Cloud products, usury, and the death of property

February 20, 2017 § 41 Comments

Human beings used to be reasonably capable of distinguishing reality from imagination, at least in the boots-on-the-ground world of day to day life.  Property at one time referred to something real, something which exists in its own right. Thus property could be possessed, repossessed, bought, sold, stolen, consumed, or destroyed independent of the property’s owner or of any other particular persons.

Human beings and possessions were understood to be different things, with the notable – but at least clearly delineated – exception of economic chattel slavery, not to be confused with prison.

Then along came widespread acceptance of usury. Liberal modernity counts, as one of its crowning achievements, the destruction of chattel slavery.  As with all of liberalism’s putative emancipatory achievements, this is illusory.  Rather than freeing humanity from the objectification inherent in chattel slavery, liberalism has merely driven this objectification into the subcutaneous socioeconomic metalayer, implanted it under the skin, making it that much more difficult to see and resist.  As always liberalism does not actually “free” us from authority as it pretends to do: it simply makes authority sociopathic.

The old tyrannies could at least be seen out in the open. A man knew where he stood. Now the tyranny comes cloaked as the seductress “freedom”. Liberal tyranny boils up from under layers of flesh, lurks inside clinging to the bones as it gnaws away at internal organs and releases its offal into the body. If paganism, Mohammedism, and Rabbinic Judaism are packs of hyenas harrowing Christendom, liberalism is a cancer that eats away at it from within, an alien embryo feeding on its host as it releases a thousand horrors.

But I digress.

Property is objective[1], that is, it consists of objects independent of any particular human subject or subjects.  Owners are human subjects, human beings independent of any particular property. Take away a man’s property and you still have a man.

You can tell who truly owns what by asking what happens when the music stops: by asking what, at the end of the day, secures each person’s claims. In a recourse mortgage the borrower “owns” the house and the lender owns the borrower, because the lender is contractually entitled to collect deficiencies from the borrower if selling the house does not fully discharge the borrower’s contractual obligations.  The situation is even worse than that though, because in the case of taxable real estate the sovereign really owns the property and leases it back to the tenant (whom we deceptively label the “owner”).  Real estate “owners”, then, don’t really own the actual property. The sovereign owns the property and what the “owners” really own is exclusive leasing rights: a kind of financial security.  That isn’t nothing, but there is much less there than meets the eye. Real estate “ownership” where there are property taxes is a form of lie: what is owned is not land and buildings, but a perpetual[2] and exclusive lease on land and buildings.

Products dependent upon cloud software represent a new, technologically enabled phase in non-ownership “ownership”.  Cloud software or “Internet of things” products require a “mother ship” somewhere on the Internet in order to work. Without the mother ship they become literally useless; “bricked” in the vernacular. For example you can spend years of your life producing work with a cloud based – or even just cloud licensed – CAD program, under the illusion that you own at least your own actual work product. You don’t own the software, it is merely ‘licensed’ to you, sure.  But in fact you don’t even really own your own work product which you produced with the software using your own hands and mind, because you cannot even continue to access your own work without regularly checking in with the mother ship to ensure that license terms are met . If the terms and conditions change, or the company goes out of business or the mother ship crashes for some other reason, you can’t even access the features of your own “property”; not even your own accumulated work.

Cloud products represent a kind of legalized ransomware.  As with usury there is a superficial resemblance to legitimate transactions; in this case a resemblance to having sold or leased you some tools with which you can produce your own  work; work which you then own. The work you produce with cloud-based ransomware looks like it belongs to you.

But when the music stops your hammer no longer works, there are no other hammers which will work, and all that you have built with the hammer is hostage to the true owner’s terms and conditions.  You were never the owner of your own work product in the first place: you rent your own work at the pleasure of the private party who really owns it.

When philosophical anti-realism invades the domain of property, the distinction between persons and property disappears.  This erodes the distinction between persons and objects in spheres beyond property and ownership.

If you would like to see the great dehumanization reversed, I can’t really offer much hope. But I’d be happy to hand you a shovel.


[1] Nota bene: not physical or merely physical, since physicalism is false.

[2] At least for as long as the tenant continues to make payments, which can be increased at any time without his agreement.

The financial nanny state

October 1, 2016 § 20 Comments

Some folks seem to think that in suggesting that people are responsible for preserving their own property, from which it follows that they should not put their life savings into property they don’t personally understand (and instead should put their savings into property that they do personally understand), I am demonstrating a lack of empathy.

A different view though is that – unlike the modern financial nanny state – I am treating my readers like adults capable of making their own choices about what property to own, and living with the consequences of those choices.

If you don’t like monetary inflation – the fact that the number of fiat dollars which trades for a loaf of bread changes gradually over time – then by all means buy something other than bank deposits to serve as your life savings.

What you will find is that prices – the relative trading ratios of different goods and services – are not static.  And you will find that ethically preserving your property requires work, expense, and risk.

Now maybe your nanny didn’t tell you this.

But I’m not your nanny.

