Reason I’m asking is because I have an aunt that owns like maybe 3 - 5 (not sure the exact amount) small townhouses around the city (well, when I say “city” think of like the areas around a city where theres no tall buildings, but only small 2-3 stories single family homes in the neighborhood) and have these houses up for rent, and honestly, my aunt and her husband doesn’t seem like a terrible people. They still work a normal job, and have to pay taxes like everyone else have to. They still have their own debts to pay. I’m not sure exactly how, but my parents say they did a combination of saving up money and taking loans from banks to be able to buy these properties, fix them, then put them up for rent. They don’t overcharge, and usually charge slightly below the market to retain tenants, and fix things (or hire people to fix things) when their tenants request them.
I mean, they are just trying to survive in this capitalistic world. They wanna save up for retirement, and fund their kids to college, and leave something for their kids, so they have less of stress in life. I don’t see them as bad people. I mean, its not like they own multiple apartment buildings, or doing excessive wealth hoarding.
Do leftists mean people like my aunt too? Or are they an exception to the “landlords are bad” sentinment?
No raindrop thinks itself responsible for the flood.
I’ve never heard this phrase before and I love it.
Quit exhaling! We have a climate crisis!
But this is my regulated breathing minute!
It’s shades of gray. A company that rents out millions of houses is millions times worse than your aunt. Your aunt is still contributing to unaffordable housing and keeping 2-3 families from permanent housing. How bad she is is up for debate and I for one don’t care to debate that. Being upset about people like your aunt is pointless when we should be insanely angry about corporate mass homeownership.
It’s all.
Buying a house as an “investment” is what we call “scalping” in other businesses. Not to mention the fact that this type of buying worsens housing prices and increases homelessness for personal gain, even on a small scale.
The only exception I can give is people who rent out part of their own home, as this situation actually creates available housing.
Don’t take it personally, but landlordism is fundamentally parasitism. It’s a matter of fact that private property, whether it’s a townhouse or a factory, enables its owners to extract value from working people. If people personally resent landlords like your aunt, it’s probably not so much because that’s where the theory guides them as it is that almost everyone has had a bad experience with a landlord or knows someone who did. Landlords have earned a bad reputation.
I don’t disagree that landlords are for the most part acting parasitically. However I would argue that in order for society to function “parasitism” is a requirement. I want to be clear and state that THIS form isn’t required, but some form is.
Let me explain my thinking. Nearly half of the population doesn’t work. The population of non workers can almost entirely fall within these categories: children, attending school, disabled (mentally or physically), or retired.
These populations need money even though they are not producing any. I would guess that most of the extracted profit that comes out of “mom and pop” rentals goes to providing for non-worker expenses.
Now I believe these expenses should be covered by taxations and redistribution of the factor income, but since we have a pathetic system of this in the US it’s hard for me to fault someone for using investment property to hedge against child care and/or retirement
I am not as well read as I would like, but I don’t think Marxist theory really faults anyone for acting in their apparent self-interest. The point is to become aware that you belong to a class with common interests, likely the working class, and that you can team up with your fellow workers and tenants to build leverage and get a better deal. Eventually, you can stop surrendering the wealth you and your class create to the minority bourgeoisie class.
To your point, a landlord who also has to hold down a regular job is still part of the working class. However, they might fall into the subcategories of labor aristocracy or petit bourgeoisie. Because they have it a little better, they’re less reliable or even traitorous in the class struggle compared to regular workers, even though they rarely have the juice to make it into the bourgeoisie.
What you’re talking about, I wouldn’t call parasitism.
The owner of a home has “freedom”. When you buy a home, you are free to do with it what you want. What makes landlords parasites is that the tenant is paying for that landlord’s “freedom”, but they are not receiving it themselves.
But my point is that there are certain categories of people who need access to income that they themselves do not produce. An able bodied capitalist is not one of these people, but a worker who is using real estate as a retirement vehicle is.
