[Translated from a 2018 Berlin lecture by an editor of GegenStandpunkt, the German Marxist quarterly]
The housing question in capitalism
There is an acute housing shortage. As always, there is no shortage of good proposals on how to deal with this problem: activists rail against excess speculation and price hikes that could always be banned or curbed politically; progressive parties call for rent control and even expropriation. Then maybe rents would be affordable again. Owners association and their free democratic lobbyists can only warn against such a thing: If you impose regulations on owners and restrictions on rents, then investments in new apartments will no longer be worthwhile and therefore not be made; then living space will be scarce and then – as they know – rents will only continue to rise. The opposite is what would help – removing barriers to their business; then housing might work out again.
You can’t say that one side is right and the other side is wrong in this dispute. They are both right in the sense that this is exactly how the political management of the housing issue works in capitalism: empowerment and restriction as policy levers. They are wrong in the sense that the proclaimed problem is guaranteed not to be “solved” in this way or any other. Because where land is made into private property by the power of the state and licensed as a superb source of income, the claims of land ownership are as unavoidable as they are incompatible with the housing requirements of a people locked into paid employment and the earnings from this source of income.
The “housing question” is therefore as old as capitalism itself and as such can not ever be “solved.” We can prove this to anyone who might not believe this – at least for their neighborhood – and to all those who are otherwise interested in a critique of the political economy of land ownership …
Introduction
There is an acute housing shortage – this diagnosis is anything but new; it is a recurring theme in news about the market economy with its vibrant metropolitan areas and up and coming regions; this shortage has always been a side effect of our economic system. At the same time, signs of scarcity are actually alien to the market economy.
– This does not really fit its ideological self-image, which constantly praises itself for constantly optimizing supply as the best conceivable form of economic activity and for having a panacea for all identified or conceivable shortcomings and for, in principle, having it available: then it just needs more money (investments, innovations, subsidies, transfer payments, loans ...), and then the thing will work out again. It may be true that in the market economy some needs are not met to the satisfaction of those affected; but this is always due to the fact that those affected are simply unable to afford some of the products being offered; there can really be no question of a material shortage or a lack of use values. But when apartments go on the market, people line up down the street – lines that would usually only be associated with East Germany, which made it immediately clear to every observer: these lines are evidence of a miserable economy of scarcity that simply can’t get things done.
– Where else in the market economy does a buyer who is able and willing to pay have to compete for the goods he wants? Apart from the market economy’s praise for itself, this shortage does not fit the reality of capitalist growth, which is what this type of economy is all about and goes hand in hand with a constant “more” of everything. This type of economy very reliably generates an oversupply of products for every pocketbook because this is how society’s ability to pay is mobilized for growth. In a country where, for example, dumpster diving has become a profession, no one would think of talking about a food shortage: this sport rather testifies to the dimensions of the absolute surplus that is produced and thrown away for growth. And as we said: not so in the housing issue; in this subdivision of the market economy there is – actually always – a housing shortage, this peculiar phenomenon of scarcity. Why is that?
As far as there is a capitalist product called “housing,” there is actually no problem; there might be bottlenecks in capacity there too, but these are answered by capital in its own way: they are a question of profitable production and tackled accordingly by the construction industry with the techniques of increasing productivity and the use of cheap labor. Capital then ensures that the production of useful goods is profitable in this sector too. This results in such wonderful ideas as modular construction, where living rooms and bathrooms only need to be stacked on top of each other with a crane and the house is finished. If government regulations stand in the way of such progress, they should be removed. And so on. So as far as the shortage of a product is manufactured by a capitalist, all the laws of growth apply, and then there can be no question of a housing shortage in the sense that too little has been built. Those who say this now are not referring to insufficient capacity in the construction industry and housing sector, but to a shortage of building land and excessively high land prices. Builders are announcing that the creation of cheap housing for the masses is simply no longer a profitable business for them in many places and is therefore no longer being considered.[1] They point to land prices or rents which make the profit calculations on building affordable housing appear unprofitable even with the cheapest prefabricated building materials. So this really is an anomaly in our economy, which normally manufactures suitable products for every ability to pay, no matter how modest, in order to exploit it for itself in the certainty that “even little bit counts”: Here, needs that are ready to pay remain unserved because their commercial exploitation is not worthwhile – and this is explicitly not a question of worthwhile production, but depends on the price and availability of land, which is the obstacle here. In the end, there is talk of too little affordable living space without the production of living space being a problem of any kind in modern society.
So land is the decisive keyword. What is it?
First, unlike the world of commodities, whose production and logic have already been discussed a little, it is not something that is produced at all: it is a good that has not been produced and therefore cannot be reproduced. We are not dealing with a product whose manufacture and sale follow the growth needs of capital and is then also produced and available in that amount.