How to determine the price you are sold for in the slave market

September 26, 2016 § 28 Comments

boulanger-gustave-clarence-rudolphe-french-1824-1888-the-slave-market

Your personal price as a chattel slave, in dollar terms, is reflected in your credit rating. In this post I will outline a proposed methodology for calculating the price that you are currently selling for in the chattel slave market. I haven’t worked out the details: this post is really just a starting point.

Like many modern terms, ‘loan’ is used equivocally.

Suppose that you are a borrower of money. We can calculate your value as a chattel slave by looking at the differences between the non-recourse (and therefore non-usurious) loans you can acquire and the personally guaranteed (usurious) loans you can acquire.

Scenario 1: non-usurious borrowing

In one sort of loan — a non-usurious loan — you sell your lender a stake in some property that you are purchasing or that you already own.  You retain the use of the property, so you pay rent to your ownership partner (lender).  This rent is often called ‘interest’.  You may also buy back your partner’s share over time.  This is often called ‘principal’.

If your partner doesn’t know you very well, he is going to want to get some idea how well you will take care of the property that he owns in partnership with you. This kind of knowledge is provided institutionally by the modern process of establishing credit ratings. Based on your trustworthiness – whether established by credit rating or some other means – your lending partner may require a larger down payment (thus lower loan-to-value ratio) and / or may charge a higher rent (because he is taking a greater risk).

If you stop making payments for any reason, he can recover what he is owed by repossessing the property. Financially and morally this is the same scenario as a landlord evicting a tenant who stops paying the rent. Depending on circumstances, this may or may not affect your credit rating specifically or your reputation generally.  But your partner’s financial claims are limited to the property that you own in partnership.

In this non-usurious scenario, your trustworthiness as a partner with custody and use of the lender’s share of the property is reflected in the interest rate and in the loan to value ratio (and thus the size of the required down payment). These in turn are generally determined by your credit rating.

Scenario 2: usurious borrowing

In a usurious loan, the lender’s claim is not against property or only property: it is against your personal guarantee that you will repay the loan.  The thing you are selling to the lender in this case is not an ownership stake in property: it is a contractually binding ownership stake in you, yourself.  This will generally be reflected in a larger required down payment and a higher interest rate.

Calculating your price:

Your current market price as a chattel slave is related to the similarities and differences between these two kinds of scenarios.  Specifically it is related to the premium you have to pay in terms of larger down payment and higher interest rate for the unsecured personal loan.  I’ll propose the following calculation for the sake of discussion:

Take the largest personal unsecured loan you could get approved by a reputable lender with your current credit rating.  Then determine what size non recourse loan you could get approved – say to purchase some real estate – with the same down payment and interest rate.

Your current price as a chattel slave – the price for which your owners are currently buying and selling you in the marketplace – is the same as the price of the property that you could purchase with the non recourse loan.

The Mickey Mouse world of intellectual property

April 24, 2016 § 32 Comments

I don’t have strong views about intellectual property. Modern understandings of property and commerce are perverse, immoral, and unreal. It seems likely that at least some of what IP law sanctions, asserts, and prohibits goes against the natural law. But I haven’t personally done the due diligence required to credibly advance particular arguments about particular laws or practices.

Generally speaking intellectual property has similarities to cash — once we have an adequate grasp of what cash actually is and is not.

The sovereign is, qua sovereign, the ‘owner’ of certain marketplaces: that is, he sets the terms upon which transactions are permitted and carried out in the marketplaces over which he is sovereign.

Cash – or more specifically, sovereign-issued currency[1] – entitles the bearer to engage in certain kinds of taxable transactions in the sovereign’s marketplaces. (People often use it for non-taxable transactions too, and in other marketplaces owned by different sovereigns: insulin is valuable for barter in trade by non-diabetics).

Fiat currency does not authorize all conceivable transactions, of course: various transactions such as selling yourself outright into slavery are not “allowed” (that is, enforced); and usurious contracts are allowed/enforced but should not be.

Intellectual property, then, is like a lease or easement in the sovereign’s markets. Leases and easements are a kind of financial security, that is, claims against property.  A patent permits the patent holder to sell the patented invention in the sovereign’s marketplaces, while forbidding other parties to sell the patented invention.  A patent, then, is a financial security; the property against which it entitles a specific claim is the sovereign’s marketplaces.

It is similar to Disney allowing only Starbucks to sell coffee in Disneyland.  When you are in Disneyland, you must commercially transact within the rules of Disneyland.


[1] Modern economists use the label “money” to refer to many essentially different kinds of security: actual paper currency, individual currency-denominated claims against the balance sheets of banks, bank claims agains the balance sheet of the Federal Reserve, etc etc.  All mainstream modern economic theories — Austrian, Keynesian, Chicago, MMT, Labor Theory of Value, etc — are metaphysically anti-realist, that is, are disconnected from reality and therefore insane and incoherent. In fact I am not personally aware of any metaphysically realist economic theory (an economic theory which competently distinguishes between imaginary reality and actual reality) at all, mainstream or fringe.

How ‘live and let live’ becomes ‘die, foul oppressor!’

