Peter Lewis asks whether doubling down on Government controls, regulations, imposed costs and tax penalties is the answer to a ‘broken’ housing market?
In the time since the recent British elections the results have received little in-depth coverage and analysis in our local media. Apart from the shocked surprise at the outcome by many of those closet-socialists active in the media, most commentators have shrugged their shoulders and gone back to analysing Trump.
Yet it is interesting to look not only at the overall result but the ebbs and flows of the various UK electorates and the population profiles within and consider how this may reflect potential changes in the New Zealand political arena.
A competition between two opponents
Generally, in mature democratic democracies, politics becomes a competition between two major political parties. For most of recent history, these parties tend to comprise a Conservative party mainly supported by the farming and white-collar business and professional sectors who promote policies intended to create wealth, and a Socialist party supported by blue-collar voters and those who derive their income from the public purse who promote policies intended to redistribute that wealth.
The rise of the professional political class
However, we now see that these distinctions are breaking down, not only in those who support such parties but also within the parties themselves. This has been coupled with the recent advent of a professional political class.
The old path to politics
In the past, an individual would move out into the working world, achieve some success and reputation within that sphere, and then be sufficiently motivated both by their own experiences and the experiences of those around them to progress into political action.
The new path to politics
These people, those who possess actual real-world experience, have now been replaced by theoreticians, those who have formulated their ideas and beliefs secondhand by reading, listening and absorbing the pre-packaged opinions of others.
The changing nature of work
Rapid changes in the nature of employment have hastened these changes. Gone are the days when you joined a major employer on entering the workforce and stayed there, secure and well-fed, until you eventually achieved the gold watch and the retirement cheque.
As well as now moving from company to company, perhaps from occupation to occupation, many people have also ended up in the gig economy. Self-employed contractors are not now just highly qualified professional experts and consultants, they can be Uber drivers, Airbnb operators and cleaners.
This is insecure employment, vulnerable to any sudden changes in the political or economic environment, and carrying few if any employment benefits.
Blue collar conservatives & white collar socialists
We can now see that, in the UK elections, many traditionally blue-collar voters abandoned Corbyn’s socialist promises to nationalise this and tax that and opted for more certainty, less change, and (by leaving the EU) reducing the risk of Johnny Foreigner coming in and stealing their jobs.
The number of voters choosing this option vastly outnumbered those holding secure office jobs in large prosperous cities who’d like to remain in the EU because it makes it just so much easier to pop over to Majorca for their summer holidays.
Thus the working class are now tending to vote conservative while the educated and professional middle class veer towards socialism.
Generally, it would seem that the more insecure you feel about your current status in society these days the more conservative you will become.
The socialist path
Our own two socialist parties now strongly exhibit this trend. Gone are the muscular horny-handed manual workers from both the political and electorate ranks of the Labour party, while the ranks of the Greens have, right from the start, been heavily populated by schoolteachers and academics.
These days, to become a Labour party MP, forget the hammer and sickle – move from University into either an MPs support staff role or take a job in an NGO, cultivate contacts within your local party branch, and prepare to pounce when the time is right.
The conservative path
For National, there is a similar route – possibly moving from university though a top law or accounting firm and on to the governing board of a multinational company before gracefully accepting the offer of a seat in the Beehive.
Divorced from the real world
Thus we now get a Government almost entirely consisting of people who have grown up and matured in a social and economic hot-house, the path smoothed out in front of them and with minimal exposure to the vicissitudes and tribulations of the real world.
Having always been able to view humanity from the top down with an air of supreme detachment, they are then able to formulate and enunciate grandiose plans that are quite detached from reality and practicality.
The result? We end up with lofty promises to end homelessness, reduce child poverty and build 100,000 affordable homes within 10 years. After hubris comes Kiwibuild.
Are controls, regulations and taxes the answer?
Our housing market may well be ‘broken’, as Shamubeel Eaqub claims. However, is introducing a plethora of controls, regulations and taxes the answer? Real world experience indicates probably not.
Case in point: food
You and I fortunately live in a country where most of us have access to a vast array of clean and generally wholesome reasonably priced food available in almost unlimited quantities.
Sure, there are rules around food storage, handling, and other health-related issues, but there is no overriding and controlling Ministry of Food arranging the supply and marketing. It comes to us by the magic of the free market.
Yet in societies where rationing, government control, 10-year plans and state food markets are imposed we invariably find food shortages, endemic corruption, high prices and poor customer service, sometimes even ending in famine.
So if freeing up the market so that it expedites efficiency and supply works for the food industry, why would it not also work for housing?
Will doubling down on regulations free up the ‘broken’ housing market?
Do we really expect that the current plethora of limitations, consents, restrictions, imposed costs, red tape, tax penalties, and over-the-top requirements will provide a responsive and freely functioning lowest possible cost housing and residential rental market?
And if it doesn’t, will doubling down and imposing even more of such demands, as prescribed by those MBAs and PhDs now holding the reins of power, prove to be the solution for fixing the ‘broken’ housing market?
Back out in the heat and dust of the real world, well away from the air-conditioned four-windowed lofty high-rise corner offices of downtown Wellington or Auckland, I suspect not.
Photo credit: The feature photo is a derivative of “Michael Pollan” by Jeannette Montgomery Barron.
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