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and that's why this is called systemic inequality - the inequality is built into the rules of the system.

I'll go one step further. This inequality is built into how humans work.

Most of us would not extend credit to somebody with low odds of returning it, so why do should we expect companies and organizations to behave differently? I feel like wrapping this up as in the pretty words "systemic inequality" is framing it as some constructed oppressive structure, which I'm loathe to do.

Sometimes humans are selfish, sometimes they are generous.

You don't like the term "systemic inequality" yet you're framing the problem in terms of our current system: very impersonal, only-the-numbers-and-ROI matters.

If you phrased it as "most of us would choose to exploit the more desperate because they have very little alternatives instead of willingly helping out" you might trigger different instincts. Instincts that would favor restricting interest rates and favoring a stronger social safety net.

There are more generous and forgiving systems that have existed successfully elsewhere in human history, so they're not incompatible with human nature, so yes, I think it's fair to characterize the American system as iniquitous.

Why should someone else's desparation and need be solely viewed through the lens of economic opportunity for someone else?

You don't even need RoI here, and I never even had that baked in. Any sustainable system of credit even would result in the same phenomenon.

In it's simplest form, to make a loan, you have to have the resources to loan out to begin with. Furthermore, dereliction of debt is expected. There is no guarantee that people will repay in a timely manner, and missed payments/discharged debts are not uncommon. As such, interest rates can serve to create a sustainable system by helping to cover these debts.

Discount any consideration of their ability to repay, and what you give is no longer a loan, but a gift. A gift at the cost of others that you loan to.

> very impersonal, only-the-numbers-and-ROI matters.

What would be a more personal approach when figuring out whether or not to loan the money to someone?

Deciding to lend to someone because you know them (they are "part of the community"), or they are a friend, or they are family. Of course it can be seen as more "humane" but it can also be seen as nepotism and/or a system excluding newcommers/strangers.

The condition is still the same. "Will he/she be able to pay me back/ return the favor"

And that condition will always benefit those who can return back. It's not about being newcomer or stranger, it's about being able to identify if it's a loan you can do.

That sounds like the personal system of honor being used for credit worthiness. Which wound up leading to dueling while doing a worse job of the primary task than banker evaluations. Needless to say all around it was a worse system with worse outcomes and worse externalities.

Not extending credit to people who are likely to default: makes sense

Denying a 2% discount to people who are likely to default: ???

Could argue that it "makes sense" in exactly the same way - when you offer the discount, you increase overall spend / demand, i.e. you increase the size of the loan, which is something that as the lender you would prefer to do toward people with better credit.

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