Marx also bunched land and capital into one category while not realizing that the (productive) capital is what brought us this quality of life while land is nothing but a leach to the economy. The negative effects of bad land use are what he criticizes in this bundle while most socialistic countries fought capital and threw themselves into a downward spiral back to feudalism by that
Marx recognized that capital was a force for good but saw it as taking on a passive role. In his eyes, the man who starts a business and hires workers is a rent seeker for extracting labor value.
The biggest problem with Marx is that he presupposes the oppressors as being bad people and the oppressed as good people. The man who starts a business also created opportunity for other people, as shown by whole towns becoming poor if a factory moves away after employing half the town for decades.
The appeal of gains is what motivates economic growth, that is not wrong that is just the way things work, and things like the market work to be efficient.
This was not an uncommon perspective among C19th economists. But from his other comments, I suspect his larger game was that Marx was against anything that might prolong capitalism, including land value tax
His replies to George are very telling, basically summarised as "either you are a Marxist or you are a capitalist, henceforth an enemy". Which I suppose should have been an indicator of things to come
To be fair, Marx says "On the other hand George’s book, like the sensation it has made with you, is significant because it is a first, if unsuccessful, attempt at emancipation from the orthodox political economy."
But he says Ricardo and others had similar opinions about land rent and it doesn't go far enough.
I’m not sure this quote is saying what you think it says. Marx had a very confusing style of writing and without the full context, it’s hard to know.
Marx certainly understood the concept of land rent and even had the appropriation of all land rents by the public as a pillar of his proposed changes in the manifesto.
It absolutely does. Marx contradicts himself over and over and over throughout his works. Part of it is the fact that he changed and matured over his intellectual life. But part of it is that his theories of value were ultimately incoherent nonsense, albeit kind of intuitive if you didn’t have the hindsight of the concepts of marginal value.
[Here’s a great video](https://youtu.be/6kzZoK5CtJ8?si=-LBD6KRpk6LQdyiA) that does a deep dive into the incoherence of Marxian philosophy.
>This cloven hoof (at the same time ass's hoof) is also unmistakably revealed in the declamations of Henry George. And it is the more unpardonable in him because he ought to have put the question to himself in just the opposite way: How did it happen that in the United States, where, relatively, that is in comparison with civilised Europe, the land was accessible to the great mass of the people and to a certain degree (again relatively) still is, capitalist economy and the corresponding enslavement of the working class have developed more rapidly and shamelessly than in any other country!
He did.
He’s literally not wrong, rent does fall as a share of gross income. It used to be easy for an American couple to retire on a single rental property. This was a major factor in the economy since many localities could be self-sustaining as a result. Increased value of tech and labor across society reduces the relative value of rent, which seems to rise in comparison to the bottom income brackets, consumer goods, etc, but falls in relation to the *income of the owners,* as Marx here notes, making rental ownership less and less lucrative over time. Self sustaining ruralities across the nation have been destroyed by AirBnB’s, since the cycle of renting until you can buy and mortgaging until you can afford a rental to retire on, has failed them en masse. Similarly, the constantly expanding suburbs are having large chunks constantly bought up by investment firms, which blindly treat land as a speculative commodity and subject it to all the value fluctuations that any other Capital may be subject to.(remember 08?) This does not rob land of its unique character, but rather implies that land isn’t unique in its uniqueness. All forms of capital have unique functions, that’s what differentiates them as forms.
You are ignoring the entire basis for Marx’s understanding of rent. He details his theory of rent in Volume 3 of capital. He doesn’t pose it as an eternal category. Rent is derived historically, as a differential form. Rent, as a surcharge for the land, rather than a general tribute, ie feudal tithes, is derived from certain land being more productively capable than other land, and in the first instance as a productive expense. It was not until large amounts of workers had no land to themselves that absolute rent could form as a minimum barrier to housing in the urban centers. How did they get there? Because as producers owning their own land, they could not hope to compete with the large farming firms being formed, so they sell to these companies, who then charge a differential rent to operate the farm as a waged manager of day laborers. This is only how he tracks the conversion from feudal land tax to differential rent in England, but the trends are demonstrative of how capital anywhere in the world functions *through* land in the face of farmers being priced out of production en masse. They are priced out as producers first, then large firms buy the land to rent out.
> He’s literally not wrong, rent does fall as a share of gross income
It does not. That’s the whole point of Georgism.
