Thesis Number: #9 (Page 6 of 10)
Reformers unwittingly connive by focusing on palliatives to mitigate
- unaffordable housing: by demanding subsidies for low-income families, allowing the crisis to creep through the generations;
- labour markets: demanding protective regulations which disadvantage those who fall outside the regulatory net (Box 4); and
- the division of people into Haves and Have-nots: by seeking tax-funded benefits which perpetuate fiscal-based injustice.
Box 4
Dying for Work
The rent-seeking culture induces attitudes that cause increasing numbers of middle-aged men in Britain to kill themselves, when they are rendered unemployed. While suicides have been declining in most sections of the population, they rose dramatically since the 2008 crisis for men between the ages of 45 and 59, according to the Office for National Statistics. Feelings of humiliation and desperation caused them to be almost two and half times as likely to commit suicide as the rest of the population in 2012.
The emphasis on palliative action derives from the entitlement culture, which seeks to distract people from root causes. When writ large, we see whole populations subjected to the Stockholm syndrome: hostages come to identify with the cause of their kidnappers.
The net effect is that the palliative approach, far from mitigating crimes against the people, permit income inequality to grow. That inequality is now at an all-time high in countries on both sides of the Atlantic. The mechanism that deepens this financial injustice can be viewed by shifting attention away from an exclusive consideration of income. We need to take into account capital gains from land-based assets.
- The land market redistributes value away from those who work, to those who do not enhance the value of the locations they occupy. The “good fortune” of home owners is neither accidental nor random. Their capital gains are the logical result of laws that enabled a minority to extract community-created rents for their private benefit.
- Money-lenders battened on to the rent-seeking mission of the aristocrats. Result: today, bankers are legally empowered to fabricate “money” out of thin air. Then, through mortgages, they oblige people to yield up to 25% of the value they create over their working lives. Bankers create nothing and give nothing, but they claim title to the real value created by working people.
Because of this history, Britain became the archetype of a weak form of governance. We define a weak state as one in which the law-making powers cannot be used to treat all citizens as equals. The weak state is servile to rent-seekers.
This economic model is bankrupt. Nations do not pay their way. They are (to borrow a term from ecologists) unsustainable. They do not cover their costs. That bankruptcy can be expressed in cash terms, as a percentage of gross domestic product (GDP). In 1980, the richest members of the OECD had average household, corporate and government debts equal to 160% of GDP. Thirty years later, this had doubled to over 300% (Cecchetti et. al. 2011: Table 1, p.7). A large and growing part of the costs of current consumption are imposed on future generations. Similar deficits stem from our treatment of both culture and nature. Rent-seeking is the behaviour that is cannibalising our civilisation. Is it possible to orchestrate an end to this process of depletion?