Blog #58b: From Civil Rights to Human Rights via Transformative Rights.


 

Blog #58b: From Civil Rights to Human Rights via Transformative Rights.

 

The issues raised by the discussion of utopias in Blog #58a: From Immediate Demands to Utopias via Transformative Demands, have a striking parallel in the discussion about rights, ranging from civil rights to human rights via transformative rights.

 

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I.                 Rights: Human Rights and Civil Rights

 

“Rights” has many meanings, as in: ” human rights,” ” the right to the city,” “the rights of man,” “women’s rights’ or “minority rights.” When we speak of minority rights, we mean the rights of minority groups to be treated fairly and equally in matters in matters in which treatment should not vary by minority status, e.g. color of skin. What “fairness” and “equally” mean may be debatable, but what “rights” means is clear. It is a claim that the law, the existing judicial system, must see to it that the desired end is achieved, and if they do not do so, they should be changed so that they will. It is a critical, but not a radical or revolutionary, call.

A.    Human Rights

In the Declaration of Independence, Jefferson speaks of right that is self-evident: “the right to life, liberty, and the pursuit of happiness.”[3] The French revolution’s “Liberté, égalité, fraternité,” and Thomas Paine’s “The Rights of Man” saw rights in a quite different sense: as a revolutionary change in the entire structure of society, certainly of the nation, as an ultimate goal, not one or a specific set of rights, but a claim to a system, to an independence, that would permit rights to be pursued, not within the existing, but within a new, society”Rights,” in the minority rights meaning of the term, is a claim for a change in legal standing within an existing system; in the French or revolutionary meaning, it is a goal for a movement of fundamental social change. . For The socialist Jaurès the French revolution’s “rights of man” “anticipated socialist utopianism, not legal internationalism.”[4]

 

B.    Civil Rights

Jefferson’s right, an inalienable human right, is clearly a right to change the system; it is, after all, in a revolutionary Declaration of Independence. Civil rights, historically, are rights within the system, rights in fact the system itself is called on to guarantee.

The point is more than an academic one. It came quite dramatically to fore again in the civil rights movement in the United States in the 1960’s, when a significant part of the movement began to make it clear they wished, not simply to be included within the existing framework of laws and government, but within an entirely new one.

In Sam Moyn’s excellent story of the varing role of “rights” discussions over the course of history, the tension between civil rights and human rights formulations reflects somewhat the same difference in the meaning of rights, from immediate demands to broader goal statements. Human rights claims, in W.E.B. DuBois and Martin Luther King are on the other hand more on the order of what Moyn calls “transformative utopianism.” Moyn also highlights the relationship between internal human rights efforts as going beyond more limited domestic and practical claims, as in Stokely Carmichael’s move from a United States-centered to an internationally-oriented effort, and Malcolm X’s vision of “human rights—but in the sense of collective liberation from imperial subordination.”[5] It is a movement between a critical and a radical or revolutionary meaning, between  change within and change of, the system, the underlying structures of of power that define how a society operates. It is a movement which depends on the historical possibilities of the particular moment.

C. Transformative Rights

While the right literature on rights offers much more material for examining the questions raised above than is possible here, the suggestion of linking internal political struggles around civil rights and international struggles around human rights, clarifying the implications of each for the other, as Sam Moyn ‘s work does, should have wider attention in social movements which often use the language of rights to formulate their claims. As with utopianism there is the danger that human rights is pushed into a limited consideration of what the United Nations of international law are willing to recognize and enforce, neglecting to examine what taking human rights seriously might mean for changes not only within the existing systems of international law but also for changes in the very meaning of “civil law” within national states. It is fertile ground for further constructive exploration. The concept of transformative rights might be useful.

 

[1] Significantly, it is a singular right that Jefferson cites, one big one, to a new country in the context, not multiple immediate if critical rights within existing national relationships.

[2] Moyn, op. cit., p, 40.

[3] Significantly, it is a singular right Jefferson cites, one big one, to a new country in the context, not multiple immediate if critical rights within existing national relationships.

[4] Moyn, op. cit., p, 40.

[5] See Samuel Moyn. 2010, The Last Utopia, Harvard University Press, Cambridge, Mass., pp, 104-106. Moyn does not generalize to the conclusion I suggest in the text, but focuses on the multiple ways “rights” have been political issues over the course of history, suggesting how their meaning has changed with their context, and I believe the dichotomous meanings referred to here are revealed in many instances.

Blog #58a: From Immediate Demands to Utopias via Transformative Demands.


Blog 58a: From Immediate Demands to Utopias via Transformative Demands.

The Occupy movement was frequently criticized for not making immediate and concrete programmatic demands. The movement challenging climate change and calling for society to become managed along ecological lines is sometimes charged with the same failure. The slogan, “Cities for people, Not for Profit,” and the Right to the City movement, are likewise often faulted in the same way, charged with being utopian, unrealistic, naïve. The tension between efforts to bring about changes within the system, to meet priority needs as a priority goal, or to change the system itself to deal with long-term causes and consequences, is a tension fraught with difficulties, both in theory and in practice. Examining the handling of utopias and utopian ideas , while on its face perhaps theoretical, can provide some illumination as to the practical alternatives for social movements as well.

I. Utopian Utopias and Non-Utopian Utopias

A. Utopian Utopias, “utopian” ideas.

“Utopia” and “utopian”: those are two quite different words, often used with quite different meanings and, if they are used without attention to the difference, they can have quite different, even contradictory, practical implications The discussions of utopia go far back in history, at least to the Greeks, recurs in the discussions of and within the Occupy movement, and is the source of on-going tensions in discussions of strategies of social change all over the world: are the goals of this movement or the assumptions of this program or that utopian, or is the spelling out of a vision of utopia now a mobilizing impetus for movements of social change? The focus on such questions was hot in the 1960’s, in the new left, in the anti-colonial struggles and movements for national liberation, in the peace movements. They perhaps came most sharply into focus in 1968, with Herbert Marcuse’s talk on The End of Utopia in Berlin[1] and in the signs displayed by the students on the streets of Paris that year: “Be Realistic; Demand the Impossible.”

Recognizing the differences in the two meanings, the positive meanings of “utopia” and “utopian” as ideally desirable and the negative meaning of the two terms as meaning “impossible” and “unattainable” leads to the question

“Is utopia still a utopian concept?”

Using utopia in the positive meaning and utopian in the negative.

Thus: “is an ideal society still unattainable? “

So we need to distinguish between two concepts of utopia: that of 1) a an imaginable but unattainable perfect future state, a utopian utopia, and that of a good, or a just, society, in which the principles of social justice would prevail, a just utopia seen as the goal of actual political social, and economic societal arrangements, a concrete, really attainable utopia: an attainable utopia, for short, as the word will be used here, “attainable” as opposed to “utopian.”   It was then argued that by the 1960’s there should be an end to the painting of an utopian utopia because an attainable utopia had become possible, and continuing to define it as utopian was conservative if not self-defeating.