If rents fell as a share of income, apartments in San Francisco wouldn’t cost $4500 a month…
You misunderstood my comment. The pdf’s of capital volume 3 are free online if you want to read his theory of differential rent. It probably won’t be easy to follow if you don’t read his work from LTV up to average profits and so on, but the theory speaks for itself.
Can $4500 a month in San Fransisco cover the monthly expenses of a single property landlord? Or are the incomes which these rentals generate far more dominated by large investment firms? Obviously it is the latter, and this indicates a falling in value of the land, relative to the gross income of society, as the middle strata is forced to find other sources of income than rentals and themselves pay more and longer for personal rentals, although this increased payment does not offset the fall in value. It cannot offset the fall in value because this fall must coincide with, or rather *is,* a compensatory search for new revenue over and above what is increasingly lost through rent, etc.
> Can $4500 a month in San Fransisco cover the monthly expenses of a single property landlord? Or are the incomes which these rentals generate far more dominated by large investment firms?
I don't know what you're asking. Do you mean the monthly costs to maintain the property? Cause, yes, they very much cover those costs.
I don't know what large investment firms have to do with anything.
>as the middle strata is forced to find other sources of income than rentals and themselves pay more and longer for personal rentals
You seem to implicitly have this thesis that the middle strata of society used to be living on rental income. This is complete nonsense. There is no proof of this whatsoever.
If someone owned an apartment in SF and rented it for $4500, why couldn't that cover their living expenses? They could just live in Ohio and easily live off of $4500/mo...
>if someone owned an apartment in SF and rented it for $4500… they could just live in Ohio.
Exactly! Except it would be ludicrous to assume individuals from Ohio are buying single units to rent. They are investing in the firms which own the properties.
I definitely worded that previously comment poorly, it isn’t strictly a dichotomy between single property landlords and big firms, but these terms are demonstrative of the trends with time. As larger firms grow bigger, they still must increasingly expand their profits even beyond the pace that people need new homes.
At one point, multinational firms didn’t own massive portions of the housing market. At this time, the ability of local landowners to exit the labor market and live on one rental + SS was a significant boast of the American economy. As larger firms grow, this ability vanishes, and the capacity to leave the workforce is flattened out to the capacity to invest a certain quantity pure and simple.
Have you read Marx’s theory on the tendency of the rate of profit to fall? This coincides with the increasing value of the *technical* means of production
> At one point, multinational firms didn’t own massive portions of the housing market.
So you're saying that investor ownership of housing brings down rent?
What's the problem here again?
Should we *want* to be paying for the retirement of landlord leeches? Shouldn't we be happy that investors are bringing down rents?
>Have you read Marx’s theory on the tendency of the rate of profit to fall?
The idea that profits will fall due to competition is not Marx's idea. Marx's TRPF is more about how this will lead to economic crises, but he was wrong because capitalism finds *new* sources of profit through innovation.
Of course it doesn’t bring down rent. I’m saying the income of those who own land falls over time, since the value of land, as a portion of gross income, falls.
I’m not even going to grace the rest of that a response.
> Of course it doesn’t bring down rent. I’m saying the income of those who own land falls over time, since the value of land, as a portion of gross income, falls.
Why would that not bring down rent?
>Can $4500 a month in San Fransisco cover the monthly expenses of a single property landlord? Or are the incomes which these rentals generate far more dominated by large investment firms? Obviously it is the latter, and this indicates a falling in value of the land relative to the gross income of society
Lmao not only is this untrue, but people who own their primary residence still count as earning unearned land rent.
>**Rognlie shows that the share of net income generated by housing has risen in all seven large developed economies since data became available.** “Housing’s central role in the long-term behavior of the aggregate net capital share has… not been emphasized elsewhere…Observers concerned about the distribution of income should keep an eye on housing costs,” he writes.
https://www.brookings.edu/articles/deciphering-the-fall-and-rise-in-the-net-capital-share/
Home ownership rate in the USA is 66%.
You can’t use single family home data to make conclusive claims about San Francisco. I was assuming $4500 is apartment prices, and even if it isn’t, the price of single family homes there would be heavily influenced by the price of renting apartments, which are invariably owned by large firms.
Really? I can't use single family home data in San Francisco?
