Wikipedia:Reference desk/Archives/Humanities/2017 June 17

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June 17

Consolidation Act

What was the earliest consolidation bill passed by Parliament? Peel's Acts are the earliest ones that I know of.—azuki (talk · contribs · email) 03:20, 17 June 2017 (UTC)

The Inclosure (Consolidation) Act 1801 was earlier, no idea which was the first. Warofdreams talk 21:10, 22 June 2017 (UTC)

If everyone owned an equal number of shares

Imagine every citizen has come to own an equal number of shares in every company in the country. This will cause a large fraction of the country's GNI to be divided equally among them. What effects would this have on the economy? Would it be good or bad for their standard of living? I assume a lot of people would give up working if they could live on the dividends. Would that make the whole thing a failure?--88.81.124.1 (talk) 05:19, 17 June 2017 (UTC)

This appears to be a request for "opinions, predictions, or debate", which we don't do here. --76.71.5.114 (talk) 05:46, 17 June 2017 (UTC)

I imagine it's something that's been discussed by economists and I'm interesting in reading what they had to say about it.--88.81.124.1 (talk) 05:49, 17 June 2017 (UTC)

The dividends wouldn't be enough to live on. Sagittarian Milky Way (talk) 06:06, 17 June 2017 (UTC)

Based on the estimates here [1], if all US dividend payments were redistributed equally to all US residents, it would amount to about $1300 / person / year. Not enough to make a large difference to the standard of living of most people. Dragons flight (talk) 07:07, 17 June 2017 (UTC)

A Vatican citizen with a thousandth of the Church would pull in about $75,000 a year, just from American donations. That's an impressive-sounding 130 million lira, or a little over double middle-class Italian. InedibleHulk (talk) 07:40, 17 June 2017 (UTC)

Dividends from shares are supposed to be taken from profits, not throughput. And as to the original question, exactly how would this differ from communism, would it be because people would not get any extra help if they got sick for instance? Dmcq (talk) 10:42, 17 June 2017 (UTC)

How is the pence not profit? That cash is only earmarked for "the many different needs of the Universal Church and for the relief of those most in need." As long as an ostensibly decent Pope's in charge, those needs will be ostensibly be limited to the decent sort, but the Pope's shadier neighbour could spend his chunk of the daily bread on heroin under the same faith-based agreement. InedibleHulk (talk) 04:50, 18 June 2017 (UTC)

Note that some approach like this may actually be necessary, at some point, when working for a living no longer becomes practical for most people, due to replacement by robots, computers, etc. The alternative is high tax rates on the corporations and the few who still can work, with everyone else living "on the dole". At least if everyone was given stock they could do something useful, in that they could help guide those companies to act in their interests through shareholder votes, etc. StuRat (talk) 17:05, 17 June 2017 (UTC)

I don't want to own certain companies like tobacco but selling them could raise the stock price (however miniscule), what could I do in that world? Sagittarian Milky Way (talk) 17:50, 17 June 2017 (UTC)

Yea, rather than giving everyone stock, giving everyone a voucher they can use to buy the stocks of their choice would be better, both for personal preferences and to make the market more functional. StuRat (talk) 04:01, 18 June 2017 (UTC)

We have a case study: post-Soviet Russia. If there's no restriction on resale of the shares, most people immediately sell their shares for cash, and the rich buy them up. So, you kind of wind up back where you started, or worse. See: Privatization in Russia and History of Russia (1991–present). --47.138.161.183 (talk) 21:31, 17 June 2017 (UTC)

47.138.161.183 -- There were shadier things going on than just poor people selling to rich people. The word "rich" is a little problematic, since most of those who were rich in Russia in the early 1990s were so due to misappropriating government property... AnonMoos (talk) 23:15, 18 June 2017 (UTC)

A lot of the answers here are looking at this purely from the perspective of profit paid to shareholders. There is also the issue of ownership and control of the corporate sector being handed over to the population. 196.192.183.14 (talk) 23:17, 17 June 2017 (UTC)

I addressed that in my 1st response. StuRat (talk) 04:03, 18 June 2017 (UTC)

Making US hundred dollar bills worthless

Are there good sources that discuss the following?

If the US government suddenly declared all US $100 bills held outside the United States as worthless, what would the downside be?