B.    Attainable Utopias

In what sense could there be an attainable utopia? In 1967, it was said in Berlin

“Today any form of the concrete world, of human life, any transformation of the technical and natural environment is a possibility, and the locus of this possibility is historical. Today we have the capacity to turn the world into hell, and we are well on the way to doing so. We also have the capacity to turn it into the opposite of hell. This would mean the end of utopia, that is, the refutation of those ideas and theories that use the concept of utopia to denounce certain socio-historical possibilities. It can also be understood as the “end of history” in the very precise sense that the new possibilities for a human society and its environment can no longer be thought of as continuations of the old, nor even as existing in the same historical continuum with them. Rather, they presuppose a break with the historical continuum; they presuppose the qualitative difference between a free society and societies that are still unfree, which, according to Marx, makes all previous history only the prehistory of mankind.”[2]

There are other interpretations of the End of Utopia formulation, notably by Russell Jacoby and Sam Moyn, which however use the concept,[3] 20 some years after Herbert Marcuse used it, in a quite different way from his use. They consider it still as the exercise of picturing a perfect although unattainable world and pursuing it, and see the ending of that result as a defeat of the aspiration for a radical change in society.[4] Herbert Marcuse, I believe, would have agreed, but differentiated a utopian utopia from an attainable utopia, from the real possibility of making a close to perfect world no longer unattainable, no longer utopian as a unrealizable ideal, but a goal now possible of achievement.

The political implications of taking all utopias to be utopian are strong. If one wants to use utopia in that sense, it follows that striving for utopia, or even spending time thinking through and imagining what a utopia might be like, is a useless exercise. If, however, one wants to argue that today utopia is no longer a utopian, in the sense of unrealizable, vision, but rather one that can be a concrete goal of human (political) activity, what follows is rather an incitement to concrete political action. It was an optimistic vision, as opposed to Moyn’s implicit assumption that utopia and utopian are necessarily associated and unachievable concepts. But I argue that an attainable utopia today is both optimistic, in its presentation of a lofty goal that is achievable, although pessimistic in agreement with Jacoby and Moyn, that the effort to achieve it as an immediate goal seems quite remote, depending on how one reads history. But I argue that there is a new real historical possibility of the realization of an attainable utopia requires a change in policy and program, in which the realization of that possibility, while it cannot be seen as an immediate goal (pessimism), can yet inspire individual partial steps towards its realization that may, as they come together, still make ultimate success possible (optimistic).

Thus, today, implicitly to label all discussions of utopia as utopian is politically loaded, conservative, hostile to efforts for fundamental social change.

It would not always have been so. The End of Utopia argument, as the long quotation above suggests, is made in a specific historical context, and I would rather read Moyn and Jacoby as reading that historical context today as different from what it was in the 1960’s. If the historical context indeed does not support the contention that attainable utopias are today possible, if the “historical continuum” in which earlier discussion of utopias still continues unbroken, then indeed today all utopias really are utopian. The belief that there has been a fundamental historical change, some time after World War I and increasingly thereafter, in which technological development has advanced far enough to make a society of abundance, of plenty for all, a real physical possibility, is a belief that has substantial support, and seems, if one things about it, intuitively plausible: if all the waste that goes into production for war, for unsatisfying luxury consumption and satisfaction of inflated and “false” needs, for competition for status and conspicuous consumption, for growth for its own sake, for legal and illegal theft, were instead funneled to challenges into ending existing inequities, into production of the necessities for a decent life for all in a society that put justice above profit and power, could not abundance for all, a real utopia, be realized today, even though hardly foreseeable in any earlier historical period?

The point is simple: an attainable utopia, not “utopian” in the sense of “unrealizable,” is a possibility today more than it has ever been before in history.

C.    Critical Utopias.

But even in earlier historical periods, the criticism that talk of utopias was useless and irrelevant to positive social change is only partially correct. It is correct, for instance, if heaven is seen as a utopia to be achieved in the hereafter, not in the now, thus preaching submission and patience and tolerance of injustices that will be rewarded, not in this life, but after it. This idea of utopia explicitly confined to the bye and bye indeed justifies that comment in the opening quotation: they are conservative if they amount to

“the refutation of those ideas and theories that use the concept of utopia to denounce certain socio-historical possibilities.”

For this use the concept of utopia to denounce certain socio-historical possibilities is aspect of some historical discussions of utopia that have a most critical edge, and that conceivably still have, even if indeed history is still tilted against their concrete realization

For many, perhaps most, imaginings of utopias historically have not as their purpose the presentation of an ideal society to be achieved, but rather have been a criticism of the societies in which they are written. They were not arguments for the realization of a particular utopia, a particular new society differently structured and different motivated, but rather efforts to show how ludicrous existing arrangements were, how badly they required change. Whether that change was through reform or revolution, liberal or radical, was often not elucidated. One thinks of Sir Thomas More’s Utopia, of Samuel Butler’s Erewhon, H. G. Wells A Modern Utopia, or Arthur C. Clarke’s Childhood’s End. This use of utopias as critical was thus indeed utopian, in its unrealistic sense, but not, in its historical context, an argument against social change, but rather one for it. How far concrete utopias might in their day be realized was quite different from how that might be realized today. Their political position then was as critical of the existing societies as discussions of utopia can still be today, if their ultimate attainability is not rejected ab initio. The purpose of these critical utopias was very much the same, if upside down, from novels appropriately called dystopian—the opposite of utopian—by writers such as Jack London in The Iron Heel or George Orwell in 1984. Dystopias are the presentation of an imaginary world, not as likely to be achieved, but to expose how the existing one was deficient. Utopias did it by showing what the better alternatives could be imagined, dystopias by what worse alternatives might be imagined to They were not intended to be blueprints for a new society to be achieved. Both critical utopias and dystopias were critical calls to action, in fantasized forms, intended to influence actions required to be undertaken in their contemporary societies.

So one may speak of a utopian utopia, a critical utopia, and an attainable utopia: a utopian utopia conservative in its political implications, a critical utopia or dystopia critically reformist in its political implications, and an attainable utopia, radical in its ultimate political implications, each very much dependent on its historical context.

There remains, then, the question of whether the historical context today is still the same as that of the 1960’s, whether indeed the optimism of those days on the streets and universities around the world was justified, and if not, what the conclusion as to the utopianism of utopias is today. It is hard, in a time of economic instability, high unemployment, increasing inequality, environmental degradation, unaddressed climate change, war and campaign of bombing and attrition, strong right-wing and racist tendencies in even the most formally democratic countries, to visualize even the possibilities of an attainable utopia.[5] Martin Jay certainly felt, in 1999, that visualizing the concept, as in Herbert Marcuse’s essay, “now reads like a document of a long lost civilization,[6] Is there then, at least in the short term, any surviving political relevance to the concept of utopia?

D.    Utopian Communities as Models for Transformation.

The term “utopian community” is often used to describe planned communities built in the last two centuries, and Sam Moyn uses the term “transformative utopianism” to describe “minimalist, hardy utopia[s] that could survive in a harsh climate.”[7] His reference is to the idealism of some of the protests of the the 1960’s, but the term might also be used to describe the planned communities like or Brook Farm or New Harmony or Oneida in the United States, or, very recently, eco-villages or planned communities or utopian experimental socialist models. Many were limited to attempts to implement different models for the physical growth of a community, laying out town plans and land use arrangements in a critical direction, as the Garden City movement. One might call various efforts to approach efforts of fundamental change as partially utopian in a limited way, as in Ebenezer Howard’s Garden City movement and its spin-offs. And very down-to-earth reforms such as expansion of cooperative structures to broad sectors of the economy, worker-owned enterprises such as Gar Alperovitz espouses, have a touch of utopianism about them, if very much in Moyn’s sense of minimalist for harsh social climates. The issue of whether what is espoused represents change within the system or of the system is not always clear; the underlying hope is undoubtedly for both.

