How have we all, generally intelligent people, been conned into thinking it's reasonable to work our asses off for 10 hours a day for several decades in order to transfer all the income that generates to somebody who owns a piece of land and has put some bricks on it. How do we all go along with the idea that it's ok for the society we live in to tolerate the transfer of inordinate wealth from non-landowners to landowners. How can we all have been caught up in this and agreed to go along with it?
Transfer of wealth to landowners - the greatest swindle
- Thread starter roland
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Z
z107
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There are also people in extreme poverty in other countries, while most people in Ireland live in comparative luxury. Born in the right place at the right time. This too is unjust.
DrMoriarty
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You have to go back to history... 
The first man who, having enclosed off a piece of land, formed the idea of saying "This is mine" and found people simple enough to believe him, was the true founder of civil society. What crimes, what wars, what murders, what miseries and horrors might have been spared the human race by someone who, pulling out the stakes or filling in the ditch, had cried out to his fellows, "Do not listen to this imposter. You are lost if you forget that the fruits of the trees belong to everyone and the earth belongs to no one."
"Get off my land or I'll have you horsewhipped, you horrid little man."
The first man who, having enclosed off a piece of land, formed the idea of saying "This is mine" and found people simple enough to believe him, was the true founder of civil society. What crimes, what wars, what murders, what miseries and horrors might have been spared the human race by someone who, pulling out the stakes or filling in the ditch, had cried out to his fellows, "Do not listen to this imposter. You are lost if you forget that the fruits of the trees belong to everyone and the earth belongs to no one."
Jean-Jacques Rousseau, [broken link removed], 1754.
"Get off my land or I'll have you horsewhipped, you horrid little man."
Voltaire, in conversation, 1759.
Do you propose to live in the street? Renting also transfers wealth to landowners.
Markjbloggs
Registered User
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You have to go back to history...
The first man who, having enclosed off a piece of land, formed the idea of saying "This is mine" and found people simple enough to believe him, was the true founder of civil society. What crimes, what wars, what murders, what miseries and horrors might have been spared the human race by someone who, pulling out the stakes or filling in the ditch, had cried out to his fellows, "Do not listen to this imposter. You are lost if you forget that the fruits of the trees belong to everyone and the earth belongs to no one."
Jean-Jacques Rousseau, [broken link removed], 1754.
"Get off my land or I'll have you horsewhipped, you horrid little man."
Voltaire, in conversation, 1759.
Not to mention -
"Gerrorf moi land!!!"
- Farmer Giles, Viz, c 1992.
What about the landowners who actually went out and bought the piece of land. Worked their asses off to pay for it over the years and are now reeping the rewards of this.
There's nothing stopping anyone walking into an auction and bidding on a piece of land be it big or small.
just to point out not every landowner has it handy....
What's the exact problem here? That wealth is transferred at all from non-landowner to landowner, or that an 'inordinate' amount of it is being transferred?
In what circumstance is all the income that has been earned over several decades transferred to a landowner? Is this about having to pay rent?
Sorry to have to ask but I don't understand the point you are trying to make.
The point is not about having to pay something to a landowner. Clearly the use of land, either temporarily (rent) or permanently (purchase) deserves something in return. The point is about the 'inordinate' amount of wealth that is transferred from non-landowner to landowner for the use or ownership of land. It seems crazy to me that most of our useful lives are spent generating income (ok, maybe not all our income, but a bloody big chunk of it) servicing either rent or mortgages to profit landowners for a miserable piece of land. Sure, if we work our asses off and actually get to own some land then we're on the other side. But, we simply perpetrate the same thing on the next non-landowner and we in turn expect them to work their asses off for most of their lives to pay us. And so on and so on. It seems like a pretty miserable way of organising society.
Thanks for the clarification. I can't disagree that struggling to pay a big mortgage isn't a miserable thing to have to do, and yes, you do live with it for a long time. There might be some consolation to be drawn from the fact that if you are halfway lucky the proportion of the payment to your overall income diminishes with inflation and pay-rises. You may also find that the final value of your house turns out to be way in excess of what you borrowed.
What determines what the cost of your land/house is though? Isn't it a matter of supply and demand and as a society we have agreed that it's the economic model we want. It's not perfect of course - but then nothing is - but the only alternative is Socialism and I'm not aware that that has worked in the USSR or anywhere else it has been tried. Put it another way, if it was working why has the USSR abandoned it and China is beginning to dismantle it also?
