I had not planned to write another post on the blog this year. If the analytics are correct, I doubt it will be seen by many people, but I’m going to write it anyway. Consider this an exercise in catharsis.
I live in suburban Melbourne. Badmouthing suburbia has been a favourite pastime of intellectuals for as long as I’ve been alive. I never understood why.
I’ve been fortunate to live in many different circumstances, from farmhouse to small rural township to rural city to massive Australian and European megapolis. Each of these had good and bad qualities, and it never seemed to me that the costs-benefit ratio of suburbia was noticeably worse than the others. I suspect the disdain of intellectuals towards suburbia has a lot to do with the bad memories they harbour from their childhoods rather than any objective analysis.
Suburbia is low-density housing. It emerged in direct opposition to the high-density inner city, which, even a hundred years ago, was a far from healthy living environment due to a combination of pollution, poverty, and ignorance. People moved to suburbia because they wanted a cleaner place to live. And that’s what they created. We forget also that another attraction of suburbia was the ability to be able to grow at least a share of one’s own food. To this day, older suburban homes invariably have a lemon tree. Once upon a time, they would have had a kitchen garden too.
The original spirit of suburbia, as far as I can tell, was a microcosmic version of the old aristocratic estates, which also had extensive gardens and produced most of their own food, albeit with a team of servants who did the work. A level of self-sufficiency was implied. This ethic translated into early suburbia, before consumerism undermined it. The suburban home owner didn’t have a team of servants and would have to do the work themselves, but the payoff was that they did get to live a little bit like a lord of old.
All of this was tied in with longstanding cultural and legal attitudes to the home. A man’s home was his castle (note the explicit comparison of the average citizen with the aristocracy). C.S. Lewis once stated that the whole point of politics should be the protection of family home. This tradition goes back many centuries in Britain and has a particular flavour that is different even from continental Europe.
Those of us who live in countries that were founded on that tradition, including Australia, simply take it for granted without realising its uniqueness. In many cultures, you would seek sanctuary and protection in a religious building. In Britain, the idea was that you could find the same protection in your own home, which even the king himself could not violate.
All of which is to say that suburbia didn’t come out of nowhere. It is the product of a culture. So, what does it mean that here in Australia we are in the process of dismantling suburbia? Clearly, it means we are in the process of a major cultural shift, one that nobody voted for, nobody wants and nobody seems even to be aware of. Within the last half a decade especially, little more than the blink of an eye in historical terms, suburban home ownership has become unattainable for the next generation.
How have our politicians responded to this crisis? Well, we’ll get to that.
***
Let’s talk about inflation. No. First, let’s talk about the ascendancy of the managerial bureaucratic class in western nations in the post-war years.
Prior to WW2, the total tax take of the state was in the low teen percentages. It jumped into the 30% range during the war and never went back down again. That money wasn’t paying for the military in the post war years. It was paying for the bureaucracy.
In fairness, there were good reasons for this. Unemployment had been a huge contributor to the problems of the 30s which led to the war. In the aftermath, it’s not hard to see why leaders of western nations wanted to ensure it didn’t happen again. One of the ways to do that was to have the government employ enormous numbers of people, and that’s what happened.
The managerial class operates under the technocratic assumption that the only things that count in this world are the things that can be counted. Bureaucracies love numbers and statistics. For a while, it was probably not a bad thing to have some level of precision and accuracy in measurement as a guide to political decision-making. But, for a variety of reasons, the numbers and models used by the bureaucracy have become more and more opaque.
This process kicked into overdrive in the 70s as the economy started to hit the skids and political pressure was brought to bear to change the definition of economic metrics to make them look good. No conspiracy theory is required to explain this. It is a process that happens automatically in any organisation where managers govern by numbers and where subordinates have the ability to manipulate those numbers. With the rise of the professional CEO, management-by-numbers become the dominant way in which our society is governed in both the public and private sectors. That is what the ascent of the bureaucrats has meant.
Ok, now let’s talk about inflation. Inflation is one of those wonderful metrics that the managerial class uses to measure the economy and tell us how everything is doing great, and the average bozo who thinks things aren’t great is too dumb to understand the world they live in. Another thing that bureaucrats love to do is protect their turf. The more the average person points out problems, the more complex the metrics and models become. The goal is to make them indecipherable and immune to criticism.
All modern definitions of inflation are based on price, and there’s a hundred different ways to measure average prices, each of which keeps a small army of academics and bureaucrats in jobs while allowing the figures to be massaged into whatever format makes a politician look good. As a default assumption, any modern metric that is used for political purposes is complete bullshit until proven otherwise. That is especially true of inflation since it’s one of the main metrics upon which political decisions are supposedly based.
