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In Defence Of High House Prices

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Dillow - always thinking sideways:

However - and here Marxists disagree with liberals - the purpose of capitalist economic activity is not to increase our real freedom, but to increase profits. High and stable** house prices, insofar as they facilitate indentured servitude, achieve just this.

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2013/07/in-defence-of-high-house-prices.html

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Idiotic lefty claptrap whose sole purpose is to make Capitalism look absurd via straw man arguments. It's saying that through massive market manipulation to keep prices high, the aims of Capitalism are fulfilled :wacko:

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Idiotic lefty claptrap whose sole purpose is to make Capitalism look absurd via straw man arguments. It's saying that through massive market manipulation to keep prices high, the aims of Capitalism are fulfilled :wacko:

But I wonder what is the fulfilment of capitalism - maximising profits or maximising capital formation?

The latter seems like good old Adam Smith. The former is what we seem to have.

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Nowt so blind as those who dont want to see...

Im sure he is well aware of government manipulations of the market, but if you make a decent living spewing marxist propaganda, why let facts get in the way of a good argument?

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Anyway, this whole Keynesian 'inflation encourages employment' that was adhered to from 1950-1980 (and lets be honest, still is today, the only reason they deserted it in the early 80s recession is because people feared inflation more than unemployment) was demonstrably proven false during the 70s stagflation, with rising unemployment and rising inflation. Higher prices didnt encourage people to produce more, they simply saw their purchasing power fall.

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Dillow - always thinking sideways:

http://stumblingandm...use-prices.html

He's dead right.

I can't see how anyone would disagree with any of it until:

However - and here Marxists disagree with liberals - the purpose of capitalist economic activity is not to increase our real freedom, but to increase profits. High and stable** house prices, insofar as they facilitate indentured servitude, achieve just this.

The housing market isn't compatible with free-market ideology any more than it is compatible with marxist ideology.

It is however a feature of all real-world capitalist economies, and so it's difficult to argue with his last paragraph either really.

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He's dead right.

I can't see how anyone would disagree with any of it until:

The housing market isn't compatible with free-market ideology any more than it is compatible with marxist ideology.

It is however a feature of all real-world capitalist economies, and so it's difficult to argue with his last paragraph either really.

Is there equivocation in the use of "free"?

"Free market" excludes "freedom" et vice versa: former is collective, the latter individual.

Dillow says freedom (= freedom of the individual) is defeated by the pursuit of profit (subsidised by the state) when the price of accomodation is inflated against earnings.

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snip

It is however a feature of all real-world capitalist economies, and so it's difficult to argue with his last paragraph either really.

Democratic Economies....Housing bubble =middle class votes = policies to distort housing market = less capital = less productivity = unemployment = collapse = more distortion to avoid = QE = Imputed rent and other scams = government out of control etc etc etc

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The article is correct to say that high housing costs are causing impoverishment but doesn't explain how when house prices were cheaper relative to wages people still had to go out to work - and the UK was more competitive in those days with more manufacturing. Indeed some would say it was more balanced.

The article refers to the MP complaining about a shortage of Doctors and puts that in large part down to female Doctors working part time (apparently out of necessity) but doesn't mention things like the exponential growth in the number of new ailments listed these days and recommendations in outlets like the media that things like almost every ache/pain and change in diet etc should be referred to the GP for advice.

The article mentions that Keynes said the working week would drop to 15 hours a week and says that the average is now twice that but doesn't mention large numbers of working people only work 16 hours but also have benefits and tax credits all funded by government borrowing and extra taxation as well as stealing from savers etc.

It would have been interesting if the article had filled out a bit more on points such as those.

Edited by billybong

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The article is correct to say that high housing costs are causing impoverishment but doesn't explain how when house prices were cheaper relative to wages people still had to go out to work - and the UK was more competitive in those days with more manufacturing. Indeed some would say it was more balanced.

Yes, but the workforce without full computerisation was less productive back then. Land (as a monopoly item), suck up the rest of the surplus (it is not the house, it is the land). Of course, with higher interest rate, the total cost of purchase was probably a little bit higher than than the 2.5x salary reached at around 1995.

The article refers to the Doctor/politician complaining about a shortage of Doctors and puts that in large part down to female Doctors working part time (apparently out of necessity) but doesn't mention things like the exponential growth in the number of new ailments listed these days and recommendations in outlets like the media that things like almost every ache/pain and change in diet etc should be referred to the GP for advice.

The article mentions that Keynes said the working week would drop to 15 hours a week and says that the average is now twice that but doesn't mention large numbers of working people only work 16 hours but also have benefits and tax credits all funded by government borrowing and extra taxation as well as stealing from savers etc.

It would have been interesting if the article had filled out a bit more on points such as those.

Of course other factors such as population increase that caused the marginal house price to go up. House/land prices are determined at the margin, so if 1 house sold for £200k, that is the 'value' for the street. On top of that we had liar loans and the housing benefit to add oil onto fire.

But the question remain if most of us have a fully paid for house and cars, would we work less or work the same in order to afford Ferrari and Opera and pay 40% taxes at the same time. This is obviously something cultural dependent - but my favourite plumber stops working once he got enough.

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Yes, but the workforce without full computerisation was less productive back then. Land (as a monopoly item), suck up the rest of the surplus (it is not the house, it is the land). Of course, with higher interest rate, the total cost of purchase was probably a little bit higher than than the 2.5x salary reached at around 1995.

Of course other factors such as population increase that caused the marginal house price to go up. House/land prices are determined at the margin, so if 1 house sold for £200k, that is the 'value' for the street. On top of that we had liar loans and the housing benefit to add oil onto fire.

But the question remain if most of us have a fully paid for house and cars, would we work less or work the same in order to afford Ferrari and Opera and pay 40% taxes at the same time. This is obviously something cultural dependent - but my favourite plumber stops working once he got enough.

Any surplus (finance and efficiency) could have been directed towards a more balanced economy like other countries have done.

A lot of the price increases have of course been caused purely by crazy and self serving levels of credit/government policies etc resulting in ever more people in the household having to work while at the same time more and more people only working 16 hours a week. The article didn't go into that.

Edited by billybong

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Any surplus (finance and efficiency) could have been directed towards a more balanced economy like other countries have done.

Which country is that? The power law always distributes the gains towards a small number of people - land ownership in this island, Japanese towards the shareholders of the exporters, Germany towards the shareholder of the exporters, the banks and the PIGS (used to anyway as cheap loans).

A lot of the price increases have of course been caused purely by crazy and self serving levels of credit/government policies etc resulting in ever more people in the household having to work while at the same time more and more people only working 16 hours a week. The article didn't go into that.

Yes - land prices and economies are complex systems and trying to pin that down to one or two factors will always lead to inaccurate conclusions (same with stuffs like gold ramping etc). The 16 hours + HB + TaxCredits case is actually pretty interesting.

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Which country is that? The power law always distributes the gains towards a small number of people - land ownership in this island, Japanese towards the shareholders of the exporters, Germany towards the shareholder of the exporters, the banks and the PIGS (used to anyway as cheap loans).

Yes - land prices and economies are complex systems and trying to pin that down to one or two factors will always lead to inaccurate conclusions (same with stuffs like gold ramping etc). The 16 hours + HB + TaxCredits case is actually pretty interesting.

Even some of the PIIGS compete with the UK on balance of economy. In the UK the imbalance between banking and industry etc is just one example of serious long term economic imbalance.

Some countries seem to have distributed more evenly although there seems to have been a general tendency towards more distribution towards VI interests in recent decades. Germany and Japan seem to have distributed more evenly.

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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