If they decided to do so, how would they handle amounts that foreign governments hoard?

Anna Frodesiak (talk) 07:27, 17 June 2017 (UTC)

Reading withdrawal and replacement of legal tender might help. Do you mean exchanging old bills for new ones, as for example happened with the 2016 Indian banknote demonetisation? Dragons flight (talk) 07:48, 17 June 2017 (UTC)

Actually, I'm not sure what I mean. I've been reading about it and am a bit confused. I just read part of 2016 Indian banknote demonetisation. Yes, that sounds right. Tell everyone that they have to exchange them for new ones so that baddies with huge sacks of the stuff will be left with worthless currency. Anna Frodesiak (talk) 08:02, 17 June 2017 (UTC)

(ec)If you mean that they would just declare them to be worthless without compensation or replacement, then presumably a) it would hurt the status of the US$ as a reserve currency, and as a widely accepted international currency, and b) it would lead to a a large proportion of these bills making their way back into the US. To stop this, the US would need to install currency controls, but these would be very hard to enforce in practice. Foreign governments are unlikely to hoard huge amounts of US$ bills - they often have huge amounts of US$, but not in the form of paper currency, but rather in the form of US Treasuries and other outstanding balances. In general, in modern economies, cash is a small part of the money supply. --Stephan Schulz (talk) 08:36, 17 June 2017 (UTC)

Anna_Frodesiak -- you can read on the Soviet ruble article how on December 14th 1947, paper money in the hands of private individuals was decreed to have lost 9/10ths of its value, while most other things remained unchanged (there was not a general currency revaluation at that time), or on the North Korean won article about something similar there in 2009. The Soviet measure more or less did what it was intended to do, but only under the conditions of a Stalinist police state. The North Korean measure seems to have been a fiasco... AnonMoos (talk) 08:30, 17 June 2017 (UTC)

Also, those inside the US might be worried that something similar could happen there, and dump their cash in favor of non-cash options. Some businesses might refuse to do transactions in cash, as it already has downsides of being difficult to track if stolen, requiring keeping cash on hand, and bringing armored cars to transfer it, etc., and this just might be the "nail in the coffin". StuRat (talk) 17:00, 17 June 2017 (UTC)

But StuRat, it would only be about 100s, only outside US, and only after people had a chance to exchange them. Best, Anna Frodesiak (talk) 21:02, 17 June 2017 (UTC)

Much of human economic behavior is motivated by fear of what might happen, based on similar events elsewhere. StuRat (talk) 12:08, 18 June 2017 (UTC)

Thank you all! And Soviet ruble is very interesting. Anna Frodesiak (talk) 21:02, 17 June 2017 (UTC)

Likely downsides: total pandemonium in the global financial markets, and an explosion in smuggling as people try to get $100 bills into the U.S. without being detected. There's nothing physically different about a bill held outside the U.S. versus one held inside it, so as noted above the only way to try to enforce this would be to search everything coming into the country. (For historical interest, see Hawaii overprint note for an example of notes that were created with distinguishing characteristics, so they could be demonetized if needed.) As also noted above, something very important to understand: only a small fraction of U.S. dollars exist as banknotes. Most dollars exist as entries on financial institution ledgers (see money supply). Foreign governments don't hold their U.S. dollar foreign reserves as piles of banknotes sitting in a vault. They hold them mostly as U.S. treasury securities and balances at central banks. --47.138.161.183 (talk) 21:23, 17 June 2017 (UTC)

Although, you did mention "baddies with huge sacks of the stuff"; criminals do indeed often deal in cash to avoid getting caught. Fun fact: at its height, Pablo Escobar's cartel spent over $1000 a week on rubber bands for wrapping their cash. But then, offshore banks in a number of jurisdictions have a reputation for facilitating money laundering, so I'm not sure how effective this would be in hurting criminal enterprises. --47.138.161.183 (talk) 21:58, 17 June 2017 (UTC)

AnonMoos, many countries in Eastern and Western Europe, including decidedly non-Stalinist ones like Belgium, the Netherlands, Norway, Denmark and France had confiscatory denominations to reduce the post-War monetary overhang. Actually, the Ruble reform was less confiscatory overall and more sparing of vulnerable segments of the population than in the West. It had a concrete economic purpose and was necessary to transition away from rationing. The mass-robbing-of-the-population-by-the-government view is spin. 80.171.95.11 (talk) 04:31, 19 June 2017 (UTC)