As to renting, it's based on supply and demand also, within a legislative framework designed to avoid exploitation. It suits many people to rent, in general as is common on the Continent and in large cities around the world, or at a particular time in their lives. Owning one's own house is an Irish thing to some extent, based on our landless status over the centuries and Dublin and other Irish cities pay a price in consequence. In Germany by contrast, up to last December the Govt attempted to stimulate private house purchases by giving out grants.
How you view the relative cost of renting is up to the individual, no more than with mortgages. The only objective way I can think of to determine the fairness or otherwise of the level of rents charged, is to compare them with the actual cost of home ownership.
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The availability of (excess) credit in recent years has had something to do with cost of land/houses in Ireland.
Only insofar as it stimulates demand perhaps?
"I see the property boom/bubble as a wealth transfer exercise not a wealth creation exercise. If a house doubles in price without undergoing any structural change where's the increase in wealth? Society as a whole is no better off. Instead what has happened is that wealth has been transferred from those with little property( generally the poor and the young) to those more than average property(generally the wealthy and older folk).
So the boom has actually redistributed wealth from the poor to the wealthy."
I posted the above on another now closed thread.
I largely agree with the OP and with Superman's explanation. An artifical credit boom has produced house price inflation which is a wealth transfer not a wealth creation exercise.
" In Ireland in particular, I think that the artificially low interest rates have fanned the property boom engendering a "can't lose mentality".This has not only pushed up prices but encouraged overbuilding and the building of inappropriate shoddy properties in poor locations sold to marginal buyers. Whether this view is correct remains to be seen when interest rates normalise."
I posted that on an earlier thread. We slowly getting the answers as interest rates normalise.
So the boom has actually redistributed wealth from the poor to the wealthy."
I posted the above on another now closed thread.
I largely agree with the OP and with Superman's explanation. An artifical credit boom has produced house price inflation which is a wealth transfer not a wealth creation exercise.
" In Ireland in particular, I think that the artificially low interest rates have fanned the property boom engendering a "can't lose mentality".This has not only pushed up prices but encouraged overbuilding and the building of inappropriate shoddy properties in poor locations sold to marginal buyers. Whether this view is correct remains to be seen when interest rates normalise."
I posted that on an earlier thread. We slowly getting the answers as interest rates normalise.
J
Johnny1
Guest
Do you want someone to give you a piece of their land to you for nothing? You should have bought land when it was cheap, no use in crying about it now.
S
sunrock
Guest
The main point in my view is fairness.There will always be landlords and renters and house buyers and mortgages.In recent years the pendulum has swung to property owners with cheap credit ,large inward migration and a gov that loves high house prices.
The gov could easily level the playing field by various measures such as regulating rents and taxing landlords for leaving property vacant etc etc.
Unfortunately they luv the taxes that accrue to them and scmoozin`with the property millionaires.
The gov could easily level the playing field by various measures such as regulating rents and taxing landlords for leaving property vacant etc etc.
Unfortunately they luv the taxes that accrue to them and scmoozin`with the property millionaires.
I did not mention anything about getting land for nothing, or anything close to it. My post above says that "Clearly the use of land, either temporarily (rent) or permanently (purchase) deserves something in return."
How do you know I didn't? This post is not a whine about my personal position. It's a view that people have let themselves get sucked into a huge swindle, and it's a sorry state that society has let this happen to itself. Massive wealth has been transferred to landowners. Why? What have landowners done to achieve this wealth? Generally people working are creating something and get paid an income commensurate with that. Landowners have to do very little (relatively speaking) for the same amount of money.
Sure, price as determined by supply and demand is the model we have accepted. However there's great demand out there for pyramid 'savings' schemes, yet as a society we have deemed these unacceptable. To any rational person, does it make sense that they would get into a 'buy now, pay later' scheme whereby they work their ass off every day for decades in order to pay somebody for a small piece of land and some bricks miles from anywhere. It simply does not make sense. Yet hundreds of thousands of people sign up for it. Why? This great swindle has no doubt, as previous posters point out, been fuelled in part by cheap credit. It has caused a massive blindspot for an unsuspecting and panicky public wishing to get into the same bonanza-game. There's something seriously amiss - at best we have a very unlevel playing field and at worst a great con has been perpretrated. Landowners, on the other side, are pinching themselves in glee at the wealth that has been transferred to them, for not doing a whole lot. It will be a sorry unraveling and not a nice society to be part of.
