Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (8069)	12/28/2005 12:02:51 PM
From: neolib	Read Replies (1) \| Respond to of 542009

Reality limits them to zero.. No. If a company has a negative value it will just be bankrupt. All that negative value disappears. Yes. It is current economic methods, notably bankruptcy which limits negative numbers. I was exploring if there might not be benefits to changing those laws. The unfairness is in assigning them to some third party I'd agree if the third party were unrelated. What I propose is only to affect related parties, those that benefited in some way from the activities which resulted in negative numbers. They aren't just sitting there in some mega-sized database (which might be an interesting target for hackers by the way) but rather you want to determine and impose costs and/or benefits on these transactions and change them over time. They do in fact simply sit in a mega-sized database. Anyone who thinks they deserve compensation for whatever reasons can mine the database and try to win a lawsuit awarding them some compensation. Same as now. The only thing I suggest is there be a good record of all involved. No CPA's shredding the company records anymore. Won't do any good. There is nothing in my suggestion that decides if or how much damages should be. You keep coming back to this, but I don't propose any new such mechanisms. The only one objection which is valid would be to note that American lawsuits have a long history of awarding liability in proportion to the available money to pay, i.e. deep pocket laws. As part of my system, I would say that liability is proportional to involvment, and deep pocket laws are not allowed. How do you determine that they have zero value? If you think, they will have zero future value do you just toss them out of the system? If not, if you have to track them and calculate and impose costs or benefits than this point is irrelevant, zero value or not you do not reduce the complexity of the situation. The system does not impose value. A free market which can buy or sell the legacy based on any external factors which might imply current or future value does that. The market will set zero value on most transactions because they don't see any angle to make or loss money on them. Take my breakfast this am. Cornflakes. Not likely to have any longterm value. Perhaps thought they were produced from GM corn, which caused the Monarch butterfly population to crash, resulting in a bunch of lawsuits. Oops, now my breakfast has a slight liability, perhaps $0.10. That illustrates why I think the system has merits. Genetically modified crops hold lots of promise, and also some risks. Under the current system, a producer might use them because they have higher yields, so hence a cost advantage. Any liability is limited by banckruptcy. There is no liability for consumers that chose to save a few pennies by buying such produce. Under my system, not only the seed suppliers, the farmer, the food processor, the retailer, but also the consumer participated in the problem if one arises, so all have some liability. Maintaning a record of those transactions is cheap enough IMO. This system simply assists people in being more responsible, since it may cost them in the long run. if you tried to track every transaction of any type and calculate all the costs and consequences of it for all time Not part of the system. Only the record keeping, which is cheap as I have pointed out. You might be arguing for more lawsuits and a wider spread of the costs among smaller players, and more active trading of the risks of these costs. Those things might indeed happen, but there will make things more expensive. Court cases would presumably be more numerous and/or more complex. The transaction costs of trading all these risks would be far from nil (and often they probably wouldn't be traded at all, they would be insured in a simple way or people would try to "self-insure" or people would just ignore them). Your getting close in that paragraph. Lawsuits already exist, but they tend to limit the liability to a specific agent. Take tobacco again. Why is it that tobacco growers, retailers, and users tend not to have liability, but only the product producer? At a bare minimum, the farmer aught to be as liable as the tobacco company. So yes, one of the main aims is to distribute responsibility to all the interacting parties. The other main aim is to allow market trading of the risks. I think both aims have excellent merits. What about the market operations that are perceived to have zero value but later turn out to have a strong net negative or positive.? Economists have long touted the 'fact' that markets are the most efficient means of setting prices. This applies for futures trading as well. If you could suggest a non-market means of doing so, that would appear better, I would accept that perhaps. But I don't know of any. And not only that but you would impose it on people who did not in any way participate in slavery. A gross injustice. If they did not in anyway participate, they would not in anyway be liable. Only if their inherited economic legacy includes slavery will they be liable. If it does, they inherited economic benefits from slavery as well. It would seem you would open a can of worms the size of the grand canyon. The future is always the source of any corrective actions. They might decide, just as we do now with slavery, that no compensation is in order. If so, none will happen. If they decide that compensation should occur, they have the necessary record to assign liability. Thats all.