Inflation has been tortured into unrecognisability by successive generations of academics, bureaucrats and politicians. Inflation has seen some shit, man. If you want to know what kinds of semantic torture goes on in the dark rooms of a modern bureaucracy, consider that our modern managerial class has changed the definition of a woman. If they can do that, they can do anything.
The good news is that we can do much to improve our understanding of what’s really going on in the world by going back in time to a point before the bureaucrats got their grubby little hands on power. Anything prior to WW2 is safe, at least safe from obvious political distortion. Back then, there was a different definition of inflation, one that anybody could understand.
The definition of inflation was this: inflation is what happens when an economy cannot provide the goods and services demanded of it.
Simple, right? Note that this definition does not say anything about price. Prices may rise as a result of inflation, but we must always understand that in terms of fundamentals. Inflation is always about too much demand and not enough supply.
When we apply this model to what is going on in Australia and other western nations these days, we can sum it up very simply: there is too much demand and not enough supply. Still, that is no longer a surprise since even the doctored official inflation statistics tell us that we have inflation now. But when we apply our broader understanding of inflation, we find that there are many types of real inflation that are not being captured in the official statistics. Inflation is far worse than what we are being told. This will not be a surprise to a person who knows how to use common sense, but such people are in short supply these days.
***
Let me return to where I started this post. I live in suburban Melbourne. The house across the road from where I live was recently demolished. It was an old but still neat and tidy brick home on a quarter-acre block. As I write this (on a Sunday morning no less!), there are builders at work across the road constructing three (or maybe four) townhouses where one house used to be.
At the end of my street, a block was subdivided a few years ago and a new house was placed on the southern half of what used to be a slightly less than quarter-acre block. Two houses now take up almost the entire space, with tiny little backyards and even tinier artificial lawns at the front.
The kicker, however, and the thing that prompted this blog post is another property on the next street over which, until last week, had a beautiful big oak tree in the backyard. The tree must have been 30 metres tall. I could see it from the window next to my desk, where I’m typing these words. I used to enjoy watching the myriad of birdlife that made use of its majestic branches, mostly magpies, crows and cockatoos but occasionally falcons would drop by.
I heard the chainsaws going in the morning but didn’t think much of it. Around lunchtime, I caught the first sight of the arborist, who had now worked his way to about the midpoint of the tree. By the end of the day, the oak was gone. Out of curiosity, I walked down the street to have a look. Sure enough, the house on that block has also been demolished and will be replaced by townhouses.
There are 50 houses on the street where I live; four of them have disappeared in just the last four years. Linear extrapolation is always a dangerous thing, but on current trends, the majority of this area will be townhouses in just a few decades. Low-density suburbia will have been swapped for medium density something. All of the benefits of low density will be gone, and the criticisms of the intellectuals who have been hating on suburbia for as long as it has existed will actually come true.
***
Inflation is what happens when an economy cannot provide the goods and services demanded of it. The Australian economy can no longer provide the suburban housing that is demanded of it. This is a trend that has been going on for more than 20 years. For most of those 20 years, the manifestation of that has been absurd price hikes that were completely disconnected from economic fundamentals. That was bad enough. What we have now is worse.
It seems we have now entered a new phase. It’s the phase in which suburbia is being catabolised and replaced by the simulacrum of suburbia. Rather than admit that our economy was not providing what was demanded of it and take measures to address the situation, we will turn suburbia into something qualitatively different while pretending that everything is fine.
But the problem is not specific to housing. Everywhere we look in the Australian economy, we find inflation. Let’s repeat it one more time: inflation is what happens when an economy cannot provide the goods and services demanded of it. Across Australia, there are shortages of teachers, nurses, doctors, police officers, tradesmen, and more. That means the Australian economy cannot provide the teaching, medical, police, and construction services demanded of it.
What does this mean in practice? You send your child to school expecting them to be educated, but there are not enough teachers, and so classes get cancelled. The school cannot provide the services that are demanded of it.
You need to call on the police for one of the many services that they have traditionally supplied, except the police station doesn’t have enough officers and is no longer performing non-essential work. The police station can no longer provide the services demanded of it.
You have an annoying but non-life-threatening medical problem that requires surgery. The hospital tells you that the waiting list is now eighteen months long. The hospital can no longer provide the services demanded of it.
