8 ms·

It's always interesting to see which parts of our lives are incompatible with free markets (at least for a majority of society). It's a very peculiar moral that

• bradleyjg 9y ago
  Yes, it is a little odd. If a polity thinks that long term residence should covey property rights maybe it should pass laws that encourage or require rent-to-own schemes instead of layering confusing quasi-property rights on top of the rental/ownership dichotomy.
• breatheoften 9y ago
  It is definitely true that cities require many income levels to be sustainable -- preventing monoculture is not just a kind of cultural bias but it is sound economic strategy to keep your city vital and desirable over the long term. There is so much accrued capital into wealthy hands across the world with need to find profitable parking -- allowing your city to become a real estate bubble in service to investment funds is trading short term gains for long term losses.
• loceng 9y ago
  Core survival requirements seem generally incompatible with free markets.
  • nine_k 9y ago
    This is why markets spring up in societies that developed past mere survival of subsistence farming or hunting. The society of Germany is way past that phase, just in case.
  • stale2002 9y ago
    This is completely untrue. Look at the food market. The food market is extremely close to a competitive, fully capitalistic free market. Do food sellers monopolize the market and charge extremely high prices because food is necessary for survival? No, they don't. Because the free market would force them out of business. The current free market for food has a variety of different products, from a variety of sellers, all for a very reasonable cost. This is especially true when you compare it to NON free market industries like housing, where much of the problems are caused by the government limiting supply.
    • skummetmaelk 9y ago
      This just shows you have no idea about the food market. Farming is heavily subsidized in first world countries because local farmers would be outcompeted by cheap imports in a free market. Governments subsidize their farms so that they can compete with the imports because it is extremely important for a country to be able to feed its own population if outside supply suddenly disappears. This is actually an example of why totally free markets would be disastrous. Imagine for a moment that we let many of the local farms die to the outside competetion and a natural disaster severely reduces supply. You can't just spin up millions of acres of crops and have them ready before people begin to starve. Governments must subsidize as a form of insurance spending. You have to keep the machine running artifically for when you need it. The free market would kill this "inefficiency" for short term gain with potentially disastrous results.
      • loceng 9y ago
        Let's keep in mind the quality of food that the masses have affordably available as well; lack thereof..
    • richardknop 9y ago
      Agriculture and farming is one of the most subsidised industries in western world. Governments need to subsidise local agriculture as it cannot compete with third world countries and it is a matter of national security to be able to feed your population in case of a conflict, for example. This is a very poor example of capitalism and free market as it's super regulated.
• Eridrus 9y ago
  One way to look at this is that displacement causes a loss of value, i.e. culture, kinship, etc, to the extent that capitalism is an attempt to maximise value this isn't crazy. But I think housing is definitely a thing capitalism struggles with because it is a good everyone needs and there is a finite amount of it, so much of it is zero-sum allocation. Obviously I think we need to invest more in the non-zero-sum parts of it, but it's also a difficult political problem with lots of common goods and externalities.
  • smikhanov 9y ago
    What kind of value you think is being lost during a displacement? I’m genuinely interested
    • lucaspiller 9y ago
      Maybe not value on a material level, but there is definitely value lost in the relationships and sense of community that would disappear from forcibly relocating a large group of people like this. Maybe if they moved everyone to a new area together, but I'd guess they would just be distributed across the district.
    • RobertoG 9y ago
      In some cases is precisely the value that make the prices go up in the first place. For instance, people want to live in city x because this city have nice features (good public transport, good public spaces, buildings size that leave to see the sky..). Those features are in some cases due to location but, in other cases, are due to what the people that have been living there for generations have done with the city. Now outsiders come and out-price the people that "created" the city and, in the process, destroy the value of the place. So, people start to move to another nice city. Rinse and repeat. This, it seems to me, is not a "fault of the market", but the effect of an optimization process run amok. And I have not even mentioned speculation.
    • Eridrus 9y ago
      Community has value and since people are displaced to different locations, the community does not just re-appear somewhere else, hence value destroyed. It's also very easy to find negative effects of displacement. The one that springs to mind easiest is that old people who get displaced die many years earlier. These negative externalities fall on people who simply don't have the money to pay enough to cover these downsides. For a totally trivial example with real dollars: moving costs are non-zero, so when people move against their will we trivially destroy value there. I disagree with the sibling comment which claims that the existing community/neighborhood have done is what drives gentrification - a LOT of gentrification is driven by a balancing act between price, public transportation and safety. So, I would argue that for the gentrifiers, one neighborhood is often as good as any other, but for the people who have lived there a long time, that specific neighborhood is what is important. So in this sense, it is value destroying to push these people out on a 1:1 basis. Often gentrifiers aren't even moving to their first choice neighborhood and are merely priced out of the places they actually want to live.
