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Why Can't You Afford a Home?
Throughout the western world, a whole generation is being priced out of the housing market. While wages and incomes continue to stagnate for the majority, house prices and rents remain staggeringly high. For millions of people, particularly millennials, the basic goal of acquiring decent, affordable accommodation is a distant dream.In this compelling book, leading economist Josh-Ryan Collins argues that to understand this crisis, we must examine a crucial paradox at the heart of modern capitalism. Two of the key ingredients of contemporary capitalist societies, private home ownership and a lightly regulated commercial banking system, are not mutually compatible. Their interaction leads to a 'doom loop' in which unlimited credit and money flows into an inherently finite supply of viable property, resulting in ever higher house prices. The result is declining levels of home ownership, rising inequality and debt, stagnant growth and financial instability. The only way out of this vicious circle is to radically rethink how we structure our tax and financial systems and accept that home ownership may not always be the solution.This engaging and topical book will be essential reading for anyone who wants to understand why they can't find an affordable home, and what we can do about it.
140 pages, Paperback
Published December 10, 2018
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May 22, 2024
Finance Capitalism 101…
Preamble:
--I’ll take this opportunity to unpack “FIRE” (Finance, Insurance, Real Estate).
--This 140-page gem summarizes what you would otherwise slog through in a 1,000-page textbook:
i) Accessibility:
--There are moments of real clarity, which is a must for a topic designed for abstraction (the real-world Matrix):
ii) Structure:
--Some key frameworks are mentioned. I want to emphasize a deeper structural argument, so I’ve added to and rearranged the story, step-by-step…
Highlights:
1) Rise of Capitalism: “Real” and “Fictitious” Commodities:
--There are a variety of critical lenses/debates we can use to examine the origins of capitalism; here’s the critical framework I currently start with (not detailed in the book):
i) Markets are a social relationship where commodities are exchanged between sellers and buyers, usually in the form of a “spot trade” (i.e. instantaneous exchange, thus effectively between strangers, as opposed to deferred payments or sharing).
…This asocial relationship tends to originate in the peripheries where different groups come into contact as strangers, since long-term neighbors tend to require more social relationships (with all its baggage, from cooperative gift-exchanges and commons to hierarchical feudal obligations). See: Debt: The First 5,000 Years
ii) The market’s asocial relationship also means seeking exchange-value (symbolized by the market price) rather than the direct use-value (social needs and desires). Money reaches new heights as it becomes exchangeable for more and more things, becoming an end in itself rather than just a means.
iii) Markets for “real commodities” (objects produced by labour, with a direct cost of production) have long existed prior to “capitalism”. We can call these “societies with markets”, noting that these pre-capitalist markets were often peripheral.
iv) Capitalism, on the other hand, is a “market society”. The market relationship spreads to transform society with 3 peculiar markets (labour/land/money), featuring “fictitious commodities” (since humans/nature/purchasing power are not produced with a direct cost of production just to be sold/bought on markets).
v) During the Enclosures, serfs were dispossessed of land (creating the land market) and required to sell their labour (creating the labour market). Land/labour fed into capitalism’s “Great Reversal”: in prior social systems, production came first, followed by distribution and (limited) finance. Under capitalism, finance (debt to raise the capital investment needed) comes first, followed by production and distribution. (For the past few steps, see Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails).
vi) Curiously, despite the creation of “fictitious commodities”, it was “real commodities” that boomed in the rise of Industrial capitalism. To sell their “real commodities” at competitive prices while still retaining profits, Industrial capitalists must be ruthless in cutting their cost of production, especially their “fictitious commodities” costs: labour (wages)/land (rent)/money (debt).
vii) Industrial capitalism’s mutations with prior forms of finance (“usurer’s capital”) and trade (“merchant’s capital”) are fascinating. Classical (liberal) political economy (i.e. Adam Smith/David Ricardo etc.) saw the emerging capitalism as progressive in contrast to stagnant feudal rent-seeking (extracted after production).
…Industrial capitalist profit-seeking competition led to productivity increases from cutting the cost of production; after lobbying to suppress the price of land (a cost on production!)/labour, competing capitalists have to seek further advantages by changing their production process (“Constant revolutionising of production”: The Communist Manifesto), starting with increased division of labour (Adam Smith’s focus) and leading to factory mechanization (Marx’s focus).
viii) We should note that this “progressive” capitalism framing by Classical political economy is somewhat shared by Marx (while focusing on capitalism’s contradictions and the need to transcend these; Marxists of course debate on how much capitalist productivity development is needed and when/how the transition to socialism/communism should take place).