None of this is included in the official inflation statistics, and a big part of the reason why is because these are all government services that are paid for out of taxes. Well, they used to be paid for out of taxes. Nowadays, the government finances them through debt. The Victorian government is particularly good at this, with a debt bill approaching the $200 billion dollar mark. Instead of counting them in the inflation statistics, we count them in other statistics and pretend that the two things have nothing to do with each other. This is another way in which numbers can be fudged for political purposes.
Once we understand that inflation is nothing more than an imbalance between supply and demand, the solution to it becomes really simple. Either you reduce demand or you increase supply. Once upon a time, we used to allow demand and supply to re-establish equilibrium by having a recession. Ever since the neoliberal reforms of the 90s, however, we don’t have recessions anymore. Even the very thought of a recession sends chills down the spine of every technocrat in Canberra. Apparently, we will now do absolutely anything to avoid having a recession.
One of those things involves the mass importation of people into the country. That’s another thing that’s happening in every western nation these days. The only difference is the method by which they arrive. Here in Australia, we do it in an orderly fashion, very well organised and official.
When we translate it into inflation terms, however, it’s as plain as the nose on your face that immigration will increase the demand for goods and services that already don’t exist. It is the exact opposite of what you would do if you actually wanted to stop inflation. This is especially true because the inflation we see in Australia is in the basic services that everybody requires: education, health, home construction. Most of the people immigrating to this country are young adults who are going to call on those services immediately.
The things that we can still provide in Australia are not produced in this country. The main implementer of the neoliberal agenda here was ex-treasurer and prime minister, Paul Keating. I saw an interview with Keating a few years ago where he was asked what benefit Australia got from allowing China into the global economy as part of the neoliberal reforms. Well, they solved our inflation problem, he said with a smirk.
That is somewhat true. Consumer items are in abundance, and anybody moving to Australia can count on buying all the appliances and knick-knacks they might need to furnish their place of residence. All of that stuff is made in China, however. It is no coincidence that some of the biggest supporters of immigration are the retail corporations that import stuff from China. For them, the only way they can grow their business is to have more consumers to buy stuff, and those consumers need to be physically present for that to happen.
If Paul Keating had got up in the early 90s and told the public, “I’m gonna make consumer goods cheap and housing unaffordable,” nobody would have voted for him. But that’s what happened and it was the entirely predictable outcome of neoliberalism.
***
There is a huge irony that sits at the heart of the neoliberal agenda, or at least the way that agenda has been sold to western publics. We were told that letting China into the world system would see democracy (liberalism) flourish in formerly communist countries. Instead, we are turning into China.
To fix inflation you must either reduce demand or increase supply. In the name of increasing supply, the governments of this nation are progressively getting rid of those terribly old-fashioned planning rules which actually allow citizens of a neighbourhood to have a say in what kinds of construction is allowed to go on around them. Apparently, we now need to dismantle democracy to solve our economic problems. Planning power is being given directly to state governments, who have made clear that their vision for the capital cities of Australia is high-rise apartments.
I have been fortunate to travel to China on several occasions. Modern Chinese cities are full of, you guessed it, high-rise apartments. If nothing were to change from its current trajectory, in just a few short decades, Australian cities will be indistinguishable from Chinese ones. Presumably Australia will still be importing all of our consumer goods from China, y’know, to stop inflation. Maybe another “pandemic” will break out and Australian governments will once again follow China in implementing lockdowns.
The truth is, our managerial bureaucratic class love China and see it is a model to be copied. China doesn’t have to get rid of its democracy, it never had one in the first place. The hippies who grew up reading Mao’s little red book are now the senior bureaucrats salivating at the prospect of reshaping the nation at the flick of a pen.
On a bureaucrat’s spreadsheet, whether you live in a shoebox apartment or a suburban house makes no difference. Both can easily be labelled a “home”. Shoebox apartments increase the number of homes available. Problem solved. That is the difference between understanding housing as an economic object to be bought and sold and understanding it as a cultural entity that reflects the values of a society.
Here is another thing that we have in common with the Chinese. The Chinese have been demolishing their rural culture and cramming people into high rises in the cities. We have now begun demolishing our suburban culture with the same goal in mind. Since the intellectuals who hate suburbia have all gravitated to academia and bureaucracy, this a feature not a bug for them. They get to enact their values at the expense of everybody else. At least as long as democracy can be held at bay.
***
Politics normally runs on little white lies, and we let our politicians get away with it because that’s the way the wheels are greased. The neoliberal agenda was not a little white lie. It was a big, fat, dirty lie. We need different words to describe it: deceit and fraud come to mind.
