What right to housing? (2002)

From the March 2002 issue of the Socialist Standard

Every week we are treated to the latest front-page-filling concern for the paid scribblers of the capitalist class. The current crisis is concern over the spiralling cost of housing. In recent weeks, we have had announcements by banks, such as the National Westminster, that they intend to withhold mortgages on houses in certain post-codes (mostly in London), for fear of a burst in the house-price bubble. Simultaneously, on 7 February, we were treated to a round of reports about the average house price exceeding £100,000 in Britain. At the root of all this is the continuing inability of the market system to provide for even this most basic need of a human being, a place to live.

Over the last century, the structures of home ownership in Britain changed dramatically, from a situation where most people rented their home (with an average of 4 people per household), to a situation where the majority of homes are privately owned by their occupiers, with the famous 2.4 people per household. As the population of the UK grew by some 50 percent in that century the number of houses tripled. Since the 1970s the numbers in rented accommodation has steadily fallen, and now represent only 8 million out of 25 million households. Over that century, we saw numerous initiatives from rents controls, to council houses and housing associations to try and ensure proper provision of housing, none of which worked over the long run.

In the aftermath of the Thatcher regime, housing has been left almost exclusively to the open market, with councils at best being able to cut deals with developers to build “social housing” in exchange for planning permission on lucrative projects. Between 1988 and 1996 production of new houses fell yearly (especially compared with the simultaneous clearance of slum housing stock). In 1988 a net gain to the housing stock of 234,500 houses was made, compared to net gain of only 178,000 in 1996. This fall can be seen more clearly in the general reduction in output (in terms of raw materials for houses) of building products over the same period, with bricks being the best example, falling from 4,654,000 tonnes in 1989 to 2,939,000 tonnes in 1999.

Much of this malaise will be due to the falling investment by the state. In 1988 the state (central and local governments) spent a total of £5,273 million on housing expenditure, this plummeted to £2,825 million in 1999. Some of that fall was achieved by transferring housing stock from the public to the private sector in 1999. As has been noted in the columns of this journal before, the state is currently in the processes of divesting itself of as much capital as possible, hoping to transfer it into the private sector where it can be both valorised for profit, and used in a capitalistically more “efficient” manner. This has obviously, though, had some knock-on in terms of building of new houses.

This is particularly so with regards to being unable to manage the demand thrown up by the uneven nature of the market system. Given that workers must migrate to where they can find work, in some areas, such as London, the cost of houses is much higher than in areas of low employment, such as Hull. As the labour time that goes into their building and maintenance will be about the same, the difference is the price of the land on which they are built. What this illustrates is the difference between the cost of the house itself and the cost of the land it is on.

Land monopolists

In an agricultural economy, the rental value of the land would be derived from the differences in the quality of the soil. That is, land which could produce more, say, grain per hectare per hour of labour would give up a higher rental value than the least productive land (that is, land which could be exploited only for the given rate of profit in the economy). This remains partially true of land for industrial use. In the big cities, such as London, however, there is not the remotest chance of returning the land to agricultural use, and so it becomes human geography that provides land an income, from firms wanting office space, or volumes of people (with particular disposable wealth to hand) wanting housing.

Rent is derived not from any inherent feature or use of the soil, but solely through the titular owners’ parasitic capacity to prevent capital from being invested in an area without them being given a share of the surplus value generated (usually any in excess of the average rate of profit prevalent in the economy). This capacity is derived solely through their possessing property rights legally enforced upon others. The price of land itself, not being a product of labour, is calculated by taking the income it can generate and projecting it as a rate of return on capital over a number of years (so land that, say, generates £1 million rent per annum at a rate of 10 percent would have a nominal value of £10 million).

This is, in part, recognised in the national accounts, in that the “subsoil value” of land is now listed alongside computer software patents and electromagnetic spectrum rights as “non tangible fixed assets”. It is not the quality of these “things” that creates their rental/asset value, but merely proprietorship over them.

Pressure on wages

In recent years – as part of the “property owning democracy” gimmick – government policies have tended to encourage workers to buy houses and use them as a form of savings and investment to try to climb the property ladder. This increases the number of housing transactions (as some people speculate), and also means that the government is locked into policies which must attempt to ensure the continuing appreciation house prices (or which at least prevent negative equity).

According to the Office of National Statistics, in 1998 the average person was paying 17 percent of their gross income on housing costs. Obviously, that is a percentage of wildly differing incomes, so the top 10 percent of incomes would be paying £120.80 per week on housing, whilst the lowest would be paying £19.80. Even then these figures are somewhat deceptive, since many of the lower income households were only meeting their full housing cost of an average of £59.40 per week through housing benefit (which is tapered to achieve the 17 percent cost).

This means that any increase in demand for housing due to labour migration, or other events outside a general rise in wages, will increase the share of wages needing to go into housing, and thus create upwards wage pressure. An example of this is the current plan to raise the London weighting on salaries from £2500 to over £4000. This effectively means a potential transfer of wealth from productive capitalists to landholding ones (as well as some of the financial intermediaries involved). Given that the workers could press for higher wages (thus cutting profit rates), to off-set these rises in housing costs, unlike employers landowners have no direct interest in holding such costs down. Since the employers need their workers – and during periods of growth, more and more workers – they have to surrender this indirect tribute to the landowners.

This is why capital was once willing to accept rent and housing market controls to prevent the landowners taking its profit. Hence why, now, the state pays a portion of rent to smooth out the proportion of wages spent on housing. Given, though, the size of the housing benefit budget, and the notorious capacity of landlords and tenants to make “fraudulent” claims, the state is under pressure to curb even that mechanism for taming housing costs.

What all this means is that the anarchy of capitalist production – with its self-seeking economic agents, periods of boom and slump, its uneven migratory population pressures – creates a clear contradiction between profit seeking and providing for human needs. In a world in which everyone could be easily housed, even in a country like Britain we find millions leaving in what even the government classifies as housing unfit for human habitation and actual homelessness on the streets, while nearly everyone has financial worries over satisfying this basic human need.

Pik Smeet

Workers as shareholders (1986)

From the December 1986 issue of the Socialist Standard

In preparation for the next general election the Tory Party is popularising the idea of worker-shareholders as part of that party's long-held vote-catching conception of a "property-owning democracy". From the earliest days of capitalism the rich and governments have always urged the workers to work hard, be loyal to their employers, live prudently, save money and never get into debt. The advice also included warning them to put the money in a safe place such as the Trustee Savings Banks or. in 1861. in the newly established Post Office Savings Bank. The one thing they were advised not to do was to enter the risky field of company shares.

But times change and the advice also. Every inducement is now given to getting into debt by buying on credit. Working hard and being loyal to the employer remain, but nowadays this calls for more sophisticated methods. At all times the motives behind the advice have been the same. Workers who followed the advice would, it was thought, be better profit-producers for their employers, would be less likely to fall into destitution and become a burden on the rates.

In the middle of the nineteenth century few workers were able to save anything. British capitalism was booming but the wages of most workers were at bare subsistence level. Only skilled workers could put anything by. But it was only out of their own resources that any workers could make provision for sickness, unemployment and old age, or the cost of funerals. What provision some workers could make was through membership of the Friendly Societies and trade unions. (This and other information will be found in Paul Johnson's Savings and Spending: The Working Class Economy in Britain 1870-1939).

As Paul Johnson says, few workers even troubled about what they would live on in old age because they did not expect to live long enough Only the trade unions had provision for unemployment but as late as 1911 Lloyd George reckoned that not even ten per cent of the working class were covered for it. As the trade unions grew in membership and effectiveness, in the second half of the century. wages steadily increased and savings also. Between 1870 and 1914 the number of depositors in the Post Office Savings Bank and Trustee Savings Banks grew from 2,500,000 to 11,000,000. Yet in 1911 it was reckoned that the total assets of adult workers were only £11.10p a head — just enough to cover two months' unemployment or sickness.

