While experts and commentators earnestly discuss the various causes of housing unaffordability and propose various solutions, the problem won't go away unless we seriously reconsider the root cause of the problem: contemporary capitalism, writes Dr Mark Manolopoulos.
LIKE OTHER concerned citizens, I'm interested in finding out the specifics about why cities like Sydney and Melbourne have become the second and sixth most expensive places on Earth.
For instance, given that China remains a Communist country, its residents can't technically own property but are given leases. It therefore make sense for Chinese citizens who aren't content with that arrangement to purchase property overseas that will remain in familial hands for as long as they desire.
I can't say to what extent this factor has pushed up house prices here in Australia – especially because the numbers may be higher than stated – but, as reported in the New York Times, a 2014 study by Credit Suisse stated that the Chinese bought up around $24 billion worth of property in Australia over the previous seven years. Surely this doesn’t help housing affordability, especially when you factor in all foreign purchasing.
But the thing that doesn't get discussed – or not discussed enough, certainly not discussed in places that might make a difference – is the root cause of the problem: capitalism.
Capitalism is all about private possession and the price of a possession will skyrocket if there's enough demand for it. And given that the more desirable parts of Sydney and Melbourne are in limited supply, and as more local and external elites desire these properties, then prices will shoot up. Perhaps indefinitely.
So what's the solution?
What we need to do is to reconsider whether neoliberal capitalism is the kind of system that we want to have — or even the kind of system we can survive. (Like sociologist Émile Durkheim, I wonder whether/to what extent our soaring suicide rates may be linked to this arduous system.)
It's one thing to contend that capitalism needs to be reconsidered — but how should this reconsideration take place? My suggestion is that the world's brightest thinkers need to come together to compare capitalism with other existing or conceivable options.
It might turn out that neoliberal capitalism is the best/better system — or to borrow Churchill’s quip regarding democracy, the least worst.
In which case, we're stuffed.
Or the group of thinkers might come up with a better version of capitalism. Maybe something like post-WW2 welfare capitalism. That seemed to work quite well until neoliberalism took over, wages stagnated and the 1% purchased most of the world.
Or perhaps the group of thinkers might come up with a rather different economic system. Maybe something that combines egalitarian and capitalist models? Maybe something else entirely?
Who knows. But my wager is that humanity can come up with an economic system that's fairer than the present one.
Dr Mark Manolopoulos is a philosopher and an adjunct research associate at Monash University.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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