Another word that comes to mind is weakness. As a society, we failed to make hard decisions that addressed hard realities. We have been on a decades-long departure from reality in the West, bamboozled by the nonsensical metrics of a bureaucratic-managerial class that we can no longer afford in either a literal or a metaphorical sense.
Everything that is happening now was perfectly predictable. We know that because there were people who predicted it. My recommendation for anybody who wants to explore the issue in detail is to check out Sir James Goldsmith. One of the books he wrote on the subject is freely available from his website. It outlines in very specific and precise detail what happened and why.
There’s also a number of interviews with him online. My favourite is his 1992 Schumacher lecture where, among other things, he warns that we shouldn’t be mucking around with viruses in laboratories. Talk about prescience.
Goldsmith made what should now be a very obvious point: the economy should serve society, not the other way around. Either we stop worshipping the god of money, or we get what we deserve.
Hi Simon,
Oh my! The oak tree is a sad loss. It takes a long, long, time to grow a 30m tall oak tree. And the soil beneath it was probably quite good, and will now be buried under housing. The houses that ate the land is all too real. I was sorry to hear of your plight, but as I mentioned to you, it was stuff like that, which caused me to leave the city behind.
I’d only read your essay this morning, but unbeknownst included part of your story in my own weekly essay. What can I say, you made an impression.
There are limits to the current policies, and one of the interesting (I’m not exactly sure that is the correct word) aspect to the ever increasing debt, is that the returns on taking on that burden are becoming lower every year. It amazes me to watch this all go on in real time. Anyway, what I mean, is that for all that increase in the debt burden, the economic returns are very low if not negative. The masterminds behind this show, don’t have all the answers, and my gut feeling suggests that sooner or later, we will reach the point of a currency crisis. That’ll be the pressure relief valve the folks pushing this agenda, have no control over, because it’s external to them.
You may not be aware, but: More Australians are reaching retirement with a mortgage as first home buyers get older. The stories in that article are very common, and make no sense to me whatsoever. An economic time bomb waiting to blow which relates very much to your story.
My gut feeling suggests that the independent blogosphere is very much under attack, and I’m not quite sure even how it is occurring. I know what the demands being made are though. Hmm.
Cheers
Chris
Chris – once you apply the proper definition of inflation, you start to see it everywhere. Apparently there’s going to be big job cuts in higher education due to the government putting caps on international students to try and solve the housing problem. One of the vice-chancellors was complaining that international fees were used to offset fees for local students. So, now we just transfer the inflation problem from housing to education since we’ve been using Chinese money to pay for the education of our local students. Meanwhile, the quality of the education has plummeted. At this point, out entire “economy” is based on trying to find any way to increase supply without reducing demand.
I get very down thinking about these things too. The dogboxes are even starting to appear in rural cities and towns, and one of the reasons I think they are importing people from places like India and China is that these people care much less about these living conditions, for them they are the norm. I suppose our big cities no longer became our own when they sold out to global neoliberalism. It’s implicit in the deal that they belong to the global economy.
It’s so hard to know what to do. Continually bailing out of areas is just running from the problem, but all local action is being taken away from us. Massive industrial developments (renewables) are being ticked off all over the countryside, with zero oversight. New dog box suburbs are popping up everywhere, paving over farmland. The grief turns into anger but has no release valve.
Are these the conditions that lead to massive reactionary eruptions? I don’t know where that would even come from here. Maybe Queensland will come up with some movement like it always seems to throughout Australian history. Perhaps the only thing that reverses it is a global economic meltdown.
What I find in equal measure fascinating and horrifying is that what is going on fits the virus pattern. In a normal pandemic, what you would expect to see is that people you know, including your neighbours, succumb to the disease. From my direct personal acquaintances, including my neighbours, I don’t know a single person that got especially sick during corona. Nobody I know went to hospital. I didn’t see or hear a single ambulance in the neighbourhood.
If we assume neoliberalism is a virus, then I see “infections” all around me and I don’t need a fancy test to diagnose the disease. In fact, it is clear we are in a pandemic of neoliberalism (inflation). I suspect the average person understands that, but because it is completely stricken from the public discourse, it goes into the unconscious and, Jung and Freud noted, from there it can get projected onto unrelated phenomena.
Hi Simon,
And how much were the vice chancellors getting paid again?
Since you mentioned that the blogosphere is under attack, and I’m seeing that as well, and thought you might be interested in someone’s thoughts who comes from an SEO background and dug a bit deeper into the matter. Did Google’s 2024 March Core Update Kill Blogging?