That's not what the Alec Nove book (An Economic History of the U.S.S.R.) says. Soviet industrialization was funded to a significant degree by keeping living standards of workers and peasants low (see Primitive socialist accumulation), and Stalin was always particularly opposed to giving peasants producing food crops much meaningful incentives (i.e. "the unfavorable terms of trade imposed on the villages by the practice of compulsory procurements at low prices. ... [Post-war] Soviet agriculture remained in a very weak state until a drastic change of policy occurred after Stalin's death. There is no escaping the conclusion that he delayed long-necessary changes of policy by his obstinately hostile attitude toward the peasantry"). The decree of December 14th 1947 was very specifically designed to impact peasants (who rarely kept their money in banks) much more than others.

Also, regular bond purchases were compulsory for most people in the Soviet Union, and in 1936 and 1947 the interest rates on existing bonds were lowered, while in 1947 the face value of the bonds was reduced by 2/3rds -- which is pretty directly "mass robbing of the population by the government"... AnonMoos (talk) 10:20, 19 June 2017 (UTC)

Forgot propiska - also basically an anti-peasant measure. Still, what's the cardinal difference between the 1947 reform and the reforms in other countries? Italics mine: "Post-1945 Europe had many of the traits observed today in Eastern Europe and the Soviet Union: price controls, shortages, black markets and a monetary overhang. The policy response in most countries was monetary reform - - the deliberate immobilization of liquid assets and in many instances an outright write-off of deposits. [1] 80.171.95.52 (talk) 15:17, 19 June 2017 (UTC)

PS there's nothing wrong with keeping consumption low, per se, it's called mobilizatsionnaya ekonomika. It's not Russia's fault she was forced into self-preservation mode. 80.171.95.52 (talk) 15:24, 19 June 2017 (UTC)

(machine transl., sorry) In Belgium, for example, according to the law of October 6, 1944, all old banknotes were subject to surrender, and in return new ones were issued only for the amount of 5,000 francs per person, the rest was credited to deposits in banks and savings banks, 40 percent being temporarily blocked, And 60% - constantly. Further, blocking was extended to former bank deposits; Only 10% of the amount of deposits was credited to the so-called free account, of the rest of the 40% - to the temporarily blocked account and 60% to the permanently blocked account. [2](in Russian) 80.171.95.52 (talk) 16:03, 19 June 2017 (UTC)

Thus, in terms of rationale and mechanism, the monetary reforms in the countries of Eastern and Western Europe did not differ. In both cases, it was a matter of confiscating (freezing) a permanent or temporary part of the population's savings. However, their socio-economic consequences were not the same. If in Western countries, the state sought to alleviate the situation of entrepreneurs, in People's Democracies reforms were targeted against the affluent strata (ibid) 80.171.95.52 (talk) 16:03, 19 June 2017 (UTC)

80.171.95.52 -- I really don't know too much about monetary stabilization measures in Continental Europe in 1944 and 1945, but I would doubt that they were an integral part of a consistent conscious deliberate policy (pursued for more than 20 years, from forced collectivization until after Stalin's death) of keeping the living standards of peasants/farmers as low as practically possible, as was pretty much the case in the Soviet Union... AnonMoos (talk) 20:21, 19 June 2017 (UTC)

I'm reading and learning. Thank you all! :) Anna Frodesiak (talk) 17:44, 19 June 2017 (UTC)

Reason for income redistribution

Is the reason for leftists supporting income redistribution because they believe that since white people are the bad guys while darker skinned people are the good guys, white people deserve to have less wealth than dark-skinned people,given that most wealthy people happen to be white while most poor people are darker skinned?24.130.242.91 (talk) 15:31, 17 June 2017 (UTC)

No. Have you actually read Income redistribution? {The poster formerly known as 87.81.230.195} 94.12.79.194 (talk) 16:05, 17 June 2017 (UTC)

