Buying Income Streams: A great idea for Funding education?

On August 5, 2010 By futureofeducation Topic: Books and Literature, Fundingeducation

We have read about this type of financing before. But in the fields of regular business, in the form of factoring, securitization and so on. I found this on the excellent Marginal revolution blog which points to a blog post about a remarkable piece of science fiction titled "The Unincorporated Man". It quotes a passage,

"What if," answered Hektor, without missing a beat, "instead of giving two, three, four dollars a month for a charity's sake, you gave ten dollars a month for a 5 percent share of that kid's future earnings? And you, of course, get nothing if the kid dies. Now you have a real interest in making sure that kid got that pair of shoes you sent. Now it's in your interest to find out if he's going to school and learning to read and write. Now maybe you'll send him that box of old clothes you were thinking of throwing away. Under your system you write a check and forget about the kid, who'll probably starve anyway. Under our system, you're locked into him.

But there is a problem with that: Namely, eternal servitude, where big businesses keep young peiople in the poor world as indentured slaves (In India, they call it "Bandhua Mazdoor" or a laborer who is slaving for a master because he owes money). The book ponders this questions too:


...the real benefit comes about when those 'evil, selfish, horrible corporations' get involved. How long will it take for a business to realize that there's a huge profit to be made in those hundreds of millions of starving children?...Imagine a world where a bank gives a loan to a corporation to build a school, hospital or dormitory. Not because its the right thing to do; who cares! They'd do it because it's the profitable thing to do. And because of that, my system, not in spite of greed and corruption and incorporation, but because of it, will work better than yours in any time period with any technology you choose."

 


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