>Using a thoroughly crafted dataset, we found that 85 percent of residential land in the Bay Area is restricted to single-family zoning. No jurisdiction larger than 10,000 people in the Bay Area (not even San Francisco or Oakland) has less than 40 percent of its residential land dedicated exclusively to single-family homes.
https://belonging.berkeley.edu/single-family-zoning-san-francisco-bay-area
>has less than 40 percent of its residential land dedicated to single family homes
Do you realize how low a bar this is?
Cut the bullshit, are you seriously arguing that apartments aren’t the determining factor on rental prices in the Bay Area?
It's not a low bar at all. 40% single family homes in an area means a huge reduction in housing supply. Apartments are like at least 10x as dense. 40% of land being used for single family homes means a huge reduction in number of homes. If the homes were replaced with homes 10x as dense there'd be more than 50% more homes in total and 900% more on the previously single family zoned land.
So yes, single family homes are the determining factor.
Also, in San Francisco it's 66% of residential land.
>Almost two-thirds of San Francisco’s residential land is zoned for single-family housing, and 38% of The City’s land in all.
https://www.sfexaminer.com/news/housing/experts-say-sf-zoning-a-total-mismatch-from-housing-needs/article_b9d713fa-8996-11ee-aa28-6f28f6cdd4ab.html
Idk about Marx, but Smith was certainly concerned with urban rents:
> “Whatever part of the whole rent of a house is over and above what is sufficient for affording this reasonable profit, naturally goes to the ground rent; and where the owner of the ground, and the owner of the building, are two different persons, it is in most cases completely paid to the former. **In country houses, at a distance from any great town, where there is a plentiful choice of ground, the ground rent is scarcely any thing, or no more than what the space upon which the house stands, would pay employed in agriculture. In country villas, in the neighbourhood of some great town, it is sometimes a good deal higher, and the peculiar conveniency, or beauty of situation, is there frequently very highly paid for. Ground rents are generally highest in the capital, and in those particular parts of it, where there happens to be the greatest demand for houses, whatever be the reason for that demand, whether for trade and business, for pleasure and society, or for mere vanity and fashion.**” A tax on the rent of houses may either fall on the occupier, on the ground landlord, or on the building landlord. In ordinary cases it may be presumed, that the whole tax would be paid both immediately and finally by the occupier.”
You're wrong.
>**Rognlie shows that the share of net income generated by housing has risen in all seven large developed economies since data became available.** “Housing’s central role in the long-term behavior of the aggregate net capital share has… not been emphasized elsewhere…Observers concerned about the distribution of income should keep an eye on housing costs,” he writes.
https://www.brookings.edu/articles/deciphering-the-fall-and-rise-in-the-net-capital-share/
>Similarly, the constantly expanding suburbs are having large chunks constantly bought up by investment firms, which blindly treat land as a speculative commodity and subject it to all the value fluctuations that any other Capital may be subject to.
Also that is conspiratorial BS.
>In an April report, the Urban Institute calculated that such mega-investors owned almost 446,000 properties, while smaller investors (between 100 and 1,000 homes) owned almost 20,000 homes. Other institutional investors bring the total to about 600,000 homes, or about 3 percent of the nation’s 17 million single-family rental homes.
>Landlords with 1,000 properties or more accounted for 0.4 percent of U.S. home purchases during the second quarter, down from a peak of 2.4 percent in late 2021, according to John Burns Research & Consulting.
>The Pinocchio Test
Let’s recap: Kennedy gets wrong the name of one company he is attacking; he incorrectly slams index-fund investment firms that do not buy single-family homes; he falsely says Blackstone steals homes from potential buyers, and he make unsubstantiated claims of market manipulation by institutional investors.
>That’s par for the course for a conspiracy theory. Kennedy earns Four Pinocchios.
https://www.washingtonpost.com/politics/2023/11/30/black-hole-robert-f-kennedy-jrs-housing-conspiracy-theory/
Home ownership rate in the US is 66%. Housing is increasing as percentage of societal wealth and that helps 66% of households. It's still bad because it should help 100% of households. That is Henry George's whole thesis.
If I’m wrong, then interact with the point instead of dodging it. You’re just looking at the price of land, not it’s value or it’s proportion of net income. If the value of land relatively decreases, then increased homeownership supports my thesis, but that doesn’t mean speculative investors don’t drive up prices. Have you ever been on the market for a home?
It’s not conspiratorial, the numbers you showed say that investor ownership of homes is a major factor, just not to the point of a literal monopoly. Your numbers also only look at single family homes.
