Capitalism, Socialism, and the Affordable Housing Market

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One of the cornerstones of capitalist economic theory, as taught and practiced in the business, governmental, and academic sectors of the United States of America, is called the “efficient market hypothesis”.

That hypothesis claims that a free market is an “efficient” market, meaning that it perfectly provides for the needs of consumers in a nation, at prices they can afford.

I disagree.

“Efficient market hypothesis” claims that markets are rational, meaning that they will make automatic adjustments in prices, to match supplies of (and demand for) particular commodities (whether they be food, clothing, housing, or gasoline).

However, one of the problems with the efficient market hypothesis, is that markets are not rational, because markets are made by human beings, not computers, and most human beings (from my observation) are not rational.

In fact, from what I’ve witnessed, I would claim that most human beings appear to be famously irrational.

So it would only stand to reason, that markets made by human beings (for things like food, clothing, gasoline, and housing) will not naturally fluctuate with the needs of consumers, but rather, will usually charge prices set as high as the sellers of those various commodities can get away with charging.

But what if thousands of people, in a place like a snow-covered environment, can’t afford to pay what the sellers of housing are demanding to be paid?

Should they merely sleep outside in the snow?

I don’t think so.

Yet many of them do.

Why?

I can’t say definitively, but while visiting the city of Boston, Massachusetts in the Spring of 2012, I had the opportunity to meet a fairly large number of the many, many thousands of homeless people who resided in that city then, and what I found was shocking:

There were what appeared to be, over ten thousand homeless people in that city then, contrasting sharply with the large number of “for rent” signs I saw on various houses and apartment buildings in the city, and it’s various suburbs.

I met former businessmen and women, many of whom had lost their jobs in the mass-company-firings of the recession of the 1990’s and 2000’s, (which apparently caused their companies to permanently downsize their jobs), in what resulted in tens of millions of Americans being put out of work (and in many cases, they and their families being evicted out of their homes).

While learning about the struggles of the homeless in the United States of America, the first thing I noticed is that the formal and informal network set up to help the homeless, in actuality accomplished very little to help in any real, tangible way when it came to housing people whose primary need was just that.

Instead, most of the organizations I contacted, and interacted with, seemed to offer everything but.

Food, clothing, toiletries, (and at a few of the better facilities, phone calls, and occasionally, showers), were often available, but real progress towards attaining permanent housing seemed to be continuously (and maddeningly) elusive, not just for myself, but for almost all of the hundreds of homeless people I met and spoke with.

That lack of the one crucial thing homeless people need the most, appeared to lead to a very high level of despair among many of the dozens of homeless people that I spoke with, and that despair appeared to often led many to engage in self-destructive behaviour, and even angry verbal outbursts.

More depressingly, that despair appeared to be intensified by the self-hatred many homeless people seemed to experience after such (usually-justified, yet often misdirected) outbursts, and many of the people I met seemed to be descending down into a deeper and deeper predicament.

Many began to resort to the habitual use of alcohol or drugs, in an apparent attempt to numb the feelings of resentment and self-hatred that seemed to engulf them.

Then, when those same suffering people went to seek housing, those incidents of self-medication with alcohol or drugs would be included in their “client profile”, and many of them would be shunted off into a “bad client” category, and often be:

1) forced leave the homeless shelters,

2) forced to “meet with the police”,

3) forced to attend burdensome anti-“substance abuse” classes and meetings, (despite the fact that some of them had no place to sleep at night),

or…

4) forced to “leave the immediate vicinity” of the homeless shelter, and go…

where?

As a result, many of the hundreds of homeless people I met in Boston, Massachusetts, Manchester, New Hampshire, Miami, Florida, San Diego, California, and Los Angeles, California, seemed to find themselves having no choice but to live outside for many months, years (and some, even decades), at a time, sometimes even in the ice and snow.

I met a few men who had spent entire previous, New England winters outside, some in tents in the snow-blanketed woods, and some feebly attempting to sleep on top of heating exhaust vent grates, to escape the bitter (and sometimes deadly), below-freezing, winter night-time temperatures.

It appeared that every few nights in one of the major north-eastern United States cities, someone would die from sleeping outside in the bitter winter cold. In a rare effort to avoid such tragedies, police officers in progressive Cambridge, Massachusetts would drive around, all throughout the night just before, and during, major snow storms, on the lookout for people who had fallen asleep outside.

While exploring the back streets of Cambridge, Massachusetts in the middle of a few of those bitter cold nights, I occasionally saw people bundled up inside cardboard boxes, feebly (and perilously) attempting attempting to survive the night without freezing to death.

Even more shocking, was the fact that most of the major cities I visited (such as Boston, Massachusetts, Miami, Florida, San Diego, California, and Los Angeles, California), all appeared to have their main homeless shelters located in their downtowns, often within close walking distance (and sometimes in sight of) luxury, high-rise, residential condominium towers, many of which had dozens of empty apartments for rent.

So, despite what many of us may have been taught in college economics courses, the fact is, the free market for housing in the United States of America is not at all efficient. In fact, if you explore the intricacies of many major, urban, United States housing markets, you will often find that they are woefully inefficient.

