What is morally wrong about rent and property? Communism vs Capitalism

[Aphex_Twin]

I see the issue of underlying principles is generally avoides in these arguments. Debates can be long and winding without even reaching the cause, crux of things. I think the one thing that can sum up the diferences between Communism and Capitalism is one thing - rent.

Rent is the right to receive goods in exchange for temporary rights on a piece of property. That is, the owner of a piece of property can receive goods (the products of labour of other people) for "doing nothing" (in apparence). Is this immoral?

To present an example:
A man builds a large house for his family. Say he does the labour himself and aquires the materials from nature. After this his family can live in better conditions than before. Now, another man comes into the picture. He is without home, nor can he build a home for himself. Say the initial family can spare a room from the large house to serve the man's need for shelter. Is the family immoral if it desires a service of some sort in exchange for abandoning one room? Say still that the family is made up of a husband and wife and 5 children. That the house has 8 rooms (a livingroom, a diningroom, a dormitory for the parents and one room for each child). Two children, the smallest, can probably share a room and let the man inhabit the room made avalible. Now, obviously, there is something the family cannot do if they let the man live in that room - it cannot make use of it anymore. Additionally, the labour spent by the head of the family will have been not for the benefit of his family, but rather the benefit of the man. Shouldn't then the man, who receives the benefit of shelter provide something in return?

Say still that the family will move out (it has found fortune of some sort) and that the man receives the whole house as a gift. It is their desire that he benefit from it as he sees fit. Should they be allowed to grant such a right? Do they even have a right to dispose of their labour (the house) in a way they see fit?

 

[farting bob]

Rent is perfectly fin. The owner has paid for the house (or is paying a mortgage) and what he does with it is up to him, and it only makes sense to charge someone else to live in the house.
It would be immoral to expect people with larger houses to accomodate people for free, simply because they can.

 

[Mark1031]

Nothing wrong with private property or capitalism. However, it is simply a mechanism for facilitating human achievement and advancement. It is not a religion and in areas where it fails or other considerations override it should be abandoned or modified.

 

[frekk]

That is, the owner of a piece of property can receive goods (the products of labour of other people) for "doing nothing" (in apparence). Is this immoral?

To present an example:
A man builds a large house for his family. Say he does the labour himself and aquires the materials from nature.

[/devil's advocate on]

I think one communist argument would be, how did the title to this property (the land and the materials from the land) originally come about? In a North American context, the state took it by force from another peoples and then gave it away (were land grants a kind of racial socialism, I wonder?) to its own people. They sold it and so on, so their capital rests on violent robbery originally, perpetuates and itself through interest and rent, as does the title to any of the land they sold.

The same could also be said in Europe, since at one point or another all the legal title there was acquired by, basically, armed robbery. So the legitimacy of the claim to private property might be questioned, and one might characterize the elite classes as armed robbers who charge interest on their crimes.

[/devil's advocate off]

Of course, the argument between capitalism and communism is bigger than just private property. Capitalism is more than just a free market system ... capitalism is about the increasing concentration of capital into fewer and fewer hands in order to create economies of scale. Cottage industry of the late medieval era, for instance, was free market to the degree that it recognized private property, but it wasn't capitalism.

The real argument, imho, is how to achieve economies of scale, how to create collective workforces in a legitimate manner that doesn't rob the workers of their inherent rights (or robs them of different rights, either the right to own private property or the right to own the value of their labour).

 

[WillJ]

While the idea that rent is completely and always wrong (and by my understanding that is indeed one of the underpinnings of communism) is a bit silly IMO, rent can have its problems.

Your examples, Aphex, conveniently involved the value of the good (the house) arising completely from the owner's labor. But that's not always the case.

Imagine a man, through his hard labor, earns $50,000. He buys an extra house with that money, and doesn't really do much with the house. Then an amusement park moves in a couple miles away from the guy's second house, livens up the community, and the value of the house jumps to $75,000. He then lets someone live in the house for that $75,000.

And there you have the real estate industry.

Why in the world does that man deserve that $25,000 profit?

 

[FatTurtle]

So this means that the estate agents will be the first against the wall then the revolution comes??

Anyway, my understanding would be that in a theoretical communist economy, the first man wouldn't have to build the house himself, but it would rather be a produce of joint labour from the whole community. For example the whole village would assist him in the construction of the house, and it would therefore belong to everybody. Say the first man stays in there with his family, and this second guy comes along and has nowhere to live, and the community has this nice room to spare, then he should be allowed to stay there (in the longer run not for free, becuase he will contribute with his laboring skills to the community). Basically the only fundemental difference would be eliminating the middle man making a profit from both the men (the agent )...

