From 1984 by George Orwell:
The Party is not a class in the old sense of the word. It does not aim at transmitting power to its own children, as such; and if there were no other way of keeping the ablest people at the top, it would be perfectly prepared to recruit an entire new generation from the ranks of the proletariat. In the crucial years, the fact that the Party was not a hereditary body did a great deal to neutralize opposition.
The older kind of Socialist, who had been trained to fight against something called 'class privilege' assumed that what is not hereditary cannot be permanent. He did not see that the continuity of an oligarchy need not be physical, nor did he pause to reflect that hereditary aristocracies have always been short lived, whereas adoptive organizations such as the Catholic Church have sometimes lasted for hundreds or thousands of years.
The essence of oligarchical rule is not father-to-son inheritance, but the persistence of a certain world-view and a certain way of life, imposed by the dead upon the living. A ruling group is a ruling group so long as it can nominate its successors. The Party is not concerned with perpetuating its blood but with perpetuating itself. Who wields power is not important, provided that the hierarchical structure remains always the same.
... which pretty much sums up Home-Owner-Ism.
To recap, Home-Owner-Ism is the belief that "property prices can only go up"; that the government should levy taxes on economic activity but not on privately collected quasi-taxes (income and gains from property ownership); if necessary, it should levy additional taxes on economic activity to reinflate the house price/credit bubble; and that the only relevant consideration for town planners is whether a development will adversely affect property values in the surrounding area, even where the wider social and economic costs of refusing to allow a development vastly outweigh the benefit to local property owners.
The Home-Owner-Ist economic model is almost as flawed as Socialism, so the system collapses every ten or twenty years (i.e. when the house price/credit bubble bursts). Just like Socialists, instead of re-examining the model, the Home-Owner-Ists blame it all on the banks (for going bust and for paying bonuses instead of lending to 'hard-pressed first time buyers'). However, unlike Socialism, which in the long run is always replaced by something closer to democracy or capitalism, Home-Owner-Ism has so far seldom been called into question and appears to be self-perpetuating.
When I criticise their ideology, the Home-Owner-Ists reply "If you think that being a home-owner is such a good deal, why don't you just stop whining and buy a house? There's a free market in houses, isn't there?".
Sure, there's a free market in houses in the same way as there is a free market in taxi drivers' licences in London - the point is that the underlying subject matter of either market is the right to participate in a very un-free market. Without the non-price rationing or implicity subsidies, houses simply would not cost as much as they do.
And, like the Inner Party in 1984, Home-Owner-Ists couldn't care less how unaffordable housing is for their own children or grandchildren - it is only important that Home-Owner-Ists remain the dominant group, and not who the actual members of that group are.
Signs Of Desperation From Remainers...
29 minutes ago
14 comments:
"...they couldn't care less how unaffordable housing is for their own children or grandchildren..." I care. I really do care. Very much.
It's startingg to strike me as a system where homeowners and banks balance sheets are underwritten through a government imposed unlimited charge on the future earnings of renters.
where is part one? A link would be cool.
L, thanks, but I suspect you are in a tiny minority.
SL, the irony is, although renters are hardest hit by all this (until they 'jump on the ladder'), home-owners are also paying a shedload of extra income tax, VAT etc. in order to prop up their own property values, which is a negative sum game for them as well.
Peter, good point, part one is here.
"And, like the Inner Party in 1984, they couldn't care less how unaffordable housing is for their own children"
It's partly about people's assumptions about models - that we have a model where it's perfectly normal to struggle for a few years in your first home, then buy something bigger with the increased capital, and that this is OK and is normal. They did it and their parents did it, so all is fine.
The fact that it creates a highly inefficient and inflexible housing situation in this country is lost on people...
OC, sure, that's what they say, but they are completely re-writing history.
My parents bought in the mid-1960s, 'struggled' for a couple of years and ten years later they'd paid off the original mortgage (£2,000) in full, by which time our house was worth £20,000.
In fact, anybody who bought before the late 1990s and has not remortgaged since will have a loan-to-value ratio of no more than 25%. It's people who've bought in the last five years who will struggle on until close to retirement age to pay it off.
Mark, saying that the housing market is distorted by artificial scarcity (via the planning laws) is not the same as saying you disagree with HAVING a housing market.
Prices go up in line with incomes simply because more people WISH to buy a house than there are houses available. And those "wishers" are converted into economic demand as their incomes rise.
Please cut all this obtuse theory and tell us: why is it bad, per se, for somebody to own the house they live in? Shouldn't we actually have a CHOICE whether to buy or rent?
adamcollyer
It's not just artificial scarcity of land, it's the artificial abundance of credit (affordability (wages/prices) has dropped).
Adam, when have I ever said anything against home-ownership, per se?
Never, I think you'll find.
What hacks me off is "Home-Owner-Ism", the idea that your home is not just somewhere to live and for which you pay accordingly (like cars or holidays or whatever) but an investment which has to produce annual gains, which can only arise if somebody somewhere else is being made worse off.
For example, we all blindly accept that house prices rise with incomes. Yes they do, but ask yourself why this is!
By contrast, over time, cars and holidays get cheaper relative to incomes, because of increased productivity and efficiency etc and despite the credit bubble (which AC1 mentions).
Think about it!
Crikey,Mr Wadsworth.The first time i've seen somebody else articulate the problem with the housing bubble.If it increases in value without producing anything,then it follows that the owners gain is somebody elses loss.
Thirty years ago a decent home could be purchased with a multiple of five times the average wage,but now that multiple is ten or fifteen times that,for the same property.
Like Gordon Brown's debts,it's a generational crime.
MW #'12.02 - To paraphrase one of the Nazis - "every time I hear the phrase 'property ladder' I reach for my Luger"
It's fiat money which goes down.
Mark, do you have a handle on whether rising house prices generated Home-Owner-ism or vice versa?
Bayard, the two reinforce each other.
It dates back to no earlier the 1960s, when the number of owner-occupier households reached about fifty per cent and when the Tories blew the first house-price bubble by scrapping Schedule A taxation.
Owner-occupation rose to about seventy per cent in the next twenty years (since when it has levelled out) - which coincides with replacing Domestic Rates with Council Tax and selling off a third of council housing.
In 1997 Nulab realised that this was electoral gold and fared very well out of it - if seventy per cent of the electorate only care about one economic variable, which the government can manipulate at will, it is easy getting re-elected. The problem is that the Tories will be even worse.
And, like Socialism or the EU, it is self-perpetuating. The Home-Owner-Ists sometimes admit that house prices are very high, but then claim that they have to be pushed even higher a) to prevent people falling into negative equity and b) because rising house prices create consumer confidence which in turn boosts the economy, and so on.
Or failing that, they grab the Greenie mantle and say that new development has to be restricted to protect The Hallowed Greenbelt.
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