…However, some radicals (ex. Silva Federici) critique the framing of the origins of capitalism as a linear progress from feudalism to capitalism; they emphasize that peasants were already pushing back serfdom (assisted by labour shortages from the Black Death 1346-1353 increasing labour’s bargaining power), leading to what Marx himself called the “golden age of the European proletariat” (1350-1500). Thus, capitalism’s rise (i.e. the Enclosures privatizing land and forcing labour markets: 1500-1800) is framed as a reactionary backlash to regain elite power.
2) Industrial Profits vs. Feudal Rents:
--The book directly begins here:
i) Classical political economy actually recognized the contradiction of land as a “fictitious commodity”. Land is (mostly) fixed, especially compared to “real commodities” (produced by labour) which are easily replicated (despite patent monopolies) and depreciate in value from wear and obsolescence from innovations.
…So, there were already concerns of land’s rising market value leading to “economic rent” (“unearned income”) squeezing productive investments/wages, where a falling rate of profit would threaten capitalism. The author is also channeling today’s Michael Hudson here: Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy
…Land’s increasing value is not driven by the landlord’s improvements to the land itself (which has minimal cost of production); the cliché “location, location, location” is clear: land value is driven by the productivity of the rest of the surrounding society producing a valuable location (ex. social investments in public transportation/schools/hospitals/parks/regulation of pollution, job opportunities/commercial areas, social organizing creating vibrant communities, etc.). Land value’s economic rent captures all this as windfall gains (unearned income); so, Classical reformers wanted society to tax this back, and they viewed landlords (i.e. feudalism) as parasites.
ii) If we skip ahead, pass the First Industrial Revolution (1760-1840), the Second Industrial Revolution (1870-1914) where capitalist expansion’s imperialist rivalries led to WWI, the Great Depression, and WWII… the 2 decades (1950-1970) of the post-WWII boom (“Golden Age of Capitalism”) saw the greatest capitalist expansion; today’s pro-capitalists worshipping capitalism’s mass consumerism are really starting here, rebuilding after 2 industrial world wars, in contrast to our 1500 “Enclosures” origins.
iii) After the Great Depression, FDR/the New Dealers were able to leverage enough power to put Finance in check (“financial repression”), and this carried over during the post-WWII (industrial) boom where US war production switched to mass consumerism (of “real commodities”). Thus, mortgages were for “use-value” (i.e. the social need of housing people) and (initially) restricted from financial markets fetishizing “exchange-value” (i.e. speculative financial assets; one-dollar-one-vote thus dominated by the rich).
iv) Home ownership was expanded through government subsidies on mortgages (de-risking for banks and homeowners), esp. in the US where the (“white”) “middle class” suburbia was constructed: The Color of Law: A Forgotten History of How Our Government Segregated America. Outside the US, other tenures (renting/social housing/co-ops) were also expanded. Transportation development also “expanded” land locations, helping to dampen land prices.
See the comments below for the rest of the review (the focus of the book)…
Preamble:
--I’ll take this opportunity to unpack “FIRE” (Finance, Insurance, Real Estate).
--This 140-page gem summarizes what you would otherwise slog through in a 1,000-page textbook:
i) Accessibility:
--There are moments of real clarity, which is a must for a topic designed for abstraction (the real-world Matrix):
Bahram smiled to himself as he listened: the arguments were marvellously simple yet irrefutable. Really, there was no language like English for turning lies into legalisms. [River of Smoke]--However, there are still some messy details; formatting these into separate sections (like case study examples/further readings) would help, although it would then start to resemble a textbook…
ii) Structure:
--Some key frameworks are mentioned. I want to emphasize a deeper structural argument, so I’ve added to and rearranged the story, step-by-step…
Highlights:
1) Rise of Capitalism: “Real” and “Fictitious” Commodities:
--There are a variety of critical lenses/debates we can use to examine the origins of capitalism; here’s the critical framework I currently start with (not detailed in the book):
i) Markets are a social relationship where commodities are exchanged between sellers and buyers, usually in the form of a “spot trade” (i.e. instantaneous exchange, thus effectively between strangers, as opposed to deferred payments or sharing).
…This asocial relationship tends to originate in the peripheries where different groups come into contact as strangers, since long-term neighbors tend to require more social relationships (with all its baggage, from cooperative gift-exchanges and commons to hierarchical feudal obligations). See: Debt: The First 5,000 Years
ii) The market’s asocial relationship also means seeking exchange-value (symbolized by the market price) rather than the direct use-value (social needs and desires). Money reaches new heights as it becomes exchangeable for more and more things, becoming an end in itself rather than just a means.
iii) Markets for “real commodities” (objects produced by labour, with a direct cost of production) have long existed prior to “capitalism”. We can call these “societies with markets”, noting that these pre-capitalist markets were often peripheral.
iv) Capitalism, on the other hand, is a “market society”. The market relationship spreads to transform society with 3 peculiar markets (labour/land/money), featuring “fictitious commodities” (since humans/nature/purchasing power are not produced with a direct cost of production just to be sold/bought on markets).
