Damage Is Not Enough

Steven Greenhut, apparently filling in for Christian Britschgi as Reason’s resident landlord whisperer, recently voiced his concern that “The COVID-19 Pandemic Permanently Damaged Property Rights.” 

I know proppity is a word to conjure with among right-libertarians. From my anarchist perspective, the term — as opposed to possession — carries far less weight. But I regard Karl Hess as one of the better people to come out of the legacy American-style libertarian movement. So it’s good to remind Greenhut and other right-libertarians of something Hess said fifty years ago (The Libertarian Forum, June 15, 1969)

Because so many of its [the libertarian movement’s] people… have come from the right there remains about [property] at least an aura or, perhaps, miasma of defensiveness, as though its interests really center in, for instance, defending private property. The truth, of course, is that libertarianism wants to advance principles of property but that it in no way wishes to defend, willy nilly, all property which now is called private.

Much of that property is stolen. Much is of dubious title. All of it is deeply intertwined with an immoral, coercive state system which has condoned, built on, and profited from slavery; has expanded through and exploited a brutal and aggressive imperial and colonial foreign policy, and continues to hold the people in a roughly serf-master relationship to political-economic power concentrations.

Greenhut himself evidently does, in fact, wish “to defend, willy nilly, all property which now is called private” — or at least regards recognizing the legitimacy of anything with the label “private property” slapped on it, with a near-insurmountable threshold for challenging it, as the proper default position. His article — which, unsurprisingly, first appeared in the Orange County Register — consists largely of one lazy right-wing talking point about property after another.

The first thing any serious advocate for liberty and opponent of statism should address is the fact that the private property of landlords is a textbook example of what Hess meant when he referred to private property that is “stolen,” “of dubious title,” and “deeply intertwined with an immoral, coercive state system….” Greenhut, most decidedly, does not.

As that (probably fake) George Washington quotation put it, “Government is not reason, it is not eloquence—it is force.” Government officials aren’t wiser than the rest of us, so when they tried to deal with a serious public health problem, they did so in a forceful, ineloquent, and unreasonable manner. 

I’ve got some really bad news for Greenhut about how what American-style right-libertarians revere as “private property” in land — individual, fee-simple, alienable and tradeable commodity property — came about. 

Anti-eviction orders, he writes, have “literally destroyed our property rights.” Wait till he finds out what happened to the laboring majority’s possessory rights in commonly owned land — like their customary rights of access to a share of the village open fields, their rights to keep livestock on the common pasture, and their right to gather wood and food and hunt game in the common waste — in the enormous portion of the world where such models of ownership formerly prevailed. Western Europe, where our own modern laws of “private property” had their origin, was just one of these areas. The people’s common right to the land was “literally destroyed”; and it was done, not by eloquence, but by force.

In light of these basic historical facts concerning the actual origins of Greenhut’s “private property,” some of his other comments are especially laughter-inducing. For example, “the government has made owners’ livelihoods dependent on the political system.” My dude, it was the political system that created that model of “livelihood” for them. “we no longer have property rights when officials can eliminate them by executive order, legislation, or regulatory fiat.” Google “Parliamentary Enclosures.” 

He even uses this howler: “As the saying goes, democracy is two wolves and a sheep voting on what’s for dinner.” Yeah, any time you see this “saying” — much like the old Snopesbait quote from some alleged 18th century chud about the public “voting themselves largesse from the public treasury” — you know the person quoting it is an unambiguous right-winger. The idea that the poor ol’ minority of proppity-owning sheep are being preyed upon by a popular majority of “wolves” — as opposed to the actual, non-Sowellized history in which a wolvish minority of landlords robbed the majority of their land — is a reactionary trope worthy of Menenius Agrippa.

In a slight-of-hand typical of right-wing “free market” apologetics for the powerful, Greenhut presents the “mom-and-pop landlords” who “depend on rental income” as sympathetic stand-ins for an entire class. 

Let’s leave aside the share of rental properties that are owned by large-scale individual and corporate landlords, who deserve no more sympathy than the landed oligarchs whose parasitism Adam Smith denounced over two centuries ago. Even in his defense of alleged mom-and-pop landlords, Greenhut drops some damning admissions about this source of “livelihood.”

For example: “Often, property owners have mortgages.” I’m far from the first to point out that, if you depend on the rent from a property to pay the mortgage on it, you’re not “providing housing” to your tenant. They’re providing it to you.  

