Another valuable life lesson from Elmo and friends!
Another valuable life lesson from Elmo and friends!
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I mean, this is how businesses work in general. If you don't buy their products/services, then they wouldn't be able to continue providing them.
I understand that we're trying to draw attention to exploitative landlords, but if anyone can afford to keep their property regardless of whether or not you pay rent, it's the exploitative ones.
The problem is that landlords don't create value, they seek to endlessly profit off of one time labor. Rent-seeking creates no real Value of any substance.
Nor does investing in silver, or day trading, or charging interest, or option calls. yet this is how capitalism works. We do not live in a society where value is limited to tangible goods produced.
We're using Value a bit diffetently here, Value isn't necessarily equal to price.
Actually we're using it quite the same as I wasn't referring to price either.
That's the naivete of the Internet talking. Of course landlords create value; they do so in exactly the same way lenders create value: they absorb risk by amortizing upfront costs and charge a premium to do so.
If you didn't agree that it's an ethical way to participate in the economy, say that. Don't try to pass off a moral judgment as an objective truth.
There's no Value created by risk, that's an ad-hoc justification for profiting endlessly off of labor performed one time long ago.
Houses are not "one time labor.". Housing requires constant scheduled maintenance and upkeep over time.
Not to mention the financing required to pay for it all,which is normally spread over 30 years.
Building a house is one time. Maintenance creates Value, yes, but one only needs to compare the cost of maintaining a house with the cost of renting it to see that the vast majority of profits come from rent-seeking. It's non-productive extraction.
car and house Insurance both provide value by reducing the capital investment required to continue having an item, landlords reduce the upfront cost of housing by charging a continuous fee instead of a lump sum.
Insurance is perhaps the peak of Financial Capital masquerading as Value.
what about banks?
Same problem, arguably far worse. Consider reading Imperialism, the Highest Stage of Capitalism. Banks play a huge part in the dominance of Financial Capital.
Rent seeking does create value: it provides a place to live. That is tangible value. There is no “one time labor” in this equation. The landlord continually pays taxes, insurance, maintenance, and other regular outgoings regardless of whether he bought the house outright or not.
The tenants literally pay the taxes, insurance and maintenance in their rent payment. When any of these inflates, so does the rent unless there are protections in place.
So being a landlord means someone else pays the mortgage for your unit.
The only thing that could be seen as a service are short term rental, and even then, it was abused to death by the AirBnB/VRBO and any other short term rental service.
Rent seeking is the most capitalistic thing someone can do : you use your money to get someone else to pay your rent. You do the minimal maintenance that you can get away with, and when you actually do real maintenance, your tenants get a rent hike.
If there weren't any landlord, there would still be housing. But a lot more people would own the place they live in, at a reasonable price, instead of housing being used as an investment vehicule.
the most capitalistic thing someone can do: you use your money to get someone else to pay [you]. You [lower your overheads as much as] you can get away with, and when you actually [maintain or improve your assets], your [customers] get a [cost increase].
Your argument is more aligned to capitalism in general rather than something particular to landlording. Your argument is applicable to leased vehicles and other businesses as well. Your argument incorrectly rests on an assumption that landlords simply raise rent high enough to cover all their overheads, but like any other business, landlords are beholden to market rates. If the rent is too high, then you have a smaller pool of potential tenants and it's less likely they will be long-term tenants. Also, if a landlord has mortgaged a house to rent out, it's unlikely that the rent he can collect would come near to covering the sum of the mortgage, the rental-insurance costs, the property taxes, maintenance, and other services. Property taxes alone can be several month's rent. Whenever someone assumes that mortgaged landlords are skating on rental income, I assume that someone doesn't know the true costs of owning a house.
What's really happening for mortgaged landlords is that they are using your rent to build equity in their investment faster than they could otherwise.