Since 1945 conditions have altered in various ways. The purchasing power of workers' take home pay (after deductions of PAYE and NI contributions) has continued to increase and is now well above the level of 1938. Workers' savings have grown but the ownership of accumulated wealth of all kinds remains highly unequal. The Royal Commission on the Distribution of Wealth and Income, in its report in 1975, found that the top twenty per cent of adult population owned seventy-eight per cent of the wealth and the bottom eighty per cent of the population only twenty-two per cent of the wealth. One new factor has been the payment of £10,000 million redundancy pay to workers who have lost their jobs, producing the somewhat novel feature of unemployed workers having, for a time, cash at their disposal. It is against this background that the Tory Government launched its programme for a property-owning democracy. This included a change in the law enabling council house tenants to buy their houses at prices below the market rate. The Tory Election Manifesto 1983 said. "There are a million more owner-occupiers today than four years ago".

Other items in the Tory programme have been encouragement to companies to introduce "profit sharing" to their workers and schemes to increase the buying of shares by workers. In the "privatisation" of British Telecom and other nationalised industries shares have been issued at prices below market rates, with preference to employees to buy shares. The result has been that those who acquired shares saw an immediate big rise in their stock-exchange price. According to the British Market Research Bureau the proportion of individual shareholders among the adult population has more than doubled in the past two years, to about 16 per cent. The British Telecom share issue is reported to have attracted about a million investors who had never owned shares before, including a large proportion of the firm's employees.

The latest government scheme (still in its discussion stage) aims to encourage companies to make agreements with their workers to have part of their wages related to the ups and downs of profits. Instead of an agreed wage of. say, £10,000 a year (£192 a week) there might be a basic rate of £8,000 (£154) plus a share in profit. In an average year the profit share would be £38 which, with the basic £154. would give £192 as before. If profits rose, the total would be above £192 but in a bad year the worker would receive only the basic £154. The inducement to the worker would be that some part (half has been suggested) of the profit element of pay would be exempt from PAYE deduction, worth about £5 a week to a worker on average pay.

The advantage to the employer would be that the workers would have an interest in co-operating to produce maximum profits and avoid strikes, and would make it easier for the employer to adjust costs in times of bad trade. Instead of having to try to reduce wages, the fall in total payments to the workers would be automatic, in the terms of the agreement. However the supposed effect of the scheme to which the government attaches most importance is that it would, in the governments view, encourage employers to take on more workers and thus reduce unemployment, instead of having to pay £192 a week to additional workers the employers' commitment would be only the basic rate. £154. Only if profits again increased would the employer have to pay more than that.

The scheme has received a very mixed reception. The Confederation of British Industry is lukewarm about it and the largest employers' organisation, the Engineering Employers' Federation, is hostile. The Federation doubts whether it would change the workers' attitude towards their employers and whether it would have any effect in reducing unemployment. Among the objections raised to the scheme by employers is that the unions would counter any fall in the profit-related part of wages simply by claiming an increase of the basic rate and that the workers would resist the employment of additional workers because it would mean sharing the profits among a larger number, reducing the amount going to each worker. In spite of the objections, present indications are that the government will go on with the scheme.

The TUC is sceptical and the attitude of the Labour Party is not yet known. But about worker shareholders the Deputy Leader of the Labour Party. Roy Hattersley, has come out in favour. "The extension of employee shareholding . . .  is wholly consistent with the aims of socialism. It is also in the interests of the economic success and social cohesion of the country" (Observer 16 March 1986). Whether or not the government really believes that their various schemes for a property owning democracy will make any difference to the way capitalism operates, it is certain that they will feature prominently at the next general election, in confrontation with the Labour Party's attempts to revive the lagging popularity of nationalisation by giving it the new name "Social Ownership"

The Labour Party will claim that, in selling the nationalised industries to raise revenue and to make possible a reduction of income tax, the Tories have been guilty of a profligate misuse of "public property". The Tories will retort that a Labour government, with its plans for a vast increase of government expenditure, will have to raise income tax drastically and that employee share ownership “is the truest public ownership of all" (Tory Election Programme 1983).

The Tories will make the most of the Labour Party's declared intention of government action about the shareholders in British Telecom. At present the holders of shares in British Telecom and other privatised industries are seeing a big increase in the stock exchange price of their shares. A Labour government will offer to these shareholders the option of selling the shares to the corporation only at the lower price paid for them, or of having Consumer Bonds which will not carry voting rights.

Of course, by the time the election comes round the stock exchange price of British Telecom and British Gas shares (under the impact of increased competition) may have fallen below the present price. But if the stock exchange prices keep up to the present high level, the Tories will represent the Labour Party's taking over of the shares as an act of "robbery of the workers' savings".

The Tories will not have forgotten what happened at the general election in 1931. The Labour government had collapsed, with the Labour Prime Minister. J. R. MacDonald and his Chancellor of the Exchequer. Philip Snowden, joining a National government with the Tories and Liberals. The Labour Party lost heavily in votes and seats and political commentators said that a major factor in their defeat was a broadcast by Snowden asserting that if a Labour government were elected it intended to "rob the Post Office Savings Bank" in which the workers had their savings.

Edgar Hardcastle

Well endowed (2002)

From the June 2002 issue of the Socialist Standard

The market system continues to demonstrate its incapacity to efficiently provide people with a home. On 15 May the media was filled with reports of a crisis in endowment mortgages. Some 3.6 million people in the UK are facing a shortfall in their home mortgages, out of the some 6 million policy holders.

Endowment mortgages are a way of paying a mortgage by investing in the stock exchange. They enable policy holders to reduce their monthly repayment flow by only paying off the interest, while their policy matures in stock market investments to repay the original advance in a lump sum at the end of the loan period. Effectively, they allow people to buy houses by gambling on the state of the stock exchange.

These mortgages were very popular in the 1980s, a period when the Government were lauding the stock exchange and encouraging people to become home-owners. Poor results on the stock exchange, after the fallout from the speculative dot com bubble, have seen returns on endowments dwindle. A sample 25-year endowment maturing in 2001 would have fetched £93,145, whereas one maturing in 2002 would fetch some £77,096, a shortfall of £16,049.

Although the mortgage holders have benefited from recent low interest rates, many will still face a distressing and uncomfortable time finding the necessary money to keep a roof over their heads. Many are calling for investigations into possible mis-selling of endowment mortgages, with lenders being accused of playing down the risks involved in the policies.

Corporate perfidy is at most a symptom of the problem. As the master class continues to try to shape society into its own image, it encourages the workers to try to behave like capitalists: investing the resources they have to live on into the market casino. From their perspective, this both binds the workers to the interests of capital, and provides a source of money to manipulate for profit.

Without the reserves of resources that capitalists themselves have, though, workers leave their necessities of life exposed to the vagaries of competition. Where a capitalist just sees the magnitude of their fortune shrink, workers see their money becoming insufficient to maintain them. The distinction between the exchange value of money and its use value threatens the very homes of millions of workers, and very firmly sets out the barrier between the interests

Pik Smeet

So They Say: Ungrateful Lot (1976)

The So They Say Column from the August 1976 issue of the Socialist Standard

Ungrateful Lot

Much play has been made recently by both Labour and Conservative! groups on their various schemes to allow Council tenants to purchase the properties they occupy. The Southwark Community Development Project and the Joint Docklands Action Group of Newington decided to conduct a survey to discover the appeal of such schemes to those concerned, and came up with the conclusion that “few are interested in buying a typical council flat.” The report in The Times of 29th June seemed to have regarded the findings as something of a foregone conclusion. It argued:

While new houses with gardens on suburban estates or in new towns, for example, would attract ready buyers flats in inner city tower blocks would have little or no appeal.

