Mankind is divided into rich and poor, into property owners and exploited; and to abstract oneself from this fundamental division, and from the antagonism between poor and rich, means abstracting oneself from fundamental facts. — Joseph Stalin
Of course, everybody says they're for peace. Hitler was for peace. Everybody is for peace. The question is: "What kind of peace?" — Noam Chomsky
Tyrants are never born in anarchy, you only see them raise themselves up in the shadow of the laws or get authority from them. The reign of laws is therefore vicious and inferior to anarchy; the strongest proof of my proposition is the necessity a government finds itself in to plunge itself into anarchy when it wishes to remake its constitution. — Marquis de Sade
Looking at the world as a whole, the drift for many decades has been not towards anarchy but towards the reimposition of slavery. — George Orwell
If on the morrow of the revolution, the masses of the people have only phrases at their service, if they do not recognize, by clear and blinding facts, that the situation has been transformed to their advantage, if the overthrow ends only in a change of persons and formulae, nothing will have been achieved. ... — Peter Kropotkin
Anarchism is not a romantic fable but the hardheaded realization, based on five thousand years of experience, that we cannot entrust the management of our lives to kings, priests, politicians, generals, and county commissioners. — Edward Abbey
Anarchists know that a long period of education must precede any great fundamental change in society, hence they do not believe in vote begging, nor political campaigns, but rather in the development of self-thinking individuals. — Lucy Parsons
I am not a dictator, and I do not think I will become one. I will not maintain power with a machine gun. — Fidel Castro
The writer is a spiritual anarchist, as in the depth of his soul every man is. He is discontented with everything and everybody. The writer is everybody's best friend and only true enemy — the good and great enemy. He neither walks with the multitude nor cheers with them. The writer who is a writer is a rebel who never stops. — William Saroyan
One element, however, tends to go flagrantly missing in even the most vivid conspiracy theories about the banking system, let alone in official accounts: that is, the role of military power. There's a reason why the wizard has such a strange capacity to create money out of nothing. Behind him there is a man with a gun. — David Graeber
Nov 132012
 

Going hungry and unsheltered is an unpleasant prospect; we all seek to avoid that situation. Honest but simple people can think of no other way to get their meal ticket but to earn it through some useful work.  Poor fools!  Clever people realise that work is just as unpleasant as going hungry and unsheltered.  Clever people conjure up scams to extract the wealth created by those that work so they can get their meal ticket without doing anything useful for anyone and have a good laugh at the poor boobs they swindled.  No one excels at scams more than those clever clever people in government.  Early governments were unsophisticated in their scams practically the only one they had was the Mafia’s favourite the protection racket.  You know the gag, round up some thugs, go round the working people and offer to ‘protect’ them in return for a fat slice of their hard earned wealth and if they refuse show them why they need protection…  Government has come a long way since those days!  In addition to the old favourite the protection racket, government now has the permission racket.  The routine goes like this, find something people want or need to do and then sell them the permission to do it.  If they refuse then just send the thugs round to show them why they need permission…

Unlike the protection racket the permission racket is infinitely versatile; there is no human activity that doesn’t have the potential to be pillaged for permission by the powers that be.  In the future us peasants can look forward to being coerced into paying for permission to start a family, eat, use the toilet and even breathe.  Right now we need to buy our lord’s permission to travel, use a car, work, trade, keep a means of self-defence such as a gun and build a shelter from the elements.

Permission to build is a racket that offers an additional income stream for our bureaucratic overlords besides the price of permission.  By restricting permission the market in housing is artificially distorted making prices and rents rise over time and therefore make great fortunes for the landlords, mortgage lenders and other friends of the state.  A measure of how far property prices have been artificially inflated by the permission racket compare the market price of land without permission, land with permission to build but nothing yet built and land with something built.  In the UK currently land without permission sells for around £5000 an acre, land with permission but nothing yet built sells for £200,000 an acre and with something built around £400,000 an acre…  We can easily see that the permission racket has inflated land by nearly £200,000 an acre and in consequence doubled the total build cost.  A fancy price for thin air!  Absent the ‘need’ for permission the price of a house would in general be half what it is or even less.  In 1952 you only needed £1500 to get on the property ladder now you need £160,000.  Think that rise is just from the devaluation of currency, another government scam, otherwise known as inflation?  Think again £1500 is equivalent to £39,000 today accounting for inflation which is a long way short of £160,000.  What is a house really?  It is nothing too fancy really; a heap of bricks on a patch of dirt, some simple wiring and piping, in no way can it cost a substantial portion of a lifetimes’ earnings without some serious market manipulation.

This side effect of the housing permission racket amounts to a ponzi scheme.

Ponzi Scheme -
A fraud disguised as an investment opportunity, in which initial investors and the perpetrators of the fraud are paid out of funds raised from later investors, and the later investors lose all funds invested.

The perpetrators of the fraud being in this case the government and the initial investors being those that bought property early on in the racket.  The later on you buy in the more inflated that the price you pay will be and the more you will have to lose if the scam comes undone.  In this way the propertied are co-opted into supporting the scam; no one wants to see their ‘investment’ demolished neither in value nor in its physical existence by means of a council bulldozer.  It is an especially invidious ponzi scheme because unlike most such schemes you can’t practically avoid being ensnared in it.  People need buildings and unless you are willing to be homeless you must have or use at least one building to be your home.  Renting instead of buying offers some distance from the risk of collapse but before the collapse you are still paying much more for shelter than you would without the racket.

Can it collapse? Better ask when will it collapse?  The air inflating the house price bubble comes from nothing more substantial than government legislation and the bureaucracy that implements it.  Governments are paper tigers they look fierce but are soon burnt to ash when the spark of common discontent is put to them.  That discontent is rising in temperature steadily inflamed not least by the artificially ballooning cost of living of which the housing bubble is but one of many causes.

UK house prices adjusted for inflation


Permission Rackets and the Property Ponzi Scheme.
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