[Engels wrote a booklet The Housing Question which should be on every re-reading list. However, the sections dealing with ancient issues can be skipped by most readers.]
The Housing QuestionGlobal Financial Crisis 2008 – Article No 07
by Humphrey McQueen
The housing question
With mortgages the tripwire for the sub-prime implosion, clarity about the relationship between home-ownership and capitalism is overdue. In brief, a mortgagee does not become any kind of capitalist with the final interest payment.
Two examples demonstrate the long-standing confusion of owning personal property as capitalist. At the 1949 elections, the Minister for Post-War Reconstruction in the Chifley government, John Dedman, lost his seat after declaring that the Labor Party was not interested in creating a nation of small capitalists by promoting home-ownership. Sixties radicals joked about becoming POMs - Property-Owning Marxists - when they took out a mortgage. Both statements represent the triumph of petty-bourgeois moralising over scientific analysis.
Owning one’s own dwelling cannot make you any kind of capitalist, even if that house is a penthouse in Dubai. In that case, you almost certainly needed to have been a big capitalist to afford such an abode. More significantly, paying for it could put an end to your being a capitalist by soaking up all your funds for reinvestment.
For the rest of us, rent is one of the socially necessary costs in the reproduction of our labour power. We struggle to make sure that our wages cover that outlay, along with food and clothing. If rents or interest rates go up, so does the pressure on wages. Equally, if all the workers in a labour market were to posses their own dwellings, employers would strive to push down wages until the homeowners would be no better off than those in the rental sector. The outcome, of course, depends on the relative strengths of the contending classes.
In 1936, the South Australian government demonstrated this principle by setting up the Housing Trust with low rents to reduce average wages in order to attract manufacturing to the State.
Erstwhile head of Treasury and the Reserve Bank, Bernie Fraser, has never owned his own house, arguing that it is more profitable to rent and to invest his savings. High returns are more likely with his skills and contacts. However, his exceptionalism underlines that homeownership is not the first step to becoming a capitalist.
What about the situation that more Australians have put themselves in lately by buying into a rental property? In those cases, they benefit indirectly from the values added elsewhere in the economy, making them rentiers. Had they set up a small building firm, you would live off the direct exploitation of their employees, and indirectly from the purchasers, so that they become part-capitalist and part-rentier.
Australian workers seek homeownership to escape the costs and disruption from eviction. In addition, owning your own place has been insurance against impoverishment in old age. Both reasons remain part of the socially necessary costs of reproducing labour power. They are not shortcuts to living off the labour power of others.
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[Engels wrote a booklet The Housing Question which should be on every re-reading list. However, the sections dealing with ancient issues can be skipped by most readers.]
The Housing Question
Written: 1872;
Published: (and re-published) as a pamphlet. Reprinted by the Co-operative Publishing Society of Foreign Workers;
Transcribed: Zodiac, June 1995.
During the 1870s, a major polemical debate unfolded in Germany’s worker/democratic press on the shortage of housing available to workers in major industrial centres. The influx and increase of the proletariat created a housing crisis.
On June 26 1872, Engels contributed the first of a series of articles to the Volksstaat, entitled “The Housing Question.” The last appeared on February 22 1873. Engels’ central point was that the revolutionary class policy of the proletariat cannot be replaced by a policy of reforms, because "it is not that the solution of the housing question simultaneously solves the social question, but that only by the solution of the social question, that is, by the abolition of the capitalist mode of production, is the solution of the housing question made possible."
more >> http://www.marxists.org/archive/marx/works/1872/housing-question/index.htm