While surveys like this never cease to amaze us, it shows just, how unreasonable workers can be. Who else but the members of the working class would express disapproval at the prospect of spending their lives, and paying for the privilege at that, packed together well above ground level in noisy and uncomfortable cells of concrete (often, as in the case of Ronan Point, with no visible means of support, or lifts—even if installed), albeit with magnificent views over the previously erected low-rise slums? Come to that, who else but the workers would be offered such a glorious opportunity to join "the property owning democracy”?

O Brother!

"We should not destroy or split or seek to destroy in any way the Labour Government” said Mr. Benn on the 4th July, and no doubt the Labour government gave three cheers for Benn and said "Amen”. He was speaking at the Institute for Workers’ Control in Keele University, in his capacity as Labour’s Energy Secretary, when he also revealed to his audience the information that capitalism was in "irreversible decline.” We do not know if he was standing on his head at the time.

Now we who advocate the abolition of the capitalist system were naturally agog with excitement at a “leak” of this magnitude. Was there to be a surprise announcement from the government? We scanned the newspapers. Yes, there was an announcement from Healey. No, it was not a surprise—except perhaps for his fellow minister Benn.

Britain would be one of the few countries which could look forward to a rapid recovery over the next 18

months . . .

The Times, 7th July 1976

Followed presumably by three more cheers and back-slapping. Considering that both these men are “united” in a political party which expresses the view that a system of exploitation is the only one to which workers are entitled, and capable apparently of both declining and recovering at the same time, it is difficult to avoid the conclusion that were they to pool their respective talents and issue a joint statement, it would prove twice as ignorant as either of their individual efforts.

Sir Willie?

The fanaticism with which William Hamilton attacks the Royal Family appeared to have abated somewhat when he voiced “concern” over a motion from other Labour MPs—themselves expressing “surprise” over the Queen’s purchase of Gatcombe Park for her well- breeched offspring Princess Anne. The price was reported in the Daily Telegraph of 12th June as £500,000. No, No, said the microscopically-minded Hamilton, the Monarch should spend her money as she saw fit. What was wrong was that “the Royal wealth which makes such expenditure possible has been due to the failure of successive governments to tax that wealth in the same way as that of all other citizens.”

Can it be that he is angling for something? Considering his immense publicity services to the Crown, he must surely be deserving of some appropriate medal or title. This would be no more than he deserves. We note incidentally that in the Register of MPs’ Interests, he gives one source of income under the appropriate heading of “royalties”—a reference to the money from his literary masterpiece on the Royal Family. While he, and others, spend so much of their time and effort in expressing a petty outrage at the size of the molehills, they have missed the mountains—capitalism rumbles on. But then Labour MPs could hardly be expected to think about anything as fundamental as that.

What could be fairer ?

It is usually the practice, after being led up the garden path by one man, to find at the end of it another who then exhibits a bag from which he releases a cat. Although capable of fulfilling both rôles, Eric Varley, Secretary of State for Industry, has been releasing the cat.

The dictionary definition of a scientist is given as: “A person learned in one or more of the natural sciences” and science as: “Systematic and formulated knowledge.” Now Mr. Varley has not so much altered the definition, but put it into perspective! within the context of capitalism—where, like all other members of the working class, scientists must live by selling their mental and physical energy to the ruling class. He was bemoaning the fact that “to be a technologist or a manager in industry is considered to be a pretty lousy job” and from this erudite premise, drew the conclusion that potential but reluctant scientists just did not know what they were missing:

Qualified scientists and engineers, although numerically a small category, have a particularly significant role. They have the innovative capacity to generate and translate the technology into competitive and saleable products and the responsibility for managing the production processes.

Daily Telegraph, 7th July 76

A significant role therefore, not in an abstract sense of the pursuit of Knowledge, but in the real economic field where the owning class is in pursuit of something else, the accumulation of capital.

Class Distinction

“More than 1000 London dockers, who are being paid £57 a week for doing nothing, at a cost to the Port of London of between £6 million and £7 million a year, are ‘moonlighting’ to double their earnings”, reported the Daily Telegraph of 30th June. “A scandal” is their description. They do however concede that the men, on average 1,250, do no work for the reason that there is often no work for them to do. The men are protected, however, under the National Dock Labour Scheme from sacking on this ground alone, and even the inducement of a £5,250 “golden handshake” to accept redundancy has failed to shift them. Considering the apparently universal exhortations from the press for workers to pull out their respective fingers and earn themselves a living, we would have thought that the taking of a second job would have merited praise. Apparently not, so “a scandal” it remains.

Surprising then to note that the moral indignation of the Telegraph respectfully faded to nothing when it reported on the twelve, no doubt “just”, women whom Paul Getty “richly remembered in his Will” (10th June 76). Among others they noted that Lady Ursula D’abo, sister of the Duke of Rutland, was to receive 1000 of his shares, worth £93,361, and how she was duly “surprised by the gift. The shares will remain in Getty Oil until I die, as he would have wished.”

All highly commendable; no mention here of a “scandal.” No mention, incidentally, of what happen to the share dividends either—we refer to the large cheque which drops through the letter box from time to time. Work for a living? My dear, who do you think opens the envelope!

Idle-ized

Who was Eric Singer? If you never heard of him— Snap! But on 30th June The Times published an obituary of him. What were his achievements? Take note.

According to the article, he was “an early, though later disenchanted” member of the German Communist Party. In Britain he became “a planning consultant”. To illuminate that, he was able to do his day’s work “before most people had roused themselves from their beds”, which clearly means it was a very small day’s work. What did he do after the rest got up? “He left behind an uncompleted book on inflation and an unpublished work on architecture.” He spent the war “at the roulette tables in Lisbon”, and became “a purveyor of gallantries to ladies, snuff and gossip to men”. “He greeted each day with his freshly-plucked button-hole, his stick and his joie de vivre”.

This reminds us strongly of Fred Bloggs. In his teens Fred joined the Balls Pond Road Libertarian Society, resigning when he discovered he had mistaken its name for “Libertine”. He was widely known in all four corners of the betting shop, while his élan and the je ne sais quoi with which he rolled a Nosegay cigarette made him a favourite of barmaids everywhere. He always alluded to his lifelong redundancy with the characteristic epigram: “Never done a stroke and don’t intend to, mate.”

What a curious world where a man is praised for having had political delusions and spending his life as a fashionable idler.

Alan D'Arcy

These Foolish Things: It takes your breath away (1995)

The Scavenger column from the June 1995 issue of the Socialist Standard

It takes your breath away

Orimulsion is a cheaper fuel for electricity power stations. It is based upon bitumen and is imported from Venezuela. Since it has been used at Merton power station, near Ramsgate, asthma attacks in the area have quadrupled. Because it is cheap there are plans to introduce it at a number of other power stations.

So what's new?

They throw the most lavish parties. Last year they air-freighted more than £13 billion in cash into the country to satisfy the popular demand for foreign currency. Their offices are already extravagant temples to Mammon. But now Russia's bankers want more.

With the Kremlin’s help they arc amassing enormous political power. In short. Russia's new plutocracy can boast of wealth and influence to rival the Medicis or the Rothschilds. Sunday Telegraph 16 April.

Current account

In the first five years of private operation, the regional electricity companies accumulated £1 billion surplus funds, instead of reducing charges to customers. Professor Stephen Littlechild, the highly-paid regulator appointed to prevent such excesses, either knew nothing about this or chose not to take any action. Whichever was the ease, he was useless.