The prevalent anti-landlord sentiment seems mostly to stem from bad experiences, rising rental costs, and the notion that landlords are somehow "getting something for nothing". Only the first two points are fair grievances. If you're going to take it further and propose that the owner of an asset (real estate or otherwise) cannot hire their property out, then you are striking at Capitalism itself. If you then nuance your argument by proposing that housing is a special case, and that housing rentals should not be a thing because we all need houses, then you're obliged to consider other businesses as well. One might consider owning a vehicle essential to life; should we do away with car rentals? After all, you're paying Hertz's overheads. Groceries? We all need to eat right?
That's useful, but not Value. Value isn't as simple as "use."
Get him
Landlords also do repair and maintenance (jokes aside) to maintain the property in good working order / habitability.
At least, they are generally required by law to do so. Your laws may vary.
Landlords also prep the unit for habitation between tenants and handle all of the paperwork for rent and utilities (depending).
Maintaining housing is very expensive, and many people cannot afford to just drop $25,000 to redo a kitchen or reroof a building when it is required.
So landlords are basically the middle manager between your living at the property, and all of the maintenance and financial details. You pay rent to them for that service.
My landlord doesn't do that, they have a property manager that does that stuff. Ive never even seen my landlord. If the landlord does it, then they are not doing landlording, they are being a property manager and landlord, but they don't necessarily have to, and one doesn't require being the other.
That’s disingenuous. The property manager very much is NOT paying $30k for a new roof. The landlord is. The property manager just executes the maintenance plan the landlord is paying for.
The real problem here that these kinds of discussions usually miss is the system of laws that force everyone involved to treat housing as an investment. Housing is a necessity that the government should ensure availability of for all. Some countries get it right, like Germany where the laws pushed so much reasonably priced housing that rent isn’t even painful so tons of people don’t bother buying
They do create value. They provide maintenance free housing as well as short term housing (short term as in 1-3 years.) Not everyone wants to stay in the same location for 5+ years. If you move around alot It you want to rent is usually the better option.
Now sure you could argue they are over charging for that service but that doesn't mean they aren't providing value.
The only reason why we are having issues is because there is a housing shortage that is raising the price and large companies have taken advantage of this by buying up all the houses at the crazy price and renting them out at crazy rent prices eating up the market for actual people to want to buy a house.
Robbing tenants of potential equity is not a service.
They do create value. They provide maintenance free housing as well as short term housing (short term as in 1-3 years.) Not everyone wants to stay in the same location for 5+ years. If you move around alot It you want to rent is usually the better option.
The ability to rent is useful, but the idea that endlessly profiting off of the same property and doing minor maintenance is creating Value is silly. There's no Value being created through simply owning something. Maintenance creates Value, yes, but that does not make up anywhere close to the profit of landlording.
Value is created by the use of something. If someone is living in a house then it is providing value.
As long as the something is useful it can provide value endlessly.
What is "Value?" We are talking about different things here under the same term. You are referring to "Use-Value" as Value itself. A Use-Value being created has a Value, it will provide it's Use-Value until it is consumed fully.
No. It's not large companies. It's a sickness inherent in the system and exactly what this is taking about. The only service being provided is leveraging their own credit to get a mortgage from the bank and then paying that mortgage and taxes with rent. They do that because it will decrease supply and increase value. And that's a parasitic practice done not just by large companies by any means. In my city they even subcontract for maintenance and also pay for that out of the rent. If we're doing this shit, why exactly aren't we just letting the renters own their equity for paying the goddamn mortgage. It's a disgusting system.
They provide maintenance free housing...
Keep in mind this isn't always the case. Landlords where I used to live are increasingly requiring tenants to pay for some maintenance costs. A past landlord had us pay for anything $300 or less.
Where in the world is that? I have never heard of renters paying for maintenance.
In fact, every single rental agreement I signed over 25 years said "contact the landlord if there is a problem" which was backed up by state law.
Idaho, the South of the North. I now live in Washington, where that kind of shit doesn't fly.
This incentivizes the tenant to worsen any problems so the landlord has to pay.