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What exactly do you think landowners should do in order to somehow 'earn' their right to capitalise on their assets? Cut the grass more often? The point you are missing is that the owner of an asset, be it land, shares, gold, etc, is obliged to accept risk. Asset values go down as well as up and every piece of land (or house for that matter) isn't necessarily guaranteed to make a profit. The enormous demand for houses and the increasing levels of personal wealth have pushed land and house prices up but if like me you bought shares around 1990 you are still nursing a loss. Growth in land/house prices isn't guaranteed to last for ever you know and I've absolutely no difficulty with people who capitalise on their assets when the times are favourable.
Looking at it another way, if I was lucky enough to win the Lottery or have the right parents to inherit from, what do I need to do to justify collecting my new-found wealth? Should I feel guilty about it and decline it? If you for example had inherited land which someone then decided was very suitable for development what would you do about it? Insist on taking significantly less than the market-price? Build a lot of houses and give them away?
You also need to consider what happens when an asset is realised. Sooner or later that money finds its way back into the economy to the betterment of all.
Who BTW has perpetrated this 'con' or 'swindle' you are going on about? In what smoke-filled room did the meeting take place and who was present?
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There is absolutely no comparison between pyramid schemes (a scam designed to take money off the greedy and in particular the gullible) and legitimate asset-trading as I have just explained.
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Of course it makes sense! How do you otherwise propose that people buy their houses? Save up for 30 years while 'wasting' money paying rent?[/quote]
My issue is not with people cashing in on an asset they own. I also fully accept that people should be compensated for risk. My issue is the extent to which they are being compensated and the extent to which this compensation has increased over the past number of years. Where property values have, say, doubled in a period of 5 years can you honestly say that the additional value being demanded by the holder of the asset is explained (even in part) by any increase in the risk associated with holding that asset?
Of course you would cash it in. My issue here is the number of poor sods being conned into thinking it's good value to pay an enormous amount of money to you for it. In a decent society, I believe your piece of land should not be capable of being, say, quadrupled in value overnight by 'someone' at the stroke of a pen. How can we justify this massive transfer of wealth to one person.
Sure it will trickle back over time into the economy, but perhaps you could try to explain this economic theory to most of the younger generation now who are now locked into a life of slavery to mortgages to fund a massive transfer of wealth to the lucky sods who happened to buy property before they did.
Nearly everyone is to blame. Society has done it to itself. No-one has recognised a problem or dared called a halt. People paying crazy prices for houses have done it to themselves by refusing to even consider the price might be crazy. Banks feeding it. The ECB haven't helped. Mortgage brokers, estate agents, property developers all pinching themselves that this amazing bonanza could actually be happening to them. And sure why wouldn't they. Everyone is clamouring on the same bandwagon of greed. Everyone refusing to believe it's anything other than good value to pay increasingly crazy prices. Government doing nothing to even recognise there is a problem. Of course landowners will take the money if they're being given it. Society however should have recognised some time ago that and done something. Government intervention is one way of achieving this.
To my mind here is a very thin line between the value proposition in 'schemes designed to take money off the greedy...and gullible' and the value proposition in the property market today. The whole property market has been shored up by vested interests to the extent that it is doing exactly what you are describing. Asset-price bubbles normally attract a good deal of greedy and gullible people.
My issue is not with people taking out a loan to purchase an asset. My issue is with the value propostion being presented to them. It stinks. It goes like this: "Work day-in-day-out for the next 30/40 years and give me and the banks most of your income. In return I give you a miserly piece of land and a few bricks." Do you actually think this makes even a jot of sense? Work most of your fruitful life for a small piece of land and some bricks? What kind of society can accept this? Blind? Greedy? Gullible? I believe so. I think it's a terrible shame society has let this happen. It's difficult to blame anyone in particular, but when we look back at the mess that is going to take place, I think few will find it hard to find themselves anything but guilty of feeding this sorry picture. Society (probably through the government) should have recognised the problem and done something about it a long time ago.