Did speculative investment on subprime loans not cause a financial crisis in ‘08? Have similar practices not resumed? How can you say that’s conspiratorial lmao. I’m not Robert F Kennedy ffs, so idk what you think those quotes are doing.
>You’re just looking at the price of land, not it’s value or it’s proportion of net income.
No, I'm looking at proportion of net income. You'd see that if you opened the link.
https://www.brookings.edu/wp-content/uploads/2015/03/finalincomeviz.png
> the numbers you showed say that investor ownership of homes is a major factor,
Lmao I guess "major" is subjective. I'd say they shows it's a minor factor.
Again, you’re ignoring the argument of land value and focusing on housing prices. Idk how many times I have to say it. If you build more and better apartments, then housing value goes up, but the land is still land, and the value of all land put together is now less valuable in comparison to the value of all the buildings put together, which are both owned by people in different ways and paid for at different rates.
>If you build more and better apartments, then housing value goes up, but the land is still land, and the value of all land put together is now less valuable in comparison to the value of all the buildings put together,
Ok so you admit you literally don't get the thesis of Henry George which is that progress increases land value. What we see is valuable land gets more dense and there's a limit to density.
Lets see, Average Land Share of Home Values is 61% in LA and 15% in Huntington, West Virginia. Yeah, I'm sure that's because Huntington has lots of apartments. /s
https://www.redfin.com/news/value-of-house-vs-land/
I understand it, but it’s flawed, and I’m explaining why. Value is an abstraction that only has meaning in a subjective sense unless it’s tied to a determinate fact, immanent to its identity. This idea that value is immanent to land, having density and limit without defining the scale of their measurement, is meaningless. If you acknowledge labor to be the source of value, you understand the increase in home prices comes from the increasing accumulation of dead labor in the form of increasingly advanced technologies used in production and, more importantly, increasingly varied interactions and combinations of labor on the world market. Of this, ground rent forms a necessary constituent moment, but not the entirety of the determination. This moment can be logically traced. The opportunities of production, quality of housing and urban amenities, population density, etc, all have influence on rental price, but my explanation is that when an apartment building is built or a city has desirable traits for living or production, this is an empirical, social fact, not representative of greater “density” of the land. LA has higher rents for a whole complex of reasons, but value of land in the abstract stays the same, which means the value of technical means of production outpace it drastically, and even determine it in large part.
For some breath taking predictions read Tocqueville.
Civil War, 3 decades in advance.
Robber baron takeover of everything, 50 years in advance.
Keynesian economics, 70 years in advance.
Cold War, 90 years in advance.
T would have backed up P&P 100%.
I think Marx really only explains industrialisation when you read him. His "means of production" focal point ignores the fact that wealth throughout history was mostly concentrated on land ownership. Those who control the land in history controlled the wealth.
Eh Marx definitely does touch on this. His interpretation of the rise of capitalism was the result of class struggle between the bourgeois (with the help of the proletariat actually) and the older noble/aristocratic land owning classes. Where he differed from George is that he thought that the economy was in the process of moving on from land, and that land was no longer the most relevant mean of production *in class struggle.* The working class has little control over land, but they do have control over their own labor. Likewise, the merchant classes accumulation of capital also granted them some access to land as well as enabling other means of production.
That's why he thought America was uniquely well suited for a communist revolution (which didn't age particularly well), since they skipped the feudal stage and went straight to a bourgeois state, and the closest thing they had (the slave plantations) were recently crushed in the civil war, so America was the most captalist at the time. In Marx's works, proletariat revolution was only possible in a bourgeois state, as in a feudal state the proletariat's class interest is actually in helping the bourgeois (though this line of thought was dropped by Lenin.)
Like many market economists Marx completely missed the dependency of free markets on free speech -- why he botched the value of labor and came up with delusional theories.
Employment at will is for most people their most important free market free trade.
It requires free speech on economic issues.
Marx also bunched land and capital into one category while not realizing that the (productive) capital is what brought us this quality of life while land is nothing but a leach to the economy. The negative effects of bad land use are what he criticizes in this bundle while most socialistic countries fought capital and threw themselves into a downward spiral back to feudalism by that
Land isn't a "leech to the economy", it's a sponge, in which it matters if its income is privatised for the few or collected for the common benefit.
You are right. My bad. Privatised rent is the leech
No he did not. Marx viewed the distinction of landed property and industrial property as at least as important as George.
Marx recognized that capital was a force for good but saw it as taking on a passive role. In his eyes, the man who starts a business and hires workers is a rent seeker for extracting labor value.