II. Transformative utopianism

Utopian, however, in almost all historical usages, carries with it the idea of complete change, a different society as a whole, as in its original use by Sir Thomas More and the subsequent thinkers discussed above. A “partial utopia” is really an oxymoron, a contradiction in terms. Striving for efforts at reform, by definition less than a complete or revolutionary change, can thus only properly be called “utopian” in the sense that they may prefigure one part of a utopia, on step towards complete change, part of a transition towards something more. Rather than call such efforts “utopian,” with its dominant usage as unrealistic, desirable but unattainable, does its transformative potential a disservice. There is a continuum in efforts of social change, ranging from small-scale, clearly piece-meal actions and ideas – “increase the amount of affordable housing till no one is homeless” – to large-scale goals, such as “provide housing on the basis of need rather than ability to pay.” It is stretching it to goal the former utopian,” but it may in fact be seen, and advanced, as part of efforts to attain the latter, maybe a utopian housing system, a partial utopia. I think it would be more effective to speak of such a partial, or even sectoral, goal as transformative utopianism.[8]

And in this more limited meaning, but still at the forward edge of the politically relevant, I believe pressing the case for a long-range and comprehensive perspective of social change, efforts to work out the outlines of an attainable utopia, of a critical utopia, of a transformative utopia, can still play an important and positive role. Immediate and concrete programmatic demands for reforms need such utopian perspective today if they are to have a lasting impact tomorrow. The trick is formulating and fighting for demands that both secure immediate benefits but raise the possibilities of broader social transformation; demands that address the narrow immediate but open to vista to the whole, demands both for change within the system and change of the system.

[1] lecture delivered at the Free University of West Berlin in July 1967. Reprinted in                                   vol   of

[2] Herbert Marcuse, The End of Utopia, First Published: in Psychoanalyse und Politik; lecture delivered at the Free University of West Berlin in July 1967, included in Herbert Marcuse, Marxism, Revolution and Utopia, ed. Douglas Kellner, Routledge, 29014, also available at www.marcuse.org/herbert/ and at ttps://www.marxists.org/reference/archive/marcuse/works/1967/end-utopia.htm

[3] Samuel Moyn, 2010, The Last Utopia: Human Right in History, Cambridge, Mass, The Belknap Press of Harvard University Press. Russell Jacoby, 2,000. The End of Utopia Politics and Culture in an Age of Apathy. Basic Books.

[4] For a short overview of other uses of utopias, see Marcuse, Peter. “Utopias and Dystopias in Brecht (with a side glance at Herbert Marcuse)” in Silberman, Marc, and Florian Vassen, ed., 2004. Mahagonny.com The Brecht Yearbook 29, The International Brecht society: University of Wisconsin Press, pp. 23-30., available http://digicoll.library.wisc.edu/cgi-bin/German/German-idx?type=turn&entity=German.BrechtYearbook029.p0042&id=German.BrechtYearbook029&isize=M

[5] Herb Gans has tried to do so, in a thoughtful way, in Imagining America in 2033: How the Country Put Itself Together After Bush University of Michigan Press, Ann Arbor, 2009. But it has not attracted the widespread attention it deserves

[6] Review in London Review of Books, “The Trouble with Nowhere” June 1, 2000, p. 23.

[7] Op. cit. pp. 119, 120.

[8] For more on the concept of transformation, see my Blog #30, Transformative Proposals in Nine Areas, at pmarcuse.wordpress.com.

Blog #55a – Why is there Inequality? It’s no Mystery


Blog #55a – Why is there Inequality in the U.S.A.?

An Answer in 22 and 7 words.

Piketty showed, in 648 pages, that inequality is increasing long-term. It continued in the short term:

In 2009, figures were: average net worth, top 1%;   $16,439,400   bottom 20% minus $14,000

Total Net Worth[1]      Top 1 percent              Bottom 80 percent

1983       33.8%                   18.7%

2010       35.4%                   11.1

Why is this so?

The wrong answers:

1.     Because the need for higher education and more skills is growing. Wrong because:

  1. Access to higher education and skill training is controlled by the 1%. They support education that helps them produce profit, do not support that which could lead to criticism and organization for higher pay.
  2. And higher pay and greater net worth are more related to parents’ incomes, s4ector of the economy, e.g. financial, education, social work, art, than to training and skills.

Because it is just, and criteria for justice in the distribution of income is that a person works harder, contribute more to society, is smarter, needs more, is justly entitled to have more. Wrong because:

  1. Sitting in an office is not harder work than working on an assembly line or collecting garbage, but is paid more because hedge fund managers have more power than factory workers or garbage collectors.
  2. And hedge fund managers do not contribute more to society than social workers or teachers, in fact do major damage.
  3. And there is no evidence the 1% have higher innate IQ’s than the 99%.
  4. And the 1% have more than they need, most of the 99% less.
  5. And the 1% have vastly more than the 99% to begin with.

 

 

The right answer, in 22 words.

 

The 1% are rich because they profit by keeping the 99% poorer. There is only one pie to divide, whatever its size; if the 1% take more, the rest will take proportionately less..

Why is this so, in a democracy, and so little understood?

The wrong answer:

1.     Because the people wanted it that way. The wrong answer because:

2. Wealth provides political power also. And apparent prosperity co-opts opposition.

3. And the 1% control the means of mass communication, and bury the alternatives.And presumed experts of the 1% pontificate that trickle-down will work to the benefit of all.

4. And the 1% control the use of physical force, the use of incarceration, etc.

 

The right answer, in 7 words:

 

Political and economic democracy are too limited.

Blog #55b expands on this answer. Blog # 55c gives concrete examples.

[1] G. William Domhoff, at http://www2.ucsc.edu/whorulesamerica/power/wealth.html

Blog #54 – Community Land Trusts as Transformative Housing Reforms


Community Land Trusts as Transformative Housing Reforms

That New York City has a housing problem is rather well known. The devil here is indeed in the big picture as well as in the details. 47% of the city’s low-income renters[1] pay more than half of their incomes to obtain housing. Imagine what paying half your income just for housing means for the ordinary person, let alone one with limited income. 24% live in overcrowded quarters, more than 1.5 persons per room in the standard definition. Neighborhoods are clustered by race, ethnicity, income, household composition –what impolite critics call segregated, one of the most segregated (84.3 on the widely used dissimilarity index, where 100is completely segregated. Only Gary, Detroit, and Milwaukee, of the 314 other metropolitan area in the United States, are more segregated.[2] 224,000 units were in physically poor conditions. 164,000 units were vacant but not available for sale or rent, according even to the official figures.[3]There were 15,993 mortgage foreclosures in the city in 2013;

Bloomberg News[1] headlined the fact:

FORECLOSURES SURGING IN NEW YORK-NEW JERSEY MARKET.

