Monday, 5 September 2011

To say "property-owning democracy" is tautology - there is no other kind


OK, I know that the term "property-owning democracy" refers mostly to houses. And this allows people to write utter nonsense about property:

Yet even though the property-owning democracy idea has achieved neither its social nor its financial goals (the housing market has manifestly not developed in an orderly fashion that seamlessly matches supply and demand), there remains a truculent insistence from the right that somehow it is still interference from the state that is the problem, rather than the lack of it.

Now setting aside that the housing market is so constrained by regulation - be it financial, planning or legal - that to describe it as free is utter claptrap, we need to stop with this critique, catch a breath and ask what exactly is the problem?

The reason this critique is wrong - and verging on immoral - is that you cannot have a liberal democracy without property rights. Whether those rights apply to land, housing, paintings or that old pair of boots in the bottom of the cupboard. What is worse is that we are now telling people that owning property is just something for the rich:

We are, arguably, at another point of potential momentous change: the centre-ground voter is increasingly well-knowing about the foolishness and falsity of the home-owning democracy myth; the actual facts reveal that new home ownership, especially among the young, was steadily declining even before the 2008 credit crunch; and the gradual, tentative, dismantling of the previously cherished RTB has not led to any popular revolt.

The liberalisation of property finance and the "Right to Buy" brought about perhaps the biggest redistribution of wealth in England's history - shifting valuable property from the state and from big landlords into the ownership of ordinary men and women.  There are over 6 million homes in the UK that do not have a mortgage and, for those with a mortgage, there are plenty where it is neither a financial burden nor a significant proportion of spending.

The real question is how we allowed the vested interests within the housing system - landowners, existing householders, finance companies and the government - to fix the system so as to make it ever more expensive to 'get onto the housing ladder'.

What these critiques are telling us is that owning things is for the wealthy - ordinary people should not have such aspirations, should satisfy themselves with the outlook of the serf. Indeed the criticism includes - shock-horror - that some folk don't understand (and by implication shouldn't be allowed to play):

A Shelter UK survey indicates that one in four mortgage holders have no idea what the UK base rate is. These mortgage holders are playing with significant financial risks while being unaware of their exposure. Data from Legal & General indicated that maybe 90% of UK mortgages are on variable rather than fixed rate of interest. That's up from 60% from 2007. In something of an understatement, Shelter UK said that when the Bank of England does raise rates, this could push risk-ignorant owner-occupiers and those assuming permanently low interest rates, into a 'spiral of debt and repossession';

I bet those mortgage holders know what rate they are paying, how much they pay out each month and what their limit is in terms of payment. And - since Shelter are stupid - let's point out that all those poor fools on variable rate mortgages got the full advantage of the lowest interest rates ever, unlike the clever chaps with fixed rate mortgages.
Ownership is a good thing. It gives us a real stake, a commitment that renting or living for daily consumption doesn't bring. Ownership allows us to pass things along to our children should we so wish. And ownership stores up value - even if house prices aren't rising I still end up with a valuable property having had the benefit of living in it all the while!
Don't get me wrong, there's nothing wrong with renting (although the housing subsidy implicit in social housing is a massive distortion to this market) but we shouldn't go around telling less well off people not to aspire to such wealth. That owning things is not for you working class folk.
Yet that is precisely what the Joseph Rowntree Foundation, Shelter and a plethora of left-wing commenters are doing. And not only are they wrong but their arguments erode the central element of a free society - property rights. It really scares me that some see the constraint of property rights as essential to a liberal democracy:
Yet, still there remains in place an obstinate refusal to see that, without a determinedly redistributive infrastructure, liberal democracy simply cannot exist
The left believe that Government must have the right to confiscate property so as to allow for a liberal democracy?
Herein lies the fundamental reason why the left are illiberal. Such arbitrary powers - we cannot predict precisely which property the government plans on seizing so as to "redistribute" - are the short road to autocracy. Whatever the pain of owning property it is preferable to a ghastly socialist world of confiscation, rationing and centrally-planned chaos.
For me such a position is immoral, it patronises ordinary people and it maintains the myth that if it all goes wrong it's someone else's fault. And the government will bail us out.
this is the myth that got us into this mess. For heaven's sake let's not do it again.

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