“Housing is central to understanding what’s happening in capitalism today” – An interview with Brett Christophers

Brett Christophers is professor at the Department of Social and Economic Geography and the Institute for Housing and Urban Research at Uppsala University, Sweden. His most recent book, The Great Leveler: Capitalism and Competition in the Court of Law (Harvard University Press, 2016), provides a theoretical and historical examination of the relationship between competition and monopoly in capitalism. Christophers’ research ranges widely across the political and cultural economies of Western capitalism, with housing and housing policy being of particular interest. In this interview, which took place back in February, we talked about housing and political economy and the transformation of the Swedish housing system.

Elinor Chisholm: What does an understanding of political economy offer people who are interested in housing?

Brett Christophers: For me, political economy more than anything else entails thinking about economic questions in their broader political and social context. It means thinking not just about individuals and preferences, but also thinking about institutions, whether they’re state institutions, or financial institutions, or construction companies. It means thinking about the relation between institutions and consumers and employees and it means thinking about those relations explicitly as relations of power.

Where housing is concerned, it’s trying to think about housing in the context of broader institutional and political relations, and trying to get away from the economists’ very narrow focus on questions of supply and demand. And rather thinking about how those relations of supply and demand are themselves socially constructed in particular institutional contexts.

EC: What should governments keep in mind when taking advice from economists?

BC: The arguments we tend to hear from politicians, that they in turn hear from mainstream economists, tend to rely on a set of often unstated assumptions about how regulation interferes with relations of supply and demand and that if you remove those regulations, supply and demand will align with one another. Equally importantly, it assumes things that the private sector will behave in such a way as to enable supply and demand to meet one another. In reality, the private sector rarely does behave in this way. In the UK case, a classic example would be that the government releases surplus public land for the private sector on the assumption that the private sector will build housing so that supply can meet the evident demand. And lo and behold, it doesn’t happen, because the private sector has all sorts of motivations that simply don’t conform to the stylised models that politicians and mainstream economists use.

So that’s where political economy comes in. It’s about examining actual behaviours and actual relations of power, and understanding what happens rather than making a set of essentially unfounded assumptions about how the state on one hand and the private sector on the other hand behaves.

EC: How does one go about, as your paper with Manuel Aalbers puts it, ‘centring housing in political economy’?

BC: Political economy – by which I mean a tradition of thought that is largely if not entirely indebted to Marxism – has traditionally been very heavily focussed on relations of production, the relations between capital and labour in the industry-factory context. And most of what happens outside of that rather narrow understanding of production – finance, the buying and selling of commodities on markets – has been underplayed. Our sense, and a lot of other people have alluded to this in different ways, is that if you look at contemporary capitalism today, houses are much more important than just their production. So we argue that you can’t understand contemporary capitalism without giving housing a much more central role.

First, you can think about capitalism as flow, as circulation, or motion, which is something that David Harvey likes to talk about quite a lot. Things being produced, things being sold for money on markets, and then money being reinvested in new rounds of production and so on and so forth. You can’t understand those processes of circulation without thinking pretty closely about where housing fits into that. For example, you find that the financial system in the UK is as much bound up with financing the housing market as it is with financing production. And then you can think about all the different ways that housing is implicated in the circulation of capital – as a physical product, as something traded in real estate markets, as something that’s rented, or renovated.

The second way we wanted to think about housing was as a social relation. If you think about the classic relation in capitalism, between capital and labour, you see that social relations today are massively mediated by relations of housing. People’s relationship to landlords, be they public or private landlords. People’s ability to reproduce themselves socially or economically is fundamentally bound up with their position in housing markets, with their level of security or precarity. The intersections of class with race and gender relations – you see this in the predatory lending in the subprime crisis in the US. You can’t understand social relations within contemporary capitalism without giving housing a central role.

The third way was thinking about capitalism as ideology. Our argument is that housing is not only one example of private property, but that it also plays a much more foundational role. In many ways it’s kind of the archetype of the idealisation of private property. It plays almost a wider role of cementing private property relations within capitalism because of the ideology of homeownership. Not in every country, but certainly in most Western countries, with a couple of notable exceptions, homeownership has become such a central ideology that it almost underpins and underwrites the hegemony of private property ideology more generally.

Housing is pretty central in all these different registers to understanding what’s happening in capitalism and political economy today.

EC: People’s position in the housing market – their precarity or their security, as you put it really affects their quality of life. Given how heavily housing is embedded within contemporary capitalism, what can we do to create fairer outcomes?