The Thatcher nightmare

House prices have fallen by 25 percent in real terms since 1990 and experts believe that they have much further to fall. Over a million people in Britain arc caught in the negative equity trap, where they currently owe an average of £7.000 more in mortgage repayments than their home is worth on the market. Apart from the debt burden, this makes it extremely difficult for them to move house. During Margaret Thatcher’s rule, with her campaign for a “home-owning democracy” and income tax relief on mortgage interest payments, house prices doubled in seven years. Now the market is swinging back again.

True Brits

National Grid, the electricity transmission company being privatised, has avoided paying almost £2m in tax by setting up a financial arm in Dublin.

The company ladled £160m of its cash flow into the tax avoidance scheme before the government stepped in to make the arrangement less attractive.

A National Grid spokesman yesterday confirmed the existence of the "special purpose” firm and defended it as: “a tax-efficient way of managing the company’s money which is our duty on behalf of the shareholders. It is part of our treasury function, and normal practice for UK companies that have big cash flows” Independent on Sunday, 2 April.

The Scavenger

Your home as ‘fictitious’ capital (2024)

From the April 2024 issue of the Socialist Standard

In more recent times the opportunities to ‘make money from money’, so to speak, have expanded for the ordinary person. For example, the 1980 Housing Act introduced by the Thatcher government in the UK gave council house tenants the legal right to buy their council homes at a discounted price. This, combined with the introduction of mortgage interest relief, significantly impacted on the property market and widened popular participation in it. Around the time of the First World War three-quarters of the UK population rented their homes; by the early 2000s the situation had reversed with over 70 percent of the population nominally owning their homes – although the percentage has since declined due to the increasing difficulty of would-be first time buyers to get on the housing ladder.

While rising house prices might put the idea of owning a home beyond the reach of some would-be first time buyers it is, paradoxically precisely these rising house prices that make the idea of buying a house such a financially attractive proposition. While house prices as a multiple of average earnings fell during the late nineteenth century (with the result that buying was not seen as a worthwhile investment, which explains why rented accommodation was such a widespread phenomenon in early twentieth-century Britain), that trend has reversed in the late twentieth and early twenty-first centuries, boosted by the relative stagnation in wages. The benefit of owning a home, steadily appreciating in value, instead of paying ‘dead money’ for some over-priced rental property, is all too obvious.

A few people with the financial resources to engage in the ‘buy to let’ business might find themselves in the position where they can comfortably live off the rents of their tenants. However, for the vast majority who have purchased a home, renting it out is simply not an option. Even taking in lodgers would be impractical in many cases.

Consequently, most homeowners continue to depend absolutely on some form of paid work since, with home ownership, come financial commitments such as mortgage repayments. True, you might manage to sell your home and realise a capital gain (particularly if the property market is booming) but you still have to find somewhere else to live. It is this that makes the idea of treating one´s home as (fictitious) ‘capital’ – as some commentators do – somewhat problematic. You cannot be without a home since it is a basic human need (unlike other forms of fictitious capital).

If you do sell your house at a time when house prices are rising then you have the problem of having to pay more for some other house. On the other hand, as well as going up, prices can also come down as occasionally happens after a property boom. Having to sell your property in a slump could very well plunge you into dire financial difficulties that you may never recover from, financially speaking.

The above qualifications notwithstanding, it is nevertheless the case that a fairly large percentage of the working class do indeed engage in the speculative buying and selling of property at some point in their lives. Normally, the primary means of purchasing a property is via a loan (mortgage) from a bank. Bank loans (in this case for consumption as opposed to the production of commodities) are, as we saw, a classic example of fictitious capital.

In the past, at least in the UK, it was building societies (or ‘mutuals’ controlled by their members) that had a virtual monopoly in the issuance of mortgages. This changed in a big way in the 1980s with banks entering the mortgage market and offering a variety of different mortgages to suit different customers. Mortgage loans as a percentage of total bank loans have subsequently grown very significantly.

These are ‘secured’ loans inasmuch as your home serves as collateral, meaning that if you fail to keep up with your mortgage repayments the bank can take possession of your home. The same is true of car loans. However, there are also various kinds of unsecured loans where collateral is not required, such as personal loans, student loans and credit cards. These are riskier from the standpoint of the lender and for that reason sometimes attract a higher rate of interest. With the growth in both the volume and diversity of consumer debt the exposure of working people to the machinations of fictitious capital has increased greatly in recent years.

However, when we are talking about fictitious capital what more likely springs to mind is not so much our monthly mortgage repayments or our credit card bills but an institution like the stock market. Most ordinary people would have little, if any, direct experience of dabbling in the buying and selling of shares. Essentially the stock market is the domain of the wealthy private investor or else (and to an increasing extent), institutional investors.

The stupendous wealth that can be made on the stock market rams home the point, again and again, that it is not through hard work that one can become incredibly wealthy. This breeds a kind of cynicism towards work born out of the belief that what is officially supposed to motivate us to work is precisely the lure of money. If we go along with that belief, how could we not feel cynical when we see fortunes being made by others who don’t have to lift a finger to do it? When we struggle to pay the bills on the meagre wages we earn it is perhaps understandable that some might feel resentment.

Sometimes, this can be misconstrued as ‘envy’. However, the ‘politics of envy’, as it is called, is an ideological snare and a trap for the unwary. To ‘envy’ someone is to covet what they have and, indeed, to want to become like them (and hence to perpetuate the very system they benefit from). However, it is structurally impossible, not to say nonsensical, for the majority in a capitalist society to find themselves in the same economic position as the minority of being able to live off the unearned income that the majority, after all, provides them with. It is not envy that this majority should feel but, rather, outrage.

Robin Cox

Snowden’s Goodbye (1932)

From the November 1932 issue of the Socialist Standard

On September 28th, Philip Snowden (now a noble Lord) wrote a letter to Mr. Ramsay MacDonald (not yet a noble Lord) giving his reasons for resigning from the National Government. Whether he proposes staging a “come-back” as leader of the Liberal Party, we do not, of course, know, but the possible future appearance at a general election of Ramsay MacDonald leading the Tories and the noble Lord leading the Liberals would certainly add to the gaiety of elections.

Lord Snowden’s long letter contains only one reference to the workers, that since the National Government has been in existence “unemployment has greatly increased.”

The following extracts from his letter (taken from the News-Chronicle, September 29th) give the basis of his reasons for leaving, and are an illuminating expression of his outlook and where his sympathies lie.

He writes: —

“But I can no longer, without loss of all self-respect, remain a member of a Government which is pursuing a policy which I believe is disastrous to the welfare of the country, which will lead to the disruption of the Empire, and which is fraught with great danger to our international relations.” (Italics ours.)

The main purpose for which the National Government was formed has been achieved. . . . The acute national emergency which then existed no longer exists. The Budget has been balanced: stern economies have been enforced; borrowing for the dole has been stopped; a great conversion scheme has been successfully carried through; and the threat to our national credit has been removed. (Italics ours.)

The Agreements (Ottawa) have surrendered our fiscal autonomy, and handed over to the Dominions the control of British trade policy, reducing this country below the status of a Dominion.

You cannot expect Free Traders to acquiesce, even passively in such a policy of national humiliation and bondage.”

How sad. How very sad ! Like the sea waves that always keep returning and telling the same old tale. After helping to enforce stern economies and stopping borrowing for the dole, to be faced with the disruption of the Empire and national humiliation. It is really too harrowing. Will it move to tears the three million unemployed and the workers who have had their wages reduced ?