November 12, 2015 § 16 Comments

If you don’t like usurious loans, don’t make one.

If you don’t like abortion, don’t have one.

If you don’t like gay marriage, marry someone of the opposite sex.

If you don’t like divorce, stay married.

If you don’t like contraception, don’t use it.

If you don’t like the comprehensively liberal choices on the ballot, you are equally free to support your own candidate.

If you don’t like liberal democracy, move to a monarchy.

If you don’t like slutty women, find a nice chaste girl.

If you don’t like peter pan manboys, Eat Pray Love and “marry” a hunky millionaire handyman. Or get cats.

If you don’t like poverty, give to the poor yourself but keep your hands out of my pockets.

If you don’t like exploiting labor, pay your employees a good wage.

If you don’t like genocide by immigration, live in a better neighborhood with the other racists.

If you don’t like public school indoctrination, homeschool.

If you don’t like comprehensive moral permissiveness all the way from the center to the peripheries, well, you are destined for Hell you self-absorbed rule-obsessed promethean neopelagian.

Paper wealth, or, we’re going to Disneyland

November 12, 2015 § 22 Comments

People find paper or electronically recorded securities counterintuitive.  Why the heck does anyone value pieces of paper with ink on them, or numbers in computer memory?  Why the heck is anyone willing to trade a real working car in exchange for numeric balances stored by software in a data center somewhere?

In the Zombie Apocalypse legal title isn’t worth the paper upon which it is written, or the bits in which it is recorded. But short of the Zombie Apocalypse, securities have value because under the laws of the sovereign they entitle you – the owner or bearer of the security – to something other than the security itself.

The title to your car entitles you to your car.

The title to your house entitles you to your house.

Bank deposits entitle you to cash on demand up to the deposit amount through liquidation of some of the property on the bank’s balance sheet.

Exxon stock entitles you to proportional profits and residual liquidation value in Exxon.

A non-usurious note or interest-bearing bond entitles you to census payments against property and liquidation value of that property up to the principal amount of the note.

A usurious note entitles[1] you to the enslavement of the person making the personal guarantee until the principal and interest demands of the note are satisfied.

Self-referential securities entitle you to run around in circles looking for the thing of value to which you think you are entitled.  It must be somewhere!

And a sovereign dollar entitles you to make a transaction, in the sovereign’s marketplaces, for which the tax is one sovereign dollar.

It is manifest (whether folks like it or not, because nature doesn’t reconfigure itself based on what people don’t like) that the sovereign ‘owns’ various marketplaces, because he makes and enforces the rules for transacting – for bartering property and labor – in those marketplaces which fall under his sovereignty. Just as Exxon owns its capital infrastructure, the sovereign owns the outer capital infrastructure in which Exxon operates and transacts.  Economic reality is not reducible to nothing but private property.

If you go to Disneyland, you have to follow the rules of Disneyland.  If the rules say you have to pay ten Mouse Groats for every transaction in Disneyland, you’ll need Mouse Groats if you want to transact in Disneyland.  If the tax rules are more complicated than that you’ll still need Mouse Groats based on the transacting you want to do, the tax rules, and the supply of Mouse Groats. Mouse Groats are a securitization of Disney’s ownership of the marketplace in which you are transacting.

And it is all fun and games until the zombies come.


[1] Of course, as an intrinsically immoral case of usury this entitlement may be enforced by the positive law, but it is not a genuine moral entitlement.

Out of student loans and treehouse homes we all would take the latter

November 6, 2015 § 13 Comments

I recently discussed bank loans, usury, and the ‘creation of money’ in a thread at The Thinking Housewife which readers may find of interest.  At the very least discussing the same subject matter with different words, and with different questions and answers, can sometimes be helpful.

To simplify matters, you can think of a bank – in the absence of usury – as a big pooling of claims against property.  When a bank loan against property is made, that specific property is added to the pool of property against which the bank has claims, and the borrower is issued a deposit account of that same value in return.  The deposit account is a generic claim against the whole pool of property.  So the trade is that the bank gets to add the property to the pool, and in return the borrower gets a claim of equal value against the whole pool.  Since the bank now has an ownership claim against the new-to-the-bank property while the borrower still gets to use that whole property, the bank charges the borrower rent for its share: interest.

The problem with a simple usurious loan is that there is no property; and with a collateralized usurious loan that the loan is made against “more” than just the property itself. The “more” is the borrower’s personal guarantee of repayment above and beyond forfeiture of the property.  So in the usurious case it looks like the bank creates ‘money’ – a deposit account or part of a deposit account – out of nothing, by adding the promises of borrowers to repay to the pool of ‘property’ — a pool which is now partly composed of nothing but personally promised IOU’s.

This is important simply because it is true, of course, but also because it shows not only that the Church was for thousands of years more morally correct than the rest of the world but that the Church’s doctrine on usury continues to this day to be more financially correct than pretty much all of the modern world.

Post title swiped from twenty one pilots, who seem like nice kids:

Where Am I?

You are currently browsing the Property category at Zippy Catholic.