BC: One of the things that I always come back to, and this is just one example, is the tax system. I think many people, including myself before I started studying housing, are pretty blind to the many different ways in which different types of tax policy impinge upon housing and accessibility to housing. There are all sorts of things that could be done differently to how they’re done today.

One example. About a decade ago, inheritance tax was abolished in Sweden. If you have a proper, meaningful inheritance tax system, it stands to reason that over the long term you’re much more likely to enjoy a more equitible distribution of housing assets. The removal of inheritance tax clearly makes it easier and less costly for relatively advantaged parts of the population to simply hand down their assets to their children, thus embedding inequalities that are concentrated in the housing system.

Another example. In Sweden today, interest costs on residential mortgages can be offset against personal taxation. Why is that the case? Renters can’t offset their rental costs against their personal taxation, so why should you be able to offset your mortgage interest? The basis for that in my view is purely ideological. It’s a means of subsidising those who own housing. And not everyone can own housing, and not everyone wants to.

The traditional notion of tenure equality which used to pertain in Sweden whereby it was considered to be equally valid and equally acceptable to be a renter or an owner has basically been demolished, and different methods of taxation are central to that.

So I think a huge amount could be done within the context of the existing political-economic system to make housing much less problematic. Of course the problem there is that politicians typically aren’t willing to go there. It cuts to the nerve of the electorate. Making significant changes around mortgage taxation, mortgage interest relief, or property taxes or wealth taxes or inheritance taxes, tend to be areas which politicians refuse to go to, whether they’re on the left or the right.

EC: I first learned about different models for housing systems from the work of Jim Kemeny in the 1980s and 1990s. In his and others’ work Sweden is an example of a totally different housing system, and one that appears to lead to much better outcomes, especially for renters. So I found your work on Sweden’s current housing system – which you describe as a ‘monstrous hybrid’ that plainly doesn’t work for disadvantaged groups – really useful, and pretty depressing. Let’s talk a little more about Sweden and its transformation from a country that prioritised tenure neutrality to one that explicitly privileges homeownership, such as, as you’ve already mentioned, in tax policy.

I saw an article in the Guardian in the UK a couple of years ago, and the headline was something to do with the lack of affordability for residential properties for purchase in the UK. The subheading was something like, ‘a whole generation doomed to a lifetime of renting’. When you get a nominally progressive media outlet that has itself so bought into the ideology of homeownership, that the whole idea of renting is some kind of inferior lifestyle, that tells you everything about how entrenched the ideology of homeownership is.

Something similar has happened here, but it’s happened much more recently. The very idea that homeownership is a more valid or more acceptable way of living than renting is not a natural way of understanding the world, it’s something that’s culturally and politically shaped over time. Political and cultural institutions in Sweden have just as much a role in fomenting that set of attitudes and attitudinal transformation as in the rest of the world. And coming from the UK and having lived in New Zealand and in Australia, it’s somewhat depressing to see Sweden heading down the same course, while knowing what the likely outcomes of that are. It’s a little bit like turkeys voting for Christmas.

When I teach undergraduates in Uppsala and I ask, what are you planning for housing over the next ten years, all of them want to own a home. The reason they want to own is partly because they want to own but equally because they do not want to rent. And partly that’s because it’s extremely hard to rent because there’s been under-construction of affordable housing for renting for at least two decades in Sweden.

EC: There has been quite a bit of overseas media attention on the problems finding a home to rent in Sweden. In these articles (this one on Bloomberg for example), Sweden’s system of rent regulation is blamed on the lack of supply. But in your perspective, that’s an incomplete analysis.

BC: It’s about having a historical perspective. Arguing that all we need to do is remove obstructive regulations and the market will clear and everything will sort itself out, ignores what has happened historically. It’s saying that the problem is regulation, the remaining regulation. That might be partly the case, but we also have to say, well it’s also because of the removal of certain regulations.

There was a whole system of subsidies that were in place that enabled large-scale construction of property for rental. When these were phased out during the 1990s, it rapidly became much less economically viable to construct property for rental. Having removed the supply side intervention, the demand side intervention in the form of rent controls remained in place. So what we’ve got is a sort of imbalanced system that simply doesn’t work.

What I would say is that it’s incredibly important not to idealise the past when looking at these things. That’s a classic leftist problem particularly in Sweden. In certain respects things might have been more functional, more progressive perhaps in the past, but it would be wrong to suggest it was perfect. The property that was built was somehow ideal property, or was distributed in an unproblematic way – that’s clearly not the case. But it is important to understand what’s happened historically to bring us to the current impasse. And that’s what seems to be missing from the argument we often hear from the economists.

This interview was edited for clarity and length.

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