Anyhow, the News-Chronicle for October 17th informs us that Lady Snowden (with portrait, as usual) is supporting the proposal of Sir Landon Ronald for the broadcast of an appropriate prelude to the Two Minutes’ Silence on Armistice Day. On the same page is a reference to a broadcast on disarmament by five Fellows of Oxford Colleges. The reference commences : —

“The writers outline the present alarming state of Europe and the growth of a situation containing the seeds of war, . . .”

However, although he has, for the moment, said goodbye to the Government, Lord Snowden is not out of the “news.” In a message to the National Association of Building Societies he is reported as delivering himself of the following: —

“By the help which this institution offers, about one-fourth of the houses in this country are now owned by their occupiers. The social significance of this fact is tremendous. It has given to this large part of the population a feeling of security and independence.”

Has the noble Lord any conception of the existence of these people who have tied a millstone around their necks for years ? The number who, through illness or unemployment, have had to give up their “own” houses and seen the small savings they had used thrown away after stinting themselves and struggling fruitlessly to meet the demands of the building societies and the expenses of their jerry-built houses ?

The value of an Englishman’s home and the reward of “thrift” is shown up in a significant manner by the following extract from the News-Chronicle of October 13th: —

“CARDIFF, Wednesday.

The Ministry of Labour are likely to become the owners of considerable house property in the mining towns of South Wales in the near future as the result of instructions recently sent to local public assistance committees.

This instruction, which is issued under the powers of the Poor Law (Public Assistance) Act of last year, requires that any applicant for relief who is an owner of property in any shape or form must first of all lodge the deeds of such property with the Public Assistance Committee.

A member of the Pontypridd Public Assistance Committee to whom I spoke to-day said the order had caused much resentment, particularly in view of the fact that hundreds of aged ex-miners, who had bought their cottage homes with their life’s savings, had, owing to the depression, come to the end of their resources and were now compelled to part with the last remaining link with prosperity and happy days.

UNABLE TO REPAY.

Doubtless, said the Member, the Ministry will compel us to hold these deeds until the loans from the Public Assistance Committee are repaid. As, however, there is little likelihood of many of the being ever in a position to do this the Government looks like acquiring a lot of cheap house property.”

From the above the “social significance of ownership” certainly does appear to be “tremendous” when it is a case of workers “owning” houses which they get if they live long enough, keep up the payments, and the houses are still standing at the end of the term.

Fellow workers, how much longer will you allow shallow self-seekers, like Snowden and his kind, to throw dust in your eyes and divert you from the only thing that matters—the control of your destinies by yourselves.

Gilmac.

The General Election (1951)

From the October 1951 issue of the Socialist Standard

After weeks of speculation and anticipation by newspaper political writers, Mr. Attlee announced the date for the general election, October 25th. It has been suggested that he might wait to make the announcement at the Labour Party Conference and thus stimulate some electioneering enthusiasm amongst the delegates, or that he might wail till after the Conservative Party Conference and so keep his political opponents guessing. All the time it was recognised that the Prime Minister would select a date for the election that would be as favourable to his party as possible.

One may well ask, “How can one date be more favourable than another?” There are many who give loyal and steadfast allegiance to one or the other of the main political parties and who can be relied upon to vote accordingly. There are many, many others who have no political tie-up and who will vote at the election according to the state of their liver, the personality of a candidate or the latest international scare. This is known as the floating vote and it is courted by all vote-catching parties.

To capture this floating vole strategy is employed. If through some action or some event, the stock of the political party that is in power rises and it is in favour with a large section of the community, then the time is favourable to invite re-election. Similarly, if for some reason the parties in opposition are temporarily in disgrace, the time is propitious to spring an election on them. If the opposing parties can be caught unawares or at a time when they are ill-prepared for an election campaign, so much the better for the Government party’s chances at the polls.

One thing is obvious from this, the whole business of an election, from the standpoint of the capitalist political parties, is a vote-catching affair. Policies are moulded to attract votes, candidates are selected with an eye on their vote-drawing abilities, and any manoeuvre that will entice or stampede working class voters to give support to one party or another, is considered legitimate.

In the past the Conservatives have scared votes away from the Labour Party by such devices as the “Zinovieff Letter incident” and the cry “They will take your savings.” At the last election the main tenor of the Labour Party’s campaign was a vague threat of the terrible things that the Conservatives would do if they were to get back into power. “Keep the Tories out," was the cry.

Working class votes can only be juggled around in this manner whilst the workers themselves are ignorant of the manner in which they can use the political machine to serve their own interests. Whilst they can see no alternative to capitalism they will allow their votes to be shunted backwards and forwards at each general election. Many will treat the election just as they treat the annual Oxford and Cambridge Boat Race, taking sides according to their fancy, and others, hoping to gain something from the process, will support the party that makes the fairest promises.

Whether Mr. Attlee, by his selection of a date for this general election, has rung the changes on the Conservatives, we are not aware. One thing is certain though, he has outmanoeuvred his own party critics, Mr. Bevan and his supporters. Mr. Bevan, who has claimed that the Labour Party would do well to be out of office for a while, will now have to pull his weight to make the election campaign a success, unless he is prepared to retire from the contest. He has been rocking the Labour Party boat for a month or so past, now he will have to take a turn at the oars. If the Labour Party is defeated at the polls, then Mr. Bevan’s eloquent criticism will be diverted from his own party and he will thunder his condemnations from the opposition benches—at the Conservatives. From all angles he will be brought to heel.

This general election will be a contest between the Labour Party and the Conservative Party. Nobody seriously considers a victory for smaller parties. The two giants have much in common. They are both parties of capitalism. They both adhere to the wages system, capital and property institutions. Faced with the problems born of capitalism, they work out a series of futile solutions and present them as a policy programme. In a world where masses of wealth are in the hands of a few, whilst the many have only just enough to live on, both parties are prompted to seek a remedy. They both claim to be in favour of some slight redistribution of property and oppose one another bitterly over their respective schemes. But see them join hands and bare their teeth when socialists suggest that it is not this slight redistribution of property that is required, but common ownership of the means of production and distribution.

The Conservative proposal is for what is termed a “Property owning democracy." This boils down to a vague plan for helping more workers to buy their own houses. The implications are wider.

“A true property-owning democracy must be based upon the wide distribution of private property not upon its absorption into the State machine.” ("This is the Road” p. 14, Conservative Party, 1950.)

The Conservatives think that if everybody owns a little private property, if everyone has a stake in the property institution, then it is more likely that nearly everyone will continue to support a system based upon property ownership. Those who own the millions will feel that their system is safe if those who own the ha’pennies and pennies can be kidded that they are property owners too, and have a stake in the system.

The Labour Party would preserve the system of property by different means. Property would to some extent be taken out of the hands of private individuals and placed under the control of the State. The main difference being that the State manipulates the property on behalf of the private owners. The idea that this makes for a more equitable distribution of property arises from the mistaken notion that the State is an institution which represents society as a whole, whereas, in fact, it is an institution that has grown out of property society to serve the interests of the property owners and to maintain “law and order” in a society of class antagonisms. All property that is taken out of the hands of private capitalists and vested in the State is really placed in the hands of the capitalist class as a whole.

Even the Liberal Party, or what is left of it, although nobody is likely to take it seriously, has its solution to the “property problem.” Co-partnership in industry is the plan. Every worker has his little tiny bit of property and. of course, becomes a staunch defender of the private property system to the delight of those who own enough property to make it worth owning.

None of these schemes solves the workers’ problems. The process of development in capitalist society is for property to concentrate into fewer hands. Any crumbs that may be thrown to the workers will be to save them from getting so hungry that they threaten to take over the feast for themselves, and to encourage them to produce more of the good things for their masters.

