Rent and Spongers -> Property

Amazing that some tabloids keep going on about people sponging off the welfare state and living in government accomodation.

Quite contrary it seems to me that the landlords are the spongers. It remains absolutely absurd in my view, and everytime I examine it even more absurd, that it is legal to charge people for something that they don't consume. I live on someones land and I leave that land as I found it and so what has the landlord got to charge me for? Upkeep of the property, rates etc absolutely should be paid for but for physical occupation how can that be "costed".

Well the simple answer is that there is always someone who will pay for it and so the landlord will house them in favour of those who won't. So essentially it is a bribe to the landlord. In the same way we might give a bung to a doctor to give us treatment next. But why is it wrong for the doctor to receive a bung, but not the landlord? Maybe the landlord needs to pay himself a wage for the paperwork involved in maintaining a property. So at minimum in UK at the moment a small room is worth £70 a week excluding all bills, or £3500 a year. If a landlord has 10 such rooms his income is £35k/year. Suppose he pays contractors £200 a week for service and maintainance to those rooms - that is £10k. So he takes home £25k or a salary of £12.5/hour. Does this really cover the "work" he does in owning a property?

My only conclusion whenever I look at this situation is that the real spongers in society are the landowners - indeed the owners in general - who take a hefty slice out of the productivity of this nation and damped economic productivity heavily. Supporting a Capitalist class is what is really happening in society, but the Capitalists twist the idea to make the poor look like the spongers - guilty conscience maybe ;-)

=== Further to above === 6/8/10
The system of rent begins with invasion. Kings and Queens own land by virtue of conquest and then only by their consent is it parcelled out to people they like and trust. Thus in a monarchy the monarch effectively liberates those in favour from labour by giving them lands from which they can take a percentage of the produce and so not work. In turn they supply produce to the monarch to ensure the running of the monarchy.

The argument usually put around is that the serfs who paid rent did so in payment for military protection. As argued here before - protection from what? another land-lord! Battles are only between land-lords for right to control the productivity of lands. A visitor centre at Hadrian's Wall runs a documentary which explains very clearly the reason for castles and big building - they are symbols of power and thereby reinforce the control of the ruling elite over the locals just as much (if not more) than defend them (who?) from external invasion. The traditional argument seems to imply that the invading people are going to kick the locals off the land and do the farm labour themselves - hardly!

Rent was established then as a means to avoid working and to support a system of control that ensured freedom from labour. Upper classes have always been idntified by their freedom from economic concerns achieved by rent.

The protestant work ethic is a very smart achievement by which those who pay rent, and who the establshment rely upon for income, are given the false consciousness that to not work is a sin. Even my mother who is from borderline aristocratic stock has this mentality. It is more of a joke hearing the down trodden working classes speak with anger of people not working - I imagine this is simply resentment at so much of their life having been taken up with work. Yet all around the workers who hold these ideas the rich avoid work, especially those who take rent for doing nothing. This is a spectacular false consciousness!

In the medieval world wealth was measured in gold. There was as much wealth as gold and that was it. Smith changed that for good with his "Wealth of Nations" where he argued that wealth as created by labour.

Now the stock markets do not create any wealth - they are simply exchanges where wealth changes hands. The same is true I argue for rent. No work is done on land to make it "rentable" - it is rentable simply as it is. Nothing is taken from the land that makes it unrentable. The landlord thus creates no wealth but never-the-less takes a share of the wealth created.

Average house price is about £225k and average salary 24k. A couple will pay £450k for their house over 25years with an income of 24kx2x25=1200k. So 37% of their income will be spent on land-rent effectively (altho after that they own the house). This figure is similar to what I experience with about 1/3 of salary being spent on rent.

From the above analysis this "tax" is payed in return for no value added labour from the land-lord. The land-lord thus gains effectively 1/3 of his salary free (if he has two houses) or maybe all his salary if he has 4 (1 for him to live in). It means that he does no work, and contributes nothing to the economy. He therefore has exactly the same economic impact as a "sponger" on benefits - the only difference is that he is left in peace and is socially accepted while the "sponger" is hounded by the DSS and the society as effectively a "thief". All this while the readers of the tabloids in question pay rent quite unawares. Remarkable state of affairs it seems to me.

What is more damaging is that the land-lord takes salary from workers who would have spent it in the market place and stimulated jobs. The probability with Capitalists is that the returns on capital and rent are reinvested making the situation worse. I keep coming across the economic argument (not of my creation, and attributed oddly to Einstein amongst others) that the gradual ratchet of money flow being restricted to a smaller and smaller group of elite individuals actually contracts and collapses the economy. "Bernanke's Helicopter" - the claim that money will be flown to people to increase liquidity and money flow in US if necessary - is only the desperate attempt to correct a fundamental flaw in the system that wealth in the current economy gradually trickles upwards. An article I read today said that the fault lay in the extreme salaries of the elite business world. I would say it lies in the very structure of ownership and "rent" - which is effectively salary for nothing.

It occurs to me also writing this that the system of "rent" (or salary for nothing - SFN) has other impacts. Taking people out of the workforce by making them capitalists (general term here for anyone who gets money for renting or lending something out) reduces the workforce and increases the value for labour, which is then discounted by 1/3 of that salary being taken by capitalists in rent. This is isomorphic with the welfare system - I don't therefore understand the difference or the reason why the rent system is considered good and the welfare system seen as bad... except obviously the owners of the country and the press are capitalists!!! There is my answer!!!

