Sure. We can also largely do without abortions, divorces, heartbreak...

I apologize for sounding dismissive, still in a bad mood from the other thread. But certainly you see that all judicial systems rely on coercive power to enforce decisions. At the international level that remains war. Even the most pure UN led interventions need bodybags.

So you didn't actually offer a counter argument, you just kind of missed my argument.

I agree with you that there isn't really much existing regarding international law or UN authority and so unfortunately I cannot rule out war. It will be war frequently. No doubt about that.

Nevertheless I reserve the right for me to be optimistic that most conflicts regarding debt and credit can be solved non-violently one way or the other, if only because war is quite costly too. My guess is that rules and cooperation help there. So development of common international rules is a good thing and before you can even think of starting a war you are so dependent on each other that war is almost impossible.

This doesn't mean war won't happen. It will.

If you are more pessimistic and predict it always to happen... well it could be but probably would also be a sign of a very sad world where we don't talk or make compromises but just shoot at each other in case something is not to our liking.

I guess Im not being too clear - for I do not predict war (nor do I want it) for all or even for most debt default situations.

What tends to happen with international defaults are economic consequences. These harm the citizens of the country that defaulted relatively to the rest of the world.

So when I implied higher up that incentives contributing to default are bad, this is the typical harm that concerns me - not the fact the creditors lost money. Although that also counts for something.

What is happening more and more nowadays is that we all are too self-centered. When we (and Wpegg's post I jumped on is a perfect example) look at people that we borrow from and see no responsibility implied, we are losing the glue that holds society together. We only see what's in it for us - no empathy, no respect.

And that corrosive effect to society also comes from higher order effects. We might have gotten the money and then defaulted (hahaha molon labe), but then we lose something that maybe should be more precious to us - we are losing a lot of trust, with the folks that lent to us certainly and with others that would think of it. It will be much harder to cooperate in the future. *

Cooperation is kind of a big deal. And yet I constantly see that these kind of "social" costs are being ignored in the calculation of Should I or not do xyz?


* There's a lot of "easy" money being created and fueling irresponsible credit expansion and consumption. But that will not last forever, and neither will productivity gains from technological innovation happen without investment. There's also a lot of people that apply Keynes' "In the long run, we're all dead" but I personally would like to perpetuate human civilization, even if I know I'm not going to be around much longer.

I think I know what you mean but then what to do with difficult to quantify concerns about social glue or cooperational advantages?

It's important to honour contracts, not only if they are in your favor but also when it hurts. It's one of the pillars of society.

Regarding debt I think what we need is a different view on default. After all risk premiums are there to cover for the case of default. So it's not really a bad thing. It just happens. What we need are some commonly agreed on rules what to do in case of a default. An organization that can mediate between creditors and debtors. I don't really see a reason to treat international defaults any different from household defaults. You pay a reasonable amount of money, the creditor makes some loss, you are free to go, people will probably mistrust you for a while but eventually they will forget.

Economical consequences are needed for this. And anyway, everything everyone does has economic consequences. So nothing inherently bad about them.

How much is the critical question rather. There the principle could be to spread the losses equally on all involved parties.

And for social glue. Ask unemployed people what they think about social glue. They will tell you that once they have a job they will start thinking about it. So jobs are a very good start for social glueing.

Cooperational advantages, sure they exist. Individuals tend to underestimate them, kind of "only missing them when they are not there anymore" effect.

You could vote for a party that promises implementing policies that aim for exactly this effect (universal health care, social security, participation of unions). The idea would be that in the end it pays for itself (if it is so advantageous it should be able to pay for itself otherwise it's fake). Everyone is better off and they see the advantage and support this. You only have to try.

Counter-example: France and its CTG union. The country has a difficult time and the CTG union strongly opposes the proposed legislation aiming at more flexibility.

Is CTG really interested in making the situation better for everyone? What about umemploied people who may get a job because of the proposed legislation? What if they make it worse for everyone instead because even more jobs get lost? Will this increase or decrease social glue?

So much for cooperational advantages. Sometimes this can mean that all pay a bit more in the short run to have more in the long run.

A better question would be 'is the government responsible for the debt incurred by its own reckless spending of tax dollars it steals in the name of social progress?'

The answer to that would be NO. There's election to rig, minds to manipulate, and if all else fails, there's always a powerful military to keep polished, just in case the panic button needs to be pressed.

Is fragmentation necessarily bad? Decentralization of power, etc (I'd guess you're familiar with the case for it, so I won't elaborate). My chief worry is whether decentralization is possible without violence at this point.

About Slate Star Codex: I don't recall ever hearing of it before. I'll check it out. It'd be nice to have a place to explore ideas where you don't get downrepped for starting what's been a civil conversation about an (imo) interesting topic.

We talk and understand each other's values. ;)

Will make just a few points of minor disagreement / addition. Mostly we're on the same page.

Regarding international intermediation - without enforcement teeth it won't achieve anything meaningful. In the good times everyone was ok to pretend that international organizations had power, since it was not that costly to pretend. As the times became harder you see what's happening to the power (end even the integrity) of supranational bodies. (The EU obviously, but look also at OPEP)

Also, the reason debt is easly "forgotten", and therefore forgiven is likewise related to excess of money from the "good times" and artifcially extended by monetary maneuvers of central banks. Things are getting rougher however, and the consequences for default will become harsher I expect. (Greece or Argentine or Venezuela are nothing - consider the likely consequences of some kind of default in China - US relationship for the real global stakes to become clearer)

Distribution of losses equally incentivizes irresponsible behavior. We have enough of irresponsible behavior. The trend has been too much welfare and removing any negative consequences due to misfortune. Doing this is precisely what has caused us (oh yes, me too) to increasingly take risks - knowing there is a safety net and no downside. Even if it's not conscious calculation it's observation that others are "gambling" and not suffering consequences for "losing", therefore I'll also bet and maybe I'll get lucky.

Jobs are about trust. You give someone a job if you trust them. No one will give you a job if you are telling them that "I'll behave differently after I have a job". Trust is earned - and more so when no one is looking, so to speak. Someone that trusts indiscriminately is properly called foolish, and typically the folks that can hire others are the opposite of foolish.

Ergo, welfare states are dissolving the social contract and contributing to increased individualism and egoism and loss of duty towards others. They are the ironic culmination of trying to increase solidarity without proper evaluation of consequences.
It isn't necessarily bad. But as you point out it increases the risks of reduced cooperation at the higher level.
Decentralizing inside of larger politic is a win win of sorts. The kind of divorce - we go our own way fragmentation is much more lose lose though.