v) During the Enclosures, serfs were dispossessed of land (creating the land market) and required to sell their labour (creating the labour market). Land/labour fed into capitalism’s “Great Reversal”: in prior social systems, production came first, followed by distribution and (limited) finance. Under capitalism, finance (debt to raise the capital investment needed) comes first, followed by production and distribution. (For the past few steps, see Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails).
vi) Curiously, despite the creation of “fictitious commodities”, it was “real commodities” that boomed in the rise of Industrial capitalism. To sell their “real commodities” at competitive prices while still retaining profits, Industrial capitalists must be ruthless in cutting their cost of production, especially their “fictitious commodities” costs: labour (wages)/land (rent)/money (debt).
vii) Industrial capitalism’s mutations with prior forms of finance (“usurer’s capital”) and trade (“merchant’s capital”) are fascinating. Classical (liberal) political economy (i.e. Adam Smith/David Ricardo etc.) saw the emerging capitalism as progressive in contrast to stagnant feudal rent-seeking (extracted after production).
…Industrial capitalist profit-seeking competition led to productivity increases from cutting the cost of production; after lobbying to suppress the price of land (a cost on production!)/labour, competing capitalists have to seek further advantages by changing their production process (“Constant revolutionising of production”: The Communist Manifesto), starting with increased division of labour (Adam Smith’s focus) and leading to factory mechanization (Marx’s focus).
viii) We should note that this “progressive” capitalism framing by Classical political economy is somewhat shared by Marx (while focusing on capitalism’s contradictions and the need to transcend these; Marxists of course debate on how much capitalist productivity development is needed and when/how the transition to socialism/communism should take place).
…However, some radicals (ex. Silva Federici) critique the framing of the origins of capitalism as a linear progress from feudalism to capitalism; they emphasize that peasants were already pushing back serfdom (assisted by labour shortages from the Black Death 1346-1353 increasing labour’s bargaining power), leading to what Marx himself called the “golden age of the European proletariat” (1350-1500). Thus, capitalism’s rise (i.e. the Enclosures privatizing land and forcing labour markets: 1500-1800) is framed as a reactionary backlash to regain elite power.
2) Industrial Profits vs. Feudal Rents:
--The book directly begins here:
i) Classical political economy actually recognized the contradiction of land as a “fictitious commodity”. Land is (mostly) fixed, especially compared to “real commodities” (produced by labour) which are easily replicated (despite patent monopolies) and depreciate in value from wear and obsolescence from innovations.
…So, there were already concerns of land’s rising market value leading to “economic rent” (“unearned income”) squeezing productive investments/wages, where a falling rate of profit would threaten capitalism. The author is also channeling today’s Michael Hudson here: Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy
…Land’s increasing value is not driven by the landlord’s improvements to the land itself (which has minimal cost of production); the cliché “location, location, location” is clear: land value is driven by the productivity of the rest of the surrounding society producing a valuable location (ex. social investments in public transportation/schools/hospitals/parks/regulation of pollution, job opportunities/commercial areas, social organizing creating vibrant communities, etc.). Land value’s economic rent captures all this as windfall gains (unearned income); so, Classical reformers wanted society to tax this back, and they viewed landlords (i.e. feudalism) as parasites.
ii) If we skip ahead, pass the First Industrial Revolution (1760-1840), the Second Industrial Revolution (1870-1914) where capitalist expansion’s imperialist rivalries led to WWI, the Great Depression, and WWII… the 2 decades (1950-1970) of the post-WWII boom (“Golden Age of Capitalism”) saw the greatest capitalist expansion; today’s pro-capitalists worshipping capitalism’s mass consumerism are really starting here, rebuilding after 2 industrial world wars, in contrast to our 1500 “Enclosures” origins.
iii) After the Great Depression, FDR/the New Dealers were able to leverage enough power to put Finance in check (“financial repression”), and this carried over during the post-WWII (industrial) boom where US war production switched to mass consumerism (of “real commodities”). Thus, mortgages were for “use-value” (i.e. the social need of housing people) and (initially) restricted from financial markets fetishizing “exchange-value” (i.e. speculative financial assets; one-dollar-one-vote thus dominated by the rich).
iv) Home ownership was expanded through government subsidies on mortgages (de-risking for banks and homeowners), esp. in the US where the (“white”) “middle class” suburbia was constructed: The Color of Law: A Forgotten History of How Our Government Segregated America. Outside the US, other tenures (renting/social housing/co-ops) were also expanded. Transportation development also “expanded” land locations, helping to dampen land prices.
