Philip George Hayward
Nov 1 · 2 min read

Here’s an alternative explanation for you to consider. This is the focus of my own research and writings.

When resources are scarce because of primitive technology and lack of transport, the owners of the resources can “extract” prices that consumers can be forced to pay. This includes living space. This is why Karl Marx, Henry George and others were so obsessed with the injustice of “economic rent”.

Transport evolved and so did the technology to extract resources and utilise them; this led to an era of “cost plus” pricing of resources and finished products, versus “extractive” pricing which worked back from what people could be forced to pay.

This is why the real price of so many necessities and consumption products has fallen and fallen, making all people “wealthier” in real terms. This included, for several decades, the cost of living space; people in the 1800’s could be forced to pay half their income for a tenement; in the 1960’s they could have a McMansion on a large lot for a smaller proportion of their income.

The current time is marked by the re-introduction of “scarcity” into resources, artificially, by regulation, in the name of “saving the planet”. There is a class of super wealthy, the global 0.1%, who are more and more rapidly ammassing a larger and larger share of wealth in recent decades, reversing the decades of trend to egalitarianism. At the centre of this, is urban planning and the rationing of the supply of land for urban economies, leading to “extractive” pricing once again — more and more cities now have apartments that are more costly than McMansions were 30 years ago. The price of “land” can be hundreds or thousands of times higher.

The global 0.1% are liberal donors to “save the planet” activism, and one suspects that they know they are doing this for themselves, not out of a sense of do-gooding for humanity. Piketty’s famous data on capital inequality has been shown to be explained almost entirely by movements in urban property values. It is not a question of the 0.1% actually owning “too much property” (they do own property, but not a lot proportionately) but more a question of how they profit from the greatly increased need for mortgage financing, and then gaming the cyclical volatility of financial intruments based on mortgages. They successfully increase their wealth during the “busts” when everyone else is being wiped out, suggesting that they know when to “short the market”.

The so-called “evil” of entrepreneurs actually “utilizing resources” under competitive conditions is not an evil at all; it has had massive benefits for humanity. The real evil is the successful grab of “extractive” and “gaming” powers by economic rentiers who don’t use resources to create anything of any use to anyone, but who ammass the most wealth by an order of magnitude, on a truly zero-sum basis. There is far too much useful idiocy today, for this evil wealth and power grab.

    Philip George Hayward

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