Some things in life acquire an outsize popularity which defies all common sense. The outlandish appeal of such things cannot be explained except by reference to René Girard’s theory of mimetic desire – the idea that there are many things we value not for their intrinsic utility and enjoyment but because we see that other people want them. Examples of such positive feedback loops in excess fashionability would include sourdough bread, Miss Taylor Swift and houses in Clapham or Fulham.
Property is simply a stupid, rivalrous, uninnovative, rent-seeking repository for people’s money
Fulham, for instance, is so far west it should have its own time zone. If you work in the City, you would have a shorter commute if you spent the money on a Georgian manor house outside Ashford – with a ha-ha and peacocks, and the facility to park your car less than 500 yards from your front door. And yet, through some form of emergent collective insanity, people conceived the idea that Fulham is a fashionable place to live – and so, per the late Professor Girard, it is a fashionable place to live, and consequently fiendishly expensive. Clapham residents desperately point to the proximity of the Common as justification for their residency, despite the fact that it’s obviously rubbish. (Where I grew up, Clapham Common would be in contention for a ‘Nastiest Field in Monmouthshire’ award, even without the heightened risk of physical assault.)
One way to escape the follies of mimetic desire is to imagine yourself in the mindset of a different person from a different milieu or time period. I often use Louis XIV, though I occasionally substitute Snoop Dog, Bess of Hardwick or Cyrus the Great for purposes of diversity and inclusion.
Imagine showing Louis XIV your life. Almost everything would amaze him. He would offer you half of Gascony for your flat-screen television. Even driving a 20-year-old car would delight him. The Palace of Versailles consumed more water than the city of Paris, yet the cleanliness of your water supply would still astound him, as would your flushable toilet.
Almost everything available on Amazon would amaze him, except the bizarrely drab clothes. There is a chance that a hastily microwaved lasagne might be the best thing he’d ever eaten, and he would steal your shoes for their comfort. Yet he would be left with one burning question: ‘How can someone possessed of such immeasurable wealth live in such a cruddy house?’ In every respect except housing and sexual opportunity, your life is better than his.
And this is why the property market needs to be taxed. Never mind inter-generational fairness, it’s simply a stupid, rivalrous, uninnovative, rent-seeking repository for people’s money. Look at it like this. You are earning a six-figure sum, and you decide to buy a house in Clapham. What this says is that you, as an immensely rich person in 2024, have no higher aspiration in life than to spend the next 25 years of your life devoting70 per cent of your discretionary income on acquiring an asset that a poor person could have owned in 1924. How is that progress?
This problem emerges from multiple oversights in economics: the conflation of ‘capital’ and ‘land’ – a vital distinction made by Adam Smith, but which was subsequently lost. The use of ‘single representative agent’ models which are blind to inequality, especially between generations. The fact that housing costs were largely left out of inflation statistics. And quantitative easing, which redistributed money from the poor (who spend money) to the rich (who don’t) in a form (residential property assets) which makes it painfully difficult to realise the gains (except by dying).
And then we wonder why the economy isn’t growing. I suppose it might help if we had a few MPs who didn’t own two houses.
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