The process of bringing certain industries under State control is not an original Labour Party idea. Governments composed of Conservatives, Liberals and Communists have instituted State control. Certain industries are essential to the operation of all others. All industries must use transport, must have coal, gas or electricity, need telephone and telegraph systems and a postal system. To have varying rates of charges in any one of these basic industries and to have the wastefulness and chaos of capitalists' competition in them, is detrimental to all other industry. Centralised State control can eliminate most of the troubles. Conservatives will use it as well as Labourites, just as the Labour Party will adopt the Conservative “property-owning democracy” idea, under a different name, if it is considered a good vote catching stunt.

Now, as in 1950, you are asked to vote for one or the other of these parties. The details of their respective programmes differ but little from the programmes that they presented two years ago, and they differ but little from each other. The question of property is fundamental to all their other proposals and promises. Only those with no property are bothered by the housing shortage. Only those with no means of living except by finding employment are worried about unemployment. Only the wives of the propertyless are harassed by rapidly rising prices. Those with property do not fret over health services, sick pay and pensions. The problems of capitalist society are the worries of the propertyless workers. War, that outstanding problem of this century, arises directly from the property basis of present society. Wars are the result of the continuous struggle between groups of capitalists in their endeavours to accumulate more and more property.

At this election time the workers have nothing to gain by supporting either of the two main parties. They should oppose them both. All the items that fill the pages of their election pamphlets, housing, high prices, industrial disputes, food shortages, pensions, armaments, health service cuts, foreign policies, etc., all these have a common solution—the ending of the system that gives rise to them. Socialism is the only political creed worthy of working-class interest.

Property means ownership. Individuals, companies, cartels, trusts and-states own the means of producing the needs and comforts of life and dispose of these means to suit their own interests. They make them into capital, they invest them with a view to making profit and in the profit-making process the workers go to the wall, are kept poor and are called upon every so often to sacrifice life or limb in a war to make the property of one group of capitalists safe from the grasp of its rivals. Election time is the opportunity for the workers to show that they have had enough of their propertyless status and that they are determined to take the property away from its present owners, the capitalist class, and to transfer it to society as a whole.

With the means of production in the hands of society it can be used to produce the necessities, comforts and luxuries of life for all to enjoy, not for a privileged few. Wealth can then be produced for use and not for profit. That will put an end to all the pettyfogging vote-catching schemes of political parties because the problems they promise to cure will no longer exist. There will be no poverty, hence no housing problem, no unemployment, no overwork, no prices, high or low, no strikes. There will be people working to produce things and having the use of them when produced. There will be no wars as there will be no private property to fight over.

To the workers at this election we say. Do not be bamboozled into voting for the Conservatives because you think that with a Conservative Government the Labour Party will be more militant and that Trade Union officials will work better on your behalf. Do not be tricked into voting for the Labour Party because you think that it will be the lesser of two evils. Both parties support Capitalism and that is the evil. Do not think that Socialism is unattainable at present and so you are bound to vote for one of these capitalist parties. Socialism is only unattainable whilst you think that way. Pay attention to the Socialist Party of Great Britain which does not ask for your vote but for your understanding.

Capitalism will last just as long as you support it. The sooner you manifest your opposition to it the sooner will it be abolished.

We cannot hope to tell you enough about Socialism in this limited space but we will do everything in our power to help you to an understanding of your position in capitalist society and how to achieve a new society in which you can lead a secure and pleasurable life.

Capitalist politicians of all shades have been telling you for generations how their “practical” policies will solve your problems. You know whether they are solved or not. They will go on soliciting your votes at election after election with further “practical” policies. They will make you think that you are a most important person for a week or two before election day and promptly move the troops in on your job the day after if you strike for a little “practical” increase in your pay. That goes for Labour and Conservative, not to mention Liberal and Communist. The fact is that their policies are most unpractical as far as solving your problems js concerned. Time has shown that. The only practical solution is in the abolition of Capitalism and the establishment of Socialism. To that end we say, Do not vote for capitalist parties on October 25th but work with us for the overthrow of this system and the building of a new one that will be in keeping with our interest. As there is no socialist candidate in the field, abstain from voting. If you fear that your voting paper may be mis-used or if you want to give some expression to your zeal for Socialism, go to the poll and write “ Socialism ” across your ballot paper. It will at least indicate to our opponents that there is a rising tide of revolutionary feeling which will in time sweep away their rotten system with all its parasites and hangers-on. What have you to lose? Go to it.

W. Waters.

The Home Owners (1956)

From the September 1956 issue of the Socialist Standard

(Reproduced from the “Western Socialist," Boston Massachusetts, May-June, 1956).

This is the saga of American home-ownership and American home-owners—of that not inconsiderable percentage of theoretical homeowners in the United States who are a part of the working-class. Let us begin with a scientific generalization.

The working-class, we Socialists maintain, is a propertyless class which owns nothing but its labour-power, its ability to produce. In exchange for this labour-power which the workers sell to the Capitalist class they receive back on the average enough of the necessities and the luxuries to keep them producing and reproducing themselves as a class. Home-ownership is certainly not to be figured as a part of the cost of producing and reproducing labour-power.

In the face of appearances, however, this would seem to be rather a bumptious statement insofar as the American working-class is concerned. There is, without doubt, a mountain of paper in the form of deeds and titles of ownership to homes of all types which might be found in the possession of American working -people and the ledgers in the nation's registries of deeds will bear this out. On the other hand, however, there is another mountain of paper in the form of first and second mortgages. liens and attachments and so forth reposing in the nation's banks and finance companies which fairly well serves to uphold the validity of the Socialist claim and which exposes working-class home-ownership for what it is—an illusion.

The “Propertied” Working Class

Since the introduction of the G.I. Bill of Rights which arose out of World War II, nominal home-ownership among the American workers soared. Despite die astronomical heights to which the price of property rose since that conflict, it became possible for a G.I. to purchase a home with a down-payment which varied from nothing at all to a mere 5 per cent. of the selling price. The banks would put up a portion of the money and the Government through its Veterans' Administration would guarantee the rest of it.[1] Nor does the fact that the G.I Bill does not extend its benefits to non-G.I.'s excepting in the case of the numerous instances of artful transfer of such privileges by G.I.'s to others, exclude another large portion of the working-class from the ranks of home-owners. For in many cases at least a large part of a down-payment can be raised by the “buyer” by means of a second mortgage—in most cases a short term loan with a long rate of interest

And so we find that a large percentage of the American working class has become and is becoming “owners” of real estate, even landlords. Just how little average equity the worker has in his home is another matter, however, which does not need too much research to unearth. First of all, we have the first mortgage. An article in the Boston Sunday Globe for June 10, '56 tells us that there is an “unprecedented debt of nearly $90 billions on home mortgages . . ." This mortgage debt, we are informed, “is being repaid by American families with remarkably low rates of fore-closures." Be this as it may, the picture looks something like this:

Let us say our worker buys a home for $10,000 (a pretty shabby sort of deal at today's market) and that he gets his loan at 4½% interest. If he pays $60.00 per month for principle and interest it will take him 21 years and 11 months to pay off the loan.[2] But this is not the whole story by any means, for the city or town gets its cut and in most cases these taxes are added to the monthly payments making the total in this case more like $80.00 per, rather than $60.00, and which also means that the $10,000 home has within the span of a typical 20-year mortgage, just about doubled itself in cost. 

