Deputy Prime Minister John Prescott plans to restrict the right of council tenants to buy their homes. This is very encouraging to me as it is a policy calculated to remind the large ‘new bourgeoise’ of former ‘working class’ people with aspirations to become property owners just how out of sync a socialist meta-context is with their real lives.
The problem is now that some tenants have bought their homes at big discounts, and then sold them on to property companies, who in turn sell them on at a profit.
Yes, shocking. When ‘working class’ people (a largely empty term when in reality the majority of British society is utterly bourgeois) make too much money, they start getting strange notions that they should be allowed to keep it and that is clearly something the Labour Party needs to stamp on! The notion of poor people turning a big fat profit by engaging in capitalist activities like selling their own property is anathema to a party which exists to dole out other people’s stolen money to a supplicant class.
In a manner which is actually technically more in tune with the fascist variant of socialism, they are happy for people to ‘own’ private property’ (e.g. such as allowing a person to purchase their council house), but if they then dispose of that ‘private’ property for their personal benefit in a manner not in accordance with ‘national objectives’, that is seen as an ‘abuse’. Which is to say, Labour shares the fascist view that private property is just fine, particularly the bit in which the former council tenant pays the council for the property… provided it does not actually then mean the new ‘owner’ in reality controls the thing he has just paid for.
Economically at least, modern regulatory statism has a large streak of fascist thinking at its core and this is an good example of that sensibility at work.
The ‘problem’ I have with council house sales is when they’re sold to the tenants for considerably less than their market value as a political bribe.
Surely selling public assets at less than their market value is theft?
Tim,
Council property is not sold at less than market value. Like all property on the open market the reduced price reflects the incumbrance of a sitting tenant.
The only political element is the ‘three-year clawback’ rule effected as a charge on the property and which requires the tenant-turned-owner to repay a staggered proportion of their discount should they sell the property within three years of their own purchase. This element was introduced entirely to pacify the left who were howling about the alleged iniquities of ‘profiteering’ -something which they cannot countenance among the working class.
The laughably absurd assertion that this process somehow constitutes ‘theft’ is, I regret, a manifestation of muddled left-wing thinking rather than objective analysis. ‘Theft’ from whom, precisely?
‘Public’ assets are themselves the proceeds of theft, so anything which puts them back in private hands is a good thing… doubly so for council houses, which adds them to true economic stock (at least to the extent the owner is actually permitted to have true de-politicised ownership) and enriches poorer people, who are the main victim of statist distortions of markets in the first place.
Enlighten a poor US citizen, please. Do residents of Council Housing pay the equivalent of our “Real Estate Tax”, [usually paid by property owners to the municipality]? However, those residents in “Public Housing” pay no such tax. Is there the same disparity in the UK?
Council Housing (UK) = ‘Public’ Housing (US)
Mommabear,
Over here it is called ‘Community Charge’ and, theoretically, it is payable by public housing tenants provided they are actually in work.
However, it is not charged to anyone living on state benefits which means a lot of public housing tenants.
Not so, Perry! Anything which puts public assets in the hands of private investors in a free market is generally a good thing. But if there is corruption and bribery (which has happened with many privatizations around the world), then I wouldn’t call it a good thing.
Lucas: what on earth has that got to do with getting Council Housing into the private sector? Millions of people have done so in the UK. How is that ‘corrupt’? What bribery is involved in that?
Re. Tim Hall’s comment, I would have thought the problem with the present system of council house sales is not that the houses are sold too cheaply but that they aren’t sold cheaply enough. The important thing is to get the houses out of State control and into private hands (anybody’s private hands). How it is done is a secondary consideration and is basically just a question of what can be sold politically.
p.s. What the State giveth with one hand it taketh away with the other. Whilst council housing is still being sold off, “Social housing” is being built / acquired by various quasi-State organisations at a terrific rate and it has many of the same vices as council housing (occupier immobility, arbitrary subsidies to favoured social groups a.k.a. “essential workers”, indirect taxing effect, adverse effect on rate of private house building, reduction in market stock hence higher prices for the rest of us)
” ‘Public’ assets are themselves the proceeds of theft, so anything which puts them back in private hands is a good thing”
That’s a universally quantified statement, and it’s not always so. I was pointing this out–it has nothing to do with council housing.
On the other hand, if council housing is like public housing in the U.S., then it’s used as a political favo(u)r to get votes from people getting the housing. (Though like most things the government tries to do, it’s pretty poorly executed–I’d much rather have a Habitat for Humanity home.) Maybe my remark does apply.
Lucas: Not so, Perry! Anything which puts public assets in the hands of private investors in a free market is generally a good thing. But if there is corruption and bribery (which has happened with many privatizations around the world), then I wouldn’t call it a good thing.
So better leave those assets in state hands? Is that your point? That statists corrupt attempts to privatise… well, yeah…what else is new? Even so, it is better to have as many assets out of overtly political hands.
Length of ownership covenents are common for tenent-purchased “affordable” housing in the US. This is really a minor thing to get a bug-up-yer-butt about. At least in Britian, government is actually using those confiscated funds to build housing. Here in California, redevelopment agencies are awash in money earmarked by law for the construction of affordable housing. This cannot be built because “up-scale” cities have no place for this type of housing in their “master plans”.
What I find objectionable at the very root of all this is the notion that “affordable” must equate to “subsidized”. But, in California, there is no other way. Compliance cost per single family house here exceeds $40,000. Of course, with the massive reduction in red tape from a government imprimatur, this is drastically reduced. As well, maximum occupancy laws, building codes and local standards mandate that those on the lower rungs be housed far beyond their needs. In fact, today’s “affordable” housing would be considered absolutely luxurious by the standards of the ’50s.
Following on Kevin’s remarks instantly above: yesterday, I was digging around at FEE’s site and found an article that I have in hardcopy (in The Freeman, 1994), that hits on several important aspects of housing and planning (in California, to boot).
The historical implications should not be difficult to sort out.
This government manufactures poor and homeless people, in myriad ways.
Rats! The link that I just posted to FEE isn’t working for some reason (although it is when I just paste the silly thing into Netscape), but try this–
http://www.fee.org/vnews.php?nid=2913&printable=Y
The article is entitled “The past Is Prologue”, and it’s really worth a read.
The whole FEE site appears to be down; these things happen.
Perry: In some cases, yes, state ownership can be preferable to private ownership if the method of privatization is sufficiently corrupt. Someone who gains a large asset of the state at a bargain price in exchange for a political favor (for example, much of the nickel industry in Russia in exchange for large contributions to Yeltsin’s campaigns) is a theif. They’ve stolen a massive amount of money from taxpayers. If a fair market price were obtained for the asset, this could be for legitimate and productive activities like paying down debt and law enforcement. Otherwise, more money will have to be taken from taxpayers to cover these costs.