I don’t agree that the debt/capital distinction has changed all that much. Personal debt (for a mortgage on a house you’re occupying, or for student loans, or for other non-income-stream purposes) isn’t much of a driver of economies or decisions at scale. Corporate debt, as compared with share ownership, is still an important claim on future income/assets.
I guess I’m saying the standard microenomic model dominates—profits are good, and debt represents reduction of future profits. Investments (non-consumption lending or spending-with-expectation-of-future-returns) pretty much behave as you say. Consumption spending never has.
It’s not clear why you’d expect debt ties borrower and lender together more than share-based investment does. Usually the opposite is claimed, and that matches my intuition as well.
Or maybe I’m missing the “compared to what” in this claim. Debt and shares are both “access to capital”, and they have different result curves which lead to preferring one or the other for different risk profiles (and tax policy messes with this a lot). But they’re roughly the same in terms of how effectively the money can be deployed as capital.
edit: retracting this—I read the link and realized that the post’s summary had very little context that tied it to the social justice roots of the concept. I don’t have a lot to say about the distribution of wealth, disconnected from use of capital to actually make stuff.
I don’t agree that the debt/capital distinction has changed all that much. Personal debt (for a mortgage on a house you’re occupying, or for student loans, or for other non-income-stream purposes) isn’t much of a driver of economies or decisions at scale. Corporate debt, as compared with share ownership, is still an important claim on future income/assets.
I guess I’m saying the standard microenomic model dominates—profits are good, and debt represents reduction of future profits. Investments (non-consumption lending or spending-with-expectation-of-future-returns) pretty much behave as you say. Consumption spending never has.
It’s not clear why you’d expect debt ties borrower and lender together more than share-based investment does. Usually the opposite is claimed, and that matches my intuition as well.
Or maybe I’m missing the “compared to what” in this claim. Debt and shares are both “access to capital”, and they have different result curves which lead to preferring one or the other for different risk profiles (and tax policy messes with this a lot). But they’re roughly the same in terms of how effectively the money can be deployed as capital.
edit: retracting this—I read the link and realized that the post’s summary had very little context that tied it to the social justice roots of the concept. I don’t have a lot to say about the distribution of wealth, disconnected from use of capital to actually make stuff.