Of course it is not just where we live that is taxed. Everything we buy has to support land-rent (shops, factories etc). And it is not just land-rent. Every penny borrowed is taxed also. It would make an interesting calculation to find out what percentage of the wealth of workers changes hands for nothing in return. It could be startlingly large.

Now this analysis was based upon my limited understanding of Classical economics. Yet this blog has already noted that wealth is not created by labour. A particular stone that we walk past every day may suddenly become the latest fashion and suddenly when everyone wants one it may become scarce and then valuable. What was under my feet suddenly over-night gains value. This is not because of any "labour" but because value (like meaning) is created by social structure, custom and more. I forgot to note when last mentioning this that just as we might wonder what worthless thing now may become valuable tomorrow like Tracey Emin's bed, what indispensible valuable thing now may become worthless tomorrow as fashions and lifestyles change.

Now if labour is not the primary source of value and on top of this the rent system has always been staring people in the face as evidence that we don't need to work to get a salary - why for all these centuries have people frowned upon people who do not work, and more recently are on benefits? The answer has already been covered.
(1) People who do work are resentful of those who don't precisely because they don't want to work themselves!
(2) The Capitalists would have to work if they lost the power to take SFN.

Now I am not against work. The upper-classes devoid of work to do were very adept at creating diversions, ettqiuettes and light tasks to pass the time of day. It is human to be creative and to work I would say you simply cannot stop people from doing things. The problem lies in the social system of inequality that seeks to partition resources so that some are forced into positions of control and some are placed in to positions of authority. Now I must have analysed why this happens in my year long discussion of social structure... but i forget at this moment... shall look up...

So what alternative is there. Well a simple alternative is to keep the rent system but have the state own everything. Rents are then returned to the system and the people - may be not evenly as corruption will exist but more evenly than in the current multi-tiered system where everyone from land-lord to pension scheme holder tries to be a sponger.

On the subject of ownership picked up a book while shopping for my sisters birthday present which was basically a page by page apology for the right-wing. It explained for example why the Caspian sea is unpolluted while the Mediterranean is polluted. The reason is that the Caspian falls within one government jurisdiction while the Mediterranean is bordered by many countries. The rest was Prisoner's Dilemma - which would have made the whole book much shorter if he had noted that - why keep your bit of the Med clean if your neighbour just dumps rubbish etc etc... ergo it is best to have one person rule the whole world (essentially the weakness of Right-Wing thinking in a nut shell). He neglected while he wrapped up the pure logic behind Totalitarianism, to note that he was dealing with different sizes of the same thing - states. At no point did he actually question the notion of property.

Interesting other case study was the American Indian of the Plains and the West coast (I think). The Plains Indians famously don't/didn't have a system of property while the West coast did. The reason (which I accept) was that the Plain's Indians lived off a mobile mass resource - the buffalo - which could not be broken into territories, while the West coast lived off small game which fitted into territories. Exactly I would notes as we see in the natural world where territory etc is based upon resource distribution and genetic relatedness between individuals. What he neglected to make a big deal about was that there was a society that operated without property - the relative, conditional nature of property systems should be an extra-ordinary observation for those Fascists who still dine on a diet of 18th Century libertarian socioeconomic politics, like the writer of this book.

But I will concede that it got me thinking about the wealth and scientific knowledge and progress that has occurred in our civilsation in the West. It is not because of anything intrinsic to the West - it is a natural process as occurred in Ancient China, Ancient Indian, Babylon, Ancient Egypt, Ancient Greece and the cities especially of Athens, Alexandria, Rome etc - but it is due to a fixed, enduring social order. As I realised in that musing regarding my lost letter, the delicate webs of knowledge can only be crafted in systems of exquisite stability and order... what creates those and must they always be based upon property, hierarchical and unfair to lower classes... does fixed social order always carry the cost of injustice... regarding property I believe no - as Reading Council have started to realise on their bins "Keep YOUR Reading Tidy" - how can it be MY reading when I don't own it ;-) Why can't we share everything? Regarding injustice I don't know... but this is another way in on the analysis of "employment" which seem to be less and less relevant with every technological development.

=== Further to this - Brambles

Eating blackberries yesterday I noticed an odd contradiction. On the one hand the bramble produces a delicious fruit, but on the other hand it has aggressive thorns that seem designed to cause injury to everything.

That contradiction seems of fundamental essence. If the bramble didn't aggressively protect itself from herbivors then it would be eaten before it could amass enough nutrients to create the blackberries. The blackberries are especially delicious because they provide the second essential feature of sex (which is distribution of the young i.e. genes). Leaves on the other hand are not designed to be eaten, they simply happen to embody nutrients as matter of necessity. So if we play things the bramble's way we get rewarded!

This seems to parallel the observation that the beauties of human meaning can only flourish in societies that protect their growth and wealth aggressively, and the wealth of nations is enjoyed by those who play things the society's way.

Some appeasement to the right-wing position here.

I would say here that to correct ones course it is often better to oversteer onto the correct track and then continue on that correct track, than to simply find the correct destination on the horizon and stear toward that making the route as one goes. The analogy being that to correct the errors in society it seems necessary to explore the forbidden territories in order to find oneself back onto the true path. Is it possible that I have explored too far into unnecessary territories?