I’m thinking about how to get around this, you may have noticed?
Cheers
Chris
Chris – doesn’t surprise me. I’m sure it’s not just blogging either. For those us who remember how good google search used to be, the current version is a pale shadow and seems to get worse with every new “feature”.
Manipulating land to make serfs of men is the oldest trick in the book. The is nothing neo nor liberal in neoliberalism.
Australian’s are up for a tough climb if they want a way out of the real estate bog. Land sovereignty shifted from the realm of politics to economy when the castle became a part of the investment portfolio. If you want to monetize your stuff so you can get access to all the things that money can buy then you have to accept that your life is now run by the guys who own the bank.
Political independence is premised upon economic self-reliance. But colonial Australia has zero history of living properly from local resources. Money is a social invention to grease the wheels of trade which is just a way to get access to non-local resources. We are uninvited guests who don’t now how to live on the land under our own feet.
What we need is a reimagining of the Australian dream – balancing supply and demand, predominantly by relieving pressure on the demand (greed) side by way of an ethic of contentment and simple living, a return to an agricultural and horticultural economic base, a rediscovery of organic village-type communal lifestyles and all the Old World type thinking that comes with such things.
The return of the Old World is inevitable. It can be done in easier or harder ways. The easier ways demand that the ruling class get with reality and employ intelligent and creative means of conscious descent. The harder road is the one ruled by the subconscious and the demons that lurk. They involve larger or smaller variations of pestilence, famine and war. Decades of propaganda culture have conditioned people so much into swallowing comforting fantasies that the harder of is most likely.
Therefore the proper employment of imagination and ingenuity now is for the proper construction of life boats: resilient small communities for those few left with some common sense.
Unfortunately, it is much more than neoliberalism that will die.
Jinasiri – I think the story of Ned Kelly is as relevant as it ever was. Ned is the guy who knows his way around the countryside which is his home. He gets killed by the corrupt Anglo establishment. To this day, the ‘real Australia’ languishes under the same imperial domination. They don’t have to kill anybody, they just buy them off.
I was thinking the other day about Ned Kelly and how the government employed Aboriginal trackers to hunt him down. Then I remembered that a large proportion of the frontier killings of aboriginal tribes in Queensland were done by the Native police, aboriginal men from my local area of NSW employed as trackers and killers by the Qld government.
Then I thought about the Voice referendum and how now it is often black fella rangers giving out fines to people in the national parks now.
It’s all the same in long line of Imperial manipulation and BS that needs to be kicked right back to where it came from. The Empire hates nothing more than localised people, and will do everything it can to globalise them.
Skip – yeah, we could make a very long list of how that works. My favourite from recent memory are the Green Bans in the 70s. The origins of the environmental movement were a joint venture between unions and locals to protect the lived environment (not “the environment” as an meaningless abstraction). They bought out the unions leaders and destroyed the ones who couldn’t be corrupted. A generation later and the unions are happily building the dog boxes that their own children are going to live in. Sad stuff.
What were they paying the aboriginal trackers?
Skip might have more specific details, but by the time of Ned Kelly it was not unusual for aboriginals to be paid in cash or whatever goods they wanted.
Oh, you’re back to writing here! Nice.
Simon: “Badmouthing suburbia has been a favourite pastime of intellectuals for as long as I’ve been alive. I never understood why.”
Ha! Surely it’s because of the extreme car dependence and the concomitant energy costs. I know that there are some suburbs with good train service, but those are somewhat rare, aren’t they? So, you commute by car, spending a huge amount of time in traffic, and burning quite a lot of (dwindling) hydrocarbon energy in the process.
Another thing about suburbia is that it, obviously, requires low population densities. You cannot just as well expect people to drive 2 x 100 km five days a week. In Europe, it’s really quite rare for people to live in houses. In other words, yes, as you import more and more people, and as those people mostly settle in/around two or three major cities, you will indeed get a lot of high rise apartment buildings. Those people have to live somewhere, after all. Now you could certainly ask “and we needed to import all those people because…?” Well. I guess it’s profitable for a sufficiently large percentage of people who have a lot of political power.
BTW, skyrocketing housing costs are a problem all over Europe as well, and interestingly, this includes countries whose population has actually shrunk fairly substantially since the fall of communism (Bulgaria, Romania…). I’m not entirely sure how that works, though if I had to guess, it’s because the countryside is depopulating, and major cities are growing in population. So, property prices in places where people actually want to live (namely, the major cities) are going through the roof. In the depopulated countryside, you can buy a house for next to nothing, but then you’d better enjoy living without shops, schools, doctors, etc. And oh yeah, without a job, too.
