A World without Rent?

Landlords and bankers are usually regarded as necessary evils. You may be on friendly terms with them, but there’s almost always something ingenuous about the interaction. Even if you are friendly with on another, there’s some kind of a sense of being taken advantage of.

I’ve been on both sides of these relationships, and sometimes it seems there’s no way around it. As a the landlord or financier, you feel in a superior position and you want to be nice, but if you’re too nice you’ll be taken advantage of, but if you’re strict you’re hated and reviled. The perfect balance sometimes seems to be elusive to the point of non-existence.

As the tenant or person being financed, there’s an inescapable feeling that the banker or landlord is profiting hugely off of your hard work without doing very much hard work themselves.

I met a man from Afghanistan a while back while I was in Germany. He told me when I went back to America to tell the people to stop bombing Afghanistan, because their houses are made out of mud and the bombs destroy everything. He also pointed out to me that people in Germany or America may feel like their societies are more developed, but in Afghanistan almost no one pays rent. Nearly everyone owns their homes.

Now this was a very good point- paying rent is really not enjoyable when compared to the idea of full ownership of a home.

As for finance, I’ve always preferred to buy an old car outright than finance a new one. There’s just something sleazy about the people involved in finance, and this whole unsustainable model of endless economic growth ultimately depends on consumer financing.

I would argue that there is no need for consumer financing, and that we need to move away from an economic model based on consumption as the main driver of the economy. This is certainly true from an environmental perspective. I recently read that although people are bemoaning exploding population, consumption is growing 4–8 times faster than the population. So where is all the fanfare and UN programs aiming to reduce consumption? Less consumption can also have merit from an emotional or social perspective as well. When you have less, you appreciate what you have more.

I read a theory from an acquaintance recently where he suggested that the reason relationships and marriages have such high fail rates is the culture of disposable goods- hardly anyone mends clothes anymore, they just throw them out and get new ones. His theory is that this attitude comes to apply to relationships as well. Once it’s not working anymore, just toss it and get a new one.

In finance, I would argue that it makes more sense to support someone in becoming financially independent so they can purchase a house or car rather than finance them through debt. With debt financing, the possibility exists that the initial debts can be covered with more debt rather than actual productivity, leading to a destructive spiral. In fact, this is the destructive spiral that many of the ‘wealthiest’ nations, like the UK, Germany, or the US, find themselves in.

However, it is fair that people who have money would not want to simply give it away. It’s not really fair to expect them to (which is what taxes are), but it’s also not fair for them to hoard all of that potential benefit to society and let it go to waste. This hoarding is what caused the great depression and probably contributed to world war two. So investing is necessary, but how is it possible to do so in a way that doesn’t generate resentment between the financier and the financed?

I believe the key lies in mutual interests and cooperation. As long as there is a possibility in a contract for one person to profit from another’s loss, there will always be people who play the system to exploit others.

So how can this mutual interest be generated? Really, it requires a deeper relationship than a simple business arrangement. We have to think outside the box, outside the contract itself, and consider what the external conditions of a contract might be- what connects the financier and the financed beyond self interest? Do patterns of finance shape society, or does society shape patterns of finance, or is it an interrelationship?