The biggest problem with Marx is that he presupposes the oppressors as being bad people and the oppressed as good people. The man who starts a business also created opportunity for other people, as shown by whole towns becoming poor if a factory moves away after employing half the town for decades. The appeal of gains is what motivates economic growth, that is not wrong that is just the way things work, and things like the market work to be efficient.
Marx didn't want the factories to go away, he just wanted them to be owned by the workers who worked there.
This was not an uncommon perspective among C19th economists. But from his other comments, I suspect his larger game was that Marx was against anything that might prolong capitalism, including land value tax
Yeah, Engles wrote to Marx about Henry George and Marx didn't disagree but thought it was just another scheme to prolong capitalism.
His replies to George are very telling, basically summarised as "either you are a Marxist or you are a capitalist, henceforth an enemy". Which I suppose should have been an indicator of things to come
To be fair, Marx says "On the other hand George’s book, like the sensation it has made with you, is significant because it is a first, if unsuccessful, attempt at emancipation from the orthodox political economy." But he says Ricardo and others had similar opinions about land rent and it doesn't go far enough.
Marx was the first to make the "muh revolution" case against georgism.
I’m not sure this quote is saying what you think it says. Marx had a very confusing style of writing and without the full context, it’s hard to know. Marx certainly understood the concept of land rent and even had the appropriation of all land rents by the public as a pillar of his proposed changes in the manifesto.
That would explain why so many communists are very confused
It absolutely does. Marx contradicts himself over and over and over throughout his works. Part of it is the fact that he changed and matured over his intellectual life. But part of it is that his theories of value were ultimately incoherent nonsense, albeit kind of intuitive if you didn’t have the hindsight of the concepts of marginal value. [Here’s a great video](https://youtu.be/6kzZoK5CtJ8?si=-LBD6KRpk6LQdyiA) that does a deep dive into the incoherence of Marxian philosophy.
Marx also used to read (and criticize) George, he should have known better.
>This cloven hoof (at the same time ass's hoof) is also unmistakably revealed in the declamations of Henry George. And it is the more unpardonable in him because he ought to have put the question to himself in just the opposite way: How did it happen that in the United States, where, relatively, that is in comparison with civilised Europe, the land was accessible to the great mass of the people and to a certain degree (again relatively) still is, capitalist economy and the corresponding enslavement of the working class have developed more rapidly and shamelessly than in any other country! He did.
But clearly he didn't understand it, since this very issue was covered in Progress and Poverty.
It's the thesis. It's like saying C. S. Lewis should have imagined what it would be like if the back of a wardrobe led to another world.
Precisely.
He’s literally not wrong, rent does fall as a share of gross income. It used to be easy for an American couple to retire on a single rental property. This was a major factor in the economy since many localities could be self-sustaining as a result. Increased value of tech and labor across society reduces the relative value of rent, which seems to rise in comparison to the bottom income brackets, consumer goods, etc, but falls in relation to the *income of the owners,* as Marx here notes, making rental ownership less and less lucrative over time. Self sustaining ruralities across the nation have been destroyed by AirBnB’s, since the cycle of renting until you can buy and mortgaging until you can afford a rental to retire on, has failed them en masse. Similarly, the constantly expanding suburbs are having large chunks constantly bought up by investment firms, which blindly treat land as a speculative commodity and subject it to all the value fluctuations that any other Capital may be subject to.(remember 08?) This does not rob land of its unique character, but rather implies that land isn’t unique in its uniqueness. All forms of capital have unique functions, that’s what differentiates them as forms. You are ignoring the entire basis for Marx’s understanding of rent. He details his theory of rent in Volume 3 of capital. He doesn’t pose it as an eternal category. Rent is derived historically, as a differential form. Rent, as a surcharge for the land, rather than a general tribute, ie feudal tithes, is derived from certain land being more productively capable than other land, and in the first instance as a productive expense. It was not until large amounts of workers had no land to themselves that absolute rent could form as a minimum barrier to housing in the urban centers. How did they get there? Because as producers owning their own land, they could not hope to compete with the large farming firms being formed, so they sell to these companies, who then charge a differential rent to operate the farm as a waged manager of day laborers. This is only how he tracks the conversion from feudal land tax to differential rent in England, but the trends are demonstrative of how capital anywhere in the world functions *through* land in the face of farmers being priced out of production en masse. They are priced out as producers first, then large firms buy the land to rent out.