Irena – I think we need to distinguish between old and new suburbia. I live in old suburbia. I’m a 15 minute walk to the main street, 20 mins to the train station, 7 mins to the supermarket. I can cut those times by more than half by cycling. As I mention in the post, I think the paradigm of old suburbia was based on a self-sufficiency ethic where most people would have had a kitchen garden and fruit trees. I’m quite sure that was a very cost efficient way of living.
It is new suburbia that is based on a consumption ethic and commuting by car was made mandatory. I would argue that new suburbia was the precursor to neoliberalism which is essentially a way to make people dependent rather than independent. And now the whole world is becoming dependent. Bill Gates wants to feed the world. Why does the world need to be fed? Because neoliberalism has destroyed what was left of the countryside and sucked everybody into the cities. “We’re all in this together” 😛
@Simon
“Old suburbia” sounds nice (to hear/read you describe it), but again, it requires low population densities. How many people can you actually pack there? As your population increases, you are forced to choose between building farther and farther away (generating very long commutes), or packing people into apartment buildings.
BTW, not too long ago, I was listening to some “pro-natalist” podcast and they mentioned in passing that (at least in the US) people who live in houses have above-replacement fertility – unlike those who live in apartments/condos. Is this true? Well, I have long suspected that the tanking birth rates (a global phenomenon by now) are at least partially caused by our mammalian instinct against overcrowding. (Me, I spent quite a significant part of my childhood living in apartments in which we had less than 10 sq m per person, and I’d rather eat glass than live under such conditions ever again.)
Irena – in whose interest is it for population to continually increase? At the start of last century, Australia had a deliberate policy of strict regulation of immigration in order to control population. We were forced to sacrifice that by imperial interests (which is all neoliberalism is – imperialism).
Yes, that’s the irony of our situation now. We’re gonna crowd everybody into apartments, but people won’t have children in those conditions, which means we’ll have to import more people to fit into more apartments in order to keep the economy afloat. It’s such an obvious dead-end and yet it is the official policy of our so-called leaders.
Simon: “We’re gonna crowd everybody into apartments, but people won’t have children in those conditions, which means we’ll have to import more people to fit into more apartments in order to keep the economy afloat.”
Eh, for a while. In a world of globally tanking birth rates, importing ready-made adults to maintain population growth is a short-term strategy.
What I think is going on is that the pie has already started shrinking, and those with political influence are using that influence in order to keep their own piece growing (or at least not shrinking). That means that everyone else’s piece is shrinking, and in fact, it’s shrinking faster than the pie as a whole. (Y’know, increasing inequality.) So, take immigration. That will increase the price of rent: more money for real estate owners, and less for those who need to rent. But again, for how much longer?
Exactly. And this is how Australians were conned into supporting the system because taxation was rigged in such a way that owning investment property was a sure fire way to make higher returns than any other kind of investment. Apparently, 25% of Australians now own an investment property, so there’s no chance of the system being changed til it collapses under its own weight.
This has all happened before on a lesser scale. The usual result is reactionary blow back. It’s already starting to bubble up in Canada and is certainly starting to simmer here in Aus amongst the classes on the outer. Any political party who leant into these concerns would probably get a lot of support.
Whether one does or not is anyone’s guess (not much chance here in Aus). Historically too as Irena mentions cities are a population sink rather than souce. This is why they often drift away on the breeze when conditions go quickly south. I often wonder if Australia’s economy really tanked how many of the recent immigrants (and even homegrown urbanites) would just leave to somewhere else in the Anglo American empire that has better prospects. This is what happened with the Western Roman Empire, all the Urban professionals and the greater plebs all moved to the Eastern Empire as things went south.
Apparently this is happening in New Zealand at the moment (all coming to Aus of course).
Yes, but will it happen before we turn Australian cities into Beijing and Shanghai clones? I suspect Australia and the US will be last ones standing which means we’ll get the people fleeing from elsewhere, which is exactly what is already happening. Can democracy pull a rabbit out of the hat is pretty much the only interesting question left. We’ll see what happens in the US in a couple of days and whether Trump does something interesting if he gets a second term.
Yeah I very much doubt the big cities can be saved. Adelaide, Brisbane, Hobart and Perth may hold onto some local connections but Melbourne and Sydney are gone to globalism and really have been for quite some time. I was in central Melbourne this weekend and much of it was unrecognisable even from a decade ago.