For most of my life I was not interested in owning a home. Owning meant I couldn’t pick up and move or travel when I got the urge, which I did several times. One time while in a foreign country for a stay of undetermined length, I was able to contact an old landlord and secure a place to stay when I learned my return date. How would I have had a place to stay if landlords did not exist?
“Land contract”.
A land contract starts out similar to a rental agreement. You make fixed monthly payments. If you stay in the home for 3 years, it automatically converts to a private mortgage, and the first three years of “rent” becomes your down payment. If you leave before a year, you forfeit your “security deposit”, just like renting. If you leave before 3 years, you gain no equity; again, just like renting.
If you ever do decide to settle down in one spot, you’re already well on your way to ownership.
I would solve the rental problem by creating a massive, punitively high tax rate on all residential properties, and issuing an equivalent tax exemption to owner-occupants. A land contract is recorded with the county, much like a deed or a lien, and the buyer/tenant would be considered the “owner” for tax purposes.
Is this actually a thing or are you saying it should be?
Land contracts are an actual “thing”. They are legal agreements, recorded in the county register like a deed or a lien. You can buy or sell a home through a land contract right now, if you want. Currently, they aren’t particularly common, but they aren’t unknown either.
I mentioned how I would like to eliminate rent entirely, by establishing exorbitant tax penalties for people who own multiple residential properties. Land Contracts are how I would meet the needs of people who need the flexibility of a rental arrangement, rather than just buying with a private mortgage.
There is an interesting method of “rent” in use in South Korea that is far less parasitical. I don’t know of it being used in the US, but we could adopt it if we wanted. "Jeonse or “Key Money” is where the tenant makes zero monthly payments. Instead, they put down a large deposit. The landlord invests their deposit (there are limitations on what they can invest in), and keeps any interest. At the end of the rental period (usually 2 years) the landlord returns the entire deposit to the tenant. The tenant is protected by taking out a lien against the property. If the landlord cannot or will not return the deposit, the tenant takes ownership of the property.
The Jeonse deposit is typically 50% to 80% of the purchase price of the house, but it can be externally financed if necessary.
That’s nice that you found a place to stay after traveling the world, that you found some personal benefit from a system that leaves more than half a million people without proper housing (at least in the US). What does that have to do with anything that I wrote?
Presumably because he/she is a person who wants to live somewhere without the hassle of having to own a house and that is impossible without landlords. And they are not the only one like that.
So your idea that all of it is parasitism has met someone, arguably you mean to help, who likes landlords. Because despite what some people think, a lot don’t want to sign on the immense debt for a house nor maintain it. Landlords provide a service in that case and why is it your right to deny renters and landlords that service?
That doesn’t mean there aren’t parasitic landlords because there very much are. But a blanket statement that it’s all bad seems foolish. Perhaps nuance is very much lost on people nowadays.
Landlordism is parasitism. That doesn’t mean that the only alternative is a system in which people can only acquire housing by way of long term mortgages.
and that is impossible without landlords
I reject this premise. It certainly is possible to establish a system that allows for what you describe, without undue burden on people who choose to “settle down”.
“Land Contracts” could replace “rental agreements”. In the short term (<1 year) they function identically to a typical, annual rental agreement: you agree to a fixed, monthly payment. If you break the contract and leave early, you pay a penalty.
In the medium term (1-3 years), the only difference is that your payment doesn’t change (or changes only per the terms established in the initial agreement). You don’t face a sudden, unexpected increase in your monthly payment. You do not owe a penalty if you break the agreement before three years.
The real difference between rent and a land contract is that after three years, the land contract converts to a private mortgage, in which your first three years of payments are considered the down payment. You continue to make monthly payments, but now, you have equity in the home: you are the owner; you are free to sell the home on your terms, you merely owe the outstanding balance on the loan.
Because equity (eventually) transfers to the tenant/buyer/borrower, this agreement is fundamentally less parasitical.
How do we switch to this model? Well, first you need to understand that the tenant/buyer/borrower is the “owner” of the home; the landlord/seller/lender is not the owner; they are a “lienholder”. The “owner” - not the lienholder - is responsible for the property taxes.
