Thanks for the feed back! I'm glad to be having real conversations about this stuff instead of just letting it rattle around in my head.

A converse argument is, if whatever project you are considering is not economically viable if capital costs ~ 8-12%/year, maybe it was not really such a great idea.

Let's look at the data. TTP(Time to profitability)

Tesla - 10 years FedEx - 4 years Amazon - 9 years Turner Broadcasting - 11 years ESPN - 5 years (http://www.inc.com/drew-hendricks/5-successful-companies-that-didn-8217-t-make-a-dollar-for-5-years.html)

This is another example where we ignore time. Of course we want our companies to make money. And we want people working on their best ideas. But how many other billion dollar companies failed because their owner flew to vegas to bet the last $5k on blackjack and lost? The market will eventually settle things out even over time. If no one buys what your are selling, your creditors will eventually catch on. But what if the trade off is over 3 years you learn enough to turn a profit or, if you fail, your creditors get to fold your entity and profit from all the places you spent their money?

This could be a serious problem if we are depleting massive amounts of non-replenishable resources, but in endeavors where the resources are renewable, your only limited resource is time.

You either believe we are in an upward trajectory or a downward one. The data suggests upwards and I'd suggest it is more important to learn as much as possible as fast as possible than to make sure that creditors make money at only 1 degree of separation.

Well, yes and no. My understanding of capital is that it is just wealth used to generate more wealth. For example, if I am a plumber by trade and I need a backhoe to repair a sewer line, the backhoe is capital that I need to complete my project and create wealth. If I don't own a backhoe, I'll probably opt to rent one, and this would arguably be preferable to owning one as it is not every day that I need to dig up a sewer line. Obviously, if someone owns a backhoe, they will expect payment (rent) in exchange for my using the backhoe. By the same token, if I am a real estate developer and I need $100M to develop a project, I would expect to have to pay interest (rent) to use that money. I don't see the difference between paying to use someone else's backhoe and paying to use someone else's money. In both cases, I am paying for capital that I need to complete my project, and I don't really see a problem with that arrangement.

Take a second read of Gessell's parable and try to put aside the availability bias that we all currently pay interest.

Why is it obvious that someone would demand payment for use of a backhoe? If the backhoe is in use to you and returning cash to you then of course you would not take it out of service to rent to someone else unless they offered a premium. But if it is sitting idle in a work yard rusting, all you want back when you loan it out it your resource in the same condition you lent it in. This may have the cost of maintenance, oil, grease, etc. In a perfect market this is all you would be able to get for your backhoe and you'd be glad to get it. The potential for a backhoe is how many ditches it can dig, not how much money it can make for other people digging ditches. If you charge someone two ditches for them to dig one ditch, that is 'economic rent' that we seem to have some differences on. Of course it is profit for the renter, but we still only have one ditch.

The use of money only demands interest because it doesn't have a carrying cost. The banker doesn't need to part with it because $1 dollar will still be $1 tomorrow. If $1 were worth $0.80 tomorrow, some banker somewhere would be more than happy to give it to you today in exchange for you repaying $1 tomorrow. He might even be willing to give you $1.10 that he has no use for today in exchange for $1 tomorrow.

I don't know so much if there is a 'problem' with the arrangement we have now(look how far it has brought us), but I also don't think it is 'the best' way.

From a practical standpoint there is no shortage of money in the world, availability of capital is not a binding constraint.

If money is so available, maybe the issue is that people don't know how to ask for the money because they didn't have the money to pay for the education where they teach you how to ask. :)