@Maus – I mean the level of democracy relative to the Dark Ages was higher before.

I realize it’s a trade-off for the “equity lords”, but they’re setting themselves up for a big liability.

@AJ – Student loans are probably the worst kind of debt from the perspective of indenture. They can’t be discharged in bankruptcy. It thus depends heavily on the interest rate you get. If you can get under the inflation rate, it’s not too bad—then it’s just the price of admission for the job. If they are above inflation, like 3%+, watch out! In terms of controlling the professional work force, massive student loans are probably the most brilliant debt scheme ever.

In short they should no larger than what can be paid back by a similar duration of work, that is, if the education took 4 years, the student loans should be paid back in 4 years, my opinion.

@AJ, Jacob; Having paid off an excessively large amount of student debt, I consider myself an expert in this area, though it’s not a title held with pride.

I agree that student loans are not “good debt”, as some suggest. I also agree that student loans can be a driving force pushing many people toward a borrow/work/consume lifestyle. And I agree wholeheartedly with the concept that the debt should be limited so that it can be paid off in a short amount of time.

I disagree with the notion that one should place much emphasis on the rate of inflation relative to the rate of interest on the student debt. Inflation benefits the debtor only if the debtor’s wages (or earnings) increase along with inflation. There is no guarantee that your individual wages will increase just because inflation exists/increases.

For some professions, wages may not keep pace with inflation, may stagnate, or may decrease due to factors that are not predictable or controllable by the individual. Furthermore depending on the discrepancy between inflation and wage growth, and whether or not there is inflation in the cost of essential items, inflation can actually make it harder for a debtor to repay debt. For example, if essential food prices increase, but an individual’s wages do not, there is less money left over to pay off debt (assuming the debtor chooses to not to become malnourished or starve).

I don’t agree with your assessment on the Roman Republic/Empire (unless you’re using a different standard of comparison that I may be unfamiliar with), but you are definitely right on the money that history comes in cycles and I think that we will be moving toward something similar to feudalism.

Of course, I’ll take the opposite side of your implied belief here and state that I think a feudal society would trump the crass “democracy” that we’re experiencing (or experienced). I think that Huxley nailed it in Brave New World: when the mob took over, happiness became the only pursuit. Ironically, a democratic society is often founded by visionaries, but once these visionaries pass away, the next few generations squander the work of those who built such a successful society. That is what we’re seeing in the United States, and as an analogy, that’s what Rome saw toward its end (Juvenal and others were disgusted at how corrupt Rome became).

I prefer a Republic over Feudalism, yet I would never approve of democratic mob rule as they end as quickly as they begin. Happiness is for the unevolved, and even some modern psychological evolutionists are admitting that the human brain may be wired in such a way that humans can never achieve a perpetual happy state. Essentially, we’re happy for a few days, but then back to normal; but, as they point out, this keeps us moving and working toward something (I learned this from FEE – Austrian Economics Seminar Podcast). Essentially, vision is what makes life worth living.

Otherwise, I applaud your post since it looks at the larger picture in a historical context, which people won’t find anywhere in the educational system.

@Jacob re: student loans, but if your lifetime earnings – overall loan cost > earnings without degree, you’ve come out ahead. Of course if you’re only planning on working for 5 years the equation changes, but even with a pretty accelerated 10 or 15 year schedule (or part time work after retiring), I’d imagine most (state) college tuition are worth it. Hmm thinking about it, if I were actually saving 75% of my income I’d be able to pay back my loans within 2 years.

Also I think the ‘pie’ is getting bigger (at least as far as world GDPs). But you are right that there are only so many resources on earth (although with new technology we can get access to the harder to reach/ riskier ones, see deep-water drilling). But I think a better measure is the per-capita GDP. And a trend has been that the more affluent, the less children. So if the trend continues as China/India/Africa develop maybe the coming resource crisis won’t be as bad, and we level into the population cap, rather than hit the boom and bust cycle. An optimist’s view for sure, but unless there’s major policy shifts to push sustainability further than it is going, it’s one of the few systematic trends we have going for us.

I don’t think college is just trading money for time, but really time for time. Assuming it’s a net profit, then you’re essentially trading college time for being out of the workforce earlier, or a higher ‘quality of life’ for the consumerist. Though, you can value your time in your 20’s more than your 80’s which can skew the equation. However, if, as your prison analogy suggests, you view your time in college as a terrible quality of life reduction (but not your job), then there’s no reason to trade college time for less job time. So the main question I see in your prison analogy is “how much quality of life am I sacrificing now for more later”. Personally, though I enjoyed my college years, and even met my fiancee there, so for me I’d call it time well spent to retire early (since I’m not going down the ERE path the payoff is over a longer period of time).

Re: economics v reality. I don’t see them as fundamentally opposed. To paraphrase, all economic models are as good as the assumptions put into them. So while we can assume things that are wrong (infinite energy), it doesn’t mean the whole field is wrong. Also models necessarily cannot account for paradigm shifts. Take the standard supply-demand curve, if what was an inelastic demand suddenly becomes something people learn to do without (or find a new alternative), the model’s predictions fall apart.

Instead I see the root issue in humans’ tendency to be short sighted. Thus, we’ll want politicians to act in our best short term interests most of the time, even despite logic or a good economic model telling us it’s in our long term disinterest.

Has anyone come across statistics in their reading on how much land and/or business in America is now owned by foreign holdings? Any books to recommend on the subject? The one issue I have not seen addressed in this discussion is the rich landowners Jacob refers to may not even necessarily be American.