So, what we do is massively increase the property taxes on all residential properties, while allowing exemptions to owner-occupants. If you reside in the property, you qualify for the exemption. If you do not reside in the property, you owe the whole tax.
With that change, “rent” basically stops existing. Typical landlords will switch over to land contracts instead of rental agreements to avoid being hit with the exorbitant property tax. The only properties that will continue as actual rentals are those where the landlord lives on-site, (duplexes, triplexes, quadplexes) making them eligible for the owner-occupant credit.
This owner-occupancy exemption also affects commercial lenders: if they attempt to foreclose on a traditional borrower, they owe the higher tax from the time they evict, until they re-sell the property. This gives them an incentive to negotiate with the borrower, and greatly reduce foreclosure rates.
You can only say that landlords extract value from working people if they take money without giving anything in return. But landlords provide housing, which is certainly of great value.
Emotional reasoning tells us this is parasitism in the following ways:
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we believe housing is a human right therefore no one can claim they provide it as a value - it’s something we are all entitled to.
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once a house exists it seems like the landlord doesn’t “do” anything in order to provide the housing, except sit there and own it. So this must be theft because they are getting something for nothing.
#1 I understand and if you feel this then work to have it enacted as law in your homeland, because until it is enshrined in the system, you can’t expect anyone to just give away housing.
#2 is somewhat naive, because owning a house has costs including (minimally) taxes, insurance, and maintenance. Owning housing always carries a large risk too - you could incur major damage from a flood, hurricane, earthquake. And those are incredibly expensive to recover from. Not for renters, though - they just move.
The most important question of all is: how does housing come into being? If we make housing something that cannot be offered as a value, who will build? The up front cost to build housing is enormous and it may take decades of “sitting there doing nothing” to collect enough rent to recoup that.
People make all the same arguments about lending money. It’s predatory and extracts value from the people. But without the ability to borrow money, no one could build or buy a home, or start a business.
Much could be done to improve how lending and landlording work, to make them more fair and less exploitative, but when people say that in their very essence they are evil I think they are just naive children seeing mustache twirling villains everywhere.
It’s not emotional reasoning. The rental income that a landlord collects is not a wage based on any labor that they do. It is a dividend on a real estate investment. The crucial mechanism to a rental property investment is the license to withhold or take away housing from people. That’s what makes landlordism extractive and parasitic. Landlords simply do not provide housing. They capture it and extort people for temporary permission to live in it.
If you want some emotional reasoning as to why people resent landlords, here’s a short list I wrote from a similar thread:
- Almost everyone has had or knows someone who’s had to deal with an especially neglectful or difficult landlord;
- landlords have been engaging in notoriously greedy and abusive behavior since the industrial revolution;
- landlords aren’t doing themselves any favors they way some of them publicly brag and whine about being landlords;
- and there’s just something that isn’t right about owning someone else’s home and probably everyone has some faint sense of that.
You skipped the most important question, as all anti-landlord idealists do.
“How is house made?” You think landlords are necessary or helpful to housing production? How can that be if they are fundamentally parasitic?
Now you’re making faces and trying to discredit the most important question so you can avoid answering it. It won’t work.
The answer, which should be obvious, is that workers produce housing. How do you insert landlords into that process in a way that isn’t parasitic?
Who pays the workers and buys the materials? Whose land does this happen on?
how does housing come into being?
Well one “simple” way is for all the builders to be rolled up into the civil service: the government pays them to do their job, i.e. build houses, which the government then owns and allows people to live in. This must necessarily be rent-free, otherwise the government becomes one massive landlord therefore not solving the problem, and also takes the bottom out of the mortgage market because why would anyone buy when they can just move into government-provided housing without a 25-year millstone tied round their necks. It also creates a ton of job security because it means you can just walk away from a shitty employer without fear of becoming homeless.
It also drops anyone with a mortgage into the worst possible negative equity problem, which will be a massive problem for a massive number of people, therefore has zero chance of ever being voted in. So for this to work there has to be a solution to the mortgage problem, e.g. the government buys all that housing stock for the current outstanding mortgage amount, but that’s a massive investment into something that now necessarily has zero value, which would likely crash the economy. IANAE so it’d be interesting to get a real economist’s view on how this might all work in practice.
