Rents, why they almost always go up, and capitalism outside of time

2021-09-08

You're going to see Markdown notation in here. I know Gemini does not support this, but I want to be able to convey emphasis and I expect most readers will know what it means.

I don't claim to be any kind of economist, but economists are just as dumb as the rest of us, and moreover, the mainstream ones are irredeemably committed to a model of human thought and action that bears absolutely no relationship whatsoever to actual human beings. In other words, they're definitely not real scientists. So while we can't ignore what they say, we can definitely assume that it's highly inaccurate and basically useless until proven otherwise. My point is that anyone willing to _think_ a little bit is basically qualified to have thoughts on things like economies and rents and economic relationships in general.

Anyway...

By rent, I don't mean only housing. Rents are much broader than that, encompassing leases and subscriptions: Basically any relationship in which you are expected to pay for something forever and never come to own the thing that you're paying for.

Anyone will have noticed that the housing market essentially only ever goes in one direction — up. This has not always been the case, but it has been the case since the 2008 catastrophe, and I propose that it will continue to be the case for a long time. This is due to two factors: The financialization of everything and the continued concentration of capital, along with some peculiar characteristics of housing itself.

The idea is this: Housing no longer responds to the pressures of supply and demand, or at least it doesn't do so to nearly the same degree it once did. Why? Because housing is increasingly being captured by investment (read: financialization) firms who have every reason to behave like feudal lords (monopoly capitalists) and no reason at all to behave like "typical" capitalists. And why do they want to buy up housing? Because it's an absolute necessity that no one can simply choose not to have.

Everyone _must_ pay for housing. Owning it, of course, is ideal (from a certain perspective at least) because at some point, you stop paying, ownership is transferred to you, and after that costs are minimal. It's mostly an asset. But if you can't afford to own, or aren't allowed to own, you can still rent. The deal here is that you pay forever and _ownership is never transferred_ , but you have a place to live. Now, there's no question that _selling_ (i.e., entering into a genuine exchange) is profitable and always has been. With rents, on the other hand, profits continue forever; as long as the house exists and someone needs a place to stay, the owner will always be able to extract profits.

So the question for a savvy person is how to create a situation where the maximum number of people have to rent rather than own, and you own the maximum number of rentable houses. Clearly, the answer is to buy up all the houses available and take them off the market for sale, drive up housing costs such that fewer and fewer people can own, and then rent out to all those people who now have basically no choice but to agree. Returns on the investment are guaranteed, which is what financialized companies always want.

This is of course incredibly simplified, but this is exactly the situation we now live in. At earlier points in history, it might have seemed crazy to think that just a few firms would be capable of buying up all the available houses and basically monopolize an entire sector of the economy, but this is what's happening. It's not complete, but it's happening, and there's very little anyone can do about it. Capital concentration is so acute (read Thomas Picketty's _Capital in the 21st Century_) that a relatively small number of firms really do have the capital to just buy housing continually, or even build it. After the 2008 crash, they put that money to work buying up all the housing they could, and they've been doing it ever since. We're not talking a small portion of homes, we're talking huge percentages of all homes available in certain areas: between 20% and 90% depending on the area and the year.

This does a number of things. For one it drives up housing prices (a firm with functionally unlimited cash can always outbid an individual), meaning fewer houses are in reach for ordinary people, who are then, of course, forced to rent those same houses they can't afford to buy. It also creates a one-way ratchet. Once prices are too high to buy, they also drive up rent prices concomitantly. And since there are more renters, there is less vacancy, and so rental prices stay high. And, thanks to historically low housing supply that has lasted for two decades, it doesn't matter how fast you build new housing, there will never be enough to meet demand. And both developers and investors (often the same people) know this, meaning there is never any reason to even attempt to meet demand and let prices fall.

Hence, housing prices are going to rise, and they'll stay high. And there's absolutely no reason to think they'll ever fall, or stop rising with economic expansion in general. Of course, anything's possible, but there are no indications of this, and that's kind of the point. We live in a time where total monopolization (or oligopolization) is not only possible but is in fact the order of the day. Everyone wants to become a simultaneous monopoly and monopsony, and housing is one area where this is actually becoming a reality.

