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Comment by savanaly | Hacker News Reader

If we want to give charity to a class of people via subsidizing credit to them, we should be explicit about it rather than putting moral pressure on banks to make sub-optimal loans alongside honestly offered loans.

The idea that the bank is obligated to balance the scales of lending and borrowing seems odd to me as well. I keep a bank account for myself personally of course, and if some day I needed to take a big loan out to start a business I wouldn't consider my decades of having a checking account with the bank as obligating them to extend me the loan regardless of the credit risk they think I am. I voluntarily signed up for a bank account because it's good for me, and if there's nothing in the contract about them having to make me a loan in the future I shouldn't expect one and neither should they.

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Lionsion never mentioned charity, moral pressure, or subsidizing credit.

Just as banks should have no moral obligation to make certain loans, neither should specific jurisdictions have an obligation to allow large banks to displace local banks that may better serve their purposes, if they so choose.

You're both right as far as I can see. I don't understand what you're disagreeing with.

I'm not convinced they are in disagreement, they are both making related observations. A good public debate should feel out points of agreement between participants.

A great way to grow a community is to take any excess resources (proxied by money) and reinvest locally. However, if all the members bank with a multinational bank then the money (hence resources) will probably end up in a city in another country. The community won't grow.

If there was a systemic bias (beyond economies of scale) that favors big banks at the expense of community banks, that might squeeze the life out of small productive communities that the banks view as 'high risk' through a lack of knowledge about their circumstances. That would be a problem, but that issue is not related to this thread.

If the foreign cities are just more productive, then hopefully the community members will be better off because they can import enough to make up for the lack of local infrastructure.

While my view is close to yours, Samoa knows best what's right for them. Communities should have freedom too, not just individuals and corporations.

Displace? You mean by offering better/more service and taking customers from the local banks?

> I voluntarily signed up for a bank account because it's good for me, and if there's nothing in the contract about them having to make me a loan in the future I shouldn't expect one and neither should they.

That's libertarian dogma that elides the whole world outside of its narrow logic.

Corporations are ultimately meant to be agents that further the public good. They're not vehicles for the unrestrained pursuit of private profit to the exclusion of all other concerns. If natural economic incentives are not enough to motivate them to act in the interests of the public, then its the job of government and its regulations to compel a solution. To wit: if bank consolidation causes public goods such as community lending to be neglected, then government should forbid bank mergers and break up large banks until it no longer is.

> Corporations are ultimately meant to be agents that further the public good.

Corporations have rarely (if ever) been meant to further public good. They have almost always been for "unrestrained pursuit of profit to the exclusion of all other concerns".

I agree that as soon as they start acting outside public interest they should be reigned in by regulators, the problem is that regulators tend to turn a blind eye when a corporation can pay them to.

> Corporations have rarely (if ever) been meant to further public good. They have almost always been for "unrestrained pursuit of profit to the exclusion of all other concerns".

That's wrong. Corporations don't have an independent existence; they're legal entities created by law. The laws that allow for corporations were not written to better allow for the "unrestrained pursuit of profit to the exclusion of all other concerns," they were written because corporate legal entities were judged to be beneficial to the common good of the home country.

What they're meant to do is distinct from what will naturally do when their behavior is unchecked.

I think it's somewhat analogous to patents, which are rights created by law for the express purpose of incentivizing invention and encourage eventual public domain use.

What you seem to be suggesting is that everything a corporation may or may not do is a political question to be decided by lawmakers nominally guarding the “common good”.

Where does that leave a corporation like the New York Times, which may wish to publish articles in contravention of lawmakers’ ideas of the common good?

Yes of course they do. Corporations are defined as persons by law, not by the constitution. The congress can easily revoke corporate personhood and the 14th amendment and all of the rest would no longer apply.

If you’re referring to Citizens United, the idea that the decision was based on some technical concept of corporate personhood is basically a myth. Rather, it was based on combining the right of (individual) freedom of speech with another Constitutional right, freedom of association. To quote Wikipedia:

> The majority ruled that the Freedom of the Press clause of the First Amendment protects associations of individuals in addition to individual speakers, and further that the First Amendment does not allow prohibitions of speech based on the identity of the speaker. Corporations, as associations of individuals, therefore have free speech rights under the First Amendment.

If you’re not referring to Citizens United, well, it’s still a relevant precedent that would prevent your plan from working :)

Citizens United can certainly be argued as intellectually consistent. But ugh, it is simultaneously so effective at disempowering citizens who don't control major corporate entities.

Thousands and thousands of us can so easily be shouted down by massive corporations showering money on our representatives.

> Corporations have rarely (if ever) been meant to further public good.

Sorry, no time for sources, but you might want to research history of limited liability. The whole raison d'etre of corporations is to finance projects that are too risky for unlimited liability but still big enough good for public that public is willing to give limited liability protection to owners. Same applies to IP. The purpose of copyright is not to give/guarantee income to creators, but to facilitate generation of works of art to the benefit of public. For some reason lot of people are confused about these.

> For some reason lot of people are confused about these.

The reason being, their paycheck literally depends on being confused about this :). LLCs and copyrights may be intended for furthering public good, but people starting LLC or exploiting copyright protection are there for their personal profits. The public is, unfortunately, very bad at ensuring the tools created for public good are actually used for public good.

Is subsidizing local debtors at the expense of local creditors really the way yo further the public good?

That looks like a complicated question that does not have a single answer. And a government can spend money with much finer granularity than it can tax or regulate, so it is very likely that letting the banks concentrate (up to reasonable levels) is the correct answer.

Rather than constructing labrythian and usually unintended-consequence-laden incentive schemes to cajole corporations to act in the public good, it’s usually more efficient to facilitate capital’s maximization of profit, tax that profit, and invest it directly in the outcomes you’re trying to achieve. I agree that governments ought to intervene in cases like this, but nowhere is it written that regulation should be the primary tool, or even a tool.

That "dogma" is closer to reality and it is the reasonable one.

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