The Housing Crisis and Neoliberalism


Irish FamineListening to Morning Report this morning (25th May 2016)  interview these right wing completely out of touch politicians from this government making excuses for the New Zealand housing crisis, was like a rerun of the Irish Potato famine. It so riled me – all the cliche-laden stupidity and faux “I am your leader, so trust me” emptiness and attempts to convince us there is no crisis.  Well, we’re living it.

The same dull unconcern.  The same rationalisations and talk of market supply.  Underlying all this are all the hollow assumptions that price and the ‘efficiency’ of where the supply line meets the demand line.  Where – bewildering in its inconsistency and blindness – government ‘interference’ will create ‘inefficiencies’ and ‘distortions’ – but market agents like corporates and slum landlords are OK.

The same complete disregard for life, equity, justice, meaning, or a nation’s vision to be more than just a set of ‘resources’ for the commercial mill.  The same complete disregard for what works in the real world, and what doesn’t.

There is a reason why the State is involved in housing, education, health, the social fabric, the long-term view and justice, etc.  It’s because the market patently *doesn’t* provide.   The idea that is all about competition is a nonsense to anyone who has ever been part of a team, a family, a decent workplace, a community.  We cooperate so strongly at some levels and compete at others.  Cooperation is integral to any cultural life.  Life is not about competition of individuals divorced from any society, as Neoliberals presume.

But it’s more than that.  Life is not a market.  The market should never be the first option in policy, the prime directive.  Life is the prime directive.  Life in the long term.  Our culture.  Our reason for being.

That desired goal-end-outcome is the first consideration.  And then in order to provide what we desire as a people – a democracy (now there’s a thought) – we look for policies that will provide for those ends.  The market where power is held in check can be one policy option, one of many.

The market can *never* be an option for our future where nuance is not understood nor even identified and considered, and where power is not held in check.  Such ‘unfettered markets’ will destroy us all.  If you allow power and short-term thinking to co-exist, then you destroy all the social functions and natural systems.  It is profitable in the short-term to mine and move on.  It is profitable to extract.  It is profitable to use power to tilt the playing field in your favour.  And it is because power is not given a central place in their thinking that neoliberal economists are not aware enough of the potential degradation of our underlying social and natural systems.

That Irish Famine period in the 1840s was arguably the first age of neoliberalism – “The market will provide,” said the House of Commons.  I’m sure the House of Lords was even more strident because like the Mega-corporate support for Neoliberal priests today, the Lords of the 19th Century had much to gain.

Never mind feeding people, it will all settle down with the market.  (People are not actually people after all – they are ‘resources’ – and ‘Irish resources’ at that.)  Supply will come along as people pay higher prices for food etc.  People make rational choices. It’s a meritocracy. Obviously the Irish have less merit. A bit like those struggling for a house.

Except that people were dying in the Famine – a manufactured famine created by the power systems of the day – and people had no money, and the large colonial land owners (is it any wonder the Irish rebelled in 1916? and those same colonial ‘lords’ lost all their landholding they had previously stolen from the Irish) actually used their crisis to take even more of their land. Shock Doctrine Version 1.0 “You want to feed your family? OK they can work in the work house, and I’ll have your last 10 acres.”

We have this history in all its stark reality, and the Neoliberal economists assume an infinite number of equally powerless firms and individuals in their models.  What? they don’t learn about colonisation, or the dynamics of power through history?   Of the fact that it was not a meritocracy.  I mean, how can a university give a degree to a person who knows nothing of political economy and economic history?  How?

Reducing our world to some delusional purity of markets is a pernicious evil.  It encourages power because it assumes it’s all ‘willing buyer-willing seller’ rubbish, and so those with seven corporate lawyers can rip off the worker who has none.  When you point out this reality as a refutation of the logical bankruptcy of their theories – and all the other nonsense assumptions that have no basis in any real world near you – and they act like religious zealots and defend the indefensible.

I’m sorry, that ought to be embarrassing for any discipline.  It supports ignorance and an unconsidered life.  If they cannot question themselves and their base assumptions then Neoliberalism is certainly neither a science nor a humanities subject.  It is a religion, with unquestioned catechisms of faith.  A lot like State Communism actually.  More and more parallels – from the religious dogma, to the autocratic systems they put in place to ensure obedience and non-thought.

Neoliberalism completely ignores the real world.  And yet we have been listening to people in suits wth these wacky ideas since 1984 – mostly coming from Treasury and the Commerce Seminary Faculties – supported so well by the corporates and the powerful who so benefit by their policy frameworks.  They do not like the State involvement in housing. They do not like the State involvement in health.  They do not like the State involvement in education. They do not like the State involvement in prisons. “Let’s privatise.” “The market will provide.” “The private sector does it better.” “It will all trickle down.” “Deregulate and the market will create a new age of plenty and stability.” “A true meritocracy.”