It never rains but it pours

“The course of true love never runs smooth,” they tell us, nor for that matter is the course of a 20-year mortgage any smoother. A home, like its owners, does not get any younger as time goes on. In fact, figures show that almost 50% of them are at least as old if not older than the workers who buy them and in the years to follow there is much to be done in the way of repair. This section is not required reading for those workers who are able, after a hard day's labour at the shop or where have you, to repair or replace the roof, paint the sides, instal or repair the plumbing, heating equipment or electric wiring, build a fence, grow and trim a hedge, etc. This applies rather to the overwhelming majority of our fellow-worker home-owners who are too exhausted, or too inexperienced to do the work of a dozen craftsmen in their spare time. These make the grist for the Home Improvement milk with their "easy payment” plans backed by the Government's Federal Housing Authority or by various Home Improvement Plans sponsored by individual banks. These can tie them up for periods up to five years in amounts ranging up to $2,500 plus interest. Providing, of course, one's credit still warrants such a loan. For those who have slipped and have fallen by the way-side, credit-wise, there are the second mortgage and other types of friendly finance companies which ask no more than an arm and a leg in return for the loan.

In the face of the continuing debt which confronts the worker “home-owner” in the years his mortgage has to run, fortunate indeed is the fellow who does not lose his status and revert to that of tenant in name as well as tenant in fact. In recent years there have been a fairly insignificant number of foreclosures—insignificant when compared with the vast increase in nominal home-ownership. According to the Statistical Abstract of the U.S. for 1955, pg. 457, estimated non-farm real estate foreclosures for continental U.S. ranged from 68,100 in 1926 to a high of 252,000 in 1933 and a low of 10,453 in 1946. The figure for 1954 was 26,211.

This data was taken from approximately 1,400 counties, cities, townships, or other governmental divisions. It represents the number of properties acquired through foreclosure proceedings but excludes voluntary deeds of sale in lieu of foreclosures or defaults on real estate contracts. And this last item is by no means inconsiderable. Anyone who has engaged in the so-called art of salesmanship in the home improvement field has become cognizant of the fact that a not insignificant percentage of "home-owners” become delinquent in their mortgage payments or their payments on the roof, side wall or combination storm and screen windows, with the result that they are either foreclosed or jump clear with a few dollars fa lieu of foreclosure.

That so-called Common Stake

The nominal home-ownership by American workers will no doubt continue and even to expand as time goes on. To a considerable extent and especially in the case of that large number of workers who "own” city tenements, they in effect act as rent-collectors and maintenance-men for the banks that hold the mortgage. It certainly works fine for the Capitalist class to have a working population, a large part of which has such a tangible stake in the nation as a real-estate deed even if the balance on the mortgages, the outstanding F.H.A’s, attachments and liens just about obviate the tide. Anything that adds to the feeling of a common bond between the workers and their masters is a wonderful thing—for the masters; especially when it costs them nothing. To the extent that such "ownership” exists the illusion helps to hold back worker class-consciousness. The working-class home-owner is less likely to favour strong action against his employers in a strike for example. His 20-year mortgage and his F.H.A. notes loom darkly before him and help influence his actions.

This sort of thing, however, can but help to hold back the tide. It can not prevent it from ultimately sweeping in to engulf the Capitalist system, to finally relegate it to the history of past societies. The vast majority of workers, even in America, may aspire to but will not be able to attain even the spurious type of home ownership we have been discussing. Capitalism is a system which provides real property ownership only for the Capitalist class.

Harry Morrison

[1] Last year 30% of all houses were bought with V. A. guaranteed private loans, although out of a total of 14.5 million G.I.'s of World War II more than 10 millions have taken advantage of this feature. (National Real Estate and Building Journal, May, 1956.)

[2] From a table published by “Changing Times" for February, 1956.

Finance and Industry: What is an incomes policy? (1966)

The Finance and Industry column from the August 1966 issue of the Socialist Standard

What is an incomes policy?

Last month we examined the wealth of people at the time they leave this world and found, in the majority of cases, that they had little to leave. Could it be that working on the basis “you can’t take it with you" they had the wealth at one stage, but had frittered it away on a merry-go-round of solo, scotch and sex? Alas, the answer, as they say in the best American war films, is negative.

For our evidence on this point we again turn to the report of the Commissioners of Inland Revenue for the year 1964-65, where we find the table of personal incomes for the year ended 5 April. 1964, on page 82: —

It is difficult to understand how so many people enjoy such affluent pursuits as Continental holidays and motor cars, until it is realised that of 12,780,900 married men included in the above table 36 per cent of them send their 4,592.000 wives out to work.

We do not intend to join the argument here as to whether the place of a wife is in her home. But the evidence does suggest that there is a large number of families who might be homeless if the wife did net bring home that additional pay packet.

There arc some ladies of course who are not even bothered by the thought of losing their job because of the Selective Employment Tax as they are already in the £20,000 per year class.

What can a government armed with an “incomes policy" do about such incomes? If words were the answer it would all be resolved by now. But the words have to be translated into actions that are consistent with capitalism. And the only thing consistent about capitalism is that the few will continue to exploit the many—just as long as the many are prepared to stand for it.

Them and us

One thing abundantly evident from the previous item is that we still live in a world of them and us. The wide disparity of incomes coldly tabulated in columns of figures can be confirmed upon examining the dual quality of commodities produced, even those satisfying such basic human requirements as a house to live in.

The latest occasional bulletin issued by the Co-operative Permanent Building Society is an analysis of the 2,802 people to whom they advanced mortgages, during the quarter December, 1965-February, 1966, to purchase new dwellings. From the survey Mr. Average emerged as 28 years of age, producing a deposit of £846 toward a house costing £3,864; and earns £24 14s. 0d. per week from which to pay a mortgage of £20 9s. 0d. per month for approximately 25 years.

As two-thirds of these workers were buying homes for the first time they were probably pleased to get them before the increase of “hundreds of pounds” threatened by the National Federation of Building Trade Employers in response to the government's proposals to raise the standards required of building and house equipment.

If this is how some younger members of the working class are trying to acquire a piece of the property-owning- democracy—and you will notice there is a prejudice against the older ones—how does the enemy fare?

The London Evening Standard carries a property news page, and on July 7 it had items on the following which might be of interest to you. A fifth-floor flat overlooking Hyde Park; the owner. Val Parnell, only asks £37,000. Are you a top executive fed up with commuting and want to move back into London? Your solution is in course of erection at Enismore Gardens, price range £35,000-£68,000. Perhaps you are only a younger executive, then unfortunately you must commute to the riverside at Chiswick, mooring fees are £13,000-£I8,000. Did you enjoy canvassing for the Socialist Party of Great Britain in Hampstead at the last election? Then you will be sorry you missed the eight bedroomed house sold recently for £40,000 by Sir Arthur Porritt, the Queen’s surgeon.

Do you still think there is an equality in poverty?

146 Shopping days to Christmas

Most newspapers make claims on the earnings of their readers in the scramble to attract advertising. And although many products are advertised in most newspapers there are some which only appear in those papers generally thought to be read by the higher income groups.

In case you missed the Sunday Times of July 3, we would like to bring the following to your notice, which might be of some help when preparing your present list for Christmas.

Firstly, Dupont have a new range of lighters selling at £10 I5s.-£165 and they even boast that “a few people can afford a Dupont."

Secondly, if you are fed up with the old plastic salt and pepper pots used  by your mother-in-law, nip along to Gerrard, the crown jewellers; they have a silver set for £44 10s. Or perhaps she would prefer the sauceboat for £24 10s., the sugar dredger for £25 or the coffee pot for £101 10s.

When you go, please don’t show your working class origin. Don’t ask for trading stamps.

Ray Guy.

Starmer versus the logic of the market (2023)

From the August 2023 issue of the Socialist Standard

Sir Keir Starmer has announced that the Labour Party (looking increasingly likely to form the next government) will set a target rate of 70 percent of all UK households being in owner- occupied homes. This sounds ambitious, but the current rate of 68 percent means that in fact only half a million new owner occupiers would be needed to meet this target.