Yeah as your air quotes indicate, it’s simple to say but extremely problematic to do. Still, there are incremental approaches to this. Public housing does exist, it’s just extremely small so it doesn’t have any of those systemic effects. We should dial it up. But until it’s universal, it will always face the good old American problem of “my taxes shouldn’t but you free stuff.” It’s things to like this that make UBI look simple.
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Unless your aunt is transferring equity in those homes to the tenants based on the amount they pay in rent, then yes, she’s a leech. “Providing shelter” isn’t the service your aunt is providing; she’s just preventing someone else from owning a home.
And before anyone says “but renting is all some people can afford, they can’t save up enough to make a down payment” - yes, sure, that’s true. But that’s a symptom of the shitty housing market (really the shitty state of the middle class in general*), and landlords aren’t making it any better by hoarding property, even if it’s “just” 3 to 5 townhomes.
Landlordism is parasitic. The point of Leftism isn’t to attack individuals, but structures, and replace them with better ones. Trying to morally justify singular landlords ignores the key of the Leftist critique and simplifies it to sloganeering.
Houses aren’t investments, so yes.
We arent a homogenous group, but ill tell you my personal opinion.
I trust you when you say your aunt is not bad, but what she is doing is bad (and i am sure she is unaware of it). Those 3 to 5 houses she bought are 3 to 5 houses that families cant buy. A few bad side effects:
- It lowers the housing stock in the area, so artifucial scarcity brings the prices up artificially.
- It seperates families from their communities. When your children grow up and have famailies ofbtheir own, they cant afford to stay in the community and are forced to leave
- The families that do stay and are forced to rent arent building any equity for their children. In effect, it stunts upward mobility.
There are people who do want to rent, and people whoneed to rent, but that should happen in priperly dense apartment building designed specifically for that. When houses meant for families are snatched up to profit off of, it is parasitic.
I get it, they are just trying to survive. They are playing the game that exists. Thats why i personally dont belive that most landlords like you are describing are bad people. I think the ultinate issue is that out elected officials do nothing about it. It should be illegal, or have tax implications that discourage the practice.
There are people who do want to rent, and people whoneed to rent, but that should happen in priperly dense apartment building designed specifically for that.
Who are you to say what people should or shouldn’t rent. Should all renters be piled on top of each other in over packed buildings with 600 square feet to themselves? Why can’t I rent a 2000 square foot town home for my family so that they are safe while I save up to buy my own home?
And say I rent a townhome for 10 years, then buy my own townhome, then 10 years later I rent it out to someone else while I buy something bigger? What’s wrong with that.
I think what we all have a problem with is housing affordability and a lack of systematic focus by the government on eliminating poverty.
The issue isn’t some small time landlord with 5 condos, it’s the investment groups with 5000 condos which artificially juice the rents year after year.
It’s insulting to say that all of the poor people who cannot afford to buy a home should have to live in densely packed buildings.
Rent for single family properties is higher than the mortgage of that same property. In theory. So ideally no single family property should be rented as its purely a parasite relationship. Again, in theory.
The problem is that isn’t always true in practice with today’s market and rules. because if the previous owner has had their mortgage long enough, then it could be quite a lot less than a new mortgage. That makes a situation where rent is higher than their old mortgage (providing landlord profit), but cheaper than a new mortgage (providing a valid choice to a renter).
But many of us argue that the current situation is unnecessary and drives up overall market costs. Even when done by just small landlords, it all adds up because the system allows it to.
So its not so much telling you what to rent and what not to rent. its more that in a better system, you wouldnt ever choose to rent that way. Mortgages on small or attached single family homes would just be cheaper and affordable like they were in the past. And if you needed even less costs, renting would be the option in actual properties designed for it. Whether that is sardine packed 600 sqft, or not.