Most liberals reject explicitly racial agendas, and believe that there are people of every race who are at the bottom of the pecking order due to past injustices, and that redistribution of wealth should give all of those at the bottom a better opportunity to rise. However, there are some who believe in explicit calls for racially targeted measures (affirmative action, racial set-asides). Note however that even among groups explicitly favoring black rights, there are some who will favor a switch to a universally fair set of priorities -- notably, the "Black Lives Matter platform" favors a long list of very good ideas; in each case they say, this is what they are doing for blacks, and in each case, they propose a non-"reverse"-racist method when you actually look at what they say. In any case I hope this document will make a good read for you. Wnt (talk) 16:50, 17 June 2017 (UTC)

Wow, so many mistaken assumptions in that Q:

1) Income redistribution attempts to somewhat even out income, not make anyone have more than anyone else.

2) As a practical matter, 100% equality of income is not achievable, and whoever has the highest incomes will continue to have the highest income, just not by as high of a margin.

3) One reason for it is that income naturally flows in one direction most of the time, from the majority to a small minority (here meaning a small group, not a racial or ethnic minority). Over time, this leads to a dangerous imbalance, where that small group at the top has all the power, too, and this can lead to social instability and violent revolutions.

4) A progressive income tax, combined with social programs for the poor, such as quality free education, are effective ways to limit income inequality. Racial tests are rarely applied, so all poor people are given help, not only those of certain races or ethnicities.

5) Wealth redistribution is slightly different, and there methods such as inheritance taxes can be used to limit the degree to which wealth inequality is magnified with each generation. StuRat (talk) 16:52, 17 June 2017 (UTC)

What size city might host a 600m² cricket administration building with an auditorium?

In an area where cricket is popular. Sagittarian Milky Way (talk) 17:45, 17 June 2017 (UTC)

@Sagittarian Milky Way: That sounds like a small office to me (6400 sq ft), so pretty much any city. Can you provide more details on where you saw the reference to this office? It will be hard to narrow it down just on size alone. RudolfRed (talk) 18:32, 17 June 2017 (UTC)

Last night I dreamt I was wandering around a building of cricket administration offices in Guelph, Canada, that is my best estimation of the size and I was wondering if that was realistic. I recall that it was just for the town, not the regional/national headquarters of something but whether it was for a commercial team or university or school system or what I don't know. Yes I realize cricket is not as popular in Canada as it is in Australia, South Africa etc. Sagittarian Milky Way (talk) 19:07, 17 June 2017 (UTC)

The England and Wales Cricket Board occupies rather modestly-sized offices at Lord's Cricket Ground and the Board of Control for Cricket in India have offices on the 4th floor of the Wankhede Stadium [2]. I doubt either boasts an auditorium and can't imagine what it might be used for if they had one. Alansplodge (talk) 16:37, 18 June 2017 (UTC)

So I suppose that my unconscious amazement was at something unrealistic. For comparison I looked up NBA headquarters and they have 175,000ft² of office space but the NBA is the top 30 basketball clubs of Earth. Sagittarian Milky Way (talk) 18:57, 18 June 2017 (UTC)

Perhaps lay off the cheese at bed time ;-) Alansplodge (talk) 20:20, 18 June 2017 (UTC)

Or the fried crickets. ←Baseball Bugs ^{What's up, Doc?} carrots→ 21:04, 18 June 2017 (UTC)

How do Islamic banks earn money

How do Islamic banks earn money if interest is forbidden in Islam?Uncle dan is home (talk) 20:46, 17 June 2017 (UTC)

The same way that any other bank does - by investing the deposits in businesses which make a profit and then pay dividends, or in property which goes up in value, or in commodities which you buy at one price and sell at a profit. Islam bans interest on loans - but not making a profit from a business. Wymspen (talk) 21:25, 17 June 2017 (UTC)

We have a pretty extensive article on Islamic banking and finance. Short answer: they lend money, and get paid back the principal plus some extra, but they don't use an interest rate and don't call it interest. --47.138.161.183 (talk) 21:38, 17 June 2017 (UTC)

I don't know much about this, but I am suspicious that Western banking actually is more "Islamic" in character than it is often given credit for. I mean, the traditional idea of interest is that a homeowner takes out a mortgage on a house, in which the house is pledged as collateral, i.e. the bank can take it and have it sold if they aren't paid. But as I understand it, the homeowners actually end up leaving the title of the house in the bank's name, so that it is not merely collateral but actually isn't theirs in the first place. Same for cars. [3] Though with houses, apparently there's a difference between a "quit claim deed" and a "title" ... I'm not the right one to shed light on this. [4] Traditionally there is an additional requirement that the "owners" maintain fire insurance on the house.