"Free" as it isn't the renters responsibility. If something breaks they call the landlord and say fix it.
Obviously the maintenance cost will be baked into the rent cost, or as an added fee as shown in your example.
We had to fix it or arrange to have it fixed, then the landlord would verify it was fixed to their satisfaction. The landlord was otherwise hands off until it exceeded the cost limit. This was the norm for the area.
Ahh ok, I miss read your comment.
No, you're fine! I didn't specify. I lived with it for so long, it didn't even occur to me to outline the process.
In theory, the value they create is in handling all the home maintenance. Of course, many of them don't do their jobs in practice.
I'd articulate my stance slightly differently, but "handiwork" and even "property management" are real jobs that produce value, but neither of those are "being a landlord", as evidenced by the fact that the more successful and/or lazy landlords hire managers, etc. and let the "passive income" roll in. The fact that they can outsource even the relatively small amount of labor sometimes associated with their occupation and then still profit endlessly shows that they have a very parasitic social position.
Maintenance creates Value, yes, but landlords aren't maintenance services, they extract by far the bulk of the profits off of owning the home itself and renting it.
none of them maintain their properties
If they don’t create value then they wouldn’t exist in a capitalist market. Their value is that they take the liability of homeownership.
Capitalism optimizes for exchange value not use value, also landlordism is a fuedal holdover that hurts capitalism, I would suggest reading the chapters in capital volume 3 on land rent
I agree I think they should probably be taxed accordingly. My comment was more just a face value judgement that they do exist and they are of value because people do rent houses.
I’m also not really sure what a viable alternative is in a free market.
I’m also not really sure what a viable alternative is in a free market.
How is a 30 minute video about the Soviet economy a valid answer to alternatives to landlordism in a capitalist market? At least give me a timestamp where they speak to this point.
The viable alternative is to get rid of the "free"market
lol
That's not Value. "Risk" and "liability" aren't Value. Nothing is being produced here. There is risk, and there is liability, but that in and of itself is not Value. Additionally, the "risk" in being a landlord is miniscule, even if we take the false pretense of risk creating value, the difference between the minor risk and massive, endless profits from the same property forever is nonsense, the landlord continues to profit over and above their initial investment.
What do you think Value is?
I’m not sure how you define value, but I’m using it to mean “the price or amount that someone is willing to pay in the market” this could be for a tangle thing, like the house itself, or a service, like renting it.
My point is that landlords successfully find willing persons to rent their house for some amount of money. Therefore there is by definition value because it’s happening, whether this is ethically OK or being rented for a fair amount is a separate argument.
When I was a university student I didn’t have enough capital to buy an apartment, but I found value in being able to rent one.
I’m not sure how you define value, but I’m using it to mean “the price or amount that someone is willing to pay in the market” this could be for a tangle thing, like the house itself, or a service, like renting it.
That's close to the truth, but not quite. Supply and Demand distort the price around a central Value.
My point is that landlords successfully find willing persons to rent their house for some amount of money. Therefore there is by definition value because it’s happening, whether this is ethically OK or being rented for a fair amount is a separate argument.
Not really, the fact that something is purchased doesn't mean the "risk" or "liability" created the Value behind it.
When I was a university student I didn’t have enough capital to buy an apartment, but I found value in being able to rent one.
You found it useful, ie renting allowed you to fulfill the Use-Value you needed, shelter. You appear to be using Subjective Value "Theory," ie the idea that Value is a hallucination different from person to person, which is of course wrong.
You found it useful, ie renting allowed you to fulfill the Use-Value you needed, shelter. You appear to be using Subjective Value "Theory," ie the idea that Value is a hallucination different from person to person, which is of course wrong
I’m not using value in this way, I literally googled “ value in a market economy” because this is what I meant by value and I cut and pasted the common definition of this usage. There is no hallucination or subjectivity, I’m using value to objectively mean what people are actively paying for. If something exists in the market, and it is being exchanged for something in return, it has “value” by this definition.
