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Monday, August 23, 2010


Pay Up :: News :: Article :: Philadelphia City Paper

Pay Up :: News :: Article :: Philadelphia City Paper

Philly is requiring Bloggers to pay a $300 business registration fee if they have any revenues as a result of their blogging (even if the revenues are reported for the city income tax, and are less than $300). Some liberals and civil libertarians gripe about this as a restriction on the freedom of speech. I think that argument is half baked, but it is clearly a barrier to entry to the writing business, and it prevents writers from exploring different business models (which may or may not generate substantial income).

Saturday, August 21, 2010


"No Pago" Confronts Microfinance in Nicaragua | North American Congress on Latin America

"No Pago" Confronts Microfinance in Nicaragua | North American Congress on Latin America

I was skimming through Kiva's loans, and saw a notice about Nicaragua's "I won't pay" movement. As described in the above article, many poor people have taken micro-finance (MF) loans that they are unable to repay. They have attacked MF offices and won a "repayment moratorium" in the legislature.

It seems that the basic problem -- and the spark that set off the movement -- is that in Nicaragua, people get arrested for failure to repay their loans. The above article linked to another, with this description of the situation:

In late June, Pro Credit arrested six people with overdue debts in Jalapa. Other regulated financing entities did the same and through legal collection rulings started expropriating the debtors’ loan collateral, often houses and land. This action is required of financing agencies regulated by the Banking Law: if they have an arrears portfolio, they have to do something about it. The law states that a collector has to visit the person with the overdue debt within seven days and then get a judge to execute a sentence within 72 hours. Failure to do so results in a fine by the Superintendence of Banks.
Since these protesters are being faced with arrest (I don't how long it takes to release them), I think that their disruption and vandalism may be justified.

Anyway, the issue of forcible debt collection is something that I rarely see addressed by libertarians. If anything, libertarians seem to take the conservative position of wanting to make bankruptcy harder. I am rather liberal regarding bankruptcy, though I think we should eliminate all of that complicated litigation and place strict limits on how debts may be collected by force.

Since the creditor voluntarily places his wealth at risk, he has no inherent right to use force to recover it. Repayment should me mainly enforced by a reputation system. I am opposed to involuntary wage garnishments by creditors, which amounts to a slavery contract. I am opposed to involuntary bankruptcy. Confiscation of personal property should be limited to property that was explicitly granted as collateral (in which case, the debtor effectively sold it). Confiscation of corporate property is fine, since it is already detached from the owner.


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