What it does though, is send a signal about the priorities of Sir Keir and his party, that they will be on the side of property owners. It is as much an ideological expression as it is a practical policy. As Sir Keir said in a tweet: ‘Owning your home is not just about having a place to live, it’s about having pride and security’. Presumably renters cannot have pride and security.

This is balanced by the claim that ‘Labour will introduce a Renters’ Charter to give new rights and protections for renters. We will build more high-quality, affordable homes and restore the dream of home ownership’. Quite why having a place to live should be a dream is a strange thing: it’s only a ‘dream’ because it is so unobtainable at present.

As the Office for National Statistics notes: ‘Over the last 25 years, housing affordability has worsened in every [Local Authority area], especially in London or surrounding areas’ and ‘In 1997, 89% of LAs had an affordability ratio of less than five times workers’ earnings, whereas only 7% had this level of affordability in 2022’ (tinyurl.com/bdfbmmjw).

Part of the problem is that whilst everyone could be housed by simply building more houses, the financial model of home ownership requires constantly rising house prices. To make buying worthwhile, prices need to rise by more than inflation and interest rates, else effectively, the owner is just renting from the bank (alongside shouldering all the liabilities for maintenance and structure). For many people, their house is a financial instrument for when they plan to downsize and retire on part of the difference between house prices (or rent the house out, as a form of pension income).

So, Labour’s plans to increase home ownership cannot come at the price of threatening the asset value of those who already own a home, much less those who make their income from letting out houses (which includes a great number of MPs of both parties).

Further to that, any widespread house-building programme will almost inevitably be met with fierce opposition from local home owners who will see a threat to their amenities (as well as the value of their properties from the increase of supply). Even in such cities as Bristol, where the house prices are overheated and there is massive demand for new housing, every option to build new is met with a storm of protest from NIMBYs.

Land monopolists

Even then, widening the pool of home owners doesn’t change the effect of private property in land on the general economy. As Marx notes in Volume 3 of Capital:

‘Wherever natural forces can be monopolised and guarantee a surplus-profit to the industrial capitalist using them, be it waterfalls, rich mines, waters teeming with fish, or a favourably located building site, there the person who by virtue of title to a portion of the globe has become the proprietor of these natural objects will wrest this surplus-profit from functioning capital in the form of rent’ (Chapter 46, tinyurl.com/4fnpkk4j).

The value of houses derives, in large part, from the general growth of the economy, and the expansion of demand of land:

‘One part of society thus exacts tribute from another for the permission to inhabit the earth, as landed property in general assigns the landlord the privilege of exploiting the terrestrial body, the bowels of the earth, the air, and thereby the maintenance and development of life. Not only the population increase and with it the growing demand for shelter, but also the development of fixed capital, which is either incorporated in land, or takes root in it and is based upon it, such as all industrial buildings, railways, warehouses, factory buildings, docks, etc., necessarily increase the building rent.’

Merely by holding onto land in the form of property draws a share of the surplus value generated (either through rent on homes or through windfall sales, both of which feed into raising the cost of wages to the industrial capitalist, without increasing the mass of use values the workers can purchase).

‘The mere legal ownership of land does not create any ground-rent for the owner. But it does, indeed, give him the power to withdraw his land from exploitation until economic conditions permit him to utilise it in such a manner as to yield him a surplus, be it used for actual agricultural or other production purposes, such as buildings, etc’ (Chapter 45, tinyurl.com/5b8jsz96 ).

This means that any attempt to regulate landowners could be met with stock being withdrawn from the market to protect their margins: it is the right of ownership that gives them the ability to extract tribute, nothing inherent in the land or the house itself. It’s worth noting that in 2021/22 the UK government paid tribute of £30 billion, about 2.5 percent of government expenditure (tinyurl.com/6wj5hh9h). This was in part reduced by the government pressuring social landlords to hold their rent down, which might explain why Sir Keir’s plans do include an element of expanding social housing as well.

His plans, though, also run up against another part of the logic of a market society. As empirical research by Warwick University showed, back in the 90s, ‘every additional 10 percentage points on home ownership puts 2 percentage points on the unemployment rate’ (tinyurl.com/yc76fj8m). Reducing the mobility of labour seems to cause more rigidity in labour markets.

Sir Keir may think he has come up with a low-cost way to win over natural Tory voters, but it is not without risks. The problems do not stem from any technical difficulty in providing suitable housing for all households, but from the nature of property.

Pik Smeet

Badged and Kebabbed (2023)

Book Review from the July 2023 issue of the Socialist Standard

Badgeland. By Steve Rayson. Bavant Press. 2023.

This is an engaging and well-written account of a life spent in left-wing politics during the 1980s, mainly in the Labour Party and also in Militant for a time, referencing a variety of Trotskyist and leftist groups from the era, together with their preoccupations and campaigns. Hence the Badgeland title – from ‘Rock Against Racism’ to ‘Coal Not Dole’.

Rayson starts as a schoolkid with an interest in politics in his home town of Swindon before moving on to be a student radical at Bath University and then after graduation to various management positions, initially at the former Greater London Council (GLC) before its abolition by Thatcher.

He charts an emerging disjunction in his life between the metropolitan sophistication of London and its progressive social liberalism and the visits he makes back to his working class roots in Swindon to visit family. There, the working men’s club frequented by his father and his friends has little time or interest in the radical left. Much to Rayson’s dismay they instead developed much more of an interest in buying their council houses and making a quick buck by joining in the various share-offerings of the privatized utilities. It is a tale that reflects a fundamental and wider shift at the time, when former working class trade unionists became seduced by the alleged benefits of the ‘property-owning democracy’ promoted by Thatcher’s Tories.

The book is funny by turn and sad at others, and in essence charts his frustrations at the failure of most of the campaigns he got involved in, from CND and the Miners’ Strike to the fight to save the GLC. He also traces the parallel tendencies within the left that were to emerge as New Labour, making an accommodation with Thatcherism that Rayson was uncomfortable with.

Eventually, after his time as a manager in local government, Rayson became an entrepreneur himself and in the ultimate irony claims that his life in and around Trotskyist groups prepared him well for the task, incongruous though that may sound. Part of a recalled conversation with a left-wing friend at the time is worth repeating:

‘I think all start-up founders should join a Trotskyist group as a teenager. It is far more valuable than studying for an MBA. They run weekly education sessions, they give you homework and individual mentors. They make you do presentations and coach you in the art of public speaking.

Okay, you have to moderate the hand movements and stop referring to everyone as comrade… But seriously it was Trotskyists who helped me achieve my ‘A’ Level grades to get to university…

Trotskyists teach you sales skills the hard way. They put you outside M & S with newspapers saying ‘Smash the Capitalist System’ and challenge you to sell as many copies as you can. It is the sink or swim school of sales training and better than any selling course…

They demonstrate how to build organisational capacity and communicate a consistent vision to their members. They generate revenues that are out of all proportion to their small size and are incredibly resilient. They create and publish national newspapers. They are also experts at guerrilla marketing which is a required skill for entrepreneurs.’ (pp.352-3).

In this he’s not entirely wrong of course, and others have made successful careers in public sector management for themselves based on some of these skills. Rayson has also worked in that sector and as a consultant too, and clearly still has an interest in radical politics.

These days, despite his various campaigning disappointments, he says he tends to vote for the most radical candidate on offer. Perhaps he’s even voted for the SPGB. Strangely enough, there is an argument that our commitment to a society of abundance and free access to wealth without a coercive state means that socialism as we see it could be the most creative and ‘entrepreneurial’ society of all. But then again, he would never have learnt any of that from Militant or the RCP.

DAP