See the comments below for the rest of the review (the focus of the book)…
March 24, 2023
簡潔地解釋土地、銀行借貸、經濟政策點樣導致「買唔起樓」嘅問題，到尾段更提出重新定義「房屋」，重新制定税制同經濟發展模式，以達至 affordable housing 嘅願景。雖然個人仍然認為自置居對個人嚟講仍有好多作者未論及嘅重要性，好難用宏觀論述説服人以租屋代替買樓，但作者嘅重點並非在於個人，而係在於整體點改變現時畸形嘅房屋市場發展。
有啲關於經濟學嘅部分好難明，所以唔算睇得明曬成本書，而且關於「香港鐵路」為成功例子嘅部分（書末）有少少異議，但整體嚟講算係 open a new perspective on how to view housing, land and banking.
［書摘］
xxiii
事實上，一個城市能夠發展出一套針對房屋問題的金融經濟論述，其實需要各種深入全面的公開房屋數據作前提。不單只是一些諸如房屋落成量、各項印花稅稅收等最基本的數據，而是能夠進一步提供各種專題性的、具歷史維度的、能捕捉新社會趨勢的關鍵數字，才能如書中這般扼要地以數字趨勢點出問題核心。
譬如，書中提及，有些國家會進一步調查外資持有物業的房屋數據。這些持產資料在香港相當欠奉(政府甚至正在收緊相關查册），並沒有完整的數據可以揭示香港住宅物業持有者擁有多少物業、持有的名義為何、多少是外資持有等，以致在房屋問題的討論裡遮蔽了「資產集中化」及「外資爭樓」的潛在問題，更遑論在此基礎上發展出公眾論述及政策改變。這其實都源自於數據基礎開源的問題。
我們並非完全沒有以上數據，問題是官方會否主動對外開放。香港私人房屋的空置狀況，除了現時差估署（編按：差銷物業估價署）的抽樣估算，住宅用水量的官方數字會是個更準確而全面的參考。然而政府多年以「沒有備存數字」為由，拒絕公開各區的極低用水量單位總數，令這些住宅空置狀況長期隱沒於公眾的視界之外，亦導致相關房屋空置政策無法落地生根。此可以看出，開放數據——公共論速——政策改變的紐帶關係，也能說明為何香港難以發展一套深層次的論述對待深層次的房屋問題。
15
古典經濟學家們認識到土地具有數個特徵，使之區别於其他生產因素——資本（機器、工具、電腦）和勞動力（體力、知識、技能）。尤其是，土地天生就是固定、稀缺與不可再生的——你無法移動或創造更多土地。
特定用途土地的固定供應量，意味着它無法輕易地融入標準的經濟學理論——此理論假定藉由自由市場的價格機制，商品供應會有效率地配合需求。舉一個簡單的例子：如果手提電話的需求增加，製造商就會提高手提電話的產量，成本由製造商承擔，直至達到供需均衡，供足應求，市場「出清」(clear）。公司固然可以簡單地提高電話價格，但是，假如市場充滿競爭的話，此舉會增加消費者另選其它牌子電話的風險。市場競爭催生了數量與價格之間的有效協調。
然而，土地不能像手提電話那樣增加產量。土地需求上升，只會引起價格上漲，而不會引起供應反應。其他條件不變的情況下，土地需求提升只會使價格上升，供應數量不會因而提升。
結果，誰擁有需求不斷上升的土地，就等於站在經濟學上獨特的位置。持有如此稀缺的資源，就能賺得不勞而獲的額外收人——古典經濟學家將之稱為「經濟租」（economic rent ）。土地擁有者可以在其他經濟主體(economic agents ）開發土地時，例如建立完善的交通運輸、好學校或餐廳，收取使用土地的費用，由此獲利。
即便尚有大量「空置」土地未被用作經濟用途，亦無礙擁有者從土地榨取經濟租——因為經濟生產力較高的地區，例如市中心，土地相對地稀缺。每一個地區或多或少都是獨特的，因此不論掌握哪一片土地，其本質就是壟斷，一如史密斯在《國富論》（The Wealth of Nations ）所言。由是者，地主可從不得不使用其士地的人身上贏得不相稱的回報。
古典經濟學家與後來的社會運動者如佐治 (Henry George）。亦愛慮地主抽取經濟租的能力會危害經齊發展。經濟增長時，土地擁有者可以向非擁有者收取更高的租金，没取租戶（例如工人、店員和企業家）創造的所有頟外收益。因着租金上漲，可以用於生產的資本投資和薪酬之盈利比例變得非常小，最終引致經濟不景、不平等和失業率飆升。換言之，經濟租會「排擠」 (crowd out）生產性投資與所得。
20
事實上，土地與資本根本是不同的現象。拒絕認清這一點，由此發展的理論肯定會誤入歧途。土地是固定的，不能被生產或再生產，不會被「用完」，亦不會折舊。資本物品（captial goods）由人類生產，可輕易地複製；它隨時間會有物理損耗，亦會因科技創新（想想電腦和手機）而貶值。在任何一套國家帳目都能發現數量相當的負值，詳述物質資本庫存的「折舊」(depreciation）。