You are indeed using SVT, where Value simply means a good is useful. We aren't talking about the same thing.
"Subjective value theory" as opposed to marx's "theory of value" which is sometimes mistakenly referred to as "labor theory of value" actually an earlier development that Marx refined into his own theory
I think we have different definitions of value and I will not pretend to be an economic theorist, this is out of my depth. My argument comes from a very practical perspective of supply and demand. There is obviously demand for renting property otherwise it wouldn’t exist.
I do think that capitalism at large creates an economic barrier and if one is below the barrier it is difficult to build capital and if you’re above the barrier it is easy. Picking on just land-lording is only picking at one instance of some larger systemic issues that capitalism brings with it. This will not change unless the government adds regulations that add “fairness” to pure capitalism.
This will not change unless the government adds regulations that add “fairness” to pure capitalism.
This is an impossible dream. Capitalism demands that the majority of people are perpetually in an underclass (with some shuffling of who specifically is in it). You can't have an entire population of small business owners, most people need to be wage-laborers or some equivalent.
I didn’t say anywhere that regulation will make it work or make it better, I just meant that it will certainly not change without some form of regulation.
I’m also not claiming that capitalism is perfect or even good, all economic theories are idealized, I actually don’t think there is a magical system with a simple set of rules that will actually work. The real world is complicated and messy and has exceptions all over the place.
I think there probably is some mixture of free market and socialist ideas that do work, and most countries work like this today.
It really frustrates me when people talk about "mixing capitalism and socialism." Whatever thing you're talking about is not what socialism is. Socialism is not when the government does stuff. Socialism is not when the government uses taxpayer money to fund social services or welfare. Socialism is the workers controlling the means of production.
Eclecticism doesn't work, it imagines that it can pick out the best of everything, but in reality it ends up either being fundamentally dysfunctional because you can't just decontextualize things from their theoretical framework and have it all work out, or they just end up being one thing with a partial veneer of other things. Almost every country you thought of when you wrote that comment unambiguously has nothing to do with socialism, they're just versions of liberalism that believe in some level of welfare, etc.
I think we have different definitions of value and I will not pretend to be an economic theorist, this is out of my depth. My argument comes from a very practical perspective of supply and demand. There is obviously demand for renting property otherwise it wouldn’t exist.
Supply and Demand are only part of the factor, they orbit around Value. What determines the price of a commodity when Supply and Demand cover each other? The answer is Value.
I do think that capitalism at large creates an economic barrier and if one is below the barrier it is difficult to build capital and if you’re above the barrier it is easy. Picking on just land-lording is only picking at one instance of some larger systemic issues that capitalism brings with it. This will not change unless the government adds regulations that add “fairness” to pure capitalism.
I pick on all of Capitalism, I'm a Communist. Landlording just happens to be the topic at hand. At that matter, regulations and "fairness" will never fix Capitalism, just make its worst aspects more bearable until it collapses under itself.
I pick on all of Capitalism, I'm a Communist. Landlording just happens to be the topic at hand. At that matter, regulations and "fairness" will never fix Capitalism, just make its worst aspects more bearable until it collapses under itself.
Isn’t this an argument that could be applied against communism though? Communism is government regulation to enforce fairness, if it can’t fix capitalism, why would it work in a communist economy?
Your comment reminded me of a quote about the Bolsheviks and the idea of communist "equality"
long quote
The kind of socialism under which everybody would get the same pay, an equal quantity of meat and an equal quantity of bread, would wear the same clothes and receive the same goods in the same quantities — such a socialism is unknown to Marxism.
All that Marxism says is that until classes have been finally abolished and until labor has been transformed from a means of subsistence into the prime want of man, into voluntary labor for society, people will be paid for their labor according to the work performed. “From each according to his ability, to each according to his work.” Such is the Marxist formula of socialism, i.e., the formula of the first stage of communism, the first stage of communist society.
