Seventeen Contradictions and the End of Capitalism Read Online Free PDF

the social democratic era in Europe and had spillover effects in North America and in selected parts of the developing world. The involvement of the state in housing provision has, obviously, waxed and waned over the years, as has the interest in social housing. But exchange value considerations often creep back in as the fiscal capacities of the state are put to the test by the need to subsidise affordable housing out of shrinking public coffers.
    There have been, then, a variety of ways in which the tension between use values and exchange values in housing production has been managed. But there have also been phases when the system has broken down to produce a crisis of the sort that occurred in the housing markets of the United States, Ireland and Spain in 2007–9. This crisis was not unprecedented. The Savings and Loan Crisis in the USA from 1986 on, the collapse of the Scandinavian property market in 1992 and the end of the Japanese economic boom of the 1980s in the land market crash of 1990 are other examples. 1
    In the private market system that now dominates in much of the capitalist world, there are additional issues that need to be addressed. To begin with, the house is a ‘big ticket item’ that will be consumed over many years and not, like food, be instantaneously used up. Private individuals may not have the money up front to buy the house outright. If I cannot buy it with cash, I have two basic choices. Either I can rent or lease from an intermediary – a landlord – whospecialises in buying speculatively built housing in order to live off the rents. Or I can borrow to buy, either getting loans from friends and relatives or taking out a mortgage with a financial institution. In the case of a mortgage, I have to pay the full exchange value of the house plus the monthly interest over the lifetime of the mortgage. I end up owning the house outright after, say, thirty years. Consequently, the house becomes a form of saving, an asset whose value (or at least that part of the value that I have acquired through my monthly payments) I can cash in at any time. Some of that asset value will have been sucked up by the costs of maintenance (for example, painting) and the need to renew deteriorated items (for example, a roof). But I can still hope to increase the net value I command as time goes on by paying off my mortgage.
    The mortgage finance of a housing purchase is, however, a very peculiar transaction. The total paid out on a $100,000 mortgage over thirty years at 5 per cent is around $195,000, so the mortgagee in effect pays a premium of $95,000 extra in order to acquire an asset valued at $100,000. The transaction hardly makes sense. Why would I do this? The answer, of course, is that I need the use value of the house as somewhere to live and I pay $95,000 to live in the house until I take full ownership. It is the same as paying $95,000 rent to a landlord over thirty years except in this case I ultimately secure the exchange value of the whole house. The house becomes, in effect, a form of saving, a repository of exchange value for me.
    The exchange value of housing is not, however, fixed. It fluctuates over time according to a variety of social conditions and forces. To begin with, it is not independent of the exchange values of surrounding houses. If all the houses around me are deteriorating or people of ‘the wrong sort’ are moving in, then my house value is very likely to fall even though I keep it in tip-top shape. Conversely, ‘improvements’ in the neighbourhood (for example, gentrification) will increase the value of my house even though I myself have invested nothing. The housing market is characterised by what economists call ‘externality’ effects. Homeowners often take action, both individual and collective, to control such externalities. Propose buildinga halfway house for released criminals in a ‘respectable’ neighbourhood of homeowners and see what happens! The result is a lot of