So is it one of those notorious “scarce goods”? The fact that we are dealing with a quantitatively defined, i.e. limited, piece of nature does not explain anything. There are many natural substances which cannot be reproduced. They may all be “finite” and maybe even used up at some point. That is, as long they are used as raw and basic materials in a production process – i.e. as means of production. That is their economic concept, and capital deals with them accordingly: it procures them in order to incorporate them into its production process; it prepares them accordingly, develops their utilization further, processes them and comes up with substitutes when they are expensive or difficult to procure. In this way, scarce natural resources also fall within the logic of capitalist growth and, in the end, scarce natural resources are turned into abundantly available products. The situation is fundamentally different with land: it is not consumed at all during production. It does not enter the production process as a means of production; it is not a means of production at all, but a mere condition of production.[2] It relates to the entire process of manufacturing useful goods in production as a mere condition.
What else: land – that is only a piece of the earth’s crust, where everything takes place. But what “only” means here is that there is no place in the world over which political rule does not reign; it rules over the area on which the state is established and social life takes place. And bourgeois rule has come up with the idea that this area should exist as a patchwork of parcels of land, all of which are private property.[3] This then is how the above determinations develop their significance: the dumb joke about land is not its inability to be multiplied, it is not the quantitative limitation of the available area, but its quality as private property – this is how these determinations, which are banal in themselves, become a barrier in the first place: the equally banal and indispensable prerequisite of all life and production – that it must take place somewhere – is subject to a right of exclusive disposal. This is what the state decree of private property does when it is extended to land. This property is based on nothing other than the state’s decree – nothing else, because nobody has produced anything, so that the state with its guarantee of property would add something by guaranteeing the producer’s ownership of this product. Here, property has only this negative purpose: it establishes the exclusivity of disposal over a general condition by means of the state power lent to it.
Of these, the so-called landowners hold one piece in their hands as a legal title entered in the land registry. This includes the state permit for them to make a source of income for themselves from this participation in state power as private individuals. How does this work?
1. Landed property – uncapitalistic
Landowners take advantage of the fact that everyone needs what they possess and are not using for themselves. They secure their earnings by ceding for a period of time the exclusive right of disposal that they have over this comprehensive condition to those who need their patch of land and pay for it.[4] In order to overcome the barrier that the right of property imposes on everyone who does not own it, they demand a tribute for themselves. This may take the form of a residential rent that is made up of elements other than the tribute to land ownership – but this tribute is always included in the total rent paid. And even completely undeveloped land extracts the tribute that we are talking about here.
In this way, landowners take advantage of the fact that everywhere in capitalist society money has been earned, which was first produced as wealth within it. Capitalism is a mode of production in which – in whatever concrete form – new property is constantly being created, which has its final form in money. The entrepreneurial and laboring classes, who are bound up in production, live – quite differently, indeed, but always – from this circumstance, but not only them, but also the class of landowners. This is also quite familiar to the bourgeois mind in the form of the moral accusation of parasitism. And as far as the social character of these people is concerned, it is perfectly ok: landowners live from the fact that others elsewhere in society are increasing wealth and they take some of it for themselves. They contribute nothing to the system of acquiring money through the creation of new property in which they participate in this way. In this respect, the accusation that land ownership is parasitical is quite apt. However, those who like to make this accusation should not be mistaken: What they have on their hands is not a moral aberration and much more than an antisocial character trait of uppity figures, namely the unproductive aspect of their source of income, land ownership. And those who can’t stand the fact that they are on the take without giving anything back may, with this criticism, be serving an arch-capitalist ideal and, in this respect, a tradition that is well established in capitalism, i.e. indulging in a rather reactionary concern – but this standard is still wrong: as if capitalism would ever shine in other spheres of exchange of money, commodities, services and, last but not least, labor by remunerating fair contributions! In any case, it has not yet run out of reasons for complaints. With this standard of justice in mind, one could easily go mad about the whole of capitalism when it subsumes God and the whole world under property and its autonomous increase and thus creates a whole host of quasi-autonomous legal titles for earning money. And we will also come to the extent to which land ownership fits in wonderfully with this; the wealth that is earned there is just right for capitalism.
But as I said, in the sense just explained, landowners are external to the entire capitalist process of production and life, with nothing but their state-guaranteed exclusive disposal over its elementary condition. In this sense, land ownership is something per se uncapitalist.
Of course, it belongs to capitalism insofar as it lives from its proceeds – from what else? It is uncapitalist in relation to what capitalism achieves as a mode of production.[5] It is external to the capitalist logic of the creation of private property through the application of social labor, which characterizes the mode of production in general.
