"In a democracy the poor will have more power than the rich, because there are more of them, and the will of the majority is supreme" - Aristotle
If Aristotle is right, then we don't live in a democracy. And we don't - we have only a partial democracy because the rich have successfully curtailed democracy from intervening in the economic sphere.
The Guardian reported yesterday that "private landlords in Britain are set to own £1 trillion worth of homes by late spring 2015".
Since 2001, private landlords have hoovered up another 2 million homes - and there is no sign of this land grab slowing down. By 2016 it is estimated that private landlords will own 1 in 5 of all UK homes. In fact, 80% of new households since 2001 have been accounted for in rental properties.
According to a report by mortgage lender Kent Reliance the average landlord has seen a return of 15% over the past 12 months, equal to £27,475 per property. Every year private landlords are making receiving around £45 billion in rent - those are people's wages and taxes (via housing benefit) subsidising the already wealthy.
This is a shift towards rentier capitalism - non-productive investment that allows the capitalist to simply leech value parasitically from society, without creating anything of value. It was John Maynard Keynes, a Liberal, who looked forward to "the euthanasia of the rentier". Not because he believed the rentier was immoral, but because it destabilised capitalism.
But private landlordism is immoral - and profit is profane (I agree with Russell Brand). It's nothing more than exploitation institutionalised. Institutionalised exploitation is about as concise a definition of capitalism as you could wish to find.
But even if you don't agree with the moral outrage of some living the high life off the backs of others' labour, then maybe you agree with Keynes (or indeed Piketty) that such vast concentrations of wealth create an unproductive and destabilising effect on capitalism which requires intervention.
It also makes the poor poorer and the rich richer, since quite apart from the iniquities of the capitalist mode of production, an extra slice of labour value is being handed over to the capitalist property-owning class. It is for this reason that the advent of universal suffrage quickly led to the advent of council housing - housing to meet need, not greed. Housing as a right, not an investment opportunity (as we've blogged before).
So here are some proposals to euthanase the rentier:
- Residential property ownership is capped to two properties per person - this could be phased in but would force many landlords to sell excess properties, bringing down house prices and helping to tackle the housing crisis
- Expand right-to-buy to the private sector, with private landlords compelled to offer whatever discounts councils are by law forced to offer
- Apply a new tax on unearned income to rental receipts - at double the rate of income tax!
- Allow councils to set rent caps as they did during nearly all of Thatcher's period as Prime Minister
- Start organising private rented tenants into a union and organise a rent strike - there aren't enough courts, police or bailiffs in the land to evict them all!