Economic Myths: The Property-Owning Democracy

From City AM:

Thatcher's property-owning democracy needs to be rescued...

ONE of Lady Thatcher's greatest legacies was to increase home ownership, allowing families to buy council homes at a discount. Her right to buy policy, while only one of several reasons why homeownership jumped in Britain in the 1980s and 1990s, (1) nevertheless played a central role in changing the aspiration and culture of the UK public, as well as enabling many more people to own assets...

But these are absolute figures: since [Thatcher's day], the total number of households has gone up substantially. The latest figures show that the share of owner occupiers fell to 65.3 per cent in 2011-12; this is down from a historic peak of 70.9 per cent hit in 2003. The last time home ownership was this low was in 1987.(2)

The situation is still not as bad as it was in 1980, when just 56.6 per cent were homeowners, but the trend is ominous for those who believe that property ownership should be widely dispersed (3) to ensure that as many people as possible own a stake in our economic system.(4)

1) RTB was only a short term boost and a last hurrah. The biggest absolute and relative increases in owner-occupation rates were in the 1960s and 1970s (when our economic system was much more Georgist than it is now, or certainly a lot less Home-Owner-Ist).

2) As I've said before, the real but hidden agenda of Home-Owner-Ism is to concentrate land ownership into as few hands as possible and enable the smallest minority to collect the maximum in rent. For sure, I'll never qualify for social housing, but I'd rather house lower income people in social housing at virtually no cost to the taxpayer than hand over money as RTB subsidies or as Housing Benefit and rent payments to private landlords.

3) That totally contradicts his opening claim. Who owns council housing and Housing Association housing? All of us, the whole nation, the "democracy" that's who. We all own a 1/62 millionth stake in it. So selling it off reduces the spread of ownership and concentrates it in fewer private hands, thus achieving the hidden agenda, see (2).

4) Woah! More DoubleThink on several fronts.

i) Quickest way to give people a bigger stake in the real economy is to cut taxes on what they actually earn and spend.

ii) Home-Owner-Ism's stated aim - to increase the spread of owner-occupation is in itself A Good Idea, you'd have to be heartless or blind not to agree - but what that means in practice is that there'll be fewer landlords collecting less in rent (which sounds a bit Socialist, which is why they never say it). Simply stampeding people into swapping high rental payments into high mortgage payments does not really change anything.

iii) When the Homeys say "a stake in our economic system" what they must mean is "a share in the total land rents", which ultimately can only be achieved by giving people... er... a share in the total land rents, i.e. a Citizen's Dividend/personal allowance funded out of a tax on the rental value of land. If that goes hand in hand with method (i) so much the better. You can't end slavery by allowing slaves to buy their own freedom.