One also notices the uncapitalist aspect when one raises the hot price question: What should it cost to temporarily hand over this elementary condition of life and production? What determines the price at which the use of land is temporarily ceded to an interested party? Just think of the price range from zero to infinity demanded for a hectare. Here we are asking about something that is apparently in and of itself indefinite. So this is what happens when the supposedly universal law of the market economy, that prices are the result of supply and demand, is actually true: you are lost in the woods. Now you can think of a thousand aspects that undeniably play a role here, such as the beauty of the surroundings or proximity to the highway – use value determinations that range from practical necessities to questions of personal taste. They also have their own concept and are therefore not arbitrary: they concern the self-confident settling and enclosing oneself in a world of money-making. As such, they all enter into the relationship between supply and demand - and do not provide a shred of objectivity for the price issue I have raised. If we continue to follow them, it is clear that we have bid farewell to the political economy of value. Here there is no value at all around which prices could oscillate; the rental price is based on nothing but the competition for the supply and demand of the good. Here there is no production that sets its objective date for price competition, where on average a certain amount of work is necessary and the entrepreneurs, in their competition for an optimized ratio of advance and surplus, work themselves down to some marketable price. Conversely, one can study here ex negativo what is meant by the so-called “theory of value”: the ultimate economic regulator of the market prices of commodities – not of land – is a question of value which stems from the sphere of production. The secret of the political economy of capitalism lies in the production process and its use of labor power for exchange value. This is one of the lessons we learned from Marx that can be studied here in the negative, as I said. And even those who have not understood the comparison with Marx, because they have not yet read Capital, can and should have noticed that the determination of the price of land represents, precisely because it is given by nothing but supply and demand, a deviation from capitalist normality.
2. Landed property – anti-capitalistic
The landlord is, as I said, dependent on capitalism, which creates property in production. The interests and needs he relates to and exploits are, of course, all capitalist: the particular aspects of supply and demand follow the laws of capitalist growth, which concentrates a population in one place and depopulates other places, and so on. Only: the landlord’s involvement in this economic system does not have the character of a contribution to it, but a deduction from it.
This form of handling a general condition of production and living has something decidedly anti-capitalist about it: it is a pure cost factor, represents a permanent deduction from what is at stake, merely in order to constantly overcome this obstacle. And this obstacle is not marginalized in the course of continuous growth, it does not lose importance, but on the contrary:
To the extent that capital with its ripple effects on social life grows and prospers in one spot, so does the power of land ownership to take its tribute from the yields of capitalist growth. It is capital itself that puts land ownership in this comfortable position: With its competition for advantageous locations, it provides the increasing demand which land ownership as a monopolist answers with price mark-ups via access to corresponding areas. For the individual entrepreneur, the claim of land ownership may be one cost factor among many, which he of course only takes on when his business is ultimately worthwhile for him – there is no need to worry about that; and once he has paid the rental price, he has also secured his exclusive right of use, including the freedom to use it for his business purposes. For this mode of production as a whole, the mere condition that it has to take place somewhere becomes an obstacle to its success, the more successful the production of money wealth – locally and overall – takes place. Land ownership is always an obstacle in the sense of a brake on growth for capitalism – its tribute is a cost factor for capital that increases reliably with its growth.
And land ownership can become a hindrance to growth. In individual cases anyway: Rising rents drive the selection process between competing entrepreneurs to the point that some can no longer afford or want their business due to land prices, withdraw from inner city centers, etc. But also in general: In the meantime – again – the interesting problem is being discussed that employers are having problems because their workforces can no longer afford to live near their workplaces. This is a problem for capital, that land ownership has always caused for it: There were philanthropic entrepreneurs 150 years ago who dealt with this circumstance; they cut off the tip of the anti-capitalist nature of land ownership that got in their way by becoming one themselves and setting up Krupp settlement programs for their workers. Not only entrepreneurs, but also the state and trade unions have taken care of this: unholy alliances against landed property which, by obstructing housing for the workers, torpedoes the business with their labor services. And nowadays one hears similar complaints from employers in beautiful cities like Munich about how their (prospective) employees can no longer afford to live near their place of work; Deutsche Bahn rediscovers the good old tradition of company housing in its search for employees, etc. And the politicians are quite concerned that the demands of land ownership represent a problem for the prosperous progress of growth when they declares housing to be “a central social question of our time” (Housing Summit 2018) and thus express the anti-capitalist character that land ownership represents for capital itself to be that and the problem that people have in their useful role in coping with it and within it.
All these examples and historical digressions or not: the non-capitalist and anti-capitalist nature of land ownership provides the political-economic reason, the necessity, that questions of this kind arise again and again. While it seems there is no need to worry that the state could revoke its licensing of land ownership in principle, the contrast of land ownership to the other capitalist sources of income gives it permanent tasks; and at least the political culture of debate brings up demands such as “expropriation” – a few words on that, if necessary, at the end. The question of how land ownership and its claims can be integrated into the bourgeois community is in any case always there for its political sovereign. The reason for this lies in the nature of this source of income.
