Housing reform examined. An illustration from Vienna. (1927)

From the December 1927 issue of the Socialist Standard 

The housing problem is—for the workers —neither new, nor limited to any one country.

It existed before the War and exists still, despite the much-advertised efforts which have been made by the post-war Governments all over Europe. In essence the problem is simple. The workers cannot afford to pay rents high enough to make the building of houses a profitable undertaking for the capitalist building concerns, and even when the municipalities or the Government step in they are faced with the choice either to let their houses at rents less than sufficient to meet the cost, have them unoccupied, or else overcrowded with two or more families. In the “New Leader” (October 21st) there appeared an article by an Austrian writer, Olga Misar, bestowing high praise upon the Austrian Labour Party for the housing policy which they have carried out on the Municipal Council of Vienna. They have built some 25,000 working-class dwellings and have thereby greatly reduced the pressure on accommodation which immediately after the War was probably worse than in any other European city.

The writer points out that whereas in pre-war days the Viennese worker had to pay away about 25 per cent. of his wages as rent, the present proportion is only about 2 or 3 per cent. A man with £1 per week wages, instead of paying 10s. rent, now pays only about 1s.

If this is true, does not the Austrian Labour Party fully deserve the praise which Olga Misar showers on them?

In fact, however, this is only part of the story. Other information is contained in an Austrian Labour Party pamphlet, “Die Wohnungspolitik der Gemeinde Wien (1926)” (Housing Policy of the Vienna Municipality), which very admirably illustrates the soundness of the Socialist opposition to the advocacy of reforms.

True, rents are proportionally less, but SO ARE WAGES. What has happened is as follows :

Seventy per cent. of the production of the Austrian factories is for export, but as Austria has few sources of raw materials or fuel, she must import them at world prices. Faced with the problem of exporting manufactured goods in competition with big and better equipped German, English and American industries, and lacking the capital to re-equip their factories on modern up-to-date lines, the only solution for the Austrian capitalists was to lower wages, and at the same time, if possible, increase the efficiency of their workers.

By the almost complete elimination of rent from the expenditure of working-class households wages could be and have been reduced without sacrificing the indispensable minimum of food, clothing, etc., necessary to maintain their working powers.

That this is a correct view of the situation is confirmed by a report published by the International Labour Office of the League of Nations. The report says :—

“The item of expenditure on rent in working-class budgets was reduced to practically nothing ; in July, 1923, it was barely 1 per cent. of the total expenditure of a working-class family, whereas before the war it might be estimated at about 20 per cent.

The change, however, directly benefited certain classes of workers only. But this applied only to unskilled wage earners in a few industries. Most of the workers were in the same position as those of Germany; they had practically no liabilities under the heading of rent, but the corresponding amount was not included in their wages. The actual gain was thus nil.

Industry, on the other hand, benefited, as in Germany, by the reduction in the cost of most labour by the full amount which rent represented in wages before the war.” (The Workers’ Standard of Life in countries with depreciated currency. International Labour Office, Geneva, 1925 P. 97.)

The nett result is that the efficiency of the workers has been maintained or increased by the added comfort and contentedness promoted by better and less-crowded housing accommodation than would have been supplied by private capitalist builders. And since this could not be carried through as a financially self-supporting scheme it has been financed at the expense of the Austrian landlords, by means of heavy house and rent taxes levied on landlords money was raised by the Municipality to build and subsidise working-class dwellings.

In short, the landlords have been plundered by the Labour Party in order to subsidise the export trade of the Austrian factory owners. The workers pay less rent, receive wages which are correspondingly less than before, and give better service.

The “successful” Labour housing policy is then just part of the sectional struggle between exporting and landowning capitalists.

Even so, there remains the question of the better housing accommodation. It will be said that this at least is a gain to the workers. True, but did it need a “Labour” majority to secure that incidental gain, and is the securing of it a justification for the policy of fighting for reforms of the capitalist system ?

It was in the interest of the manufacturers to have their employees well housed, contented and efficient. Henry Ford, Bournville, and Port Sunlight are instances of the care taken by more progressive capitalists to ensure that the home conditions of their workers do not militate against their efficiency as wealth producers ; and the activities of almost every government (including the Austrian Central Government) in the direction of restricting rents or of building or subsidising houses, show that they will not neglect their own interests as an employing class. Instead of allowing themselves to be used as the instruments of a section of the capitalist class, the party of the workers should concentrate on the very necessary and at present largely neglected task of demonstrating the impossibility of solving the poverty problem inside the capitalist system.

Edgar Hardcastle