Interrogate An Isateian Philosopher of Economics

[Alicorn]

Since people were hassling poor Splay about it in the Make My Characters Talk To Each Other thread, why not give you an expert?

I do not have centuries' worth of Isateian phil econ in my head. I will be making shit up on the fly. Also, my philosopher of econ is not a Real Character (at least so far) and does not have personal opinions, it is merely present to interpret and answer your questions from an informed generic Isateian perspective.

Fire away.

[DanielH]

On Earth, loans can go into default, and people can go bankrupt. I imagine Istanian economics would not tolerate this; how do you handle situations where one party cannot complete a deal as originally planned?

Is there ever a problem with dishonesty in economics, or does the Istanian psychology somehow prevent that?

If I have an object I do not want, and think that the effort of finding a buyer would not be worth the potential money from selling that object, I can put it in a public location and indicate that it is free. Is there any equivalent to that in Istanian economics?

[Kappa]

I could imagine attaching a little sign saying "I will pay you, unknown stranger, precisely this unwanted object for the task of removing this unwanted object from my life", but that feels like the kind of cheat that someone from outside the society would come up with for working around their suspicion of gifts, and less like something they would readily do from inside the society.

[Alicorn]

Loans are required to be insured. It is taken as a given that no one will deliberately default, but the availability of the insurance guarantees that an unforeseen circumstance will not spiral out of control. In most historical societies loans were prohibited, guaranteed by debt slavery and could only be accepted by already-free persons with no living ancestors, required equivalent collateral such as a descendant, or required the suicide of the defaulter if such came to pass.

Prior to our social unification it was possible to misrepresent facts of one's economic situation to members of other societies or to individuals within one's own to whom one had no ties. In modern times it does not come up.

We go to considerable lengths to diminish transaction costs as much as possible. There is a subscription service to which nearly everyone subscribes to collect unwanted items, sell, recycle, or discard them appropriately, and remit some of the item's value (after a cut for the service) to the original owner. Non-subscribers may attend barter meets or determine that the transaction cost is too high and treat the object as refuse.

[Lambda]

When determining fair prices, how do people deal with the subjectivity of value?

[Alicorn]

Once the seller's floor price and the buyer's ceiling price are disclosed within the appropriate context of the rest of the market and its competition, there are a number of popular formulae to determine who may capture the intervening value. Which formula is customary depends on the market, who bears the majority of the transaction cost, whether either party expended significant overhead, and other factors, but in principle any price between those values may be fair if agreed upon.

[DanielH]

Obviously you don’t have charities the same way that Earth does, but they solve some problems which seem to be solved on your planet. How is that handled?

[I am assuming that this Istaneian philosopher of economics can borrow your knowledge of Earth econ. Also, it is weird to read the relevant parts of Elcenia; I keep thinking that Zinc and Splay are brainphoning]

[Alicorn]

Our system does not have to be robust against defectors, and we can come to a consensus about what to use publicly pooled funds for when privately arranged transactions will not fill a need. It is true that we do not have a way to manage individuals who can provide literally no benefit to their society, but these are less frequent as we learn, as a species, more about genetics and childrearing.

[DanielH]

Forwarding questions from my re-reading of the Make My Characters Talk To Each Other thread:

Well, how does your civilization handle things where in order for a public good which arguably benefits each individual but needs to be rolled out slowly, or when something is a strict benefit to each of two parties but benefits one more than the other, especially in a context where the agents have very little use for marginal fungible goods like currency?

(from something Elspeth said)
How well did your system work in practice before the war, at which time you did not have a single global society to which all individuals owed their allegiance? Apparently there was sometimes dishonesty, but I’m not quite clear on why that disappeared or what other differences might have existed.

EDIT: Formatting

[Alicorn]

In situations where a benefit is to be given to everyone but cannot be distributed simultaneously to all recipients, some means of selecting recipients would be brought to consensus - perhaps age discrimination so that there is more equality in how long each person may benefit from the thing, or some attempt to evaluate whether there will be more positive externalities from some potential recipients than others. Two parties taking a mutually beneficial action in a situation where the disparity in value capture cannot be easily resolved may opt to proceed anyway but it is customary to use some agreed-upon formula to even this out, or for the more greatly benefiting party to shoulder transaction cost or risk. The lowered marginal value of money does not diminish its value as a symbol of even exchange, and accumulated capital has many uses even when there is already enough for most ordinary purposes, at least in our economy.

In modern times, all Isateians owe our existence to our collective state, and in recompense for this we are asked to conduct ourselves as honest citizens contributing productively to consensus and collective action. In the past, we owed our existences to our immediate parents instead, and their interests were ascendant, sometimes through several generations. There was no requirement to be fair to people outside the network of a coordinated family or group of allies, except insofar as actual theft and indebtedness have always been anathema.