3. Landed property – fully capitalistic
Based on what has been explained so far, land ownership still develops an immense productive power that conforms with the system and is even in its own way capitalistically productive: land in the market economy represents its own sector of tradable goods, and figures on a market created specifically for it as value that contribute its share to social wealth and its increase. Increasing money instead of simply siphoning off money – how does this work with this source of income which is unproductive in and of itself?
a) From source of income to object of valueWe have determined the source of income to be the taking part in a piece of state force through the right of ownership which develops a social power to extract tribute. The successful exercise of this force provides the person who holds it with regular monetary revenue; and it does this in an economy in which property proves itself to be capital insofar as it continually provides its owner with regular returns of money.[6] This is the basis for a socially valid, practiced fiction: if there is this regular monetary income, there must be a capital value from which it springs as its source: with this “flowing back,” land ownership becomes an object of value, a piece of fictitious capital. Fictitious precisely because this capital has not been invested anywhere, in business resources of any kind whatsoever, with which something productive is carried out, which in the end earns money through the sale of products and services which amortizes the advance and exceeds it. Here it is exactly the other way around: Nothing but the revenue justifies the return flow and surplus in view of the net present value from which it originates.
Crazy? Sure. Just very capitalistically appropriate: In this economy, capital valorizes itself because it subsumes the production and reproduction process of society and places it under the regime of increasing property. In this society, work is carried out for this purpose – for producing the monetary value of property; and thus – with property in the form of money as a means of command over someone else’s will – work is made available for this purpose. In capitalism, property ultimately functions as a source of its own accumulation – and no longer only in the sphere of production: the art of executing this law of property accumulation, even without a productive process occurring between the advance and the surplus, was certainly not invented by the landowners; they are truly professionals in the mindless application of this art. It obviously does not give their bourgeois minds any headaches when a pure right of disposal becomes a piece of social wealth that spawns a litter – they make it easy. This art comes from the world of finance, which is able to make a source of money – whatever it is based on, even a mere promise of payment – and then, in principle, turns every source of money into a commodity, giving it a fictitious value that is practically traded. From this dizzying world of finance, which has invented bonds, securities and shares, comes the whole crazy operation that gives value to the most tangible thing in the world – a patch of earth that is worth nothing in and of itself and has only cost the good lord something in creating it, so that in the end the simplest proud landowner can walk across his property and imagine that he is not trampling on a bunch of dirt, but on real value, and that this is as down-to-earth as the ground on which he stands.
That’s quite something: as an obstacle to the capitalist process of production and life, which must first be compensated for through its profits, this anti-capitalist means of acquisition is smoothly transformed into an object of value, which not only claims its share of social wealth, but represents one itself. Land has nothing to do with social wealth to begin with, it is a condition for everything; as private property, it gives its exclusive disposer the ability to extract a tribute from other interested parties; the fact that it proves to be a source of revenue, that is, regularly yields returns, gives the same thing a value – it is fictitious capital in the sense that the tribute it earns is like the interest that an asset earns, because that’s the joke of property in capitalism. By state decree into a commodity, i.e. into a piece of social wealth with value that can be quantified in so many millions of euros: a remarkable political-economic transformation.
The value that comes into the world in this way is not exhausted by the use of the thing it is attached to. After all, land cannot be exhausted when it is consumed. Rather, this fictitious capital value lasts as long as it generates this money revenues. Thus is how it exists ideally, derived from the quality of property as a source of income.
The labelling of this existence as “ideal” already indicates the next transition to another determination, a further inversion: with the certainty that land has value, it becomes an object of buying and selling and proves to be real value that is paid for. This already includes an emancipation from the basic source of income: A landowner who wants to sell his property acts in the certainty that he holds a piece of value in his hands and negotiates with his buyers over the amount of this value; the rents and leases earned, i.e. the property as a bubbling source of income, naturally play a decisive role in this, but not the only one; the price question not only takes into account all the good and bad conditions for getting money out of the property on a monthly basis, but a comparison with all other investment possibilities for capital and its interest. [7]
b) From object of value to capital investmentThis is the next act of madness in the business with cultivated and undeveloped land: When it is sold, it is an investment of money for the buyer: He takes the ideal “return flow calculation” from earlier, the fictitious value, dead seriously in practice and pays for it with his money; he advances real money as capital that is intended to generate a return. The rent thus takes on the new political-economic quality of a return on the underlying capital. That is the claim on it and it is now calculated accordingly – it has to justify the investment. In this sense, it is and remains of course a lie, a basic capitalist lie, that the buyer has bought capital that will valorize itself: he also has to make sure of this, that is, hold out his hand to his tenants, to impose the claim on them. He turns his investment property into one by increasing the rents.
