This 2014 excerpt of an article by Catherine Cashmore.
Protests that continue to erupt across Australia against the Federal budget consist of two sectors: those who are disadvantaged through cuts to government expenditure – young people, job seekers, groups on low-incomes, the home-less – and those against political parties who want to exploit the situation to swing the popular vote in their favour.
It comes at a time when many young Australian’s are growing increasingly disillusioned with what politics, in a neo liberal capitalist culture, is able to achieve.
No one cheers at the thought of saddling our younger population with student debt – however, when it comes to the cost of shelter, a different attitude arises. This country is pinned to rising land values, as a necessity to fund retirement and most other lifestyle and business needs.
“Rent” seeking can take on many forms – such as patents and government licences which cripple competition from smaller industries and produce an unfair advantage. For example, the Taxi industry’s licenced monopoly gleans an economic rent from the purposely-limited number of licences. ‘Uber’ and ‘Lyft’ offer consumers a cheap and reportedly safe ‘match-making’ alternative; however their progress has been repeatedly stifled by government intervention.
Rupert Murdoch: ”Because capitalists are always trying to stab each other in the back, free markets do not lead to monopolies. Monopolies can only exist when governments protect them.”
This is in essence what the Arab Spring was all about. Many mistook it as a grasp for democracy – however it wasn’t. It was a grasp for the freedom to prosper unimpeded by onerous regulation or rent seeking behaviour. At its essence was a desire for economic justice, equal access to opportunity.
The most damaging of rent seeking behaviour, and the one that yields the most gains, is trading the economic rent of land. An increase in the market price of land is an expected result when economies are improving along with capital investment in infrastructure. Therefore, of all rent seeking behaviour, owning a plot of land in path of this progress yields not only the greatest windfall of passive gains, but is also used as a significant source of territorial and political power.
Our oil, natural gas, timber, coal, and water reserves are the product of it. We travel on it, work on it, party on it, sleep on it, and bury our dead in it. Wi-fi, airplanes, all forms of technology need it.
However, the flow of income that comes from owning land over and above the value of building on it feeds speculation, attracting a cabal of banking and finance interests and concentrating the vast proportion of a country’s wealth in the hands of a few, above the very real needs of many.
Whilst rich land-‘lords’ and mining magnets grow wealthy, collecting their unearned windfall in economic rent – they ironically tell the young tenant saddled with student debt “so you think the world owes you a living?” and command the low waged worker to “pull their weight.”
Economist Michael Hudson points out in USA studies, how the magnitude of land-price gains are brushed under the carpet to hide the massive unearned profits reaped by those who hoard it.
When you appreciate how lucrative rent-seeking is to those in power, it is very easy to see how democracy fails us – working tirelessly to silence voices by politically reinforcing faulty economic theories, while strenuously working against efforts to liberalise them.