The Rentier and the Lumpen by Basak Tanulku (Independent researcher based in Istanbul)

This blog post will discuss the logic and the factors behind the current dual class structure, characterised by increasing lower and upper classes and declining middle classes. In this class structure, the upper and the lower classes, i.e. the rentier and the lumpen tend to have similar aspirations of speculation and consumption. From a psychological approach, the relationship between the lower, upper and middle classes can fit into a Freudian framework of id, superego and ego. In this framework, id corresponds to the animal inside a person, which needs to be satisfied, like sexual libido, hunger and thirst. Superego is the human part above all, corresponding to the narcissistic personality, which sees the self above everything and separates the good from the bad. Ego is in between the two, the suppressed part of the human personality. In this current society, superego is the rentier, free to do anything; id is the lumpen, who is unable to control basic instincts and to be satisfied; and ego is those in the middle, pushed from all sides, living in constant debasement. In this context, it can be argued that the rentier (the superego) and the lumpen (the id) vote for the same political parties, and share the same political and ideological ambitions and sexual fantasies. However, the ego, those in the middle, is pushed from both sides, envied and debased at the same time:  ridiculed for being ordinary and conservative and isolated from mainstream life because of the power of the new rich and other parasitic forms of life that are seen to deserve the high life as the result of their material and symbolic wealth.

How have we ended up here? This psychosocial context fits into the political economy, which emerged in the 1980s, all over the world. This era has many names, such as “neoliberal”, “consumer”, or “global”, along with many more beginning with a “post-” prefix, although all these terms may have alternative meanings in different theoretical paradigms. During this period, particularly the developed countries restructured their economies through post-industrialisation, and shifted to service-based economies in which innovation and high technology became very important for any economy to be considered successful and competitive. The membership of the conventional working class has declined due to the impact of outsourced production to developing countries, a process accelerated by “globalisation”. In this process, the conventional working classes have transformed into people dependent on ‘ready’ money which prevented them from forming class consciousness. This led to the erosion of class solidarity among them, and the decline of trade unions and class-based politics. The offspring of the working classes became stigmatised through terms such as “benefit scroungers”, “chav”s or “asbo”s, which refer to the underclass or lumpen, or people with neither class consciousness nor solidarity who live in an era of consumption, celebrities, football superstars and tabloid newspapers. They become symbolised through long-term unemployment, low levels of education, and an attitude towards life which can be summarised as “no future”. Their situation is legitimised by political actors and those who profit from such a political context. In this new class structure, the conventional middle classes have also experienced a decline both in numbers and prestige, best represented by public sector workers stigmatised for their perceived “non-job” jobs. Their declining status corresponds to a declining sensitivity towards accumulation and planning for the future, since a more differentiated consumer market with many products necessitated a throwaway society, with an apathetic attitude towards the environment, people and the future. The middle classes correspond to an ordinary, conventional and boring way of life, restricted in 9-to-5 work shifts and two-up two-down households consisting of a married couple with two children and pets.

However, there are also the winners of this new economic system. Despite their small numbers in the workforce, they had a high social status and important symbolic power in society: they are the “new middle classes”, i.e. people working in financial, real estate or various service or creative sectors. Within the new middle classes, new groups emerged, such as “yuppies”, “bohos”, and “hipsters”. Their lifestyle is characterised by an urban buzz around nice neighbourhoods, independent cafes, boutiques, small restaurants, art centres, and luxurious retail, residential and business complexes. At the same time, the “new rich” emerged, corresponding to a lifestyle characterised by spending sprees, luxury brands, and seven-star hotels in cities like London, New York, Istanbul, and Dubai, which created by world-known architects became highly standardised. The new rich create money out of thin air and can be regarded as ‘rentiers’, people who derive income primarily from speculation.

These changes have created a more polarised and unequal class structure. However, many have become fascinated by the power of money and lifestyles of celebrities. And in this context, there is a symbiotic relationship between rentier (the upper classes or superegos) and the lumpen (the lower classes or the ids). In this relationship, the rentier eats most of the cake made of easy money based on a principle of profit. Meanwhile, the lumpen lives with a hope of one day catching up with the status of rentier. This continuous hope, fueled by the promise of continued consumption, kills the lumpen day by day without them ever noticing. In this relationship, while the rentier is free to do anything they want behind closed doors, the lumpen feels free to do so in streets. Because of that, we see people who we would never expect to find together in a photograph, such as aristocrats of various ranks, rentiers and celebrities who are regarded as national treasures in their countries.