I think the USA will long outlast us economy wise. We have a big problem with domestic production of all the essentials compared to them, and they can leverage a huge domestic market and land corridors to other big markets to the north and south. Australia has always suffered mightily when global trade has contracted. Trade wars, tariffs and export controls will probably spell doom for our economy, which is already running on fumes.
That’s before even accounting for the fact that another big drought is due around the end of the decade, which if anything like the last will lead to some interesting times.
Simon: “Apparently, 25% of Australians now own an investment property, so there’s no chance of the system being changed til it collapses under its own weight.”
Ah, yes, that’s the other thing. It’s a problem in many countries. People with money (not just the legitimately rich, but those who have some savings that they’d like to invest somewhere) buy houses/apartments, meaning that those who want to buy a place to “just” live in are largely outcompeted. On an individual level, it makes sense: other types of investment are simply riskier. But on a societal level, it speeds up decline, as more productive branches are starved for funds, and as those who don’t own property use up an ever larger share of their shrinking income on rent. And then they lecture the young for having gone on a breeding strike. (“Your ancestors raised children in mud huts!”)
Are there any historical precedents for this sort of thing? I wonder if it ends with a bang or a whimper. Unaffordable food have a tendency to produce riots. (Didn’t the French Revolution start out as a bread riot?) Unaffordable housing, though…? Perhaps it “just” produces tent cities (and no babies). However, it probably does make a country more vulnerable to foreign invasion, since an ever larger share of the population has no stake in the system and therefore no motivation to defend it.
One more thing occurs to me: buying a house/apartment to rent out is a safe and easy option only as long as law and order can still be relied upon. If those start breaking down (which they do tolerably often once the economy crashes), it becomes a far riskier, and put bluntly, a far more violent affair. Suddenly, courts and the police cannot be relied upon to evict renters who stop paying. (Suuuure, they may still go after murderers and such, but insolvent renters – pfft!) If you really, truly want them out, you have to resort to violence, intimidation, or tricks such as simply locking them out (if you have the actual means to do that, which is far from guaranteed). And if you do succeed (not guaranteed), how confident are you that they or their friends won’t return the favor by beating you up, or beating up your spouse/child, or killing your dog (or merely vandalizing your car)? And if you just let your property sit there empty, then sooner or later, squatters will move in, which is even worse than a “renter” who is not paying rent. (After all, the non-paying renter was probably an ordinary person out of a job. The squatters may be far less “ordinary.”) So, landlording stops being an attractive option for retired dentists who’d like some extra cash for little to no work, and it’s left to big bosses who have the ability to hire big men with big muscles and baseball bats. Renting also becomes even more awful than it already is, but that’s the thing: you can always get out of landlording by simply cutting your losses, but people who rent often don’t have much of an alternative, unless you count the option of moving into a cardboard box under a bridge.
So, yes. Affluent (but not really rich) people invest in real estate because it’s a “safe option.” But if the rest of the economy goes the way of the dodo, then the safety of the “safe investment” evaporates pretty fast.
Skip – it’s a curious thing to walk around the areas of Melbourne where the high rises are. They are almost ghost-towns on the weekend. There’s been media stories that most of the apartments are empty, since they are just places for foreigners to park their money. I could well believe it. Meanwhile, where do young Australians want to live? In the old worker’s huts of the inner city. Almost as if they are desperately clinging on to some vestige of real history.
Irena – I think the worst part about property investment is how dumb it is. You learn nothing in the process since everything is outsourced to other people and you just take the profit. Meanwhile, no money is put into speculative business ventures, which at least are vehicles for learning and may contribute something valuable to society. I would expect a nation that invests in property to become stupider over time.
I don’t know how it works in Europe, but in Australia almost nobody is a landlord directly. You outsource that role to real estate agents and they take care of all the problems with the renters. Ultimately, the police will show up to evict people. Now, there is a shortage of police in Australia these days, so your larger point stands that a break down in social order would be a problem for landlords. But, then again, it will be a problem for everybody if it gets that bad!
@Simon
At least in the Czech Republic, landlords generally deal with renters directly. This is also true in Serbia (which is where I’m originally from). But the UK, for instance, is like Australia: if you rent there, you probably never have any contact with the property owner.
Anyway, in Serbia, it seems to be pretty hard to kick out a non-paying renter. Courts will rule in the landlords’ favor – but they’re very slow (potentially several years; I know of a case, admittedly involving an office rather than an apartment, where it took something like a decade). And if a renter just leaves after not having paid rent for several months – eh, it’s probably best to just cut your losses, since a court case will take forever. So, in practice, it’s not just a matter of *what* the courts/police will do, but *when* they will do it. Of course, if you are an insolvent renter, life can get pretty miserable for you as the landlord keeps trying to kick you out. That said, if you simply have nowhere else to go…
(I’m not completely sure how evictions work in the Czech Republic. I’ve always paid rent on time.)