With the existence of such a real estate market, where fictitious capital is marketed, an emancipation of speculative value creation from the basis of this entire circus takes place: a line must be drawn at this point under the crucial question of what the property regularly yields in tribute and how much it is therefore worth: The value of the real estate emancipates itself from what it is derived from; the rental income takes on the character of one viewpoint for the value of the real estate investment to which all sorts of others, especially those of the future, are added. It is the achievement of this wonderful market to turn capitalist speculation with a non-capitalist object and an anti-capitalist source of income into a true sphere of growth of capitalist wealth through speculation. And as I said: The basis for this, and to that extent the entry point for the hated financial sharks and speculators who have gotten wind of it, is that land, as an innocent object of value, is itself nothing but a piece of fictitious capital, that the metamorphosis from the unpriced tribute to the value of the land has long since take place in this fundamentally decent sphere.
In its developed form, this sphere of the market economy also has a nice peculiarity that makes it very interesting for all types of investors: its relationship to growth, which was previously criticized as anti-capitalist – the more business and commercial life takes place, the greater the deduction that real estate captures from growth – is turned into the opposite when it is transformed into an object of value: Because the second decisive aspect of real estate value is the measurement of rent against the general return on (any) capital investment, this logic of the development of real estate value stands as a “counteracting cause” against the urge of finance capital to find worthwhile investment opportunities in times of low interest rates, i.e. poor general uses for money: If the interest rate on capital is low, the rents achieved in their transformed capacity as investment returns represent an even greater value of the underlying fictitious capital. So in times of endlessly prolonged devaluation crises and low interest rate policies, real estate prices rise to unimagined heights and, along with real estate prices, the share that land and concrete gold make up in the social wealth of capitalist society increases, and money flows tirelessly into it, and its further growth can therefore be speculated on excellently, etc. etc.: Because, just like old Samuel Butler said, the “value of the thing” here is really “just as much as it will bring,” this is a beautiful self-referential story in which speculation develops value further by speculating on its further development.
Anyone who wants to “buy” today may therefore complain that prices are far too high. What may cause disillusion for the average person with his comparison – buying or renting? – and then soon pass again, takes on a completely different dimension for the professional buyer: If he realizes that buying land is hardly worthwhile in view of these high prices, then he has an eye on the yield as a point of comparison, which tends to be what he gets. The defensive side of this may be the flight of frightened deer into safe, “real” investments made of earth and concrete; the offensive side is always: the measly yields need to be practically corrected, so rents, which are once again totally antiquated in view of the expensive apartments and land, are too measly. They have to go up – again: rent increases is the ideal way out of this terrible dilemma for investors.
But that’s not all. In addition, or instead of thinking about increasing monthly rental income, he treats his “property” as one that is still “developing” its value, i.e. that is hopefully continuing to rise in price, and wants to pocket the price difference from yesterday to today as his profit tomorrow. He doesn’t stand idly by: with luxury renovations and the well-known legal and illegal harassments, he not only increases rents, but also contributes, for example, to the replacement of the resident tenants who are able to pay, which further increases the attractiveness of the property. And this also includes the much-maligned vacancy rate: The small 1×1 of managing the investment includes the calculation that unrented land and real estate is attractive because there is less human baggage with tenant protections attached to its marketing, and the freedom of potential buyers to start their business is immensely greater.
You will notice that the last few determinations on speculation do little more to explain the housing shortage in capitalism than they just explain the latest disgusting appendix of this state of emergency in its current form. The necessity of the whole thing lies in the very starting point of the kind of source of income land ownership is: a non-capitalist asset that, thanks to state power, turns an anti-capitalist source of income that lives by deducting from the wealth that others produce – and from there into a capital investment that has to bubble up more and more for speculation. The benefit for the tenants from this business-like use of the power by the state: they have to pay.
4. Tenants …
The whole transformation of land ownership from a parasitic deduction to a capitalist service provider works out a little differently for the tenant than for capital, which can live quite well with land ownership on balance. It is definitely not worthwhile for him, but if he wants to live, he has to pay. He pays all the claims that have been declared, including compensation for the ruined interest rate level. So you can see how short-sighted the accusation of being a parasite actually is: people are not just dealing with an ugly figure living in the suburbs at their expense, but with the full force of fully developed capitalist land ownership as a subdivision of finance capital and its exploitation claims. He is entangled in this without having any of it under his own control. And he competes with the potencies of a business world that pays rents and leases in line with its competition for the best locations – if and because this proves to be the right strategy for its business.