 

By Basak Tanulku (Independent researcher based in Istanbul)

‘When an uprising of the property owning classes in Hampshire is your best hope for the future you know you’re in trouble’ By Andy Inch (University of Sheffield)

This is a post about the land-use planning system in England. This is not a subject that makes it high up the list of topics that ‘critical urbanists’ tend to consider sexy, or even perhaps remotely interesting. Still, I make no apologies for that. You see planning is in a pretty parlous state in England. Successive governments have identified governmental control of the use and development of land as a regulatory burden and a significant barrier to economic growth. At times the construction of planning as a key economic problem has reached heights of absurdity that a fine comic writer would be proud of.

I remember watching the BBCs ‘Newsnight’ not long after the 2010 election when Danny Alexander, Chief Secretary to the Treasury and Harriet Harman’s favourite ginger rodent was on. Asked how the Coalition was going to sort out the broken British economy following the worst economic crisis in living memory Alexander cited planning reform as one of the two or three key ways in which the Government was going to unlock growth. That’s right. Planning Reform. It was as if he had stumbled across Michael Heseltine’s infamous speech from the early ‘80s and taken literally his reference to planners having ‘jobs locked in filing cabinets’. All they had to do was find the keys the idiot planners had lost.

Some time after that the government announced the first relaxation of permitted development rights. This somewhat arcane change to what homeowners are allowed to build without the need for planning permission was widely trailed in the media as another key plank of the government’s recovery package. As if the hassle of securing planning permission was the only thing preventing people from unleashing the wave of conservatories that was needed to bring back sustained prosperity. Bugger endogenous growth theory. We just need everyone in Hampshire to build a bigger sunroom.

Since then there has been initiative after initiative. According to Steve Quartermain, the lucky man who until recently went by the title ‘Chief Planner’ at the Department for Communities and Local Government, there wasn’t a single pre-budget statement in which George Osborne didn’t announce further deregulatory planning changes during the last parliament. It’s a trend that seems to be continuing.

This is hardly surprising. The ‘Treasury view’ of planning has long been informed by the basic Hayekian assumption that any attempt to plan economy or society is just another step along the road to serfdom. The fact that the right to develop land remains nationalized in England must seem like a painful anachronism from this perspective.

Depressingly the only thing that seems to be holding back the neoliberal attack are the thousands of Conservative voters sitting in their already amply proportioned sunrooms in Hampshire, tutting over the Daily Telegraph and relying on the planning system to preserve their green and pleasant views.

As Malcolm Tait and I argue in a forthcoming paper on the Coalition governments’ approach to planning reform, the Conservative political tradition has an uneasy and somewhat contradictory relationship to the idea of planning control. Different forms of conservative thought suggest very different attitudes towards planning, from the one nation ‘conservationism’ of the National Trust and CPRE through to neoliberal advocates of the raw efficiency of the market. These attitudes also draw on very different ‘spatial imaginaries’, the former generating deeply felt attachments to primarily rural landscapes, the latter viewing place as little more than a ‘competitive asset’. We argue in the paper that the balance of forces between these traditions defined the coalition government’s politically troubled oscillation between discourses of ‘growth’ and ‘localism’.

Since we shaped that argument, however, the steady onslaught of deregulatory pressure has built further. I now wonder whether we need to consider a slightly different interpretation, one with even bleaker political implications.

Speaking in 2010, Nick Boles, who was soon to become planning minister, suggested a seemingly more Schumpeterian view of planning. A view premised on the value of ‘creative destruction’:

Do you believe planning works? That clever people sitting in a room can plan how people’s communities should develop, or do you believe it can’t work? I believe it can’t work, David Cameron believes it can’t, Nick Clegg believes it can’t. Chaotic therefore in our vocabulary is a good thing.

What if we read the steady feed of deregulatory measures that have been passed since as a fairly successful programme for chaos; a strategic attempt to manage and overcome the tensions between different Conservative traditions whilst steadily pushing back against the idea of planning control?

Hugh Ellis from the Town and Country Planning Association is one of the few voices to highlight the significant negative effects that key, detailed changes to the policy regime are having. This includes, in no particular order:

  • The strengthening of a presumption in favour of (sustainable) development, coupled with the need for local authorities to have an up-to-date five year supply of land for new housing has made it much harder for local authorities to defend against unwanted speculative development.
  • The heightened emphasis on the financial ‘viability’ of development that has led to the loss of significant public benefits including large amounts of affordable housing that is typically negotiated from developer profit.
  • The changed definition of affordable housing that means developers only have to produce housing at 80% of market rates
  • The loss of space and sustainable building standards
  • Further changes to permitted development rights which mean that authorities now have no control over the conversion of existing offices, warehouses etc. into new housing. This is leading to the ongoing loss of large amounts of office space in high demand areas, particularly London; converted into homes without any means of checking whether the construction or space standards are adequate, or whether there is adequate provision of schools or open space.