Community Land Trusts may have a significant effect on New York City’s housing crisis, may affect struggling and even prospering neighborhoods, may achieve significant savings in the city’s budget for housing while increasing the afford housing supply for families in trouble. But their long term impact may go further, and be a transformative new way of looking at the housing market and its limits, and model the way it can best function to serve the needs of all the city’s resident.

 

The federal government has, in its fashion, responded to such problems; New York City has the highest number of public housing unit, owned and managed, and maintained (in niggardly fashion) by the New York City Housing Authority itself. New York State has, if reluctantly, permitted the city to establish limits on the rents that can be charged for a declining portion of the city’s large renal stock. Mayor Bloomberg responded by pushing for extensive new construction of units, with a minor allocation to those most in need. Mayor de Blasio has put forward an extensive and expensive new housing plan that envisages 200,000 new units, and more, in the next 10 years.

 

But of course, when we say “New York City has a housing problem,” hat does not mean everyone in the city has a problem. The New York Real Estate Board holds that the real estate market has rebounded from the bursting of bubble that the industry, with the active encouragement of the financial sector, itself produced so recently. Rents going up are good news for landlords, if bad for tenants.[5] Mortgage foreclosures by banks and other financial institutions provide opportunities for big operators to buy up homes at a bargain, throwing home owners willy-nilly onto the rental market, shattering hopes of accumulating wealth by investing in “asset building” in a housing market sure only to go up, not down. At the same time, a Rent Stabilization Board makes sure rent regulation won’t prevent landlords from covering the costs when they go, protecting the profits from their investments, regardless of whether that means their tenants chances of meeting their basic needs are widely jeopardized. Talk of inequality!

 

A tiny new non-profit, called NYCCLI, somewhat incongruously pronounceable as “nicely,” the New York City Community Land Initiative,has just been incorporated in New York. What does it hope to offer to deal with this situation? Quite a bit, it turns out. NYCCLI’s formal incorporation papers describe it purpose as “advocating for community land trusts.”

 

And what is a community land trust? A community land trust is a trust that typically owns land, on which the housing unit or units are leased, for 99 years, to a limited equity co-op which provides homes for households, typically lower to moderate income, who occupy the buildings as members of such a co-op and have all the rights a home owners would have except for the right to sell the unit at a profit. Their sales price is set by a formula approved by the trust, typically permitting recovering the purchase price plus improvements plus some cost-of-living adjustment, but excluding the value of the land, which of course remains with the trust. The trust that owns the land also sets some basic rules for its use, basically to ensure that the housing on it will be permanently available to household who need it at the most affordable rents possible. The board that runs the trust is typically composed 1/3 each of residents of it housing, residents of its neighborhood, and supporters, who may come from government, advocacy groups, or technical experts who may be helpful to the trust. [6]

 

What good are community land trusts? They have four major advantages:

 

First, they make possible the creation of affordable housing on a permanent basis, especially for lower income households. CLTs make a key trade-off: they give up the possibility of speculating on an abnormal increase in the dollar value of the home in return for the security of knowing there is no threat of loss if housing prices go down and no danger of eviction if the cost of occupancy become unaffordable because of job loss or ill health or other circumstances beyond a household’s ability to control. And unlike almost all currently existing affordable housing programs, if a community land trust receives public subsidy, its benefits remain permanently available to their targeted low/moderate income recipients, and do not expire after a fixed time period of 20 or 30 or 40 years, and costs for such future residents have been permanently fixed to exclude any increases in the speculative value of the unit.

 

 

Second, community land trusts build communities and stabilize neighborhoods. They provide for deeply democratic management of their housing. By having not only residents but also neighbors and supporters from the wider community on their boards, they can provide diversity, establish priorities for expenditures, achieve efficiencies of scale, and put the strength of the trust behind individual members falling on hard times

 

Third, community land trusts represent a whole new approach to the principles governing the way housing is distributed, occupied, and used in a democratic society, limiting the intensity of the inequality induced by a private market which sees housing as a commodity to be bought and sold for its exchange value, for the profit it may produce, instead of for the needs it may satisfy, its social use value. NYCCLI’s approach can help change housing from a symbol and magnifier of inequality to address at least in part one of inequality’s main causes.

 

But fourth, and in the long run perhaps most important, they can be transformative.

 

Community land trusts challenge the arrangements of a housing market used to the pleasures and pains of speculating on housing value, which is, economically, fundamentally speculating on the value of a given location, and instead see housing as a necessity of a decent life and a supportive environment for all. And they provide the same opportunity for “wealth creation” or “asset building” as does buying a house with a mortgage and paying off the mortgage: put the equivalent of what is put into paying off the mortgage principal and interest on the land into a savings account or other good investment, and you have the accumulation with perhaps even less risk. Putting this together, they can move from seeing housing as a commodity, valued for its exchange value, the profit it can produce, and see it rather as a necessity of life, even perhaps up to a certain configuration as a public good.

 

The different tenures of housing and the legal and financial relationships householders have to the housing they occupy have major implications for the way people live. Community land trusts can provide a form of home ownership for a resident that combines the privacy and security and insulation of the American Dreams’ single family suburban house with the solidarity and support and social richness of the ideal urban life-style. Immediately, to reach the lowest income groups, they will need some public support for acquisition or basic running costs, and they richly deserve such support.[7] In the long run, transformatively, they can benefit not only their residents but the neighborhoods and the housing system

 

[1] http://www.bloomberg.com/news/2014-02-26/foreclosures-climaxing-in-new-york-new-jersey-market-mortgages.html

[2] Censusscope, available at http://www.censusscope.org/us/rank_dissimilarity_white_black.html

[3] The Census Bureau’s Housing and Vacancy Survey for 2011,. The count by Picture the Homeless suggests a significantly higher figure.

[4] http://www.bloomberg.com/news/2014-02-26/foreclosures-climaxing-in-new-york-new-jersey-market-mortgages.html

[5] The Real Estate Board summarizes:

“,,,notable gains this quarter, as compared to the second quarter of 2013, included: the 19-percent-increase in the average sales price for all homes in Brooklyn to $715,000; the 15-percent-boost in coop sales in Queens; and the 13-percent-increase in the average sales price for a coop in New York City to $768,000. The residential market in Manhattan also remained strong with the average sales price for all homes increasing by six percent to $1,491,000 year-over-year” http://www.rebny.com/content/rebny/en/newsroom/press-releases/2014/REBNY_2014_2Q_Report_Improving_Economy_Drives_Residential_Sales.html

[6] Detailed information is available from the national Community Trust Network, whose website, at http://cltnetwork.org/, contans extensive references to further materials, as do NYCCLI’s own educational materials.

[7] And remember the enormous subsidy that inures disproportionately to higher income households from the mortgage interest deduction in our income tax system.

Blog #38 – Community Land Trusts: Empty, Moderate, and Full-bodied.


Community Land Trusts – Empty, Moderate, or Full-bodied?

Community land trusts,[1] as a legal form of ownership of land, can come in three different forms: empty – available to any group for any purpose; moderate – to deal with serious but limited problems for a limited group, or full-bodied – handling both immediate problems but with a broad social justice perspective pushing transformative content and actions.

