08 August 2018

More functionality

So when I was talking about functionality in a post recently, various commentators thought I was describing something plausibly either socialism or anarchism.

This made me blink a bit, and then I recognized that I hadn't said that the Seriously Full Service Credit Union Arrangement -- hereafter SFSCUA -- is a market actor.

Markets work fine if, and only if, all the participants are knowledgeable, all the participants have the option to refuse (at least on the scale of "this deal"), and there's a rough parity-of-pockets so that one party can't use greater financial endurance as a tool to impose costs.  (and if there's decent regulation disambiguating a common public notion of what it means to cheat and applying penalties to those as do anyhow.)

Part of the point of the SFSCUA arrangement is that it's potentially immortal.  It buys housing stock on the assumption that it's got a fifty year planning horizon and thereby a real need to minimize maintenance costs, so of course some initial capital spending is warranted.  It buys food on the futures market.  (It probably clubs together with other SFSCUAs and that entity buys food on the futures market, just as real credit unions handle insurance capital requirements today.)   It's not a corporation; it doesn't have immunity from liability and you are secure in your share.  (You can sell it or swap it but there's no way to offer the corporation (the SFSCUA isn't) a buyout agreement, sorts of thing.)

This is the sort of thing that makes markets effective; individuals can't possibly know enough for there to be an effective market in nearly all areas.  There is no fix for this that doesn't involve collective actors.  I think the intense opposition to collective actors on the part of corporations should tell us something.

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