place after all - they sound nice if you are usually a debtor, but the practical effect isn't debtors are better off, but that there are no debtors because nobody will loan them anything.

Completely pushing the responsibility onto bank would indeed discourage existence of banks. Thus the search for mutually acceptable alternatives, and for divergent paths spawned by the cultural sentiments mentioned. Though right now I feel like asking for a brainstorm about how to best make a divergent techpath facing a given direction results in mostly being pulled onto the Modern Homeline Terran techpath.

Originally Posted by Anthony

Not sure how that's a problem. People should want to avoid debts they can't pay off. The goal with things like bankruptcy law is to have a penalty that's large enough to discourage the unwanted behavior (people borrowing money they cannot or will not repay) without being utterly crippling. You can certainly argue with the proper magnitude of the cost, but there has to be a cost. Unless of course you want credit to be unavailable.

Ideally, credit will usually be unavailable for things that are not likely to fail, unavailable for things that are likely to result in bankruptcies. Also, ideally, the cost for debtors who failed to pay up due to their own faults should be significantly higher than the cost to debtors who failed through no fault of their own (e.g. due to a significant shift in inflation of one currency relative to another). Clearly at TL8 of our techpath, things like mass hard-currency debt mis-evaluations are still a thing.

Originally Posted by Anthony

What is it you think is the root cause? It's not interest. Interest is not per se bad. The root problem is borrowers making bad financial decisions and bankers encouraging people to make bad financial decisions. You can't legislate away stupidity, but you may be able to structure the financial system to discourage it.

'Bad' is something of an ethical judgement, while I'm trying to make the two techpaths into rivals with no clear winner. Anyway, interest itself is not the sole contributing factor here. However, the 'ability' to apply interest in an unconditional way seems to be part of the contributors to such issues.

Originally Posted by Anthony

It's impossible to make the problem un-notable; credit cannot exist without a means for the lender to profit, and an enforcement mechanism to require borrowers to make an honest effort to repay their debts. This is, necessarily, going to be bad for people who fail to repay debts.

This assumes a captain who is honest and competent. Neither of these things can be taken for granted.

Well of course a good system should encourage/reward both competence and honesty, and punish the opposite.