Thank you, Brian. The reasons for housing becoming a “monopolistic price extraction” commodity, is the focus of my posted essays. If you haven’t read these two, I would be pleased if you did read them and comment:

By way of general theoretical explanation about ‘free markets” and “free market capitalism”: a lot of false assumptions exist about “privatization” and “competition”. Critics say that “the free market has failed”, because in the examples they are considering, governments “privatized” an industry, or partly deregulated it in ways that were intended to “introduce competition”.

The problem is this: you don’t have a free market unless there is complete freedom for new suppliers to enter the market. Even without collusion between existing suppliers, the equilibrium is quite different, if you have an absence of such freedom.

The best example of the false assumption, concerns urban planning: it is assumed that we can create a proscriptive regulatory boundary around a city to “prevent sprawl”, but it is assumed that there is still “competition in land supply” because the land inside the boundary is owned by thousands of different people. And yet it is obvious from the evidence, that every city with freedom to continue to add to urban land supply by “converting rural land”, has a house price median multiple of circa 3; and every city that does not, has a median multiple of 6+.

I believe the hypothesis about “freedom of new suppliers to enter the market” has explanatory power in all cases. Another pre-condition is that potential supply, from resources able to be converted to goods and services, must be “super-abundant”. As my essay about consumer surplus explains, this pre-condition was created during the 19th and 20th centuries by the evolution of transport and trade. Karl Marx was right about the powers of the “capitalist” to extract predatory prices for pretty much anything, and in fact most economists agreed with him at the time; the disagreements were over the morality of each potential “solution”. But Marx did not foresee evolution in transport and trade completely destroying these powers of predatory pricing; possibly Alfred Marshall was the major economist who did predict this.

Glad if you had time to read my recommended essays.

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