Non-housing examples

This is true of not just housing, but basically everything. If there is some sort of viable way to turn a commodity market into a rental market, that's what people will do, and this always results in higher prices that must be paid forever. Just consider streaming media services like Netflix. It does not obey any of the "rules" of competition or supply and demand that economists talk about. Everything about maintaining a streaming service has gotten cheaper and cheaper. Storage is practically free. Hardware has been dirt cheap (at least until the covid supply crunch — it remains to be seen how this will affect things), labor costs are slowly going down, and there is intense competition among streaming services, or at the very least, there are a million streaming services to choose from. And yet, prices continue to rise like clockwork. Every two years or so, ever major streaming service raises it's prices, even as their costs go down and their intellectual property increases. I'm not saying this is some great burden, like in the housing market. It's just entertainment. But I am pointing out that this is the logic of rental capitalism. The economics mean that any rental/subscription/lease relationship is a one-way ratchet that leads to higher prices.

Some even more general theoretical thoughts on "complete commodification" and capitalism outside of time

This is more of a bullet-point outline of the root relationships that ground everything I've said above.

What is a commodity? For the purposes of this analysis, it is something that is owned and has been abstracted away from its actual properties, fetishized, and turned into something that exists only to be sold.

So, there two main aspects:

1. Owned

2. Abstracted into something that exists only to be sold

Let’s consider how we can push each of these elements to an absurd and ultimately terrifying limit.

Commodities are owned

What’s the logical conclusion of ownership, of having absolute _dominium_ over an object? How can we take this to extremes?

Permanent ownership. That is, _dominium_ cannot be transferred, even for money.

This also eliminates temporal considerations as well. Permanent ownership is perpetual, eternal ownership.

Singular ownership. That is, one person owns everything. And given the above, this one person owns everything and also that ownership can’t be transferred.

All this is starting to sound an awful lot like a king.

Universal ownership? That is, everyone owns everything?

Of course, this makes no sense. If everyone owns everything, then the concept of ownership is meaningless. So universal ownership is the abolition of all ownership, the abolition of all property. This begins to sound an awful lot like communism, and hence is reprehensible to the capitalist.

Commodities are abstracted into something that exists only to be sold

What do we mean by abstracted? All physical characteristics are ignored.

The only meaningful property is that it is something that can be sold. The physical characteristics matter a lot for the buyer, but a commodity is only a commodity for the seller. And once it is sold, it is no longer a commodity.

So there is a temporal break. At some moment in time, it is a commodity, and at some other later time, it is not, and the moment that determines which is which is the transaction, the exchange.

How do we take this to an extreme?

What if you could abstract the commodity not only in space, but also in time? Not just ignore the physical characteristics, but also the temporal ones? What if it was something that was forever being sold, in perpetuity, always in the process of exchange? This is nothing more than a lease, a rental contract.

All this is starting to sound an awful lot like tribute.

Conclusion

Now do that to everything: turn everything into a commodity in the sense outlined above, pushed to the absolute extreme of both physical and temporal abstraction and fetishization. You get the _universal lease economy, the universal subscription economy, the universal rental economy_. Rental capitalism, rental feudalism.

Once you own everything, or at least enough of everything, you can turn things into uber-commodities. Commodities that exist only to be sold, but whose ownership is never transferred and which are _sold forever_. A perpetual lease.

What is this thing? I don’t know the name, but here are the characteristics I’m thinking of:

It is still owned, but owned completely and forever by someone or something

Meaning that the rights to it, the _dominium_, are permanent. If it is “sold” or leased to someone else, they just get to partake in it for a bit. They don’t ever own it. You pay to participate in it/with it.

This is why it seems to take the form of a service. A service can be done over and over again. And a service can’t be owned, since it’s an act. But if you own/control everything that is needed to perform that act, you effectively own the service.

It still exists only to be sold.

The above two points are not a contradiction. The selling becomes just as eternal as the ownership. So it’s more like a lifetime lease.

And if this becomes the case, what is really being sold, after all? If this is universalized enough, have we not simply commodified life itself? Aren’t we really just saying that once someone owns enough of everything — meaning enough of the things that humans need in order to survive, thrive, exist, reproduce, etc. — they effectively own us, they own people?

The difference between this and slavery is that our life is being leased or rented back to us in return for a tribute, the monetary acknowledgment that yes, we are in fact owned. This is a slavery that recognizes that slaves are the ultimate source of value and that slaves are the ultimate source of the recognition that registers all value.

This is not a situation that exists currently, but it is the direction we are heading. Whatever this is, it is, in fact, another stage of capitalism. Capitalism outside of time.