On Thursday, October 9, 2003, at 03:01 AM, Robert B.Z. wrote:
I actually enjoy the objections of both Patrick and Frank because they are
contructive and make sense.
Here we go: Patrick, if you lend someone a piece of gold and get the piece
bank plus a smaller one, you won't be hauled to prison - BUT - might be
forced to donate the smaller piece to a charity fund.
And when I say no, I will not give the smaller piece to a charity fund, the sheriff comes and takes me to prison. If I resist, he shoots me. I love the way people say "you won't be hauled to prison" but forget to mention the condition "if you cooperate." :-)
What two adults do among themselves is up to them, unless one of them gets
something for nothing. ...
And then when the sheriff finishes subduing me one way or the other, he takes the smaller piece of gold and gives it to the charity fund ... which gets something for nothing.
The charging of interest is forbidden in so far that someone gets something for nothing.
I didn't get something for nothing. I got something in exchange for giving another individual the power to use a piece of gold for an entire month. I was fortunate that the individual even bothered to pay me back at all.
And besides, what's wrong with getting me getting something for nothing if the other individual AGREES to give me something for nothing? Just call it ... charity if you will. As in, gee I let you use that gold piece all month and thanks for giving it back, but brother can you spare a dime? ;o)
Now, if the guy comes to you to get one piece of gold in order to buy
something and sell it a profit and you participate in the profit, that is
perfectly fine. You shared the risk, hence you are entitled to share in
the profit. How much of the profit you get is a matter of negotiation
between the two of you. If you however charged him interest, did not share
the risk and got something for nothing, then you loose the something extra
you got.
Whoa there! I shared the risk and that entitles me to share in the profit? That almost sounds like getting "something for nothing" -- except that you have wisely acknowledged that assuming risk deserves compensation.
Since you also state that how much of the profit I get is a matter of negotiation, then I'll simply phrase things differently to skirt the prohibition against interest. (I'm pretty sure you've made this point yourself in previous discussions.)
I'll invest my gold piece in the other guy's venture (e.g. his life). I won't inquire into his business and demand a full accounting of profits. I'll just assume he's making roughly 5%, so each month I'll only require that he pay me 5% of only the amount I have invested with him (the single gold piece). I won't demand any portion of the profits he makes with his own money, because that would be getting something for nothing. Also, he can defer paying me back in full if he chooses, simply reinvesting my slice of the profits into his venture and then paying me 5% of my now larger sum of money invested with him.
Presto chango! We have loans with variable payment schedules and compounded interest, and I don't get thrown in jail! Yaaaay! I've got interest! Yaaaaaay! :-)
Except I think you're saying that if his venture "fails" in some way, I cannot continue to demand the 5% and must forfeit my investment entirely, right? But why should that be? Surely he has some other irons in the fire, so why can't I demand that he pay me back in full including my 5% share of the profits directly related to my investment? His other ventures will just be less profitable to him, that's all. And why can't we have an agreement that if all else fails, I get his house? He could put up his house as collateral against his inability to repay me if his venture goes astray.
-- Patrick
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