雖然土地價值會伴隨或導致經濟與金融週期改變，但長期而言，土地通常會升值 (appreciate），而非像資本般貶值。這是思考相關問題時不容忽視的一點。當人口、經濟發展與資本存量(capital stock）增加，土地數量依然是固定的。結果就是土地價值（俗稱「地租」〔ground rent 〕)必然上升——除非有勢均力敵的非市場干預 (non-market intervention ）介入。
房屋與地段亦與其他形式的資本不同，它們同時提供了兩種不同的功用。 房屋既是提供大量設施服務（庇護、鄰近工作與文化福利設施、組織家庭的基地）的消費品，同時又是金融資產和價值貯存。的確，在迄今為止的先進經濟體中，住屋是公民持有的最大單一財產。在特定情形下，這兩種功能能夠相互補足。然而，如果樓價和地價升幅超過收入，金融資產的功能便會支配房屋需求，令樓價和地價投機化。房屋因此對許多人口而言不再是消費品。
125
大體而言，指私人自置居作為主要佔有權方式的經濟��擁有較高生產力或效率，這種說法是站不住腳的。不少實證硏究發現，在特定的區域或國家，自置居增加與失業率上升有正面關係。自置居水平高漲的國家，流動人口通常較少，這既削弱勞動分工的效率，還加劇了窒礙經濟發展的避鄰主義（NIMBYism，Not In My Backyard）。
寬鬆的房貸或能帶來短期消費刺激，伹終將使經濟更見脆弱，導致財富更為不均。房屋政策應該對佔有權保持中立，由政府提供津貼或收取稅金。亦應該藉由長租期保障、限制加租和加強租客權益等措施，設法保障私人租賃。政府應着手增加非市場房屋儲備，包括社會租金房屋、社區主導計劃和各種合作方案，確保不同類型與尺寸的房屋都有不同類型的佔有權方式，並且令房屋供應滅少依賴波幅不定的土地與家宅市場。
最後，提供適切的投資他選和穩健的退休保障，以滅少住戶傾向依賴房屋市場投資獲取退休養老金。當人們不再擔憂永不能獲得一所安全、負擔得起的家宅——或錯失良機增值量財富，他們就不會熱衷於將自己所有收入、甚至不惜借貸，押注在房屋之上。
有啲關於經濟學嘅部分好難明，所以唔算睇得明曬成本書，而且關於「香港鐵路」為成功例子嘅部分（書末）有少少異議，但整體嚟講算係 open a new perspective on how to view housing, land and banking.
［書摘］
xxiii
事實上，一個城市能夠發展出一套針對房屋問題的金融經濟論述，其實需要各種深入全面的公開房屋數據作前提。不單只是一些諸如房屋落成量、各項印花稅稅收等最基本的數據，而是能夠進一步提供各種專題性的、具歷史維度的、能捕捉新社會趨勢的關鍵數字，才能如書中這般扼要地以數字趨勢點出問題核心。
譬如，書中提及，有些國家會進一步調查外資持有物業的房屋數據。這些持產資料在香港相當欠奉(政府甚至正在收緊相關查册），並沒有完整的數據可以揭示香港住宅物業持有者擁有多少物業、持有的名義為何、多少是外資持有等，以致在房屋問題的討論裡遮蔽了「資產集中化」及「外資爭樓」的潛在問題，更遑論在此基礎上發展出公眾論述及政策改變。這其實都源自於數據基礎開源的問題。
我們並非完全沒有以上數據，問題是官方會否主動對外開放。香港私人房屋的空置狀況，除了現時差估署（編按：差銷物業估價署）的抽樣估算，住宅用水量的官方數字會是個更準確而全面的參考。然而政府多年以「沒有備存數字」為由，拒絕公開各區的極低用水量單位總數，令這些住宅空置狀況長期隱沒於公眾的視界之外，亦導致相關房屋空置政策無法落地生根。此可以看出，開放數據——公共論速——政策改變的紐帶關係，也能說明為何香港難以發展一套深層次的論述對待深層次的房屋問題。
15
古典經濟學家們認識到土地具有數個特徵，使之區别於其他生產因素——資本（機器、工具、電腦）和勞動力（體力、知識、技能）。尤其是，土地天生就是固定、稀缺與不可再生的——你無法移動或創造更多土地。
特定用途土地的固定供應量，意味着它無法輕易地融入標準的經濟學理論——此理論假定藉由自由市場的價格機制，商品供應會有效率地配合需求。舉一個簡單的例子：如果手提電話的需求增加，製造商就會提高手提電話的產量，成本由製造商承擔，直至達到供需均衡，供足應求，市場「出清」(clear）。公司固然可以簡單地提高電話價格，但是，假如市場充滿競爭的話，此舉會增加消費者另選其它牌子電話的風險。市場競爭催生了數量與價格之間的有效協調。
然而，土地不能像手提電話那樣增加產量。土地需求上升，只會引起價格上漲，而不會引起供應反應。其他條件不變的情況下，土地需求提升只會使價格上升，供應數量不會因而提升。
