History is cool, but this is gross rentier behavior. Perpetual bonds should be banned. Perpetual ownership comes next.
It includes the area where the 16th century rich people from Amsterdam would build their out of town mansions. Traveling there by boat, on a water system that has been managed for over 900 years. So this 367 years is old, but the organisation paying has existed in some form for more than twice that.
It’d be fun story and a cool bit of financial history, and keeping it “alive” is definitely worth a few grand every 10 years or so.
But this ritual is also Proganda for capitalism. I don't mean that in a conspiracy way --- no one at Yale was like "yeah let's do this it makes finance looks good", but it clearly reflects someone having positive associations about this and the history of finance.
It's kind of like how keeping around powerless monarchs is harmless in one sense, but a cosplay to uphold a classist society in another.
I would not try to go for records with the longevity of either, I would abolish the monarchy and force all perpetual bond holders to sell them back to the issuers.
You are onotologically correct but epistemologically confused.
In the first order, bonds are just contacts that are fungible enough to trade.
In the second order, we have markets for them which arrange prices.
In the third order, based on the practice of those markets and theorizing about them, we can up with temporal discounting and thus a way to assign finite present value.
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> It's no more or less exploitative than a bond with finitely many payments and the same present value.
And where was it said that the exploitation of the bond was solely a function of its present value?
My complaint is not with present value. I am aware of these things. My complaint is with the nature of the contact in a way that is not captured by present value.
Administrative effort + 10 bucks is _nothing_ compared to that.
I have very little interest in a return to a feudalism where higher authority owns the product of my labor
2. Serfs were indefinitely tied to the land. Heritable Fiefs were also indefinite.
In general you are exactly backwards, indefinitely arrangements are a holdover from Feudalism. Getting away from them is getting further from Feudalism.
The only problem with renting is landlords --- someone else owning. Look up LVT. If it's "rent all the way down" --- the land rent is ultimately disbursed back to the people, then there is no issue.
mind you, the netherlands is a constitutional monarchy in which the king is legally bound by the constitution. Changing the constitution to just absolve the monarchy is a possibility. One that just hasn't happened yet, because the monarchy in the netherlands is quite popular.
Also, in the past two decades, the monarch had to resign some roles he still played in goverment. (like appointing the "informateur" and "formateur" during the formation of a new cabinet.) This all happens without his approval, because he doesn't have the power to draft and implement laws. That is done by both chambers of goverment.
https://thehustle.co/the-people-making-millions-off-listerin...
Liber(al,atarian) "Freedom of contract" is easily refuted child-philosophy. Society not choosing to spend communal resources enforcing your stupid contract is not an abridgement of individual rights.
That is the starting point, then we can get into "contracts made under duress" with the understanding that its not incumbent on society to judge the situation perfectly every time, because ultimately society is extending a favor not a right to the contractees.
In the opinion for the Court, Chief Justice John Marshall wrote that by establishing a corporation, Eleazar Wheelock had created “an artificial being, invisible, intangible, and existing only in contemplation of the law.”
He explained that “by these means, a perpetual succession of individuals are capable of acting for the promotion of the particular object, like one immortal being.”
(Also, by the way, corporate personhood is nothing new.)
Conceptyally they are kind of the same thing.
Of course most companies fail in longer time frame, also modern stocks are kind of a modern concept, but there are some really old companies here and there. Most dont pay dividends but conceptually they could.
Also in 100 years people will probably still drink wine/beer, eat salt or will want to go to some respected restaurant or a traditional hotel near a japanese wellspring.
The bond creates an obligation to pay to a third party. The stock creates no obligation and the management/owners of the company can decide that it is worthwhile to pay the owners a dividend.
If I lend you $100,000 to open a restaurant and the restaurant is barely scraping by, you still owe the money. If I invest $100,000 in your restaurant, I have an ownership stake in the restaurant, but if there aren't any profits there won't be money coming my way. Yes, if the restaurant completely fails, maybe I'll lose the lent money, but I will get paid before owners. Likewise, if the restaurant is making $10,000/year before my loan is paid and it's a 10% interest loan, I get to take that $10,000/year interest owed me.
Stock is just giving someone a claim to a percentage of the business. Bonds are giving someone a claim to a certain amount of money. There's a huge difference. Bonds need to be paid even if the business is doing poorly (unless you want the business to declare bankruptcy). Stock doesn't need to be paid, but of course the stockholders get to share in the success of the company if it happens while bondholders don't.
There are convertible bonds where someone will give you money at a lower interest rate in exchange for the ability to convert the bond's value into equity if the company does well. For example, instead of a loan at 10%, I offer you a loan at 3%. Your stock is currently $20/share. If the stock hits $50/share or higher, I can convert the bond's value into stock at $50/share. I loan you $100,000 and the stock hits $100/share and so I convert that $100,000 bond into 2,000 shares which is worth $200,000. As the lender, it's low risk - I might lose some interest if the company doesn't do well, but it's still a bond; if the company does really great, I can share in the gains (though not as much gains as if I'd just invested the money since the price was $50/share instead of the $20/share I'd have paid had I just bought the stock). As a borrower, it means not having to worry about servicing debt at high interest rates (which can really hurt the company) and if the company is doing so well that the stock is soaring that much, the slight bit of watering down of investors isn't really important.
But that's a tangent. Stocks and bonds are really different in terms of the obligation. Bonds/debt can destroy your company if you end up having to use all your revenue servicing that debt. Issuing stock doesn't come with that risk for the company.
Thing is that nobody will sell you a perpetual bond (especially one indexed by inflation), while you can buy "perpetual" stocks.
Some companies pledge to pay dividends every year (what of course can be changed when they have a bad year as you explained).
But realistically you wont get a perpetual bond, especially a safe one easily because noone is insane enough to offer it. While you can get stocks.
Conceptually some elecricity company can pledge to pay dividends every year and probably will do, since their business is not going anywhere soon.
Few months ago somoene here posted a discussion about royalties that kind of work similar to a perpetual bond https://news.ycombinator.com/item?id=31112411 but again it is a very rare thing...
Best proxy for a perpetual bond are stocks, for me conceptually it is very close, since perpetual bonds are not offered by anyone.
Conceptually it is a debt to owners.
There is far too much inertia/permenance in development currently. Lot's of empiracle research like https://cepr.org/voxeu/columns/missionaries-human-capital-tr... on this.
This is a design flaw. We should design economic systems that have less permanent state to remedy this.
Which do you like better --- worker-controlled coops or state/everyone-controlled companies? I am fine with either or an interpolation between them.
This isn't some hippy-dippy thing, there would be a robust and healthy bond market to capitalize these institutions.