The differences are significant. Community land trusts can simply be an expanded form of co-operative ownership used by those protecting an already strong position in the housing market, insulating its members from outside influences by exclusion. The legal form of land trust is available to all, and ”community” can be interpreted restrictively by the well-to-do as easily as broadly by less well-off users. Thus, community land trusts as an empty form.

At the other extreme on a scale of social justice, community land trusts have the potential to play a transformative role in our housing systems, favoring lower-income households and all those ill served by existing markets, including poor households, the homeless, African-Americans and ethnic minorities, many women, households diverse by gender relations, age, and background.  -justice focused community land trusts can whittle away at the dominance of the private market as a method of allocating housing. Community land trusts can be models of democratic governance, both internally and at a larger scale of governance. And they can help in the political processes by which public resources are allocated to establish and implement a meaningful right to housing for all. Thus, necessarily, full=bodied community land trusts .

Community land trusts may also be transformative in a quite different context: achieving effective grass-roots democracy. If extended, community land trusts may be seen as a form of neighborhood self-government, in fact controlling land uses and what goes with them in an unquestionably powerful manner, viz. having legal title to the land. But such a potential for community land trusts is not at this point seriously in the picture. The tie-in with other social movements pressing for democratization of land use controls and the planning function of government should not be ignored, however.

In between these two extremes lie a wide variety of variations in form and content. The exclusionary use of community land trusts would presumably be rejected by most. There is a danger of co-optation by interests posing community land trusts  as an alternative to public housing or rent regulation or subsidies or favorable tax treatment for those in need. Presumably, also, a formal commitment to principles of social justice and serving those in need would be part of any mainstream moderate position. But how sharply to focus their immediate goals, how widely or narrowly to devote their energies, how to use limited resources, with whom to ally and who to confront in adversarial fashion, how far and in what manner to be politically engaged, are all matters in which strategy as well as principle. Compromises will be inevitable. Thus, moderate community land trusts.

Where in this spectrum of possible community land trusts  a given effort stands seems to me to depend on three factors.

  1. How seriously is “community” taken? Community land trusts can be simply a legal form of holding title, used for tax and financing purposes, but in daily use essentially a management company, negotiating with utilities, contractors, maintenance staff, etc. Or it can be seen as a part of an effort for form and maintain a communal level of social interaction, involving not only collective democratic decision-making but a sharing of activities, of information, of social responsibilities, of political involvement. It can affirmatively work on positive relationships with its outside neighboring community, having not only neighborhood representatives on it boards but helping integrate its residents in its community, more widely defined, sharing facilities, activities, information, as circumstances suggest. Likewise, it can affirmatively look to achieve and make use of a diversity of residents, including both levels of recognition and of assimilation comfortable to each.
  2. How, and how clearly, is the constituency of the community land trust understood? A community land trust has control over who its members are, can have processes similar to those of cooperatives in interviewing potential new members. But there are general principles that must be established, and they will influence not only who is in the community land trust but what its relations with its outside community and government will be. Specifically, income levels and household composition can be defined as criteria.
  3.  If the principles of social justice are followed, it also becomes more likely that the community land trust will operate as a full-bodied trust.
  4. How does the community land trust see its political role? Every community land trust except an exclusionary one of the well-to-do faces the reality that many to whom it would like to be open cannot afford even the non-profit real costs of decent housing. The need may go from an immediate need for help even with basic costs or special needs to an on-going concern about rising costs or changed incomes limiting what a household can afford.  That inevitably means a concern with governmental subsidies, levels of taxation, utility costs, building codes, public services, public facilities. But the problems community land trusts  face are shared by a large part of the population as a whole. If the community land trust sees itself as part of a broader movement to achieve social justice in the provision of housing, perhaps as part of a broad right to housing movement, it will be more and more a full-bodied community land trust both in its inception and its ongoing daily activities.

A note on the ideological and economic aspects of community land trusts:

The idea of community land trusts resonates with an old theme in economics: that of land as a common natural resource, one not the product of human efforts, and therefore not to be appropriated by individuals for their private use, but to be shared among all. Community land trusts can be seen as an implementation of that view, at least on a small scale: no individual has the legal right to dispose of his or her interest in a community land trust for personal gain. Yet, theoretically, the ability to sell an interest in a building built on land in a community land trust at a price for that building fixed in a private market will take into account that that interest is made more attractive by its ground lease. Thus a likely profit can in fact ensue to the seller of a community land trust unit, amounting to an ability to make a private profit from a natural resource,. The market value of a building or unit in a community land trust building is technically the price of a commodity.. The land itself may be decommodified, but the right to use it is valuable, and could be realized by a sale of what is on the land and benefits a private owner from its common ownership. The land is decommodified, but not necessarily the building on it, to which the value of participation in the community land trust accrues.

What makes the typical community land trust radical is not the separation of land from building and its character as natural resource, but rather the restrictions that the classic community land trust, moderate to full-bodied, imposes on those leasing the right to occupy from the trust. Those restrictions typically regulate the price at which a housing unit in a community land trust can be sold. In these community land trusts , the leases to occupant members either prohibits the occupant from selling the unit except at a price established by the board of the trust, or gives the trust itself the right to buy at a fixed and limited price if the unit is put up for sale. . In this way community land trusts operate as would a limited equity co-op; the separation out of land ownership is simply another way of controlling collectively the price of units in it, as well usually as the characteristics of new buyer occupants. It is the restrictions in the permitted sales of units in a community land trust which make it an ideologically radical idea, and the terms of that restriction set the extent of the radicalism. If limited to an original price, originally set not aiming at a profit, and usually increasing only to the extent of the occupants own investment of money or labor in the unit, that makes it radical, for it effectively takes the unit out of the housing market and eliminates its use as a provider of private profit. A resident of a classic community land trust has virtually all the rights of a home owner, except the right to sell at a profit.  It turns housing into a set of use values, rather than of exchange values.[2]

Community land trusts may also be transformative in a quite different context: achieving effective grass-roots democracy. If extended, community land trusts may be seen as a form of neighborhood self-government, in fact controlling land uses and what goes with them in an unquestionably powerful manner, viz.having legal title to the land. But such a potential for community land trusts is not at this point seriously in the picture. The tie-in with other social movements pressing for democratization of land use controls and the planning function of government should not be ignored, however.

All this has two implications. One is that such a community land trust cannot be seen as a “creator of wealth.” The opportunity to benefit from a speculative increase in the value of land is denied the owner. That may make a community land trust less attractive to some, but may be welcomed by others, and should in any event be clear in the use of the community land trust form of ownership. The other implication is the need for thoughtful consideration of how permitted sale prices are established. While the principle of non-speculation is clear, its definition is not quite. Specifically: typically, the seller is allowed to recover his or her purchase price plus investments. But usually that purchase price is adjusted by some formulae, such as changes in the cost of living, benchmarked to some measure of the rate of inflation, at least on the up side. That means it has some characteristics of an investment that does have market advantages: it is protected from erosion by inflation. It has the additional market advantage, the more full-bodied the community land trust is, of having collective backing against personal misfortune; foreclosure is technically impossible and eviction for non-payment of rent is handled more humanely than it is in the market, again to varying degrees. That benefit is of course realized to some extent in directly market terms when it comes to financing; a bank is likely to recognize the stability provided by the collective responsibilities and spread out risk inherent in the community land trust form as opposed to conventional single-family home ownership.

