Isn’t it ironic that if someone happens to ask us the value of our house, we don’t tell them how attractive it is or how warm and comfortable or how much we enjoy the views. We simply give them a £ value and may even mention whether that figure has gone up or down in the time since we purchased it even if the attributes we value day to day in living there haven’t changed at all!
And therein lies a bigger problem for our society going back to when land first started being treated as tradable, private property in the 16th century triggering the birth of modern capitalism. Land is different from other forms of capital – we all need it to live but it is limited, we can’t create more of it.
As this excellent article explains: “much of the wealth accumulated in recent decades has come from housing. The classical economists would have viewed this as the accumulation of unearned economic rent; a transfer of wealth from the rest of society towards land and property owners. But in Britain, these windfalls are celebrated — house price inflation is hailed by economists and the media alike as a sign of economic strength. The cost this imposes on the rest of society is ignored. As John Stuart Mill wrote back in 1848:
“If some of us grow rich in our sleep, where do we think this wealth is coming from? It doesn’t materialize out of thin air. It doesn’t come without costing someone, another human being. It comes from the fruits of others’ labours, which they don’t receive.”
As someone of the lucky age group who benefited this way, I am challenged.