結果，誰擁有需求不斷上升的土地，就等於站在經濟學上獨特的位置。持有如此稀缺的資源，就能賺得不勞而獲的額外收人——古典經濟學家將之稱為「經濟租」（economic rent ）。土地擁有者可以在其他經濟主體(economic agents ）開發土地時，例如建立完善的交通運輸、好學校或餐廳，收取使用土地的費用，由此獲利。
即便尚有大量「空置」土地未被用作經濟用途，亦無礙擁有者從土地榨取經濟租——因為經濟生產力較高的地區，例如市中心，土地相對地稀缺。每一個地區或多或少都是獨特的，因此不論掌握哪一片土地，其本質就是壟斷，一如史密斯在《國富論》（The Wealth of Nations ）所言。由是者，地主可從不得不使用其士地的人身上贏得不相稱的回報。
古典經濟學家與後來的社會運動者如佐治 (Henry George）。亦愛慮地主抽取經濟租的能力會危害經齊發展。經濟增長時，土地擁有者可以向非擁有者收取更高的租金，没取租戶（例如工人、店員和企業家）創造的所有頟外收益。因着租金上漲，可以用於生產的資本投資和薪酬之盈利比例變得非常小，最終引致經濟不景、不平等和失業率飆升。換言之，經濟租會「排擠」 (crowd out）生產性投資與所得。
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事實上，土地與資本根本是不同的現象。拒絕認清這一點，由此發展的理論肯定會誤入歧途。土地是固定的，不能被生產或再生產，不會被「用完」，亦不會折舊。資本物品（captial goods）由人類生產，可輕易地複製；它隨時間會有物理損耗，亦會因科技創新（想想電腦和手機）而貶值。在任何一套國家帳目都能發現數量相當的負值，詳述物質資本庫存的「折舊」(depreciation）。
雖然土地價值會伴隨或導致經濟與金融週期改變，但長期而言，土地通常會升值 (appreciate），而非像資本般貶值。這是思考相關問題時不容忽視的一點。當人口、經濟發展與資本存量(capital stock）增加，土地數量依然是固定的。結果就是土地價值（俗稱「地租」〔ground rent 〕)必然上升——除非有勢均力敵的非市場干預 (non-market intervention ）介入。
房屋與地段亦與其他形式的資本不同，它們同時提供了兩種不同的功用。 房屋既是提供大量設施服務（庇護、鄰近工作與文化福利設施、組織家庭的基地）的消費品，同時又是金融資產和價值貯存。的確，在迄今為止的先進經濟體中，住屋是公民持有的最大單一財產。在特定情形下，這兩種功能能夠相互補足。然而，如果樓價和地價升幅超過收入，金融資產的功能便會支配房屋需求，令樓價和地價投機化。房屋因此對許多人口而言不再是消費品。
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大體而言，指私人自置居作為主要佔有權方式的經濟��擁有較高生產力或效率，這種說法是站不住腳的。不少實證硏究發現，在特定的區域或國家，自置居增加與失業率上升有正面關係。自置居水平高漲的國家，流動人口通常較少，這既削弱勞動分工的效率，還加劇了窒礙經濟發展的避鄰主義（NIMBYism，Not In My Backyard）。
寬鬆的房貸或能帶來短期消費刺激，伹終將使經濟更見脆弱，導致財富更為不均。房屋政策應該對佔有權保持中立，由政府提供津貼或收取稅金。亦應該藉由長租期保障、限制加租和加強租客權益等措施，設法保障私人租賃。政府應着手增加非市場房屋儲備，包括社會租金房屋、社區主導計劃和各種合作方案，確保不同類型與尺寸的房屋都有不同類型的佔有權方式，並且令房屋供應滅少依賴波幅不定的土地與家宅市場。
最後，提供適切的投資他選和穩健的退休保障，以滅少住戶傾向依賴房屋市場投資獲取退休養老金。當人們不再擔憂永不能獲得一所安全、負擔得起的家宅——或錯失良機增值量財富，他們就不會熱衷於將自己所有收入、甚至不惜借貸，押注在房屋之上。
October 6, 2019
VIB: very important book. Lots of wisdom and lots of sense. It's not only about the subject on the title, powerful as it is; its also about the current predicament of the financial system that took hold in the West.
"Land and money are two of the most neglected concepts in economic theory."
