Tuesday 20 October 2009

1984(19): Home-Owner-ism

From 1984 by George Orwell

... it was also clear that an all-round increase in wealth threatened the destruction -- indeed, in some sense was the destruction -- of a hierarchical society. In a world in which everyone worked short hours, had enough to eat, lived in a house with a bathroom and a refrigerator, and possessed a motor-car or even an aeroplane, the most obvious and perhaps the most important form of inequality would already have disappeared. If it once became general, wealth would confer no distinction...

Nor was it a satisfactory solution to keep the masses in poverty by restricting the output of goods. This happened to a great extent during the final phase of capitalism, roughly between 1920 and 1940. The economy of many countries was allowed to stagnate, land went out of cultivation, capital equipment was not added to, great blocks of the population were prevented from working and kept half alive by State charity.

But this, too, entailed military weakness, and since the privations it inflicted were obviously unnecessary, it made opposition inevitable. The problem was how to keep the wheels of industry turning without increasing the real wealth of the world. Goods must be produced, but they must not be distributed. And in practice the only way of achieving this was by continuous warfare.


That's the clever bit, you see.

The dominant ideology in Anglophone countries, whether by accident or design, is Home-Owner-Ism, which has only developed into a fully-fledged set of political-economic-ideological beliefs* since the 1960s or 1970s.

Unlike IngSoc, Home-Owner-Ism does not divert excess productive capacity into warfare (and thereby destroying it), it diverts excess productive capacity back into property values. This is achieved principally by restricting the number of houses that can be built; steadily reducing the tax burden on property ownership (while increasing it on everything else) and diverting as much money (a lot of it being taxpayers' money) into the banking system as possible.

So whoever happens to have been on "the housing ladder" the longest is not just top of the heirarchy, but accrues the benefits of all the excess productive capacity as well - in plain English, earnings before housing costs are relatively evenly distributed (according to skills, effort, luck etc) but disposable income after housing costs is vastly greater for those who have paid off a mortgage than it is for first time buyers - I don't mean one-and-a-half or twice as much, it is more like five or ten times as much. Unlike in 1984 where the Inner Party members keep all the power but live relatively meagre lives.

I cheerfully admit that George Orwell probably didn't mean the book that way, but even in his book, there appears to be a complete lack of new residential construction. The Proles all live in Victorian back-to-backs and the Outer Party live in blocks of flats constructed in the 1930s. When he and Julia meet up in the countryside, Winston is quite surprised to see that urban London suddenly stops and all around are it are green fields, meadows and forests.

I argue a lot with Home-Owner-Ists, and they are also masters in DoubleThink, which makes them very slippery opponents indeed, but I will cover that some other time.

* I say "beliefs" in the strict sense that a lot of people genuinely believe that half of the UK by surface area is developed or urbanised. It's not, about ten per cent is developed or urbanised.

12 comments:

Steven_L said...

It's what people want. As long as their house prices are going up they'll vote for anything. As soon as the trend becomes threatened ...

It'll either end up in tears or with 90% of the land owned by the banks and government, then again which is which?

Mark Wadsworth said...

SL, Home-Owner-Ism only works if more than half are "on the ladder", which is why it is a relatively new phenomenom. It wasn't until 1971 that 50% of households were owner-occupiers, according to this.

It wouldn't be the dominant ideology if most people were tenants (whether of local councils, banks or the factory or farm owner is neither here nor).

Anonymous said...

A good example and argument. You're beginning to win me over to LVT.

It certainly has merits and it is probably not popular with the wealthy landowners - who have the power to veto it.

How to proceed?

Mark Wadsworth said...

F, "How to proceed?"

That's the tricky bit! And it's not just LVT that they oppose, of course, it's any new construction of anything - whether houses, power stations, shopping centres or airports.

woman on a raft said...

That's a very good way of putting it - I'm beginning to get an inkling. Keep going.

roym said...

i seem to recall kevin cahill saying that the amount of the UK that was developed was lower, at around 4%

Mr curious said...

Mark, if I may put a compliment your way, you seem a very clever bugger and for me, the best advert for UKIP I am aware of.

I have a question for you?

Any thoughts on the situation in California?

The state has been teetering on the edge of bankruptsy. I understand that this is partly due to the state being overwhelmed by illegal immigrants and others who are less than productive. But also due to the unwillingness of the wealthier state residents to pay for the costs. I understand this has something to do with low property taxes.

Now, I think LVT is a brilliant idea, but if it were introduced into an area as divided as California, what is to stop all the wealthy residents leaving?

Is there a problem with LVT, rather like nordic or Bismarkian type socialism, in that it will only work in a cohesive society?

neil craig said...

The elfin safety bureaucracy also destroy wealth (the rule of thumb is that each £1 spent on over-regulation means £20 lost by the regulators so 200,000 regulators destroy what 4 million workers create).

Then we have the eco-fascists. I once heard Robin Harper, Green MSP explain that the reason the Greens moved from "small is beautiful" to supporting the EU was that the EU bureaucracy has a fair chance of stopping all economic growth.

Thank you for that Orwell quote - it is entirely apt.

Mark Wadsworth said...

WOAR, thanks, I shall.

Roym, Kevin C may well be right, but it depends how he classified stuff.

As a reality check; Greater London is about 1.2% of the surface area of England but contains 14.4% of its population; ergo, if all developed areas in the UK are of similar density to Greater London*, that means our entire population and 99% of economic activity (i.e. everything excluding agriculture) takes place on 8.3% of its surface area, so I'll stick with "about ten per cent" for the time being.

* Greater London is still about 40% green spaces - rivers, fields, forests, large parks etc.

Mr C, see my subsequent post.

Mark Wadsworth said...

Neil, well, obviously. Elfin Safety and Equality regulations destroy value in the same way as do planning regulations (the NIMBYs and Greenies have formed the coalition from Hell), the basic principle is the same.

Steven_L said...

I was more thinking along the shared ownership/shared appreciation lines. If house prices keep outperforming incomes it'll have to eventually end up like that, with a load of guys (and girls) playing monopoly on what's left.

Mark Wadsworth said...

S_L, the best kind of shared ownership is LVT - you own the bricks and mortar and although you legally own the land, in economic terms the land appreciation goes into the pot to cut other taxes.