So “decommodification”  is not complete, but is certainly ideologically challenged by the use of the community land trust form, and its extent will vary with the details of the trust instrument and the leases given pursuant to it.

And if the above economic analysis is right, it provides some solace for potential participants in a community land trust that, while they may not accumulate speculatively-driven wealth by participation, they do achieve definite economic advantages in terms of security, both of occupancy and of return of original investment.

My own take, again if the above analysis is correct, on implications for community land trust practitioners:

Be clear who your constituency is. (Point 1 above.)

  1. Stress the “community” in community land trusts when presenting them. (Point 2
  2. Be clear and up front where you stand on the importance of social justice in the spectrum between moderate and full-bodied community land trust.  (point 3)
  3. Be politically active in coalition formation with other social justice oriented organizations and actors, and join with them both in obtaining the necessary support and subsidies for community land trusts  and in supporting other housing rights organizations program proposals for governmental action in the housing field, particularly on financing and rent regulation and affirmative non-discrimination. (Point 4.)
  4. Be up front about community land trusts’ impacts on wealth accumulation (minimal) and its other economic advantages: security of tenure and investment.  (Note on ideological and economic aspects.)

pmarcuse.WordPress.com  Blog#38.

[1] A community land trust is a legal form in which the ownership of land is held in the form of a trust and separated from the ownership of any structures that may be on it, which are privately (often in the form of a co-op or mutual housing association) built, occupied, and managed, subject to the term of a land lease from the trust. The trust is typically controlled by a board in which the actual users of the buildings on it are the primary members, together usually with representatives of the neighboring community and/or relevant government representatives. The leaseold interest with the users of the building have can be sold  subject to the provisions of the lease from the trust, which typically limits its resale price and must approve the buyer. An excellent fact sheet,  which also contains further useful links,.is at http://picturethehomeless.org/publications.html,,

[2] The myth that home ownership per se is a reliable way to accumulate needs to be dispelled. Home owners accumulate wealth only through two aspects of home ownership: one is savings, the other is speculation. The savings are essentially the forced setting aside of money to pay off a loan, the mortgage. Alternate investments of savings might do even better, and be subject to less risk. The other source of additional wealth creation from home ownership lies in the possibility of capturing the increase in the value of the house, which is fundamentally of the location on it is built, for the physical building itself depreciates. Again, that’s a speculative investment, and not always a safe one, as today’s economy shows. And see the historical experience recounted in Sclar, Elliott, Matthew Edel. and Daniel Luria. 1984. Shaky Palaces: Home ownership and Social Mobility in Boston’s Suburbanization.  New York Columbia University Press 1984.

Blog #29 – Premature Democracy, Congress, the 99% and the Tea Party


What’s the matter with the United States Congress? Too much democracy? ? “Premature democracy”? If the 99% are dissatisfied with the status quo and it only benefits the 1%, why don’t they change it? What explains the Tea Party’s positions and its power? Need it be dealt with? How?

 To put it another way: Why do we have serious problems of poverty, inequality, discrimination, poor education, unemployment, unaffordable housing, unaffordable health care, social aggressiveness and exclusion, insecurities of all sorts, all in a country that has the resources and claims the values to remedy them. Why then do they exist, why is not the government addressing them actively and effectively? Is the problem with our democracy?

Blog #29 suggests three answers; Blog #30 gives examples..

Summary:

 1)      Political procedures and material development. Congress’s rules are quite democratic (small d). They are not so different, for instance, from those governing Occupy Wall Street’s General Assemblies, although they do need significant change. Nor is the material level of development that is sometimes held a prerequisite for democracy missing, although also needing significant change.  Specifically, inequality in wealth permits undue influence  to be exerted in the electoral and political processes, over and above procedural rules and practices.

2)      Consciousness: Cultural, ideological, and behavioral patterns. What keeps the 99% from acting in its own interests is the gross disparity in power between the 99% and the 1%, both in political governance and private wealth. It is power both reflected in and buttressed by a set of cultural, ideological, and behavioral patterns, a consciousness, which results in substantial support for the 1% even among the 99%, a support represented by the tea party movement in the United States.

3)      The need for radical/utopian critical challenges. Those patterns, and the material economic relations on which they are based, need to be addressed directly and frontally at the ideological level as well as the political and economic if fundamental change is to take place. Liberal reforms are needed. But they must ultimately challenge the underlying structural aspect of power which keeps the 1% where they are, even at the expense of being called utopian. The ideology and consciousness that must be challenged is represented, symbolically, by the tea parties and their elected representatives in political office. The challenge must be addressed front on.[1]

 * * * * *

 1)      Political procedures and material development.

 “Premature democracy” is a phrase Slavoj Žižek refers to in a provocative discussion[2] of current criticisms of democracy. It suggests that you can’t expect democracy if the ground is not prepared for it.

 There are many in the mainstream who so hold.  They may allude to “failures of democracy” in countries recently moving from real existing socialism towards capitalism as in Eastern Europe and China, or in countries with deep ideological or religious cleavages, as in the Near East, or countries with deep ethnic or tribal divisions, as in parts of Africa. Perhaps some level of economic development is necessary before democracy can work, they argue.[3] A significantly high level of nationalism supporting a unifying national identity may be necessary, others hold. Or a sufficiently sturdy set of institutions. Or a consensus on the very idea that democracy is desirable. Or simply time, experience with democracy in practice.

 But the material developmental conditions for democracy in the United States seem to be sufficient. The evidence is overwhelming that the country has ample resources and productive capacity to feed, clothe, and decently house its entire population, and provide it with the material conditions of life adequate for the full and free development of all members of society. Living conditions that would have been considered utopian in any previous era, and that to many may still seem so today in comparison to what they experience, are in fact well within reach today. Lack of material actual productive capacity is not the problem.

 Nor are the formal rules of political participation necessary in a democracy fundamentally lacking. A focus on the actual procedural rules being followed, both for voting in and for Congress, are  a part, but only a part, of the problem.  Pointing at the procedures Congress follows as undemocratic and requiring reform isn’t enough. Occupy Wall Street struggled to put into practice as thoroughly democratic a process as is to be found in public use today. It allowed for anyone wishing to speak at a meeting on an issue to speak, in the order requesting permission, it provided for voting by show of hands almost by request any time (and informally by hand gestures after any speaker), for super- majorities to carry a vote, and even then Occupy permitted anyone with deeply felt objections to block the result. Anyone displaying an interest was entitled to vote. Some objected that it was not a very efficient way of making decisions, but it was considered an affordable price to pay for a vibrant democracy, which indeed it was.

 Surprisingly, Congress actually follows the rules Occupy uses pretty closely in practice.  It isn’t that Congress’ formal procedures are non-democratic. Those that are, like gerrymandering or interference with the ability to vote, could all be changed by Congress if it wanted, even  within existing procedures, to do so. It could regulate campaign expenditures more than it does, even given current Supreme Court rulings, and the impact of those expenditures depends on many factors other than their quantity.