Rent for single family properties is higher than the mortgage of that same property. In theory. So ideally no single family property should be rented as its purely a parasite relationship. Again, in theory.
The problem with this theory is that it’s wrong across the board.
Take a look at houses on realtor dot com or the like… they show estimated mortgage and also estimated rental value. Single family homes typically rent for far less than a new mortgage on the same property, partly because housing prices are so inflated and partly because as you pointed out, someone who got a mortgage on a property 10 years ago who is renting it out now may be renting it out based on the cost of ownership 10 years ago.
Secondly, your conclusion doesn’t follow even if your premise was correct.
Let’s pretend sfh rental prices were higher than the cost of a new mortgage on the same property. How would that then translate to ‘people who can only afford to rent shouldn’t be allowed the dignity of living in a sfh and instead should have no other option but to live in a shared housing environment… how does that follow? How could you possibly think the answer is an increased limitation on what people can rent?
The real solution is getting rid of corporate ownership of more than say maybe 20 properties at a time.
I would certainly prefer having hundreds of thousands of small time landlords with 5 or 10 properties, as opposed to dozens of billionaire corporation who each own tens of thousands of properties… be they sfh or condos or whatever is irrelevant.
Its wrong in the current market, yep. But if we didnt have inflated housing from various factors including parasites and empty housing from those billionaire corps and small time landlords, things would be generally more affordable across the board like they were in the past.
With the bar for ownership lower, that rental line shifts too. And suddenly the concept of “starter homes” is back on the menu like it was only a few years ago. And maybe we could get some smaller homes being built again to meet that demand.
Last thing i wanna say is that specific rental options don’t have to be shitty. I was lucky to have snuck my early adulthood right into this mess as it formed. I saved up for my starter house (which i am now stuck in seemingly forever due to this market, but i know i am also lucky) by renting, but i rented an 1000 sqft private entry apartment with good quality. I felt plenty dignified in there. And there are options even better of course. Some people only want to rent forever afterall. Townhomes in particular are more suited for that style of renting. Nothing against that. But also, sardine packed buildings have their place. If someone is that rough off, i’d assume they prefer that to being on the streets. The issue is even those buildings have been royally fucked by today’s market. Those 500sqft apartments shouldn’t cost more than my current mortgage, but they do, and that’s insanity.
I dont think the apartments should be small, ive lived in apartments for most of my life. Msxing out square footage is also a shitty developer tactic, but thats another story
“Landlords provide housing like scalpers provide concert tickets.”
https://lifehacker.com/why-everyone-hates-landlords-now-1849100799
That said, I do think there need to be ways to rent housing rather than buy it, since many people need that flexibility. Looks like the answer to that might be community land trusts?
Or public housing
What a magnificent comparison!
Every house that is owned for an investment contributes to the high price of housing. People shouldn’t own homes if they’re not going to make them a home. It’s unethical in my view to hoard real estate.
This is a genuine question: what’s the difference do you think between investments in general and real estate investments? I mean, technically investing of any kind is hoarding. It may not have such direct impact on basic needs, but it surely does overall.
When landlords “invest” in the housing market, they are not making the system of providing housing for people better or more efficient. They are buying up a limited supply of properties that exist in desirable areas and then charging people for the right to use them plus a nice profit for themselves. This reduces the supply for a necessary good and drives up prices, making it profitable for landlords, and a massive, efficiency draining, example of rent-seeking for the system as a whole since the landlord’s basically don’t work and instead take a cut of what everyone else makes doing useful work.
If you invest in some predatory companies you might be investing in companies that do that, or might do some other predatory practice, but you can also just be putting money into a business so that it has more money to grow its operations, or invest in some new efficiency that makes them run better, and that then both returns a profit back to both of you and helps improve the system as a whole.
Think about it this way, when you retire, you are going to need money to sustain you for a long time after you stop being able to work, so while you’re working, you need to save that money up. That money can just sit in your bank account doing nothing for anyone, or you can invest it in a business that lets them use those resources now and lets you get your retirement money back 30 years from now when you need it (though in reality that’s spread across hundreds of companies to reduce risk). That’s how investment can be a net benefit to society and make for a better use of resources, characteristics not present with landlords and housing investments.