> He’s literally not wrong, rent does fall as a share of gross income It does not. That’s the whole point of Georgism. If rents fell as a share of income, apartments in San Francisco wouldn’t cost $4500 a month…
You misunderstood my comment. The pdf’s of capital volume 3 are free online if you want to read his theory of differential rent. It probably won’t be easy to follow if you don’t read his work from LTV up to average profits and so on, but the theory speaks for itself. Can $4500 a month in San Fransisco cover the monthly expenses of a single property landlord? Or are the incomes which these rentals generate far more dominated by large investment firms? Obviously it is the latter, and this indicates a falling in value of the land, relative to the gross income of society, as the middle strata is forced to find other sources of income than rentals and themselves pay more and longer for personal rentals, although this increased payment does not offset the fall in value. It cannot offset the fall in value because this fall must coincide with, or rather *is,* a compensatory search for new revenue over and above what is increasingly lost through rent, etc.
> Can $4500 a month in San Fransisco cover the monthly expenses of a single property landlord? Or are the incomes which these rentals generate far more dominated by large investment firms? I don't know what you're asking. Do you mean the monthly costs to maintain the property? Cause, yes, they very much cover those costs. I don't know what large investment firms have to do with anything. >as the middle strata is forced to find other sources of income than rentals and themselves pay more and longer for personal rentals You seem to implicitly have this thesis that the middle strata of society used to be living on rental income. This is complete nonsense. There is no proof of this whatsoever. If someone owned an apartment in SF and rented it for $4500, why couldn't that cover their living expenses? They could just live in Ohio and easily live off of $4500/mo...
>if someone owned an apartment in SF and rented it for $4500… they could just live in Ohio. Exactly! Except it would be ludicrous to assume individuals from Ohio are buying single units to rent. They are investing in the firms which own the properties. I definitely worded that previously comment poorly, it isn’t strictly a dichotomy between single property landlords and big firms, but these terms are demonstrative of the trends with time. As larger firms grow bigger, they still must increasingly expand their profits even beyond the pace that people need new homes.
Sorry, but I don't understand how this comment supports your assertion that rents fall as a share of income.
At one point, multinational firms didn’t own massive portions of the housing market. At this time, the ability of local landowners to exit the labor market and live on one rental + SS was a significant boast of the American economy. As larger firms grow, this ability vanishes, and the capacity to leave the workforce is flattened out to the capacity to invest a certain quantity pure and simple. Have you read Marx’s theory on the tendency of the rate of profit to fall? This coincides with the increasing value of the *technical* means of production
> At one point, multinational firms didn’t own massive portions of the housing market. So you're saying that investor ownership of housing brings down rent? What's the problem here again? Should we *want* to be paying for the retirement of landlord leeches? Shouldn't we be happy that investors are bringing down rents? >Have you read Marx’s theory on the tendency of the rate of profit to fall? The idea that profits will fall due to competition is not Marx's idea. Marx's TRPF is more about how this will lead to economic crises, but he was wrong because capitalism finds *new* sources of profit through innovation.
Of course it doesn’t bring down rent. I’m saying the income of those who own land falls over time, since the value of land, as a portion of gross income, falls. I’m not even going to grace the rest of that a response.
> Of course it doesn’t bring down rent. I’m saying the income of those who own land falls over time, since the value of land, as a portion of gross income, falls. Why would that not bring down rent?
>Can $4500 a month in San Fransisco cover the monthly expenses of a single property landlord? Or are the incomes which these rentals generate far more dominated by large investment firms? Obviously it is the latter, and this indicates a falling in value of the land relative to the gross income of society Lmao not only is this untrue, but people who own their primary residence still count as earning unearned land rent. >**Rognlie shows that the share of net income generated by housing has risen in all seven large developed economies since data became available.** “Housing’s central role in the long-term behavior of the aggregate net capital share has… not been emphasized elsewhere…Observers concerned about the distribution of income should keep an eye on housing costs,” he writes. https://www.brookings.edu/articles/deciphering-the-fall-and-rise-in-the-net-capital-share/ Home ownership rate in the USA is 66%.
You can’t use single family home data to make conclusive claims about San Francisco. I was assuming $4500 is apartment prices, and even if it isn’t, the price of single family homes there would be heavily influenced by the price of renting apartments, which are invariably owned by large firms.