To make matters worse, the extreme contrast between the levels of contentment of the well-heeled, housed urban professionals, and the barely-surviving homeless appeared to lead to levels of hostility that were, not only disheartening, but even dangerous.

As a result of the predictable frustration experienced by those two extremely alienated groups of “have-more-than-enoughs”, and “don’t-have-anythings”, conflicts would often erupt, with the housed scurrying away to hide inside, and the police sometimes arriving to accost and interrogate the homeless, who were usually intimidated back to “wherever they came from”.

As a result, many of the homeless people I met seemed to be developing an increasing level of resentment towards the United States of America, and the wealthy (or those perceived to be).

After 5 months witnessing the social schisms, and other social unrest caused by homelessness and wealth inequality in Boston, Massachusetts, I boarded a bus for Manchester, New Hampshire, where I witnessed the exact same, corrosive social dynamic at work, actively undermining our national unity and sense of connectedness.

Being unable to find sales work in Manchester, New Hampshire, and knowing that the bitter-cold New Hampshire winter was quickly approaching, I boarded a plane on November 3rd, and flew to Miami, Florida.

Upon my arrival in Miami, I hopped onto a bus straight to Miami Beach, where I witnessed the exact same, depressing social inequality, occurring right alongside the winter-long festivities of one of the most lively international tourist hot-spots in the western hemisphere.

While there, I again noticed the same super-luxurious residential high-rise condominiums that I saw in Boston, Massachusetts, many seemingly built in the last decade or so, during the supposed “recession” that saw millions of American workers jobs (and paychecks) offshored to foreign countries, while corporate profits sky-rocketed, sending the Dow-Jones Industrial average, and wealthy peoples bank accounts, to before-unheard of heights.

Even more disturbingly, while in Miami Beach, I noticed that many of the poor homeless women I met seemed to feel compelled to sell their bodies, in order to afford to pay for basic, life’s necessities, such as food, clothing, shelter, or medication.

Many of the homeless people I met there appeared to spend at least half of their time hiding from the police helicopters, cruisers, and all-terrain-vehicles, that appeared to patrol the beaches relentlessly, in an attempt to chase them away from the sight of the well-heeled international visitors who flock to that city all winter long.

When not resting in my tent concealed in the sand dunes adjacent to the awe-inspiring “South Beach”, I spent my days socializing on the seawall running parallel to the beach. While walking by there one day, I met a homeless African-American Iraq war veteran, just returned home from combat.

He appeared to be suffering from a serious case of “Post-Traumatic-Stress-Disorder”, as a result of having his foot blown off by a suicide-bombers attack on the Humvee caravan he was travelling in, and he appeared to be in terrible daily pain, even though army doctors had somehow surgically re-attached his foot.

He spent his days sitting near the seawall adjacent to the boardwalk, and seemed confused, depressed, and very, very angry at the way he had been used, and apparently abandoned and disposed of, by our countries government and military establishment.

After a few months in Miami Beach, the police presence there persecuting myself, and the other homeless people, became too overwhelming, so I decided to relocate to Hollywood Beach, Florida.

Hollywood, Florida is an interesting city. Most of it isn’t anywhere near the beach, but is inland, being despairingly separated from the beachfront by the “intracoastal waterway”, and so is very humid, though very calm and sociable, inland.

The beach-front itself is almost entirely for tourists. It has a beautiful boardwalk, is very clean and quiet, and is great for:

– families with children,

– those who don’t like (or can’t tolerate) diverse or international crowds,

or

– those who need a break from the faster paced, party beaches, such as Miami Beach.

However, while in the inland part of the city of Hollywood, I met men who revealed to me that one of the homeless shelters there was charging “rent” to people who slept there, even sending disabled people out onto street corners to sell homeless-advocacy newspapers every day, in order to earn the money to pay their rent.

While walking down the street one day, I met a man in a wheelchair with withered legs due to a serious neurological disease. While listening to him speak, he recounted to me that after he had had a disagreement with the manager of the homeless shelter regarding his pain medication, he was unceremoniously evicted out onto the sidewalk a few blocks away, and left there all by himself, even though he couldn’t walk.

Subsequently, the shelter where he formerly resided was seized by the city, and condemned, and the man who operated it was intimidated out of that Florida town for being:

“too nice to criminally-prone homeless people”.

That was the first indication that there is a trend in many warm-weather cities to be hateful and hostile towards homeless people, and the more I investigated the phenomenon, the more disturbed I became.

For example, in both Florida and California, I heard repeated accounts of serious, even murderous violence being repeatedly directed against homeless people, with some cities and towns in Florida appearing to have reached epidemic levels of such repeated outbursts being directed against poor (and sometimes disabled) people living outside, as discussed in this article here:

http://www.huffingtonpost.com/2013/12/16/florida-homeless_n_4453312.html?temp-new-window-replacement=true

Sadly, such crimes appear to also be on the rise in California as well, as evidenced by this section of the “Huffington Post” news website, which discusses the rising epidemic of violence against the homeless:

http://www.huffingtonpost.com/news/homeless-hate-crimes/?temp-new-window-replacement=true

My belief is, that at least part of the reason for this, is that poor and working-class Americans are so angry and frustrated because of their recent economic difficulties, that they are striking out at convenient, socially-acceptable targets, and in the United States of America, where we worship rich people, poor people within easy reach are becoming the targets of choice.

