Part three

Comment @markmitchell590: How will you manage 2/3 of the population renting from the bank via a mortgage or owning their home outright? Negative equity will cancel out the electoral gains from the rental sector.

Answer; This is a complex issue, and, as I mentioned in the original post, it has much more history, consequences, and empirical evidence than can be addressed in a thousand words or so.

Rule No. 1: Complex problems are not solved by simple, populist soundbites.

Thus, decommodification will take 10-15 years as land prices fall. You will still be able to buy like for like and take the mortgage with you, but like any detox (remember, all this money was never earned in exchange for production; it was unearned capital via scarcity ), there must be a cold turkey plan.

For example, in 1920-70, mutually regulated building societies had 1% lending below the Bank Of England base rate but with a government stop/go policy to control the money volume lent. There was virtually no land inflation during this period, so it does work. But as I said in the original post, I’ve yet to get all the potential consequences covered; there is always a case for Donald Rumsfeld and his ‘known knowns, known unknowns and unknown unknowns.

That is why there is never an absolute answer; each generation is just trying to do better than the last.

This is a case of J.M. Keynes ‘theory of uncertainty for government intervention in the short term when things go wrong.

This is not actually about ‘can we afford it’ but rather ‘can we afford not to’. It’s also never about having enough money; it’s always about the balance of money supply and production, either out of balance and one will inflate, i.e. product inflation as there is too much money to the product, or stagflation, too much product and not enough money that leads to recession/depression (1930s UK). But again, it is another subject that is part of the complexity.

There are other options: wait for revolution/fear of revolution when the middle-class and working-class rent from the top 10% (1910) and both have nothing to lose or do something before we get to this point of ultimate pain and suffering.

I’m lucky because I was born in 1964.

Why should the time of birth dictate a person’s ability to afford a fair price for a home to rent or purchase?

As Thomas Piketty fears in the conclusion of his book Capital of the 21st Century, the rise and return of the rentier class will only end in conflict…..again.