 The problem Congress faces goes beyond procedure. What Republicans do now that is called undemocratic, like the filibuster,  Democrats might wish to be able to do if party strengths were reversed, and it is a form of protecting rights of small minorities. Arguably even removing the road-blocks to fairness in existing procedures would only make a marginal difference in the results, and going whole hog to the Occupy model might have even worse results. Apparently even the massive money sloshing around and used in the last election did not make a major difference. Private lobbying, given members of integrity, is not per se undemocratic.

 Blaming “Congress” for the current impasse on budget expenditures and taxes, and arguing that a change of rules would solve the problem, is in any case fallacious. It is the position of the Republicans, and only some fraction of them, that is immediately to blame.  Wherever the difficult line between the protection of minority rights and the implementation of majority desires might be drawn, few would argue on principled procedural grounds that it has been crossed. The filibuster rules in the Senate are perhaps the one exception, but even those can be changed under the Senate’s own rules as they now exist.

 So it is not that Congress is fundamentally an undemocratic institution, but that it substantively reflects the fact that a significant part of the electorate disagrees significantly with the majority, a large enough part so that according them minority rights does not violate fundamental democratic precepts.

 But does Congress really reflect the electorate?  the hope for democracy in the United States premature?

 That depends on how democratic the election process is, and thus on what the rules for electing members of Congress are. There are certainly large questions about how democratic those rules are. But the election of right-wing Republicans is not solely dependent on the bias in those rules. Conservatives benefit disproportionately from those rules, but their successes are only in part due to them. Certainly there are problems with registration procedures, with gerrymandering, with the Electoral College, big problems with access to the media and the role of money in elections. And certainly those rules can and should be made very much more democratic. The end result would be much more reflective of what one person – one vote would produce if all the ideal formal rules of democratic procedures were followed to the letter.

 Yet one would have to admit that, if Obama squeaked through the 2012 election with a mere 52% of the votes on a moderately liberal platform, whether the percentage of votes going to a more challenging platform have been greater, or lesser,  is an open question, even under procedurally better conditions.

 So all of the necessary conditions for success by any of these standards exist in the United States, and none of the conditions predicting failure.

 But the conditions need examination. Both the effectiveness of the procedural rules of democracy, and the benefits of the existing productive capacity, are dependent on the distribution of power that lies underneath them, and that in turn is determined by something other than sheer numbers involved in voting or in production.

 2)      Consciousness: Cultural, ideological, and behavioral patterns.

 If all rules achieved perfect democracy, there would be, in today’s United States, a substantial minority that would support the position of the right wing Republicans, say of the Tea Party. It is substantial even if only 8% of voters consider themselves Tea Party members (already a significant number, since membership implies active support, not simply voting), but according to polls 30% look favorably on it, and only 49% do not.[4] It is a large enough minority to be entitled to a substantial role in the deliberations of any democratic body, even with discounts for all the undemocratic elements contributing to its electoral strength. If there is substance, even if not mathematical accuracy, behind Occupy’s slogan: “we are the 99%, they are the 1%” why do 48% of the electorate vote with the 1%? Are their votes “freely” cast?

 The argument is strong that voters are not free to decide for whom to vote, in any but a limited formal procedural sense. The votes of a substantial number today do not reflect their actual material interests, or the results would be much closer to the 99%/1% split of Occupy. As Arundhati Roy frequently says, “We are many, and they are few.” Material interests are important, and material inequality stands in the way of a full actual realization of material equality, a realization sharp enough to determine a vote. Voters are in fact very unequal and those at the losing end of inequality are not free in their voting.

 To be fully free, voters would have to be in a position to have access to and interpret the necessary information free of manipulation by others. They would have to be free of material pressures forcing a vote against long-term interests, requiring a suppression of actual preferences in favor of satisfaction of immediate needs. That would require a higher level of material equality than we have today, one at least guaranteeing for all some minimum threshold, of income, education, health, personal security, the effective ability to exercise political, social, and economic rights. Material burdens get in the way, in a vicious circle, of the ability to comprehend the cause of those burdens. Even for Tea Party members not immediately subject to direct want, the worry about the future, interpreted for them by others in so many ways, has the same effect as if it were actually fully present today, whether or not its danger is in fact real, as it is for some.

 These material burdens could, theoretically, be changed immediately by the strong concerted action of the 99% that would benefit from change. Yet the strength of the labor movement, which might be taken as one indicator of the power of that 99%, is weaker today than it was at any time since the New Deal, and the militancy of social movements today is demonstrably less than it was then. But even a return to New Deal levels of political and social action seems remote today.

 The problem has a deeper dimension.  Even, say, a return to the social provisions of the New Deal, or even of the most social welfare oriented countries of Europe today, would likely make a limited difference. Such provisions might deal with one dimension of the problem, but a deeper dimension would remain: the ideological/psychological. It is the blocked dimension of the consciousness of alternatives. The blockages keep individuals from realizing, from visualizing, what the alternatives might be to the problematic situations they face now. Other dimensions deal with what the relations among people would be in a truly  equal society, what alternatives for the organization of society might exist, what other motivations besides profit might drive the economic engine – and what individual values might provide satisfaction  with one’s life.

 The realization of these alternate dimensions is blocked by characteristics imposed subtly but pervasively on individuals in our present society: the felt need to consume ever more goods, live in ever bigger houses, compete forever for greater incomes and wealth and power. Culture is a weak name for the pattern. Ideology, the explicit formulation of the rationale behind the system as it is, is another contributor to the blockages. Ideologies are of course directly connected to material relations, but not automatically, and are part cause as well as consequence of the material, and retain an independent and growing role in the nature of the order of society.  As long as these characteristics of the present social and economic relations persist, political relations will be subject to their influence, and the steps from 52% voting majorities to close to 99% voting majorities will be blocked.

 3)      The blockage of radical/utopian critical challenges.

 The first task to achieve real democracy is to remove the rules and procedures that prevent us from having a truer democracy, and the second is to reduce the power of those who create and benefit from the inequality of others. But undertaking those tasks needs to keep in mind the third task, opening awareness to the further dimension that is possible, the alternative dimension, perhaps seen as utopian today, but yet completely possible given the productive capacity our society has achieved. Immediate gains need to be linked firmly to a vision of the full potentials of a democratic society.

 The problem of the tea party—of a response to the problems with which the existing system seems incapable of dealing—is one embodiment of what needs to be dealt with. The tea party is made up of many diverse types, and supported financially by some in different positions but having a vested interest in its success.  For an apparent majority, the liberal side, the apparent slight majority within the 99%, the system produces enough to prevent reactions of desperation for material change, and provides enough immediate benefits to suppress troubling consciousness of underlying problems mentioned at the beginning.  More, its benefits block    visualization of how change could fundamentally create the better society necessary to deal with those problems.

 The tea party reacts to those deep-seated problems from the right, as the discussion here reacts from the left. Lacking a vision of a different future, it looks to the past it believes it had, realistically or not. It embeds the concerns it does have in a framework that past, one which includes belief in what it considers free markets, competitiveness, individual responsibility, the value of consumption, small government, nationalism verging on imperialism. That ideological frame needs to be criticized, explicitly and directly. But for most in the tea party, that frame is probably best not criticized at the beginning, but rather starting from a base of agreement on the problems and some immediate steps towards solution on which agreement can be reached, then linking those steps to a critique of a frame in which they ought to be embedded, showing how logically the immediate leads to more and more radical and even utopian visions of what in the long run needs to be done.