Note that I am playing devil’s advocate here in order to tease out some of the nuances in people’s thinking because I believe it’s important for us all to understand the details and I’m not convinced many have thought it through. Hence the knee-jerk reaction to downvote
They are buying up a limited supply of properties that exist in desirable areas and then charging people for the right to use them plus a nice profit for themselves. This reduces the supply for a necessary good and drives up prices…
This describes any financial transaction in a capitalist system.
but you can also just be putting money into a business so that it has more money to grow its operations
And how is this different from buying a product like a house and renting it out? Would any such distinction apply to, say, renting out a car or renting out your services? And “renting” a product isn’t really different from services or a cycle of buying low and selling high for anything other than the terms of the contract.
or you can invest it in a business that lets them use those resources now and lets you get your retirement money back 30 years from now when you need it
So like investing in real estate. For years that was considered kind of the gold standard of “safe” investments and generally providing a net annual return of about 5%.
That’s how investment can be a net benefit to society
I’m not convinced any investment can be a “net benefit” to society in a capitalist system. But proponents of renting out property argue it provides a “net benefit” by providing a needed service (housing) to those that aren’t themselves in a position to buy. It is inherently usurious, just like everything capitalist.
So for me, bottom-line, the only valid argument to support making a distinction between real estate “investment” and other kinds of “investment” is to say that housing is a basic human right. And if you are going to go there, why not make other things human rights like happiness, a life free from financial stress, a life of fulfillment. From my perspective that leads to the inescapable conclusion that capitalism is inherently inhumane and thus any kind of investing is immoral.
This describes any financial transaction in a capitalist system.
No it does not. If I pay you to build a water desalinating machine then suddenly we’ll have an abundance of fresh water. We’ve increased the available supply of drinking water overall.
Similarly building more housing is not as morally bankrupt as buying up existing housing and renting it back out at a profit. If you actually build more housing, you are providing a service; if you only get paid for the hours you work, you only make a reasonable amount of money, and you do a good job, you might actually be net benefit to society as a whole, as you are increasing the available supply of housing for people.
On the other hand when you live in a city where there is a limited supply of housing and you buy that up and rent it back to people at a profit so that you don’t have to work, you are simply draining the system of resources.
There is a reason that economists literally use the term ‘rent-seeking’ to describe behaviour that is personally profitable while draining the efficiency of the system as a whole, and not all types of businesses (and thus investment in them) are considered to be rent-seeking.
Oh yes it does.
We’ve increased the available supply of drinking water overall.
And then you charge up the wazoo for a basic human right.
On the other hand when you live in a city where there is a limited supply of housing and you buy that up and rent it back to people at a profit so that you don’t have to work, you are simply draining the system of resources.
Ah. It would appear you believe that somehow buying a property and renting it out does not require financial risk and effort like any other product or service. Renting out housing, despite frequent appearances, requires maintenance and expenses in order to reap a profit. What you are describing would more accurately describe investments in stocks or bonds which do not require anything but capital on your part.
" economists literally use the term ‘rent-seeking’ to describe behaviour"
Except those same economists argue that renting out housing is productive. And that’s not in fact the origin of the term. The classic example, according to the wikipedia is charging money for boats to pass a section of river. The term does not refer to housing, which requires a reciprocal exchange - you build or buy the house and maintain it and in exchange you are paid for it’s use.
To repeat because I have to: I’m not arguing this is good. I’m arguing that a distinction between types of capital investment cannot be made. You can say landlords are universally bad but other types of capitalists are good, universally or otherwise. It’s the same damned thing.
Edit: I sometimes wonder if people think houses are like rivers because they haven’t owned one. They are a huge pain in the ass and require a lot of expense and effort.
No, not all investment is the same. look up the difference between rent and profit.
Ok, so do you have a 401k? Any kind of retirement savings? A bank account that earns interest?
If so, how is that different, or at least acceptable for you than any investment?