In contrast, the claims of land ownership grab him in a very sensitive place, where he is just as powerless as he is ready to pay: housing – after all, he has to live; it is and remains an absolute necessity for everything and anything he has to do and sets out to do. For him, the fact that he cannot ignore the claims of land ownership with this vital necessity in the modern, parceled-out world is noticeable as an essential contribution to the compulsion to earn money that everyone, with the character of their needs, constantly feels in a world of private property. In this respect, it is not least landed property that ties him to his source of income, dependent paid employment. And the circumstances of employment determine a lot of what has to be done, i.e. paid for, in terms of housing and place of residence. But that’s not all, of course, people come into play with their individual calculations, because they also want to have a nice place: after all, for modern people, their own apartment is the pivotal point of their self-realization as an individual, their small, private realm of freedom. It should be tasteful and dignified, their own home, which, as the antithesis to the world of competition to earn money, represents the reason-why of all the efforts in professional life. People take this part of their needs very seriously and are prepared to spend a lot of their money on it.
So the quality in which a person is on the go and in which he confronts landed property is that of the consumer and buyer who appears as such in the market economy, freely and self-confidently budgets his limited ability to pay, and decides time and again where his money goes and which means of enjoyment remain closed to him. In quantitative terms, the proportion that rent takes in this area is certainly not insignificant; at 30-50%, it is undeniably the largest cost item in a private household budget; in this respect, I don’t want to downplay the fact that property ownership causes problems for people. But, as I said, in what way? In that they budget themselves within their ability to pay – i.e. with the income from their source of revenue. To put it in its ugliest form: The constant need to freely budget is the modern manifestation of systemic poverty. And this does not come from land ownership, but from the position of people in the social production relationship of capitalism, which is determined by their source of income from dependent paid employment.
One important clarification: land ownership causes people problems, namely problems in budgeting themselves within their poverty – but the reason for their poverty is not to be found in land ownership, but in their position in the capitalist mode of production.
This is where the trap lies when critical discontent is directed at the unsympathetic figure of the landlord. This is, if you like, the difference between a complaint about parasitism and another judgment that is quite wrongly banished to the shallowness of morality: exploitation. This predicate addresses and focuses on figures other than the landlords, namely those who endow people with their income – as a means of their business. What they pay them is not based on any vital needs, and is therefore not based on them at all, but is money for work in the service of increasing other people’s property. This is the reason for the constant pressure on income earners to budget with limited financial resources. The vast majority of people in capitalism live on this money – for work, not for life – and how to make a living from it is their problem, that is, their constant task and struggle. If they can manage that, their poverty is quite useful: in this way, they maintain themselves as what they are under capitalism – living cost factors in the capital calculation, who work in the business establishments for the property of others, the increase of which is at stake.
If land ownership attaches itself to it parasitically and tends to or completely makes it impossible for them to achieve this, then it disrupts this productive poverty and turns it into something capitalistically unproductive. Of course, this is felt first and foremost by those affected, but not only by them: at some point, even those figures who use the money they pay them to do something productive themselves, namely accumulate social property in their private hands. They, too, feel that the claims made on the wages they pay are too high and that they tend to fail to deliver for capital if wages are not enough to live on. To draw attention one last time to how useful Marx’s dogmas are proving to be: This is why he speaks of the “value of the commodity labor power”; and of landed property standing polemically toward capitalism and its useful poverty when it ruins it.
So I want to draw attention to this: the housing problem that is bothering so many people ultimately leads back to something else; the person should not be seen as a tenant with his rent worries, but as labor power whose hard work is so contradictorily determined for them as a source of income. Because whether the person as a tenant knows it or not: With his problem, he is up to his neck in an entire political economy of capitalism, against which he has control over nothing as a tenant, but as which he can only pay by standing order.
In this respect, by the way, it is a very oblique, inverted perspective for resistance that is presented by a “tenant protest.” Dissatisfied tenants in the beautiful Nordend district can easily include student council members, impoverished pensioners and doctors in private practice. The tenant is precisely the grandiose abstraction from all economic particularities that would be important in theory and practice. But a dissatisfied, overburdened tenant doesn’t want to touch them when he gets together with his neighbors and complains loudly about how expensive his neighborhood has become. There is no alternative to the very feeble threat of moving away and powerlessly appealing to the state on behalf of the figure of the tenant.
So to repeat the provocative assertion from the invitation text once again: The housing question cannot be solved in capitalism, but is an inseparable part of it.
5. ... and their political advocates
a) The logic of state interventionBut politicians at least help people in their capacity as tenants. They must be in a position to do what they are apparently increasingly unable to do without state aid: to meet the demands that land ownership and the housing industry invariably demand – of them and their source of income. Politicians know that in capitalism and for it, housing must be a condition of life for the wage-dependent majority – under the entitlement regime of land ownership, which is and remains expressly enshrined in law. The welfare state and hard-working government and opposition parties have a lot to do in this respect.