 * * * * *

Conclusion:  The first task to achieve real democracy is to remove the rules and procedures that prevent us from having a truer democracy. That will help with the second task, but is not sufficient for it: to reduce the power of those who create and benefit from the inequality of others. Undertaking those tasks needs to keep in mind the third task, which again will help with the first two: opening awareness to the further dimension that is possible, the alternative dimension, radical and perhaps seen as utopian today, but yet completely possible given the productive capacity our society has achieved. Immediate gains need to be linked firmly to transformative proposals based on a vision of the full potentials of a democratic society.

 That is the third task that needs to be undertaken. Blog #30 addresses how this third task might be addressed, with some examples intended as provocations rather than full-fledged proposals.


[1] I have elsewhere written of this, following the reasoning of Herbert Marcuse’s Essay on Liberation, as the need for the “liberation of consciousness.” See my article in Andrew Lamas, Ed, Occupy Consciousness: Reading the 1960s and Occupy Wall Street with Herbert Marcuse, in Radical Philosophy Review, Volume 16, 2013, forthcoming.

[2] Slavoj Žižek “What Europe’s Elites Don’t Know:When the blind are leading the blind, democracy is the victim” Available at http://inthesetimes.com/article/14617/what_europes_elites_dont_know1

[3] Suggested by Zakaria, Fareed. 1997. “The rise of illiberal democracy.” Foreign Affairs, Vol 76,No. 6 (November-December), pp. 22-43, in the article from which Zyzek quotes the phrase.

  [4] According to a new Rasmussen Reports poll, available at http://www.allgov.com/news/controversies/tea-party-membership-or-those-who-admit-to-it-plunges-to-8-130110?news=846706. And see my Blog #14: “Who is the 1%: The ruling class and the tea parties.”

Blog #1b – The Myth of Wealth Accumulation through Homeownership

Homeownership for most is only wealth accumulation the same way regular savings in a savings account is, and perhpas riskier.


The Myth of Wealth Accumulation through Home Ownership

Home “ownership” consists of a bundle of rights :in most people’s minds, they include the right to occupy, the right to exclude others, or privacy, the right make physical changes to the unit, the right to remain in occupancy, or security of tenure, the right to pass on to one’s heirs – and the right to sell at a profit.  Of course all these rights are limited: by zoning rules which regulate what kind of business can be done there,, set-back requirements and building codes that regulate what can be done physically with the property, perhaps parking requirements, environmental rules, laws against creating a nuisance (noise, other forms of conduct, fire codes – and in most cases obligations to opay a mortgage, which, as people are increasingly finding, limit security of occupancy quite painfully.

And yet many people believe that home ownership is particularly valuable because it is a form of wealth accumulation, wealth that will be become a stepping stone to perhaps starting a business[1] or paying for retirement or even just a new car, by virtue of the fact that its likely to go up in value and thus be a good investment, and  even if it doesn’t, as one pays off the mortgage one can take out an home equity loan and have funds for other desired purposes.  But those are two quite different hopes: benefiting from increases in property values, and being able to take out a home equity loan whether there’s an increase or not.

On home ownership as an investment that will increase in value, accumulating wealth reliably over time: the facts make that hope a shaky one, particularly today, with over four million foreclosures and an estimated 14 million homes “under water,” with mortgages exceeding their declining values. Studies over the long term suggest that’s not just now, but homes have always been “Shaky Palaces,” as one careful study noted,[2] which pointed out that even where losses could be avoided, gains did not compare favorably with investments in other areas, even with conventional savings account.  And that should be the real test: will wealth accumulate more rapidly from investment in a home, or in alternatives? The evidence does not support ever-increasing prices of homes, and certainly raises questions as to the desirability of such an investment  as an investment over other forms of investment.

But taking out a home equity loan, or holding on to a home over the years as a form of security for one’s old age, do not rely only on speculative value appreciation. As a mortgage is paid off, equity accumulates., and indeed for many that provides a safety net for old age and possible illness. But what is really happening here? Payment on mortgage principal are simply a form of regular savings; as Michael Stone has pointed out,[3] one could easily envisage an arrangement where interest payments on a mortgage remained steadily payable and instead of paying off interest the equivalent amounts were consistently saved, and invested with returns that might well be greater than the slowly declining interest on the mortgage.

The frequently heard statement that “the wealth of most Americans is in the homes they own” is a very deceptive formulation. A home is not usable wealth, not a disposable resource thatcan be usedfor whatever its occupant wants, the way a bank account or a stock certificate or, indeed, a marketable title to someone else’s property is. A home, at least for most people, is what they rely on for shelter, safety, comfort, a place to rest, to eat, to entertain, to enjoy.  They have it for its use value, not for its exchange value – or at least need it first and foremost for its use, not for what they could get if they exchanged it for something else, cash or a car or a boat. When you take $400 out of your savings account to buy a refrigerator to use, your usable “wealth”  isn’t increased by $400, it’s down by $400; if a rich diabetic pays $5,000 for a dialysis machine on which he has to depend, he isn’t $5,000 richer; if anything, he’s $5,000 poorer, less possible resale value after his death. If someone buys a house for $100,000 with a $90,000 mortgage and a $10,000 down payment from savings, he’s plus $10,000 in equity and down $10,000 in savings, and as he pays off the mortgage principal his equity goes up as his alternative savings go  And he can’t use that equity the way he could use the equivalent savings, as an investment in some profit-making enterprise. You don’t” accumulate wealth” by buying a house to live in, except to the extent you’re paying off the principal on the mortgage instead of saving and investing the equivalent amount elsewhere.  If there’s any advantage to buying/owning a house rather than a savings account, it’s in the favorable tax treatment payments and profits on sale (if any) get, an unwarranted distortion of a progressive income tax system.[4]

So treat housing as something that is to be used to meet critical human needs, not something to be bought and sold speculatively for the profit its limited supply might produce  on a sale, or for the forced savings it requires at the cost of alternative investments. Limited equity ownership, mutual housing associations, etc., are a way of providing such non-speculative housing.

Peter Marcuse

July 9, 2010


[1] The unfortunately widely purveyed view of Hernando de Soto in a developing world context. Se, among other discussions,  Marcuse, Peter. 2004. “Comment on Donald A. Krueckeberg’s ‘The lessons of John Locke or Hernando de Soto: What if Your Dreams come True?” Housing Policy Debate, vol. 15, No. 1, pp. 39-49. Available at: http://www.fanniemaefoundation.org/programs/hpd/v15i1-index.shtml.

[2] See Elliott Sclar and Matthew Edel, Shaky Palaces, a multi-year study of home prices in the Boston area.

[3] In Stone, Michael. “Alternatives to the Mortgage Trap: Household Savings and the Mutual Housing Association.” In Progressive Planning No.182, Winter 2010, pp. 22-25.

[4] See Peter Dreier and John Atlas’ several writings on the millionare’s tax deduction.”