• deleted 9y ago
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• gboudrias 9y ago
  In my opinion, capitalism in its purest form must thrive on misery (as it must exploit essential needs). This is what a truly free market implies. What I find interesting (though I don't think this is the point you're making), is that there are still people defending this obvious flaw and marketing it as a feature. But once essential needs are met (i.e. housing, food and security), what's even left? Luxuries, I guess. But even that can vary drastically between periods and societies (is gas a luxury? is higher education a luxury?). And yet here we are.
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  • nine_k 9y ago
    The thing is that other forms have been tried. It turns out that unless a form of society does not have enough capitalist underpinnings, it indeed thrives in misery of most people: North Korea, Soviet bloc, religious tyrannies, aristocracy with indentured servitude, etc.
    • skrause 9y ago
      You can have a system that is somewhere between "capitalism in its purest form" and "communism". When both extremes thrive on misery, why not try some kind of middle ground?
      • baq 9y ago
        You've described China and lo and behold most people live in misery there.
        • skummetmaelk 9y ago
          That is quite a bold statement with no proof.
          • noobermin 9y ago
• closeparen 9y ago
  I always thought of permanence as the differentiating factor between renting and owning. I actually feel less interested in owning, now that I know these "guaranteed right to rent at the same price for life" deals are out there.
  • em3rgent0rdr 9y ago
    yes, an example of one of the many unintended consequences of trying to interfere with market forces.
• rwallace 9y ago
  The problem is that housing is not a free market, and there's an uncanny valley effect: free markets are great, socialism is not without its own benefits, but a non-free market has the advantages of neither and the disadvantages of both. That is, housing is not a free market because it's illegal to build enough of it to meet demand. Employment is not a free market for a variety of reasons, which means employees don't have enough bargaining power to get remote work. And the U.S. has the special problem that Internet access is not a free market either, political corruption has crippled the ability of rural areas to provide it for themselves, which in turn damages the ability of the economy to provide jobs in areas where there is enough housing. And as long as all that is true, saying housing can be allocated by the market is just saying 'let them eat cake': an abdication by government of its responsibilities to safeguard the most basic rights of the people.
• woah 9y ago
  The supply of housing is severely limited by non-capitalist forces. It's hard to take it as an example of anything in isolation. If there was enough housing for all the people who wanted to live in Berlin, then it wouldn't be possible to buy a building and raise the rent.
• sbenitoj 9y ago
  It's also interesting that people genuinely believe this is going to solve the problem rather than exacerbate it. There is nothing any politician can do to change the laws of supply and demand. If this district in Berlin is in high demand, they're not going to fix the "problem" of high rents by keeping the supply fixed. The only solution to this "problem" is to let people build additional housing to increase supply. Instead of keeping the same people in their current units, overtime what will happen is people who currently rent apartments in this district will start to sub-let their apartments to the people who are willing to pay higher prices, acting as a wealth transfer from landlords to current tenants. And yes this will occur even if it's made "illegal" to sublet these apartments (this exact situation exists in NYC with people who have rent controlled apartments and people still do it all the time).
  • em3rgent0rdr 9y ago
    Ditto. > "The only solution..." I wonder as a thought experiment, if the city keeps buying more houses to fix the "problem", it might eventually become the dominant landlord, and then in order to raise revenue, it might find that it has to increase rents on its rent-controlled housing...
    • detaro 9y ago
      Sure, the city also raises rents when necessary. The cities real estate companies are expected to be profitable, just while keeping to other policies than "maximize profit". An option which is at least in Berlin is often offered to investors, but not always taken. (The city offers a guarantee to not interfere with a deal in exchange for concessions on how the buildings are managed, which allows to achieve the policy goals without having to invest itself. Private investors of course then often prefer other, more lucrative investments). Keeping existing supply cheap is useful for the cities inhabitants, but additional demand has also to be matched to not make this a conflict forever (and Berlin has afaik a lower rate than other German cities in approving new projects).
    • mseebach 9y ago
      Rent control is an instance of "chang[ing] the laws of supply and demand". If you need it, you didn't provide a solution. The "build, baby, build" solution would keep supply in line with demand, and prices would be stable on their own. Having rent control even if you don't need it (out of concern for long term tenancy security), you will just create a constituency with a vested interest in you not building any more. Also, strictly speaking, building is not the only solution. Curbing demand by making the city less attractive would also be a solution.
