Hacker News Reader

Comment by WJW | Hacker News Reader

Thing is, I want to start a business but need several hundred thousand USD in machinery. Lathes or bakery ovens are not free after all. I don't have that right now, and if I need to save up for several decades the opportunity will have passed. How do I convince people to lend me money without any interest?

You can replace "want to start a business" with "want to buy a house" if you prefer.

View on HN

If 30 year housing loans were not available, housing would be a lot cheaper.

Can't be cheaper than the materials and labor costs to build it. If house prices get too cheap house builders / contractors will stop building. This will pinch supply and keep house prices high enough that only cash rich (corps and banks) can afford them. Most people will have no choice but to rent indefinitely. Those who manage to save up some $400k may finally afford to buy a house just in time for retirement.

But if house prices (and therefore rents) go down, people will need lower salaries for an equally comfortable life, pushing labour costs down, making housing cheaper. Man economics is easy

Why would rent go down if a large part of the market is owned by a monolith (banks/institutional investors) who can impose price control? This is already slowly happening. Also the median price of rent in a market is not so much a function of house ticket prices, but rather house affordability. A $400k house in a cash-only market is not more affordable than a $600k house in a market with loans. That is, in a cash market, few people will be able to say ya know, with these rent prices it actually makes more sense to buy than rent - let's go buy a house in full with cash.

That all said, I'm not trying to be a lending market lobbyist. I personally avoid borrowing whenever possible, and don't even have a credit card. My contention is simply that current lending practices are the cause a lot of societal issues, but if lending did not exist whatsoever things would be substantially worse.

No, but there would be a lot more renters.

Or, and this seems far more likely, it would be owned by a very small group of people or corporations or the government.

Someone will always have money.

The system we have now may not be perfect but it a far far more egalitarian than the past when there were no loans

Canada would like a word.

Aren't a lot of companies given large amounts of capital at the early stages of the company which are not interest-earning loans?

Well they are hardly "given" any capital, they sell part of themselves for money. The VCs don't do it out of the goodness of their heart, they expect to get back more later. In any case if loans were not available and equity investments (by people who are already rich and thus have money to spare for investments) were the only way to fund capital intensive new companies, that would make my point even more.

that machinery being so expensive is part of a long tradition of 'developed countries' (powerful peoples) wielding power over other weaker countries by means of technological availability restrictions.

The history of the textile industry is but an instance of this historical pattern of behavior.

all I'm saying is that it's all part of the same 'power system' of government and order.

in the end, interests is comparable to imposing a rent on upon time usage. i.e. interest forces us to pay with money for the time we live (or time we spent), regardless of whether we are working or doing whatever, regardless of where we are as long as we are under the influence of money created through loans with interest.

that we must pay taxes on top of the interest exacted from all of us is just a cherry on top.

> that machinery being so expensive is part of a long tradition of 'developed countries' (powerful peoples) wielding power over other weaker countries by means of technological availability restrictions.

I'm having real trouble unpacking what you mean here. Machinery is expensive because... there's a worldwide cartel keeping prices up to keep out new players? Could it also be that making machines is hard and requires a lot of research/labor/material?

Reply on news.ycombinator.com