Only at the higher stage of communism, only in its higher phase, will each one, working according to his ability, be recompensed for his work according to his needs. “From each according to his ability, to each according to his needs.”
It is quite clear that people’s needs vary and will continue to vary under socialism. Socialism has never denied that people differ in their tastes, and in the quantity and quality of their needs. Read how Marx criticized Stirner for his leaning towards equalitarianism; read Marx’s criticism of the Gotha Programme of 1875; read the subsequent works of Marx, Engels and Lenin, and you will see how sharply they attack equalitarianism. Equalitarianism owes its origin to the individual peasant type of mentality, the psychology of share and share alike, the psychology of primitive peasant “communism.” Equalitarianism has nothing in common with Marxist socialism. Only people who are unacquainted with Marxism can have the primitive notion that the Russian Bolsheviks want to pool all wealth and then share it out equally. That is the notion of people who have nothing in common with Marxism. That is how such people as the primitive “communists” of the time of Cromwell and the French Revolution pictured communism to themselves. But Marxism and the Russian Bolsheviks have nothing in common with such equalitarian “communists.”
Fantastic quote, great reference.
That's not what Communism is. Communism is the process of working through contradictions (ie the proletariat vs the bourgeoisie) through Historical Development. Socialism is established via Proletarian control of Capital, rather than Bourgeois, not just regulation or "fairness."
Supply and Demand are only part of the factor, they orbit around Value. What determines the price of a commodity when Supply and Demand cover each other? The answer is Value.
Yes and renting of houses pretty uniformly exists under all market conditions I.e. even when supply and demand “cover each other”. So by your definition there must still be some value since it has a place in the market.
The value offered is a service, just like a hotel room. What is an alternative to renting that could enable someone to have a place to live without having the capital to buy property?
The Demand never covers the Supply in the housing market because houses are in limited supply. Renters are held hostage.
The alternative is government-owned and provided housing.
The Demand never covers the Supply in the housing market because houses are in limited supply. Renters are held hostage.
This isn’t true, there are certainly cases where supply outweighs demand and landlords are unable to rent their house. It doesn’t mean that renters could suddenly afford to buy it though.
The alternative is government-owned and provided housing.
I’ve yet to see where a government subsidized housing project ever turns into a desirable place to live. Unless you go full communism across the board where the government literally controls all housing, but this is extreme and pre-supposes that you are in alignment with the ideals and goals of your government. Historically this doesn’t seem to end up serving the common person better than a free market would.
All the top countries ranked by standard of living have some form of capitalist economy with some gov regulation safeguards in place.
Generalizations that are oversimplified to the point of lacking all nuance are probably untrue because there are bound to be exceptions. Instead, try including 'many', 'most', or such as an easy remedy.
Specifically, landlords can create value when they handle property management and maintenance (and the related costs) efficiently. It is wrong that greed has made that so rare.
Generalizations that are oversimplified to the point of lacking all nuance are probably untrue because there are bound to be exceptions. Instead, try including 'many', 'most', or such as an easy remedy.
The act of landlording creates no Value. There isn't a "most" there, because it creates no Value, period.
Specifically, landlords can create value when they handle property management and maintenance (and the related costs) efficiently. It is wrong that greed has made that so rare.
Maintenance workers create Value, yes. Landlords are not creating value, here, the workers are. Landlords often pay management firms as well, cutting out all personal involvement. The minor, administrative labor does create Value, but that is incredibly small in the scope of the money expropriated from the renters.
Greed didn't make this happen, Capitalism did. The Mode of Production naturally led to this, it isn't a case of especially greedy people taking power.
I mean, this is how businesses work in general. If you don’t buy their products/services, then they wouldn’t be able to continue providing them.
Of course people can simply refuse to buy housing and end up on the street, which isn't dangerous or criminalized or anything/s
Additionally the meme is disingenuous. Meant to appeal to emotion. What Elmo and Zoe are conveniently ignoring is that the party who is being provided with housing is the tenant.