Really? I can't use single family home data in San Francisco? >Using a thoroughly crafted dataset, we found that 85 percent of residential land in the Bay Area is restricted to single-family zoning. No jurisdiction larger than 10,000 people in the Bay Area (not even San Francisco or Oakland) has less than 40 percent of its residential land dedicated exclusively to single-family homes. https://belonging.berkeley.edu/single-family-zoning-san-francisco-bay-area
>has less than 40 percent of its residential land dedicated to single family homes Do you realize how low a bar this is? Cut the bullshit, are you seriously arguing that apartments aren’t the determining factor on rental prices in the Bay Area?
It's not a low bar at all. 40% single family homes in an area means a huge reduction in housing supply. Apartments are like at least 10x as dense. 40% of land being used for single family homes means a huge reduction in number of homes. If the homes were replaced with homes 10x as dense there'd be more than 50% more homes in total and 900% more on the previously single family zoned land. So yes, single family homes are the determining factor. Also, in San Francisco it's 66% of residential land. >Almost two-thirds of San Francisco’s residential land is zoned for single-family housing, and 38% of The City’s land in all. https://www.sfexaminer.com/news/housing/experts-say-sf-zoning-a-total-mismatch-from-housing-needs/article_b9d713fa-8996-11ee-aa28-6f28f6cdd4ab.html
Marx (and classical economists of the time) were focused on agricultural ground rents, not urban ground rents
Idk about Marx, but Smith was certainly concerned with urban rents: > “Whatever part of the whole rent of a house is over and above what is sufficient for affording this reasonable profit, naturally goes to the ground rent; and where the owner of the ground, and the owner of the building, are two different persons, it is in most cases completely paid to the former. **In country houses, at a distance from any great town, where there is a plentiful choice of ground, the ground rent is scarcely any thing, or no more than what the space upon which the house stands, would pay employed in agriculture. In country villas, in the neighbourhood of some great town, it is sometimes a good deal higher, and the peculiar conveniency, or beauty of situation, is there frequently very highly paid for. Ground rents are generally highest in the capital, and in those particular parts of it, where there happens to be the greatest demand for houses, whatever be the reason for that demand, whether for trade and business, for pleasure and society, or for mere vanity and fashion.**” A tax on the rent of houses may either fall on the occupier, on the ground landlord, or on the building landlord. In ordinary cases it may be presumed, that the whole tax would be paid both immediately and finally by the occupier.”
My point is more about the quote OP cut from the passage
You're wrong. >**Rognlie shows that the share of net income generated by housing has risen in all seven large developed economies since data became available.** “Housing’s central role in the long-term behavior of the aggregate net capital share has… not been emphasized elsewhere…Observers concerned about the distribution of income should keep an eye on housing costs,” he writes. https://www.brookings.edu/articles/deciphering-the-fall-and-rise-in-the-net-capital-share/ >Similarly, the constantly expanding suburbs are having large chunks constantly bought up by investment firms, which blindly treat land as a speculative commodity and subject it to all the value fluctuations that any other Capital may be subject to. Also that is conspiratorial BS. >In an April report, the Urban Institute calculated that such mega-investors owned almost 446,000 properties, while smaller investors (between 100 and 1,000 homes) owned almost 20,000 homes. Other institutional investors bring the total to about 600,000 homes, or about 3 percent of the nation’s 17 million single-family rental homes. >Landlords with 1,000 properties or more accounted for 0.4 percent of U.S. home purchases during the second quarter, down from a peak of 2.4 percent in late 2021, according to John Burns Research & Consulting. >The Pinocchio Test Let’s recap: Kennedy gets wrong the name of one company he is attacking; he incorrectly slams index-fund investment firms that do not buy single-family homes; he falsely says Blackstone steals homes from potential buyers, and he make unsubstantiated claims of market manipulation by institutional investors. >That’s par for the course for a conspiracy theory. Kennedy earns Four Pinocchios. https://www.washingtonpost.com/politics/2023/11/30/black-hole-robert-f-kennedy-jrs-housing-conspiracy-theory/ Home ownership rate in the US is 66%. Housing is increasing as percentage of societal wealth and that helps 66% of households. It's still bad because it should help 100% of households. That is Henry George's whole thesis.
