So, let's return to 14th century Catholic Europe and ban interest? How did that work out? Islam forbids interest. The owners of capital have a workaround: equity with fixed dividend payments (Shariah compliant sukuk finance). No matter how you slice the legal loaf, capital's owners will be able to structure their investment to work around it.

As an investor in post-Soviet Riga my brother and I saw how most of Soviet real estate was falling apart by the 1980s due to lack of investment. Had the CIA shown photos of Soviet real estate maintenance at congressional defense budget hearings, the US would have slashed the Pentagon budget by half.

As soon as real property rights were restored and barriers to return on capital were removed a renovation and buying boom ensued and rental yields on apts in Riga went from 18-20% in 1999 to 3-4% in 2007. My German diplomat tenant got a heretofore impossible to find beautiful 140m2 renovated apt to live in for four years and I got regular income from my investment. Scarce capital got paid just for showing up and taking a risk (Latvia? Aren't you afraid of the mafia?). The capital controls you suggest mean capital will just go on strike and not show up.

Then came the inevitable crash, a fate which Canada will see soon enough.

Your Vancouver friends work as hard as they do because they have legal protections--property rights (remember Larry Summers' phrase "no man ever washed a rented car?"). Your friends sell eggs. We provided western standard housing that replaced a Soviet era communal apt that had been falling apart (think 1970s South Bronx). Your Vancouver friends and I are more similar than your article describes.

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From Latvia and Porto I write to share learning from life in 8 languages in 5 countries & seeing fascism die in Portugal & Spain in 1974 and 1976.

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Lester Golden

Lester Golden

From Latvia and Porto I write to share learning from life in 8 languages in 5 countries & seeing fascism die in Portugal & Spain in 1974 and 1976.