You might think I’m trying to be sneaky here or trap you in some way. I’m genuinely not - just trying to understand your perspective and thinking about how folks such as yourself might choose to function given our inability to effect wholesale change in our capitalist system.
Edit: For you downvoting sheep out there, see my comment above for context on why I ask these questions.
I don’t think a bunch of people pitching in to fund a company is in and of itself a bad thing, but there are several considerations that are extensions of that that stray into unethical territory. foremost is the matter of fiduciary responsibility. When a company is publicly traded they have a legal responsibility to put money in the investor’s pockets, and that shapes the behavior of that company in ways that can be very harmful. Intent shapes action, and the imperative to provide profits to investors changes whatever intention that company may have had when it was founded. It means if the company has a choice between fulfilling that imperative or doing something to reduce harm to the world around them they will always make the decision that fulfills the intention. Where if your intention is just to be the best at something, or to provide a service, you would make a different set of decisions. The biggest example that’s particularly central in public consciousness right now is the health industry. Health insurance companies have the ability to ensure that their customers are well taken care of and that healthcare is accessible, but providing healthcare isn’t the point. Providing profit to their shareholders is the point, so in every situation where the profit, and the doing the right thing, conflict they will always choose the former because that’s the whole reason they’re doing it in the first place. Even if the CEO wanted to lead the company in a more ethical direction they couldn’t do so without courting legal action, if the investors believe their decisions aren’t maximizing profits. Multiply this by time and companies gradually become worse, even if they started out great. Enshitification isn’t just for the internet. Often this leads to unethical ends, as in the health insurance example where it causes thousands of deaths each year. A lot of it depends on whether the demand for something is fixed or elastic. Say you wanted to purchase a lot of something as an investment, if that thing is FunCo Pop figurines and you’re hoarding them banking that they’ll increase in value due to scarcity could be sold later at a markup. People can take or leave FunCo Pops, They can choose not to spend their money on your marked up collectibles. Hoarding them would be a dick move, but not necessarily unethical. If the thing you’re buying up is water the landscape changes. People need water, every single person needs water. That demand is not elastic, people have to have it or they literally die. If you hoarded that resource so that you could sell it at a higher price, and that prices some people out of being able to access water, it’s more than unethical. It’s straight up wicked. Your intention isn’t to provide water. It’s to maximise your profits, and thus your decisions will always be guided by those priorities. It’s nuanced. But not very difficult to understand. The world could change for the better, but the profit margins are too slim to make it a worthwhile goal for a savvy capitalist.
So tl;dr investment can be for good or can be for ill. I’d argue any investment ends up prioritizing profit over any ethical concerns no matter what they say. As you say, in essence: Profit motive does that. Venture capital demands it.
A society is only good as it’s incentives. Because there will always be a segment of the population that will only act when incentivized. How they act is determined by what is incentivized and what is not. We’re a society with a long list of really bad incentives. I agree with you that investment always prioritizes profit over ethical concern because we live under capitalism and that is what is expected and incentivized. The sad thing about capitalists is that they often argue against social programs because they think that people will always game the system, and it’s true. But there is a name for those people, and that name is capitalist. When they say things like “capitalism is just human nature” and that it’s natural to compete and try to gain the upper hand in all situations, they tell on themselves. It’s not human nature, it’s their nature, and they project themselves onto everyone else. I don’t think that capitalists will ever truly go away, that’s why we can’t seem to have nice things. Any society we create will have some capitalists in it. Some people are just competitive. And capitalism is a way of keeping score. It’s not true of all people, but it’s true of some. Enough to cause trouble. Any advanced society we may one day have will need a sort of pressure valve for capitalists that will allow them to feel like they’re gaining the upper hand over their fellow man. Without a way to indulge those impulses they will always undermine any collectivist society they find themselves in. They’re just something that needs to be managed. Investment can be innocuous, or it can be evil, it is almost never good. In the rare case that good does come from investment it is short lived because capitalism is corrosive. The intent to win at capitalism will always determine the decisions capitalists make, so over time everything good they create will ultimately turn to shit.
