Tuesday, July 11, 2017

Property-owning democracy (1963)

From the May 1963 issue of the Socialist Standard

We are always being told that more and more people are owning their own houses. This, we are assured, is a great step forward. We are now on the way towards a “property-owning democracy” —the Conservative Party takes great pride in the phrase.

To begin with, these houses which some workers are now coming to own are in fact usually owned not by the occupiers but by the building societies or the local councils, or whoever else advanced the money for the purchase. A worker who undertakes the ownership of a house which has had to be mortgaged to the hilt to make the purchase possible is simply adding yet another monthly repayment to those he is already probably making on his furniture, his car, perhaps even on his clothes and his holidays. Besides the mortgage repayments, he has to face the steeply-rising demands for rates from his council; and, unless he is going to allow the place to fall down round his ears, he has to foot the repair and redecoration bills, or give up his spare time to doing it himself—first buying the necessary paint and materials.

Leaving aside the question of the deposit which has to be found at the very outset, and adding up only the mortgage repayments, the rates and the repairs, a worker who embarks on house-ownership is likely to find his outgoings much higher than his old rent. If rates continue to soar as they have been doing, some house-buying workers fear that the rates and repairs alone will soon take nearly the same proportion of their income as the rent would have taken before the war.

The hard sell
Apart from these factors, the vote-catching phrase “property-owning democracy” is very misleading. It seems to have been dreamed up by the publicity departments and advertising agents who now advise the big political parties on their “image” and their approach to the electors: as if the all-too-serious questions of the future of mankind were on a par with marketing a new brand of detergent or smell-remover. The phrase appears intended to counter the critics of capitalism who say that (despite our regular phantom “social revolutions”) the ownership of property is just as firmly in the hands of a small ruling class as it ever was—if anything, indeed, it appears to be becoming more concentrated still.

The figures have not been at all affected by the undoubted fact that more people are having to buy their houses in order to keep a roof over their heads. And this is not surprising when one reflects that the property which the ruling class has in its grip comes mainly under the heading of “capital goods’—land, factories, dockyards, and so on: for it is the possessors of this kind of property who own also the results of production in the factories and mines, and who then sell the products to realize their surplus value.

Landlord democracy?
Now houses, in the context of the phrase “property-owning democracy,” are not capital goods at all. For those who talk about “property-owning democracy” encourage us to look forward to the days when every worker will own his own house. And if everyone owns his own house, there will be no one else to rent houses to. Of course, houses which are rented out to other people are the kind of property which, like factories and offices, brings in an income without work to the lucky owners. But the Tories, when they brought out this idea, can scarcely have meant us to look forward to an extension of house-ownership in this sense: otherwise “landlord democracy” would have been a more appropriate phrase. No: they simply meant that more people would own the houses they live in.

Potatoes
But in this sense, houses are merely consumer goods. It is quite true that the worker has property in his own consumer goods. It is quite true that he owns the pound of potatoes he gets at the greengrocer’s until he has boiled and eaten them, and that he owns the coat on his back until it goes to rags. In the same way, if he buys the house he lives in, he will own that too until it is pulled down under some future slum-clearance scheme. But, as we said earlier, if the “property-owning democracy ” theory becomes practice, and everyone owns his own house, then the house-owner will have no one else to rent his house to—even if he wished to do so. His house will be merely part of his consumer goods.

Docile
Who would get the advantage of such a scheme? The capitalists or the workers?

To take employers of labour first: there could certainly be advantages for some of them. For the workers would be much less mobile. If a wage-increase was refused (in time of boom) or if wages were cut (in time of slump), the worker who only rented his house might well hand in his notice and go to a better-paid job in another district if he heard of one. But a house-owning worker would not be able to move half so quickly. He would have to put his house up for sale, and wait till a buyer came along; then he would have to find a new house in the new district. He would have to pay the solicitors' fees and the estate agents’ fees on the sale of his old house, and the solicitors’ fees and the stamp duty on the purchase of his new one. Besides that, unless he had completed his repayments, there would be the trouble and expense of paying off one mortgage and taking out another. His removal would be a much more expensive undertaking, and he might well accept a lower wage than his house-renting fellow-worker, rather than go to all the trouble—in time and money—of selling his house and buying another. House-owning, in short, might well tend to make the worker more docile in his dealings with his employer.

Idyllic picture . . .
What would be the advantages to the worker?

Let us put the case at its highest. Let us assume that, unlike most politicians' plans, this one comes into full operation. Every worker in the country will own his own house: let us assume that there are no rates to pay, no repairs or redecorations bills. Every worker has his own dwelling, free from rent, rates, or any expense whatever. What then?

It seems harsh to shatter what must seem, to some workers, an idyllic picture. But it must be done. For this “property-owning democracy,” within capitalist society, would bring no benefit to the workers whatever.

. . .  and the reality
This is why. Wages arc the cost of producing and reproducing the labour-power which the capitalist must have to keep his mines and factories turning out goods for sale. And in wages, the rent the worker must pay—or his housing expenses of mortgage repayments, rates and repairs—forms an important item. This is recognized perfectly clearly by all the large political parties. When, in the last war, the ruling class felt that its very existence was at stake, and wage-increases had to be avoided at all costs, then rents were among the first-controlled, and among the most strictly-controlled, of all workers’ expenses. This strict rent-control was introduced by the Coalition Government, supported by the Conservative, Liberal and Labour Parties. For they knew that if rents went up, there would be such industrial unrest—strikes, go-slows, and so on—that wages would have to go up proportionately to cover the increases. Alternatively, if rents could be kept down, then wages could be kept down as well.

Workers’ wages have to cover their expenses of food, clothing, housing, and so on. And if every worker in the country owned his own house, and either had to pay nothing for his housing, or less than his present rent, then the “housing element” in his wages would be correspondingly reduced or eliminated entirely.

Inescapable
It is easy to say that if there was no rent to pay, the workers’ standard of living would be higher, and that he could enforce this higher standard by industrial action. But if the workers can obtain a higher standard of living simply by deciding to have it, and by resolving to support their demands by industrial action—well, in that case, they could have it straight away simply by striking for higher pay, without going to the trouble of buying houses. In fact, whether they pay rent or not, the workers will be in exactly the same position as before: their wages will be enough to cover on the average their necessary living expenses. By exceptional militancy, they might get the wage level somewhat above this standard; by exceptional lack of militancy, the wage-level might fall somewhat below it. But. taking the whole of the working class together, that is what the wage-level is. And the workers will not avoid that inescapable fact of life under capitalism by running after the latest reformist slogan.

In fact, the “property-owning democracy" is like all other reforms: the more capitalism is “changed,’’ the more it remains the same.
Alwyn Edgar

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