"Land is immobile, irreproducible and appreciates in value over time due to collective investment – none of these features apply to capital goods. Yet modern economics and national accounts treat them as one and the same. Banks create new money and credit when they lend and their lending decisions can support production and economic growth – or pump up land and house prices. A lightly regulated, profit-orientated banking system will naturally drift towards mortgage credit and away from business lending. This dynamic needs to be viewed as an iron-law, not some short-term aspect of the ‘business cycle’. A ‘free market’ in land and credit will not optimize social welfare: it will lead to increasing economic rents, unaffordability, inequality, debt and, ultimately, financial crisis."
"Banking systems in modern capitalist economies no longer engage in the activity our textbooks say they do. They have become primarily real estate lenders, creating credit and money that flows into an existing and fixed supply of land. This pushes up house prices, creating ever more demand for mortgage credit and higher profits for banks."
This is actually so good, it's mandatory.
Food for thought: "In Singapore, for example, a densely populated city-state island of 3.9 million residents, 90% of the land is owned by the state."
"Land and money are two of the most neglected concepts in economic theory."
"Land is immobile, irreproducible and appreciates in value over time due to collective investment – none of these features apply to capital goods. Yet modern economics and national accounts treat them as one and the same. Banks create new money and credit when they lend and their lending decisions can support production and economic growth – or pump up land and house prices. A lightly regulated, profit-orientated banking system will naturally drift towards mortgage credit and away from business lending. This dynamic needs to be viewed as an iron-law, not some short-term aspect of the ‘business cycle’. A ‘free market’ in land and credit will not optimize social welfare: it will lead to increasing economic rents, unaffordability, inequality, debt and, ultimately, financial crisis."
"Banking systems in modern capitalist economies no longer engage in the activity our textbooks say they do. They have become primarily real estate lenders, creating credit and money that flows into an existing and fixed supply of land. This pushes up house prices, creating ever more demand for mortgage credit and higher profits for banks."
This is actually so good, it's mandatory.
Food for thought: "In Singapore, for example, a densely populated city-state island of 3.9 million residents, 90% of the land is owned by the state."
October 12, 2022
Great and compact book that provides an incisive look into the real reasons for home prices rising far and above what is reasonable, written in 2018 and all the more applicable today. The book goes over the oft-forgotten differences between land and capital, the historical ways in which land was governed and treated, and how reforms in the 70s and 80s along with globalization opened up the doors for speculation in land and real estate in much of the Anglo-Saxon world. Looking at countries like Singapore, Germany, and Taiwan, where home prices relative to income have stayed relatively stable for the last few decades, can provide important lessons in how banks and lending are regulated, the role of the state in guiding investments, and getting away from the culture of home ownership as a main driver of wealth creation. For those not watching the news, it is reiterated that few lessons were learned in the GFC and the conditions that led to it remain ever present. Super informative and a strongly recommended read!
December 11, 2019
“However fast you can build, banks can create new credit faster.”
July 15, 2025
This is a short book but a dense and important one. Here, Ryan-Collins takes an in depth look at home price dynamics and attempts to find an explanation for rising home prices.
By looking at the history of home prices in advanced economies, Ryan-Collins is able to determine the relations between speculative finance, government policy, and home costs. I believe that this book is a must read for the topic of house prices. While the catchy title might make the book seem like a fun and simple read, the reality is that this is a complex book.
The topic discussed is multifaceted and this is reflected in the writing which does require some basic knowledge of micro and macro economics to be able to get the most out of the book. The author makes it very clear how mortgage lending and the rise of complex financial securities led to the housing bubble and subsequent economic crisis in 2008. He also warns that many countries have not learned from the mistakes of the past.
I would like to see an updated version of this book (perhaps as a new introduction or postscript) to discuss the recent developments of the pandemic. Home prices have gotten even higher than before yet there has been no collapse (yet). Will the rise of work-from-home employment be the saviour of the economy or will it be insufficient, leading us into another crash once people start defaulting on their loans? Only time will tell. 4/5
By looking at the history of home prices in advanced economies, Ryan-Collins is able to determine the relations between speculative finance, government policy, and home costs. I believe that this book is a must read for the topic of house prices. While the catchy title might make the book seem like a fun and simple read, the reality is that this is a complex book.
The topic discussed is multifaceted and this is reflected in the writing which does require some basic knowledge of micro and macro economics to be able to get the most out of the book. The author makes it very clear how mortgage lending and the rise of complex financial securities led to the housing bubble and subsequent economic crisis in 2008. He also warns that many countries have not learned from the mistakes of the past.
I would like to see an updated version of this book (perhaps as a new introduction or postscript) to discuss the recent developments of the pandemic. Home prices have gotten even higher than before yet there has been no collapse (yet). Will the rise of work-from-home employment be the saviour of the economy or will it be insufficient, leading us into another crash once people start defaulting on their loans? Only time will tell. 4/5
December 22, 2024
This is the topic of our times: Why can't you afford a home!? Here, economist Josh Ryan-Collins discusses the mortgage credit – house price inflation feedback cycle.