… there will always be a segment of the population that will only act when incentivized
I’d argue that this is true of all the population but with the stipulation that “incentives” do not need to be monetary. I completely agree that capitalism is not human nature and feel that we’ve essentially brain-washed people to believe that money and material possessions are the reward when in fact it’s all the other things in life that actually matter. I believe that this thinking, which had lots of good reasons for existing during times of scarcity and paucity of resources, can be undone eventually. I think in a post-scarcity world (I’d argue we’re there) where it is normal for people to live fulfilled lives in significant comfort free from financial and work stress those few people who can’t shake the need to competitively accumulate will be rare indeed.
Until then we have a huge problem: we have too much highly efficient prosperity for capitalist models to make any sense at all.
Yes, I’m thinking of fully automated luxury communism.
And thank you for your thoughtful comment. I enjoyed reading and thinking about your perspective.
Yes all landlords.
I your Aunt and Uncle are probably lovely people. They’re trying to survive in the same system we’re all stuck in.
Ask yourself this, who is paying the mortgage on those properties? If the renters can afford the rent, they can afford the mortgage and then some. Your aunt and uncle, and all landlords, are collecting a premium on housing, what do they actually provide? If they’re trying to save for retirement, by renting homes, who’s actually paying for their retirement? Will those people be about to afford to retire if they’re spending so much on rent? They’ll end up with nothing when they leave. Your aunt and uncle will still have 3 to 5 extra properties.
They own suburban townhomes, in some cases you find a renter who’d rather not own a home. In most cases, the market has progressed to a point where home ownership is impossible because people are hoarding homes and withholding access for rent.
It’s an unethical system. Your aunt and uncle are small line landlords and a symptom of a larger problem. They’re participating in an unethical system to gain an advantage, and it’s hard to blame them for that. That doesn’t make it ethical, or good.
Jefferson said he “participated in a broken system that he hated.” In reference to slavery. He actively tried to reform that system and was rebuffed. He’s still seen as a slave holding landed gentry today, and it remains a black spot on his (admittedly spotty) legacy. How are the people who owned 3 to 5 slaves different from those who owned 50? How are they compared to those who could afford and benefit to own slaves, and still advocated for abolition?
When we say landlords are bad, it’s not really about the individual people so much as it’s about the system as a whole. Ideally, the human right to housing should be guaranteed for everyone, along with the right to be cared for in retirement. How many elderly people don’t own their own homes, and have rent to pay as an additional expense making it harder for them to retire? Sure, landlordism can provide a source of income for people who can’t work, but for every case of that, there’s another case of someone who can’t work who doesn’t have the privilege of owning a home, such that the existing system makes them even more desperate. So logically, it doesn’t really make sense as a justification.
Cases like this should be considered when we’re looking at how best to implement our ideals, but not for determining our ideals in the first place. The just thing is that everyone should have a secure place to live. That’s the ideal. In implementing that ideal, we should consider that houses currently are used as a form of investment and many people simply use them that way without a second thought, because of social norms. If we simply seized and redistributed everyone’s properties tomorrow, some people like your aunt would be disproportionately affected, compared to if they had invested in stocks that can be just as unethical. It would probably still be better for most people than doing nothing, but we ought to craft policy in such a way that we’re not trolley probleming it (except regarding the people at the very top, for whom it’s unavoidable), but rather such that it provides benefits while harming as few people as possible.
When society is organized justly and the wealth of the people on the top is redistributed, there will be enough to go around that everyone ought to be able to benefit from it. Therefore, it shouldn’t be a problem to compensate small landlords for their properties and ensure that they aren’t harmed by any changes in policy.
As a guy who rented out one house for a very fair price i can tell you I’m the devil.
Any landlord that uses a residential family home as an investment is a parasite.
If you want to invest in real estate, purchase commercial, retail, and industrial properties. Nobody needs those things to live. The reason why this is harder is that the companies who tenant these properties generally have the leverage and means to not get exploited (though some small businesses still do get exploited)