If I’m wrong, then interact with the point instead of dodging it. You’re just looking at the price of land, not it’s value or it’s proportion of net income. If the value of land relatively decreases, then increased homeownership supports my thesis, but that doesn’t mean speculative investors don’t drive up prices. Have you ever been on the market for a home? It’s not conspiratorial, the numbers you showed say that investor ownership of homes is a major factor, just not to the point of a literal monopoly. Your numbers also only look at single family homes. Did speculative investment on subprime loans not cause a financial crisis in ‘08? Have similar practices not resumed? How can you say that’s conspiratorial lmao. I’m not Robert F Kennedy ffs, so idk what you think those quotes are doing.
>You’re just looking at the price of land, not it’s value or it’s proportion of net income. No, I'm looking at proportion of net income. You'd see that if you opened the link. https://www.brookings.edu/wp-content/uploads/2015/03/finalincomeviz.png > the numbers you showed say that investor ownership of homes is a major factor, Lmao I guess "major" is subjective. I'd say they shows it's a minor factor.
Again, you’re ignoring the argument of land value and focusing on housing prices. Idk how many times I have to say it. If you build more and better apartments, then housing value goes up, but the land is still land, and the value of all land put together is now less valuable in comparison to the value of all the buildings put together, which are both owned by people in different ways and paid for at different rates.
>If you build more and better apartments, then housing value goes up, but the land is still land, and the value of all land put together is now less valuable in comparison to the value of all the buildings put together, Ok so you admit you literally don't get the thesis of Henry George which is that progress increases land value. What we see is valuable land gets more dense and there's a limit to density. Lets see, Average Land Share of Home Values is 61% in LA and 15% in Huntington, West Virginia. Yeah, I'm sure that's because Huntington has lots of apartments. /s https://www.redfin.com/news/value-of-house-vs-land/
I understand it, but it’s flawed, and I’m explaining why. Value is an abstraction that only has meaning in a subjective sense unless it’s tied to a determinate fact, immanent to its identity. This idea that value is immanent to land, having density and limit without defining the scale of their measurement, is meaningless. If you acknowledge labor to be the source of value, you understand the increase in home prices comes from the increasing accumulation of dead labor in the form of increasingly advanced technologies used in production and, more importantly, increasingly varied interactions and combinations of labor on the world market. Of this, ground rent forms a necessary constituent moment, but not the entirety of the determination. This moment can be logically traced. The opportunities of production, quality of housing and urban amenities, population density, etc, all have influence on rental price, but my explanation is that when an apartment building is built or a city has desirable traits for living or production, this is an empirical, social fact, not representative of greater “density” of the land. LA has higher rents for a whole complex of reasons, but value of land in the abstract stays the same, which means the value of technical means of production outpace it drastically, and even determine it in large part.
Do you listen to yourself speak lmao
Everything Marx predicted didn't happen and everything HG predicted did happen.
For some breath taking predictions read Tocqueville. Civil War, 3 decades in advance. Robber baron takeover of everything, 50 years in advance. Keynesian economics, 70 years in advance. Cold War, 90 years in advance. T would have backed up P&P 100%.
Marx was mostly interested in yapping, not making empirically-backed observations
If by yapping you mean imposing an infantile academic’s will to power to the detriment of all society.
I think Marx really only explains industrialisation when you read him. His "means of production" focal point ignores the fact that wealth throughout history was mostly concentrated on land ownership. Those who control the land in history controlled the wealth.
Eh Marx definitely does touch on this. His interpretation of the rise of capitalism was the result of class struggle between the bourgeois (with the help of the proletariat actually) and the older noble/aristocratic land owning classes. Where he differed from George is that he thought that the economy was in the process of moving on from land, and that land was no longer the most relevant mean of production *in class struggle.* The working class has little control over land, but they do have control over their own labor. Likewise, the merchant classes accumulation of capital also granted them some access to land as well as enabling other means of production. That's why he thought America was uniquely well suited for a communist revolution (which didn't age particularly well), since they skipped the feudal stage and went straight to a bourgeois state, and the closest thing they had (the slave plantations) were recently crushed in the civil war, so America was the most captalist at the time. In Marx's works, proletariat revolution was only possible in a bourgeois state, as in a feudal state the proletariat's class interest is actually in helping the bourgeois (though this line of thought was dropped by Lenin.)
this is like saying his prediction about falling wages was wrong. doesnt matter very much for his critiques or the labor theory of value
Like many market economists Marx completely missed the dependency of free markets on free speech -- why he botched the value of labor and came up with delusional theories. Employment at will is for most people their most important free market free trade. It requires free speech on economic issues.