It was recently announced: “The housing issue is a central social issue of our time” (Housing Summit 2018) and initiative was taken. The problem that there is far too little affordable housing has been identified and the answers have been given with this definition: 1. The state is spending a lot of money on social housing, home building, subsidies and tax breaks for new buildings, extensions and conversions, as well as housing vouchers. 2. It wants to increasingly act as a public landowner itself: provide housing for its public servants, which it recommends the private sector emulate; make land belonging to the federal or local governments available for public housing, etc. It holds itself, namely its bureaucracy, approval and building regulations, in suspicion of having driven up costs for the construction industry and vows to do better.
Business, a profitable one, should therefore solve the problem; it is pushed to do this. The proposals all show that a) it does not mention in a single syllable the claims made by the regime of land ownership, whose un- and anti-capitalist character undermines the necessary foundations for capitalism, especially among hard-working people, or is in sharp contradiction to their source of income; and b) the fact that the state absolutely wants to reconcile the two, i.e. it does not want to offend the institution of land ownership in any way when it makes the necessary corrections. The proposals cannot therefore be recommended for intellectual adoption.[8]
This is how it works, the political management of the housing issue in capitalism: as a problem that can never be solved, but in the best of all conceivable economic systems must be continually managed.
b) The demand for expropriationOr maybe not? The debate in Berlin recently taught us otherwise. Unusually radical tones can be heard when there is suddenly talk of expropriation in the Germany of 2019. Big players in the urban housing business, who have successfully subsumed the housing of the masses into their financial capitalist calculations, should be banned from this harmful practice. Dealing with the housing needs of many Berliners should be left to state-social considerations instead of this speculation, for which they should be expropriated – albeit in return for compensation. This damaging aspect of property ownership should actually be banned.
This is really something different from the eternal social and economic policy approach to the housing issue, because it addresses the legal basis of the economic order, on which not only the business of land ownership is based.
The calls from the reactionary side against sympathizers among parts of the Senate and against all supporters of such measures are correspondingly loud and clear: They see the specter of socialism looming and feel reminded of the dictatorship and mismanagement of East Germany.
And the bold demands of the left? They deny them. They insist that they don’t want anything indecent, that their wholesome demand is totally compatible with the market economy and is actually already promised in the Basic Law anyway. And that is simply an untruth: whether they want to admit it or not, such a demand raises the question of the system itself – before the left even seriously tackles it, the other side has long since insisted that it has been raised. Even in the most absurd, wrong place where they touch on the unconditionality of property, the curtailment of the freedom of property is a questioning of the property order and thus of the ruling economic interests which are organized in this order to guarantee their benefit. The state institutionalization of private property is the sacred legal cow of all capitalism – of production as well as distribution – and is constitutive of the system precisely in that it exclusively guarantees the owner the freedom of disposal, and thus the use of what is his for business purposes, according to his private point of view – capitalist competitive success is thus nothing but a question of his private resources. They are interfering with this, fundamentally, even if they only want to reform a supposedly unimportant side note.
It is the classic contradiction of left politics to raise questions about the system with a desire for improvement without seriously wanting to raise them at all. The dogma here is that the unpopular consequences of the capitalist order, to which the state is committed and whose principles it protects, can be separated from this order and its principles; that the system’s bad character can be bought off with improvements. In contrast, the reactionary screamers are much more correct than one might like: As always, when they reject good suggestions for improvement, they insist with offensive cynicism on how unrealistic and seditious it all is, i.e. they insist on the incorrigibility of capitalism. Very instructive: what is harmful about property cannot be stopped without harming property. Where they are right, they are right.
[1] There may even be the opposite phenomenon, vacancy, in already built apartments. But this does not have anything to do with the notorious overproduction which systematically exceeds all demand, so that apartments are stockpiled like cars because it is part of the competition; vacancy has special reasons and purposes – more on this later – that do not belong to the realm of the mode of production and its growth.
[2] The fact that a factory or an office is located on a patch of earth does not make the land a means of production in the production process that takes place on it. The means of production are the means of labor and the object of labor in relation to productive labor from the point of view of the respective product. In this sense, “the earth” can really only be grasped in a very primeval form as “the first” or “general” means of production, insofar as sticks and stones are used directly as a means or object of labor; pure nature may be grasped as an object of labor at best in the extractive industry, but this no longer applies to agriculture, which is so close to nature: there the soil has long since been cultivated. Anyone who wants to can read about this in Capital Volume 1, Chapter 5. In any case, the conditional argument at issue here cannot be grasped at all with the category of the means of production.