• jacquesm 9y ago
  You could do worse than to start with those items listed in the Universal Rights of Man and assume that anything associated with those should never be in any way be something that you'd have to pay for. After all, if they are universal rights then you can't put a $ figure on them. And then you read that list and you realize that those are exactly the things that are being milked for all they are worth, and often more.
• ThrustVectoring 9y ago
  Not forming new social bonds is an entirely different thing than breaking existing ones. Yes, it maths out to "these social bonds don't exist", but the latter is far more painful to actual humans. It's also why there's a significant ethical difference between murder on the one hand, and abortion and birth control on the other.
  • closeparen 9y ago
    Being stuck in a socially dysfunctional and economically stagnant part of the country - one where you're unemployed or underemployed - is a little more severe than "not forming new social bonds," though I see your point. The place I was born made sense for my parents - barely. It didn't make any sense for me. I'd be in a world of hurt if it weren't for the ability to relocate to somewhere with job growth.
    • pjc50 9y ago
      And we see the reverse problem too; some London local authorities got in trouble for trying to move their social housing recipients to seaside towns where there were no jobs.
• matt4077 9y ago
  This isn't just about the welfare of current renters. The city (and the people in these quarters) are also concerned about the changes a neighbourhood experiences when the population changes. What often happens is that these cheap but beautiful areas attract students/artists/etc, who create (or support) lots of businesses and events that make the area attractive. When the lawyers/doctors/etc replace them, they destroy exactly what it was that attracted them to it in the first place. (I live about 300m from the building discussed in the article)
  • Jdam 9y ago
    So from an economic point of view (that is lacking in Berlin in general), which value do the artists and students create and which value is created by doctors? Fine if the leftist gov wants to sustain their neverland but not if the other part of society (dreaded doctors, lawyers, engineers) has to pay for that. (also living in Berlin)
    • matt4077 9y ago
      I was assuming that the same people would still live in the city, only in different areas. So it's all economically neutral if that's how you want to look at it. This is also not about completely excluding any group from anywhere. There are plenty of doctors and lawyers living in Kreuzberg. It's about preserving a mixture of background/ages/incomes, which has shown to work rather well. It's also hard to deny the economic impact of this scene on the city, it both includes and attracts startups, for example. Or look at Heumark development: a triple-digit million euros investment that grew out of a nightclub (bar25).
  • rocqua 9y ago
    I get that it sucks when this happens to where you live, but is this an actual issue? Why should a neighborhood, once it is made better, be set in stone? It feels a bit like a nice populist point (ragging on the rich folks displacing the downtrodden trying to pull on their bootstraps). That alone makes suspicious.
• scaryclam 9y ago
  I'm not a landlord, but I recently bought my own home. If I moved on and decided to rent my property out, I may be making a small profit. However, if the housing market changes and the rent no longer covers the cost of the mortgage, I wouldn't say it's a cardinal sin to put the rent up. Most landlords are not professionals with large portfolios. Most cannot afford to keep the property if the costs are not covered. Having rented for many years previously, I'd prefer a rent increase to being evicted because the property had to be sold.
• solidsnack9000 9y ago
  ...I think it's very arbitrary that we don't have a problem saying to outsiders "we won't allow you to live here (even though you'd be willing to pay a lot for it)" however saying to someone "you can't live here anymore (unless you pay more)" is a cardinal sin. Pre-existing rights generally count for a lot more than rights that might exist. It has been said that "possession is nine tenths of the law". (Although no one has unencumbered possession of land anymore, in the sense of allodial title.) Allowing neighbourhoods to be broken up by rich foreigners sets a bad precedent both for current inhabitants and the new ones, who are very likely to find themselves in the same situation well before retirement age (as is happening in San Francisco). City governments are accountable to the people who live there, not the greater good of the One Market, and by serving their interests are merely doing their jobs.
  • closeparen 9y ago
    People who have moved somewhere are not foreigners.
    • solidsnack9000 9y ago
      The investment firm in this scenario is, as they often are, a foreign firm engaging in speculation. If there are problems for the people of Berlin, no skin off their backs... People who move somewhere hopefully don't always stay foreigners, but they can still behave in an opportunistic way, enjoying low prices while not really putting down roots or committing to bear any of the long term costs of the community they join. American tech people in Berlin who live there for multiple years and don't learn German are an example of this phenomenon.
      • closeparen 9y ago
        It's precisely the anti-transient policies (squeeze them as hard as possible on rent, make them bear all the costs of subsidized housing) which make people transient. Of course I'm not going to put down roots in a place that's trying its hardest to get rid of me. If you want people to put down roots, stop going out of your way to prevent it.