In the UK, (and probably other countries), a mortgaged property is owned by the householder, not the bank. However, the bank holds a lien on the property, which means the owner can't sell the property without informing the bank, and the bank can reprocess (seize) the property if the owner doesn't keep up repayments. The bank can also insist that a buildings insurance policy is in place; this will recommence the owner (and the bank) should the property be badly damaged.

For Islamic mortgages, I believe that the general process is that the bank owns part of the property, and the householder the rest, in general proportion to the loan-vaue / deposit paid. The bank then rents its share to the householder, at a rate commensurate to a traditional mortgage. Part of this payment is used to (slowly) buy the property from the bank; at the end of the term, the householder will own all of the property. LongHairedFop (talk) 12:22, 18 June 2017 (UTC)

Now where the rubber meets the road is whether the banks nowadays (and I have no idea if they have started doing any such thing) are using their ownership to make it ever clearer that the holder of the "loan" is really just a renter, and one with few rights. For example, do they insist that the "owner" of a car allow them access via some kind of electronic module that transmits driving behavior back to them or indirectly via an insurance company? (I think I have already read about bottom-feeding companies that demand tracking devices in the vehicles...) Do they mandate "home security" that is surveillance on the inside of their house? I feel like this is the kind of area where capitalists have never been shy, and typically move ahead of the news coverage, but again, it's not something I know much about. But anyway, such manifestations of ownership would make it clear that the bank is not lending at interest, but charging the customer for some degree of access. Wnt (talk) 02:38, 18 June 2017 (UTC)

Unless there is a law saying that "any money earned from a loan shall be calculated as a percentage of the principal and called interest", then they can just call this money "fees" instead. The only technical difference is that there's no compounding (interest on interest), but if the fees are high enough, the total can equal or exceed the compounded interest. Western banks like to charge both interest and fees (including penalties), making it even harder to figure out the real amount you pay for the loan. StuRat (talk) 12:13, 18 June 2017 (UTC)

In addition to the article linked by the IP above, a good article to read would be Murabaha. (Not to be confused with Mudaraba.) As the main article linked by the IP indicates, quite a lot of Islamic banking is controversially in this form. I've never loaned money from an Islamic bank but have held a term deposit in the form of Commodity Murabah, because at the time HSBC Amanah in Malaysia was offering a slightly better "profit rate" than the interest rate offered by HSBC Malaysia. In my case from my POV there was basically no difference between the two other than the slightl better rate. Nominally the Islamic finance term deposit is structured such that I am buying a commodity and then selling it in the future for a profit, and I believe the commodity technically really exists in some form but really, it's not something which affects me. I'm not even sure what the commodity was (I'm pretty sure it isn't said anywhere), and it's not like the collapse of the price of the commodity makes a difference. As an interesting point, compare [5] to [6]. (The new T&C gives palm oil as one example commodity.)

Legally there are likely some differences although the specific one that jumped out to me was that if you have a lot of money, it's actually useful to have some in traditional banking and some in Islamic banking because the government deposit protections were separate so you could double the amount of protection if you had enough. That said it depends on the precise intepretation, and as said in both our articles, nominally Murabaha is supposed to be an intermediate step.

I believe one particular disputed issue when it comes to loans is how to handle late payments, as our article indicates late payment charges are controversial as they tend to be seen as riba/usury. If allowed, there are various ways these are structured e.g. for some info on those in Malaysia [7], but I don't think things there are particularly strict there. (Notably I'm fairly sure when changes do come they tend to be only things that banks have to apply in the future. Our article implies in some other places banks have found themselves in trouble due court rulings or other authority intepretations which have prevented them doing things they were doing with existing customers without a clear recourse. On factor is probably that in Malaysia Islamic finance issues are still largely decided by civil courts [8].)

Nil Einne (talk) 04:03, 19 June 2017 (UTC)