This is beyond stupidity. This is lunacy.

The Neoliberal idea that the market is the only lens of policy making (bar a few exceptions like the police and the army to protect the property owners’ interests) – the arbiter of all – is at the very least stupid.  History tells you it’s stupid.

Yet it persists. Even after the history of the other ages of neoliberalism – the 1840s (food distribution and ability-to-pay disasters) & depression (at least we got some reform acts out of that debacle).  Then the 1890s – the robber barons and more manufactured famines and Lord Curzon (who bought his Lordship and became Viceroy of India) repeated the process of famines in India – and another world depression.  The 1920s neoliberal jazz age leading to what John Kenneth Galbraith referred to as a ‘thin’ economy (all the money at the top) followed by the 1929 stock market crash and the Great Depression.

And now the new Neoliberal Age of Stupid from the 1980s. And history repeats – a system where power accumulates, people and planet are exploited, small enterprise is squashed by big mega-corporates, and we get crash after crash. 1987, 2001, 2008

… and we’re waiting for the next.
Chris Perley
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7 Responses to The Housing Crisis and Neoliberalism

  1. Good one Chris – funnily enough my wife and I both felt the same sense of total disconnect and fury listening this morning. Its the entrenched blindness with distruction being perpetrated all around I guess. Ive copied you on to my family.

    D

    PS We are working on the idea of a “NZ Festival of dangerous ideas” – hope you will be there!

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  2. Andy D says:

    So, the problem goes away if we change Government? I agree with you that markets and capitalism have to be fettered for the good of all – the difficult bit is getting the weight right. A constant struggle for any Government I think.
    That said, the lack of integrated policy for infrastructure, housing and immigration and the lack of cohesion between local and national Government is mickey mouse.

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    • cjkperley says:

      Thanks Andy. No, I don’t think the problem goes away *just* with a change of government. We need a government that rejects the mythology of the last 35 odd years. We desperately need a Sanders or someone similar who speaks of the power relations of the world and the effects of the last decades of banrupt economic and corporate policies. So not just any government. A government that is prepared to acknowledge:

      1. the disparities of rich and poor and the negative effects
      2. the rise of mega-corporate power and the need to shift our focus back to small/medium enterprise – who owns and where they live both matter
      3. the fact that markets are not the arbiter of choice, particularly when it comes to society and the environment, and never where power is allowed a free hand, and
      4. the explicit recognition that our natural and social systems are what underpins any economy.

      I could go on, but that’s a start. Loyalty to a colour (red, blue whatever) is not what we need. We need an endorsement of values and policies that put our people and children’s children clearly centre of the picture. And that means recognising what is important and meaningful, and that certainly isn’t by treating the world as a mechanical set of measurable resources.

      Best
      Chris

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  3. Tom says:

    Great comments. Re the “few exceptions like the police and the army to protect the property owners’ interests” – even that is changing.
    The US uses more private contractors (mercenaries) in Iraq than they use regular troops. The US military is slowly being privatised and that is frightening. Even in NZ, often private “security” companies are used rather than police. This is the beginning of private gangs paid by the state to control the rest of us. I don’t say this lightly, we are on a very dangerous path and the frightening thing is not enough people in NZ can see it. According to the polls they are still enamoured by National and Key. That level of ignorance is a major concern.
    http://www.csmonitor.com/Commentary/Opinion/2013/0319/A-lesson-from-Iraq-war-How-to-outsource-war-to-private-contractors

    Neoliberalism intends to privatise everything and they will use our own military and police to suppress any opposition as has already happened during anti TPPA protests.

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    • cjkperley says:

      Read Iain Pears’ Arcadia Tom. Just out. A future dystopia of Corporatocracy where each has its own private army and democracy is abolished because of its ‘inefficiency’. A sort of Corporate Warlord future – each desperate for diminishing resources and justifying any action ‘for the good of the people’. The Warlord having the title Chairman or CEO I imagine.

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  4. Brian Turner says:

    It won’t be a surprise for you to know that I concur with you. One question that keeps coming to mind, and searingly, is, ‘How is it that only a small proportion of the populace can’t see it?’ Most of our radio and newspaper commentators make only mild objections. I keep thinking that broadcasting and newspaper senior management, and those who head educational institutions, are part of the enemy camp, or they wouldn’t hold down their jobs. Or am I somewhat unfair/paranoid?
    Brian T

    Liked by 1 person

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