He compounds this with a question-begging appeal to landlords’ “right to a fair return on their investment.” Apparently his idea of “fair” is any return that the market will bear, if you can get away with it — taking for granted the legitimacy of the existing definition of property rights, power relations, and other background conditions within which your “investment” takes place.

But a system in which you take a check from your tenant with one hand, and you not only use their money to pay your mortgage and maintain the property (usually as little as you can get away with) with the other hand, but skim off enough to live on yourself in the process, isn’t exactly my idea of “fair.” To me, it’s more like an indictment of the utter screwed-upedness of our credit and capital-allocation system.

Not Greenhut, though. He actually celebrates it:

Investing in rental property has always been a prime means for middle-class people to build wealth. 

My grandfather was an immigrant paperhanger (remember wallpaper?) who invested in Philadelphia row houses decades ago. 

In fact his words “build wealth” are hyperlinked to an article, titled “How To Build Wealth by Investing in Rental Properties,” at a stereotypical hustlebro website called BuildWealth. The BuildWealth article says making passive income from other people paying off your mortgage is a “no-brainer.” Tyler Wright (another hustlebro whose handle, @DefiningWealth, is also typical of his ilk), is more explicit about the parasitism of the business model:

Bank buys me the house. 

Tenants pay off the loan.

Property manager handles everything.

I collect cash every month.

…And after the tenants get done paying for my house, I get to throw them out and keep it for myself! 

All this should be enough to show how much of a departure American-style right-libertarians — even those with “classical liberal” in their social media profiles — are from the actual classical liberalism of people like Adam Smith, David Ricardo, and Henry George, who treated the “passive income” of landlords as the paradigmatic form of economic rent and unearned wealth.

The concept of “economic rent” is very important, by the way. One thing studiously left out, in all the landlord-apologetic bathos of people like Greenhut, is that landlord rent doesn’t just amortize the outlay of acquiring the property and compensate the landlord for the labor and costs of maintenance. Even after you subtract the costs of buildings and improvements, and whatever actual labor the landlord contributes, you’re left with a huge chunk of land rent that results from the tenant’s ability — not to mention desperation — to pay. The normal market price of a reproducible commodity reflects the material cost of production — the amount necessary to incentivize production — not the buyer’s need for it. If market incumbents charge a price greater than this natural level, new entrants will undercut them and drive down the price. This doesn’t apply to land, which is in fixed supply; the landlord’s passive income, far beyond what would have been sufficient to incentivize making housing available, results from people bidding up the price on the fixed supply based on their ability to pay.  

Greenhut also devotes considerable space to scaring us with the consequences, if landlords can’t get a “fair return” on their parasitic business model:

fewer people will go into the business and even fewer will upgrade their properties….

The result is obvious: fewer available rentals and fewer rentals in tip-top condition….

Now, I talk to many people who won’t dare buy a rental house out of the legitimate fear that the government can suspend rent payments at will.’

Unlike Greenhut, I see this as more of an admission than a warning. If we depend on landlords to provide housing, and their unearned wealth is so central to the provision of housing that people will go homeless without them, that’s an indictment of the way that function is organized in our society. If their failure to “invest” in housing will produce such dire results, that’s a sign that the provision of housing should cease to be dependent on their “investment”; they’re a pretty glaring point of failure in the system.

The landlords are just one case of a much larger phenomenon in capitalism. For the class who own the most of them, things like “property,” “money” and “wealth” are nothing more than socially constructed ownership chits over the right to allocate goods produced by the labor of other people acting on the free gifts of nature. And the “return” on “investment” is nothing but a form of tribute extracted for allowing production to take place, by other people’s labor acting on nature — neither of which the “investor” created.  

The actual costs of acquiring the land, and building and maintaining dwelling places, are paid by tenants right now. We need to fire banks and landlords from their legal monopoly on administrative functions that could be organized by people for themselves, without the massive additional payment of unearned interest and land-rent to the rentier classes. We need a system of credit organized horizontally by producers for themselves. We need a system of land and natural resource possession based on community land trusts, Ostromite commons, and other restored forms of communal ownership. 

In other words, “permanently damaging” the property rights Greenhut laments is good; but it’s only a first step. We need to destroy them.

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The Anatomy of Escape
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