 

[Yom]

Why in the world does that man deserve that $25,000 profit?

Because he had the foresight (or in this case, luck) to build it in an area where property values were increasing.

 

[WillJ]

So this means that the estate agents will be the first against the wall then the revolution comes??

No, that distinction is reserved for used car salesmen and lawyers.

Because he had the foresight (or in this case, luck) to build it in an area where property values were increasing.

And this benefits society how exactly?

Edit: Oh, and keep in mind this is an example of an externality, which I know you feel so fondly toward.

 

[Yom]

And this benefits society how exactly?

Who said it benefits society? The theme park benefits society, which is why it should be subsidized, but his buying property that will gain value only helps himself.

Edit: Oh, and keep in mind this is an example of an externality, which I know you feel so fondly toward.

Not this time, the park has a positive externality, not the man who buys the $50,000 house. He just made a smart investment.

 

[WillJ]

Who said it benefits society? The theme park benefits society, which is why it should be subsidized, but his buying property that will gain value only helps himself.

But it'd be better if this didn't help himself, but only the theme park.

Not this time, the park has a positive externality, not the man who buys the $50,000 house. He just made a smart investment.

That's what I was saying. The park has a positive externality and ideally it'd be internalized, i.e. the man wouldn't get a piece of it.

 

[Aphex_Twin]

Your examples, Aphex, conveniently involved the value of the good (the house) arising completely from the owner's labor. But that's not always the case.

The house arises out of the family's need for one, out of the avalibility of the necessary material resources, out of the capacity of the family to assemble the resources together and out of their willingness to go through the effort of building.

Imagine a man, through his hard labor, earns $50,000. He buys an extra house with that money, and doesn't really do much with the house. Then an amusement park moves in a couple miles away from the guy's second house, livens up the community, and the value of the house jumps to $75,000. He then lets someone live in the house for that $75,000.

And there you have the real estate industry.

Why in the world does that man deserve that $25,000 profit?

The higher value of the house comes from the increased willingness of people to live in that area. If people wouldn't have wanted his house so "badly" they wouldn't be willing to pay the higher price to get it. So long as the trade is consensual I don't see the problem. But I know luceafarul would

 

[WillJ]

The house arises out of the family's need for one, out of the avalibility of the necessary material resources, out of the capacity of the family to assemble the resources together and out of their willingness to go through the effort of building.

Well, okay, what I meant was no others' labor helped create it.

The higher value of the house comes from the increased willingness of people to live in that area. If people wouldn't have wanted his house so "badly" they wouldn't be willing to pay the higher price to get it. So long as the trade is consensual I don't see the problem. But I know luceafarul would

But they're more willing to live in the area not because of what he did, only what someone else did.

Sure, the new owner ought to cough up the $75,000, but I have as much of a claim over the extra $25,000 as that man does. If you think that's not true because that man has a magical little piece of paper saying he owns the house, well then you might as well have this thread closed and never look at it again because there's really nothing that could convince you that never-to-be-tampered-with property isn't the greatest thing since sliced cheese. (At least not that I can think of.)

 

[frekk]

Well, okay, what I meant was no others' labor helped create it.

Doesn't really need to ... don't forget, that the man built the house, and he is entitled to the value of his labour. Rent aside, that means he is certainly entitled to the house (under pure Marxist theory). Whether he is entitled to the land, or to exchange the house for more than the value of his labour, is another matter.

 

[WillJ]

Doesn't really need to ... don't forget, that the man built the house, and he is entitled to the value of his labour. Rent aside, that means he is certainly entitled to the house (under pure Marxist theory). Whether he is entitled to the land, or to exchange the house for more than the value of his labour, is another matter.

Of course he is entitled to the house. But as you mention, no, he's (in an ideal, abstract world) not entitled to sell the house for more than the value of his labor (and here I'm using a rather expansive definition of "labor," including entreprenuership, which throws much of Marxist theory out of the window---but when someone buys a house, sits on his ass, and gets lucky by having a theme park move in, the latter two are NOT "labor").

 

[FatTurtle]

No, that distinction is reserved for used car salesmen and lawyers.

See, another example of useless middle-men that don't produce anything of value...

But they're more willing to live in the area not because of what he did, only what someone else did.

So if he had built the theme park himself (using, say, money from profitable property investments) then he would have the right to claim the $25k?

Sure, the new owner ought to cough up the $75,000, but I have as much of a claim over the extra $25,000 as that man does.