Instead of lending to businesses, which increases innovation and productivity, banks prefer the risk-free (they'll take your home if you default on payments) prospect of mortgage loans. Banks *create* money to lend to wannabe homeowners to buy *existing* irreproducible assets (land, which appreciates in value, rather than the deteriorating structures built upon the land). This access to finance provided by banks pushes up house prices, which in turn creates demand for more finance.
Land is a fixed commodity. No more of it can be created. Any demand for more land purely pushes up the price of land.
Politicians need to be brave. They need to break through the status quo. Stop taxing workers' income and sales. Instead tax the unearned increase in land value. If land were taxed, people would be less inclined to see it as an asset or a pension. Land is a right. We need it to live on.
Instead of lending to businesses, which increases innovation and productivity, banks prefer the risk-free (they'll take your home if you default on payments) prospect of mortgage loans. Banks *create* money to lend to wannabe homeowners to buy *existing* irreproducible assets (land, which appreciates in value, rather than the deteriorating structures built upon the land). This access to finance provided by banks pushes up house prices, which in turn creates demand for more finance.
Land is a fixed commodity. No more of it can be created. Any demand for more land purely pushes up the price of land.
Politicians need to be brave. They need to break through the status quo. Stop taxing workers' income and sales. Instead tax the unearned increase in land value. If land were taxed, people would be less inclined to see it as an asset or a pension. Land is a right. We need it to live on.
October 12, 2021
Excellent. Best of the best.
Author summarises that mortgage credit is the direct cause of inflated house prices, leading to a positive feedback cycle. People focused on not enough suppy or houses being built, but infact it is the continuous demand fueled by mortgage credit that is the root of the problem. The author outlines that the banking system has failed to do what it was traditional supposed to do which is to lend to businesses and for business investment. Therefore banks should lend more to business which increases productivity and production, rather than lending to fuel the property market. Solutions to this problem are recommend at the end.
Author summarises that mortgage credit is the direct cause of inflated house prices, leading to a positive feedback cycle. People focused on not enough suppy or houses being built, but infact it is the continuous demand fueled by mortgage credit that is the root of the problem. The author outlines that the banking system has failed to do what it was traditional supposed to do which is to lend to businesses and for business investment. Therefore banks should lend more to business which increases productivity and production, rather than lending to fuel the property market. Solutions to this problem are recommend at the end.
January 20, 2022
Een boek dat gaat voor het volledige kader in waarom wonen wereldwijd zo duur is geworden. Prof. Ryan-Collins (econoom) legt op een heel goede manier uit waarom "klassieke" kapitalistische antwoorden alleen het niet zullen halen. Met "bouwen bouwen bouwen" alleen komen we er niet "How ever fast you can build, bank can create credit faster". Een must read voor iedereen geïnteresseerd in het thema.
April 2, 2022
Finished in a day with YouTube’s help.
Indeed the unlimited printing of money does not equate to land. Yet financial power are so tightly bounded to our lives. There is a need that Singapore model to be applied across new cities, but I have no idea how exactly modern cities can protect the vested interests while help the young.
Indeed the unlimited printing of money does not equate to land. Yet financial power are so tightly bounded to our lives. There is a need that Singapore model to be applied across new cities, but I have no idea how exactly modern cities can protect the vested interests while help the young.
May 22, 2023
Josh Ryan-Collins指出樓價居高不下的本質是：商業銀行過度放貸，刺激信貸需求、推高樓價，進入正反饋循環；而不是供給短缺。正所謂「無論建屋速度多快，銀行總能以更快的速度創造新信貸」。這麼說來，按揭信貸的增長限制了非按揭信貸發放，企業的生產力被削弱、薪酬福利降低，所以普通人也沒有必要努力工作了，工資的增長速度比不上資本積累，再加上不少比例的個人所得稅，誰還去創造社會價值呢？如此騎虎難下該如何剎車？（Btw，對經濟學歷史理論的綜述的姿態有些高傲，一股腦地拋出一大堆專業名詞）
January 2, 2020
Disgusting. Extremely impenetrable language. Was unable to understand a thing.
June 26, 2020
This books is somewhat an historical review of the financial processes that lead to the current real estate prices and therefore the difficulty of sustainabily afford those amounts.
January 3, 2021
A short but must read book for everyone including economists & politicians.
January 4, 2021
Interesting and informative hypothesis, a short read but there were a number of mistakes (typos and a mis-stated fact) in this edition
October 9, 2021
Accessible, interesting, and actually helpful in trying to understand housing today.
April 29, 2022
Well documented
February 17, 2021
Brief and basically correct but with a strong socialist bent. Some good data and anecdotes, weak on solutions.
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