So anyway. If I suddenly found myself in possession of a lot of money, I’d definitely buy myself an apartment to live in, but there’s no way in hell I’d buy an “investment apartment” to rent out. I’m not cut out for that sort of thing, in more ways than one. Alas, Prague has absolutely ridiculous property prices. Apparently, relative to salaries, it has the most expensive real estate in the EU (second only to Amsterdam). So, I live in a rental studio. The studio’s okay (I do live alone, after all), but I don’t like the insecurity of it.
Irena – even if you own an apartment, you’re still beholden to the whims of the body corporate. The old dream of “a man’s home is his castle” only works if you own land. Of course, even then, these days you have the morons at the local council who want every structure on the property to have the proper paperwork filled in so they can justify their extortionate salaries. But more than anywhere else, a house and land situation gives you the most freedom to simply be able to do something because you want to do it without having to ask permission like a child. I daresay that’s why our Devouring Mother wants us all in apartments.
@Simon
In Europe, apartment living for the masses is a pretty much an inevitable consequence of the population density. If Wikipedia is to be trusted, the population density of the EU [not sure about the whole continent of Europe] is approximately 30 times that of Australia. Some forms of freedom are lost at high population densities. Maybe the Devouring Mother (hehe) is to blame for your increasing population densities, but one way or another, if the population density of an area is high enough, you can kiss detached houses good-bye.
Anyway, owning your own apartment/house does not give you total freedom, obviously, but it does offer a level of stability and protection. It can make a huge difference in case of job loss (retirement, too), plus it means you don’t have to worry about a landlord deciding not to renew your contract. (Actually, that’s precisely what happened to me a few months ago: the landlady decided to sell the apartment I was renting, meaning I had to move, which was a huge hassle and ended up being very expensive, too. About a month’s worth of income, all combined. Would be nice not to have to deal with such things again.) And you’re right about modifications. Even very small ones, such as choosing the color of your walls. Also, I can tell you that the furniture that I own is optimized for moving, rather than for living. Just because I never know how long I’ll end up staying where I am, and moving is such an enormous hassle even under the best of circumstances.
Maybe that’s why continental Europeans are a bunch of communists 😛
There is no reason for Australia to have to go down the path of high density. We have enormous areas of land available. What’s happening here is a deliberate decision based on the neoliberal policies that were implemented in the 90s. Prior to that, housing here was very affordable.
That sucks about your having to move. I always thought the rental laws favoured tenants more in Europe. Obviously, I was wrong.
There does seem to be a fundamental difference between Anglo cultural mores regarding housing and Continental approaches. This was actually discussed at length by Australian politicians after WW2 when the Aus federal government was pressured into taking refugees from Europe by the UN. Population density isn’t necessarily an argument because England itself has always been among the most densely populated European countries, especially since early modern times.
It may have something to do with the UK and the colonies that endured all being islands or isolated continents so therefore basically immune to land invasion and could afford a bit more ‘freedom’ and a bit less socialism so to speak, and the fact the aristocracy maintained power in our countries so everyone aped them.
Australian population density statistics are extremely misleading too because so much of the continent is not suitable for settlement. Draw a line from Rockhampton to Adelaide. Australia as a populated place is roughly 90% south of this line, and even the majority of that area is not really suitable for denser settlement compared to places like Europe.
I posted on diaspora
https://diasp.org/posts/24495453
Some peoples disagree with your point of view
Skip – I’ll have to go back and try and figure out who was the brains behind neoliberalism. The parallels with Marxism are obvious. One thing is crystal clear, neoliberalism is fundamentally toxic to traditional Anglo culture. That’s why the Brits voted for Brexit and why the yanks voted for Trump. The only reason the same thing hasn’t happened here yet is because the boomers and Gen Xers got on the property train before it left the station. I would expect the upcoming generation to swing hard against the status quo once a politician figures out how to connect with them. Seems that Polievre is doing that in Canada.
Joblion – thanks for that. The definition of managerial class or bureaucrats is not the main point I was making. The important point is that the old definition of inflation was understandable by anybody and the new one is deliberately not understandable. Moreover, the new definition deliberately distorts the situation by making things seem better than they are. It is a fraud against the public in favour of the class of people who benefit from the status quo.