If you were part of the community that jointly labored to construct it, then yes, you are. The problem is that if that was the case would there be any increase in the value of the property?

 

[WillJ]

See, another example of useless middle-men that don't produce anything of value...

Hehe, actually I'd have to say that used car salesmen and lawyers generally do good work.

Even real estate agents probably do. Keep in mind the scenario I described didn't involve a real estate agent, just a real estate speculator.

So if he had built the theme park himself (using, say, money from profitable property investments) then he would have the right to claim the $25k?

Yep, he would.

If you were part of the community that jointly labored to construct it, then yes, you are. The problem is that if that was the case would there be any increase in the value of the property?

Not sure what you're saying here.

About the construction of the house (or were you talking about the construction of the theme park?), presumably all that was taken care of when the guy paid the $50,000 for the house. But the only thing that made the value rise to $75K was the construction of the theme park.

When I said I have as much of a claim as he does, I meant that I have no claim, and neither does he.

And as for your last sentence, you really lost me there.

 

[FatTurtle]

And as for your last sentence, you really lost me there.

Sorry, I've been at work now for 13 and a half hours.. Currently waiting for a group of tenants to come into the office and sign an agreement for the letting of a horribly overvalued flat

What I mean is that if the whole economy follows (at least my understanding of) communistic lines, then there would be no property market as such becuase all the properties would be owned jointly by everyone, and used by whoever has the most need for them. Implying that if you were part of the community that constructed it, that would be the economical model that it would follow... Or something like that..

To put it this way: the Queen owns all land and all properties in England, Wales & (I think) Northern Ireland. What rights does she have to reap the rewards of an increased property market? The Duke of Westminster is one of the richest in Briatin becuase his ancestor married some farmers daughter and inherited the then grazing-land of today's West End in London. He therefore owns the freehold on most properties and is filthy rich, through who's labour??? I know this is taking it to extremes which we perhaps should avoid, but I felt it an appropriate fact to be mentioned..

I personally think it's wrong to collect rent and get the rewards of speculation in property (even though it would mean me losing my highly profitable job), however at the moment it's not only a moral right but more like an obligation to drive the economy forward in a capitalist system.

I'm closing the office now anyway, need to get home and sleep for a while, see if I can make more sense tomorrow...

 

[frekk]

I personally think it's wrong to collect rent and get the rewards of speculation in property (even though it would mean me losing my highly profitable job), however at the moment it's not only a moral right but more like an obligation to drive the economy forward in a capitalist system.

It should be pointed out here that Marx wasn't making a moral argument (he apparently felt communism would be more equitable, but this was merely incidental). Communism was supposed to emerge as the next evolution in economic systems, heralded by worker's syndicates emerging as highly competitive economic units once prices for goods consisted mainly of profit.

So, a good Marxist should drive the capitalist economy forward to reach that inevitable conclusion.

 

[ComradeDavo]

I don't see anything morally wrong about 'rent and property', such as the situation Aphex Twin described, but then another way, which could work better, would be to have higher taxes* and then build houses using the extra revenue which people could then live in for free.

*If you think about it, if they weren't paying a mortage or rent, they'd end up with more money anyways

First one is the capitalistic way, second the communistic way. I don't see anything wrong with either, but the second one could work alot better, and would ensure that everybody had somewhere to live. Of course what with the housing market as it is and the demand for houses in some areas much higher than in others, plus the fact that houses are all of different quality, the second option would take a long, long time to implement, and it is impratical to change to that situation at current. I think we should stick with the first for the forseeable future.

Focusing more on the example, I think that it would fine for the owner of the house to recieve rent, he did after all build it. In a communist way he did provide a service so in return he is getting paid, and in a capitalist way he is....doing the same thing

I think the problem with such capitalism vs communism debates is that in reality the best situation lies somewhere in the middle, taking aspects from both. Settling for just one would not be in humanity's best intrest.

 

[Chibiabos]

Everything human originates from taking. To build a house, you destroy the wildlife and any natives that were there before you. To drive a car, you put garbage in the air that everyone else must breathe.

Capitalism is really elitism ... any way you can find to control or own the most material is good; greed is the only real attribute of any value. Exploiting resources, ignoring all externalities (negative or positive) and exploiting others and taking away their capital (material) is generally the way this is accomplished. A moral sense of needing to others weakens capitalism.

Communism, on the other hand, is working for the greater good of the community. Greed weakens communism. True communism has yet to find a strong foothold for any significant portion of the world, unfortunately -- China and the old U.S.S.R were far cries from true communism.