The worship of rich people, and the resultant demonization and dehumanization of poor people, are just two symptoms of the extreme wage, income, & wealth inequality that exists in the United States of America today.

In fact, from my research, I would estimate that the last time wealth inequality was so unjust in the United States of America, was during the late 1800’s, in an age of income inequality so extreme, that the chief corporation-owning beneficiaries of our collective labors were frequently called “robber barons”.

Because of the refusal of the corporation owners of that time to equitably share the fruits of their corporations (and thus, their workers) efforts, an organized labor movement began to take shape, and by the 1950’s, it managed to secure adequate wages and working conditions for tens of millions of American workers, many of whom still do the bulk of the physical work in this country.

That organized labor movement led to the creation of the often idealized “American Middle-Class”, which many credit for the social stability that came to encapsulate the idea of the “American Dream”.

However, during the 1970’s, a new mentality began to infect the hearts and minds of the collective consciousness of the American intelligentsia, and many economists and business-people began to promote a new world-view, which disturbingly extolled the perverse paradigm that “greed is good”.

In fact, such dangerously infectious slogans were charismatically advocated by the protagonists of movies glorifying such selfish mentalities, as evidenced by Michael Douglas’ “Gordon Gecko”, in the 1987 greed-inspiring movie, “Wall Street”.

From the 1980’s, through the 1990’s, up until the victory of President Barack Obama in the mid-2000’s, this countries “greed-is-good”, and “it’s all about money” paradigms were also advanced by mind-warping, wealth-worshipping television programs, such as:

“Lifestyles of the Rich & Famous”,

and

MTV’s: “Cribs”.

As a result, the level of hyper-materialism in the United States of America reached such epidemic proportions, that people who don’t have enough money are no longer merely viewed as “undesirables”, but increasingly, as an entire underclass who are “good for nothing” but to be exterminated.

I believe that this new form of socio-economic fascism represents a very clear and present danger, not only to the millions of homeless people in our country, but also to the tens of millions of us who are merely a paycheck, illness, or missed mortgage payment away from homelessness ourselves.

So, contrary to the idea promoted by generally accepted “free-market” economic theory, the free market for housing in the United States of America does not appear to be at all adequate when it comes to meeting the shelter needs of the people who reside within our nations borders.

And so I believe that our elected government officials have, not only the right, but also the responsibility to intervene, and insure that all of the people dwelling within our nations borders of authority have their basic, housing needs met.

Unfortunately, when broaching such topics in economic discussions, it isn’t uncommon to see some contentious mass media commentators irresponsibly launch socio-economic extremist labels at their opponents, in an attempt to marginalize and demonize them, usually utilizing one of the following nebulous labels:

“Communist”, “Socialist”, “Redistributionist”, “Collectivist”, et cetera…

Yet, very little thought is often invested into what the exact definitions of those terms are.

With that in mind, I’d like to offer my opinion as to what I perceive to be the correct definition and appropriate usage of such socio-economic labels to be:

First, a “communist” is generally viewed as a person who believes in completely equal ownership of the means, and output, of production, of a nations industry.

(In the past, that goal was frequently attained by government mandate (usually through “nationalization” of a nations private corporations (a form of seizure and redistribution generally regarded as unpleasant by most.)).

On the opposite end of the socio-economic philosophical spectrum, we have what are generally called “capitalists”.

Capitalists are those who believe in allowing vastly unequal ownership of the means, and output, of production of a nations industry.

(In recent American history, that philosophy has been pursued almost to the extreme, by unjust recalibration of of our nations tax policy and codes, and has created many tens of millions of “working poor” in our nation (whose ranks appear to be growing by the day)).

Both of those extremes (of Communism, and Capitalism), have generally proven to be very ineffective forms of economic policy in the past, and sadly, they can occasionally result in widespread violence (as witnessed in the cases of both the French & Russian revolutions).

More intelligently, would be a theoretical balance between those two extremes, called “Socialism”.

Socialism, (provided it is not enforced by violence, or accompanied by racial, religious, or ethnically supremacist theories) is usually the best economic approach for a nations economy, as both the extremes of “capitalism”, and “communism” have historically proven to be ineffective models for meeting the material, and spiritual, needs of a nations populace.

Such deficiencies in meeting the needs of a nations populace can sometimes result in:

Violent internal “civil” wars (a.k.a. “revolutions”), as in the case of pre-revolutionary Russia (where a Tsarist aristocracy attempted to forcibly rule the nations repressively unequal feudalistic peasantry-based agricultural economy,

or

Violent, externally aggressive wars, such as those we are seeing in the modern-day United States of America, the leaders of which appear to be on endless Quixotic quest to (mis)-identify and displace their disenfranchised citizens rage at their increasing economic impoverishment onto convenient, external, foreign targets.

Instead, it might be helpful for our nations leaders to temper our current hyper-capitalist orientation with more socialist economic principles.



Source by Erik Dufresne

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