[3] What kind of state act this is and what this legal form depends on becomes explicitly clear in the case of the annexation of East Germany: it was decided that the system change to private ownership would not stop at land ownership, and the exciting question was who would be appointed as the owner or who would be awarded the land. This turned proletarian and peasant living conditions upside down. As the champions of private property, the business community took the side of land ownership, even though the latter only costs them money. After all, the tribute to be paid secures them their exclusive right of use, including the freedom to use it for business purposes. (see Peter Decker and Karl Held, DDR kaputt – Deutschland ganz 2: Der Anschluß, GegenStandpunkt Verlag, Munich 1990, p. 130)
[4] The counter-example is the farmer: he needs his land himself, which is why it does not generate any income for him. He makes his source of income from the marketable products he extracts from the land through his work – which in turn opens up a series of peculiarities that are not the topic today.
[5] Emphasis on the fact, which may be meant as an objection, that the landowner would look pretty stupid without entrepreneurs with factories making payments on the land, without wage earners who live in tenements being pressured for money, etc., can only be agreed with. All of this must already exist, it is a theoretical and practical prerequisite for this source of income. This emphasizes precisely what is uncapitalist about it: the landowner has nothing to do with the creation of new monetarily valued property, but lives off others who are involved in it.
[6] Money increases when you put it in the bank, that is the most self-evident thing. So much so that everyone can now complain when there is no interest any more for savings.
[7] The certainty of intrinsic value and the simultaneous vagueness in the measurement of value is also reflected in the actions of the state when, in the certainty that there is increasing social wealth here, it holds out its hand as a tax authority – the property tax, including the exciting question of how it is to be calculated: By square meters, as if the value lay in the floor area? According to actual rental income, as if the property were only worth what it brings in? Or according to a professional valuation that takes into account what one could earn with the property, whether one turns it into a source of income or not – because then one is paying the rent you save to oneself, so to speak, right? A tax policy clarification on the proper use of this type of property: as an object of value, it is fictitious capital and is treated as such by the state.
[8] Building subsidy: owning a home instead of renting is for many a dream supported by the state. This measure is based on the contradiction between the source of income and the price of housing, and this now hangs in a modified form as a sword of Damocles over the proud homeowner who is in debt for life and will remain so for as long as he can service the interest and loan repayments he has agreed with the friendly lady at the savings bank. Nobody can escape the clutches of property ownership that quickly unless they are rich enough to be a real property owner themselves and not just one on credit.
Public housing: The state carries the cost to make land ownership and proletariat compatible, designates it as a business with a social obligation, until it becomes too expensive and the freedom-loving experts warn that the large corporations are exploiting its regulations to the hilt and at the same time stifling any prospect of prosperity, thus only exacerbating the problem. Are they trying to point out how badly growth and social sustainability go together?
Housing allowance: This shows very clearly the extent to which aid for the less well-off classes under capitalism in this capacity is also aid for the system of ruling economic interests. The state subsidizes tenants who would otherwise not be able to afford housing and thus directly subsidizes the demands of the landlords. This ingenious measure adds up wonderfully with all sorts of other pecuniary incentives for the housing industry, with which it documents not only hat a big heart it has for poor tenants but also for growth, which is ultimately a prerequisite for everything.
Rent control: The sovereign has obtained a title to interfere in free price setting on the market, where supply and demand prevail and produce handsome results. It aims to slow down the continuous rise in rents in designated problem areas, a very considerable restriction on property ownership, the other side of which is, as always, empowerment. After all, with its rent index and disclosure laws, the state ensures transparency in this one-sidedly determined market and thus retains the upper hand over the hustle and bustle of real estate, which can and may, i.e. should, do anything for its success.
Rent cap: Even such an anti-freedom idea as a price cap may come up in various places in capitalism; in Berlin it comes up in conflict with the decidedly anti-capitalist character of land ownership, where it makes the housing issue in the capital untenable. It is the last powerful means of temporarily and locally restricting tribute, where the reverse is also interesting, namely what is stewing under this lid and will continue to stew for years to come. The measure has a rather bad reputation: The champions of land ownership are very keen on confusing the parasitism of their noble clientele with the productive business of the construction industry when they insist on the unconditional freedom to set rent prices by referring to the expensiveness of housing construction, which must also be worthwhile: Because land ownership as a source of income should not be infringed on under any circumstances, hard working landlords must be and remain allowed to charge their tenants the tribute that land ownership demands of them – whether or not in twofoldness with themselves. Otherwise the problem of scarce living space will only get worse! Housing as an untouchable business or not at all – according to its beneficiaries, there is nothing else is possible in capitalism.
Land use planning: Such regulations, which belong in a very early logical place, somewhere shortly after the state empowers land ownership with its institutionalizing of property, are not being discussed in the lively debate. Wrongly so. In any case, there is no need to think that the state should finally get involved now – it has been from the very beginning, it is the ultimate landlord. And from the outset, it harbors a solid distrust of competition in this sector and its results, which it therefore regulates – and thus affirms in the most fundamental way imaginable.