The Housing Crisis and Neoliberalism


Irish Famine

Listening 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.  Neoliberal fundamentalism without a shred of self-critique of its nonsense assumptions.  All to make the mathematics work in the model.

wheel-estate.jpg

Underlying our crisis, and the complete inability of either government or public sector to deal to root causes, are all those hollow neoliberal assumptions that price and the ‘efficiency’ of the market are dependent on where the supply line meets the demand line.  Complexity reduced to two dimensions.  I’m sure I remember a mathematical theorem somewhere that proves that such reductionism from multiple to two dimensions is completely meaningless – like reducing the raising and love for a child’s emergence as a rounded human being to measures of calorie input and output.  With nice graphs and three significant figures demonstrating precision of course (never mind that such a framing has absolutely no accuracy).

Their nonsense keeps compounding; wrong compounds on wrong; delusion on delusion; insanity on insanity.   Bewildering in its inconsistency and blindness, the neoliberals presume government ‘interference’ will create ‘inefficiencies’ and ‘distortions’ to their ‘perfect market’, while private (i.e. non-government) commercial agents like mega-Slumlord.jpegpowerful corporates and slum landlords are apparently OK.  Governments are big and evil, whereas all commercial enterprises are analogous to small and powerless village bakers.  What?  So we leave it to the property developers, speculators and slumlords?  Such nice chaps.  But they donate to the party of course.  Keep the wheel churning.  Keep the spin going.

There is a pattern here.  The view of government engagement as always the problem and never the solution; the view that the private sector is always the solution and never the problem.  Black and white, reductionist, meaningless, unsophisticated attempts at some Newtonian universal that is complete bunkum.

Actually, more than one pattern.  There is 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 those core meanings, not only because it is so often most profitable to exploit and destroy function in the short-term, but also because so many of the critical foundations of a decent society require a sense of community and place, and cooperation.  The idea that life and commerce is all about competition is a nonsense to anyone who has ever been part of a team, a family, a decent workplace, a county culture.  We cooperate so strongly at some levels and compete at others.  Cooperation is integral to any cultural life.  Life is patently not about competition of individuals divorced from any society, as Neoliberals presume.State house sales

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.  Government at its core is about protecting and conserving our people, communities and lands to ensure we can have meaningful life into an uncertain future.

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 – so long as the horror of abusive commercial power is held in check – can be one policy option, one of many.  But never the only one, just as centralised government should never be the only one.

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 Great Britain’s 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 they were ‘Irish resources’ at that.  People are ‘things’.  Supply will come along as people pay higher prices for food, etc.  People make rational choices with all Evil begins Pratchettthe opportunity, connections and information available to the lords who keep taking more of their land and keep them in penury.  It’s apparently a meritocracy.  So obviously the Irish have less merit.  A bit like those struggling for a house.   This is where evil begins – with the neoliberal framing of life.

Except that people were dying in the Famine – a manufactured famine created by the power systems of the day.  Yes, a famine amongst plenty.  There was more than enough food, but it was held and controlled by the powerful – those non-government powerful that neoliberalism sees as benign.  Government bad, private sector all good.   Those Irish people ‘things’ had no money to buy, so they starved ….. to death.

WWHooperFamine1876-78GroupOfEmaciaedMenandOneWoman

Great Indian Famine 1876 – 78

Look up what happened with manufactured famines in colonial India under the administration of benign commercial chaps who bought their Lordship and you will see the same pattern of disconnection from life when you look at people as things.  Viceroy of India Lord Curzon spoke these words while between one and 4.5 million died, “any government which imperilled the financial position of India in the interests of prodigal philanthropy would be open to serious criticism; but any government which by indiscriminate alms-giving weakened the fibre and demoralised the self-reliance of the population, would be guilty of a public crime.”  Prodigal philanthropy.  Weakening self-reliance.  Wouldn’t want that sort of crime on your conscience would you chaps; far better to let them die.  Let the benevolent dice of the market fall where they ought.

You can hear that echo of neoliberalism down the ages.  You can hear the moralising of benevolent dice and merit; simply the market at work, rational choice, I can buy food and a house, so I must be better.  I’d be very surprised if neoliberals teach these famine histories, or any history of complex systems tipping points into crisis.  The economy left to the market is patently not a deterministic machine, all predictable and benevolent.  There are far too many uncomfortable moral and metaphysical questions that come along when you look at the actual real empirical world outside your models.There is no housing crisis

There are yet more parallels with our housing crisis.  Crises are used by the powerful to grow their power.  If you deny those crises, you play straight into their hands.  You keep the money churn going.  The wealthy and the deal makers can see opportunity where the public suffer.  Housing, homelessness, underemployment, environment, climate change.  All denied by this government.  All for the benefit of apparently benign commercial interests – village bakers apparently.

The Anglo-Irish colonial land owners actually used their famine crisis to take even more of the victims’ 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.”  This happened, and no person with a shred of morality can excuse that as simply ‘the market’.  It is a morally criminal disgrace, whatever its legality.

[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?  Another tipping point that the models cannot predict, though any understanding of humanity would recognise as inevitable.]

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 do not learn about colonisation, or the dynamics of power through history?   Or the fact that a ‘pure’ market world where governments do not temper the excesses of commercial power is not a meritocracy; it is the opposite, where the least moral rise on the pile of carcasses they help create.  How can a university give a degree to a person who knows nothing of political economy and economic history?  How?

neolib on the edgeReducing 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.  Fair deal?  Fair go?  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 – they will 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 us it’s stupid.

neoliberalism - the walking machines.pngYet it persists.  Even after the history of the other ages of neoliberalism – the 1840s (food distribution and ability-to-pay disasters) and the depression (at least we got some reform acts out of that debacle).  Then the 1870s and 1890s – the robber barons and more manufactured famines and Lord Curzon (who bought his Lordship before becoming the famously inflexible, moralising, murdering 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.  Will it be economic, social or environmental?  Or all three?

Chris Perley

Thoughtscapes

Chris Perley has a background in embedding himself in our landscapes and fields, in management, policy, consulting and research relating to land use, the environment, provincial economies and communities.  He is an affiliated researcher at Otago University’s Centre for Sustainability.

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8 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

  5. cjkperley says:

    Reblogged this on Chris Perley's Blog and commented:

    The housing crisis – Crisis? What crisis? – is still with us after years of denial by the National Government. I wrote this a year ago when they were claiming there was no crisis – denial being the mantra de jour – no housing problem, no homeless, no child poverty, no job problem, no economic problem, no water quality problem, no climate change, no provincial problem.

    They are promising us now that they will fix housing, yet they are doing nothing that differs from the neoliberal and corporatist delusions they and Treasury have followed since 1984. Those same delusions that created all the problems. It is pathetic that they are going after the populist treat the symptom problem, instead of the root causes. Here I discuss some root causes. We need to change the framework, not just add populist surface policies that seek to empty the toxic river with a bucket, while doing nothign about the toxins flowing in at the top.

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