It can be hard to get excited about these details of planning law and policy. But taken together these changes are substantial and represent the further hollowing out of planners’ capacity to regulate in the public interest.

Some of the changes, like the loss of control over new housebuilding, are bothering the retirees in their sunrooms and so may generate further political trouble for the Conservative party. Others, however, like the new permitted development rules, are not likely to affect them very much at all. As Ellis argues, however, these changes risk creating the slums of tomorrow; poor quality places that will have significant impacts on people’s lives, particularly those who have no other choice.

Planning control was created as a response to the effects of ‘chaos’ in the nineteenth and early twentieth centuries, prompting the society to react against the all too visible hand of the market. The legacy and reputation of planning is now so tarnished that we seem to have forgotten those lessons. Perhaps it will take the slums of tomorrow to remind people. In the meantime advocates of planning as a politically progressive force are left with few allies – when an uprising of the property owning classes in Hampshire* is your best hope for the future you know you’re in trouble.

 

*with all due apologies to the good people of Hampshire.

 

Andy Inch (University of Sheffield)

 

PLEASE NOTE: This post was originally received in January 2015 and therefore was written before the May 2015 general election.  Andy has kindly made a few tweaks in recent weeks to update the post.

 

 

 

New Politics and Geographies of Housing Struggles? By John Flint (University of Sheffield)

Recent controversies over ‘poor doors’ in London apartment complexes serve to illustrate the structural crisis in London housing that was powerfully described in a recent Critical Urbanist piece by Professor Rowland Atkinson.

But the irony of the physical and segregation of rich and poor that ‘poor doors’ symbolise and operationalise is that such doors actually serve to reveal how the fates of those urgently needing affordable housing are inherently intertwined with new forms of global affluence. One of the defining features of the housing philanthropy that developed in response to the Victorian industrial city was the shared destiny in place that linked elite and impoverished urban dwellers alike. No doors, poor or otherwise, were effective barriers to the ravages of infectious disease (and occasional social unrest). This understanding combined with growing public health recognition of the environmental and medical consequences of appalling housing conditions to act as catalysts for the birth of public housing policies. That cord of geographical proximity between rich and poor is, on one level, broken by forces of globalisation in which international investment decisions and flows are made with no cognisance of their socio-spatial impacts at a local level. Professor Mike Raco has long argued that we need a much fuller understanding of how public services, affordable housing and local democracy are being recast by new patterns of global ownership and investment. The high profile struggle of the New Era 4 All and Focus E15 groups to protect their homes has brought into sharp focus how global investment mechanisms exacerbate the continued erosion of the right to affordable housing in the city. But, equally, the apparent successes of the New Era and London poor doors campaigns suggest a new politics is emerging, in which exposing investment chains (such as Westbrook Partners), demanding new positions from prominent political figures, taking direct forms of action and skilful use of social and other media can achieve significant positive outcomes. This also challenges traditional understandings of forms of tenant activism. Similarly, local governance regimes are increasingly attempting to develop new mechanisms for tackling investors who leave properties vacant.

The importance of challenging the calculations of property investors and landlords is not new: the history of the early philanthropic housing movements was based on firstly seeking the support of investors and then establishing new models of housing finance and provision when this support was not forthcoming. The achievements of New Era 4 All and similar campaigns are to be applauded and admired, but the lessons from earlier eras is that we cannot leave it to such groups alone if we want to end a housing system that has poor doors as it primary motif.

Prof. John Flint, University of Sheffield (@JFlintSheffield)

Buy-to-Let on Steroids: Crowdfunding the Property Market By Jed Meers (University of York)

McKee and Moore have recently posted on this blog about the problems associated with ‘generation rent’ – namely, those young (but increasingly, older) people who find themselves excluded from home-ownership. More stringent mortgage requirements have given banks an appetite for high deposits, stable earnings and a strong credit history, which renders access to the benefits of a newly buoyant property market out-of-reach for swaths of the population.

However, the desire to make money from bricks-and-mortar has led to a raft of new companies entering the market which offer financial instruments which bypass these institutional controls and allow those previously excluded to invest in property. Even if you cannot afford to own your own home, you can now easily buy a slice of a Buy-to-Let property online from as little as £500. The unrelenting financialisation of housing has come full circle – even those in ‘generation rent’ sitting in a Buy-to-Let property themselves, can now invest in one of their own.

These companies pull these invests outside of the control of banks and other institutions by making creative use of ‘crowdfunding’ platforms, where individuals can invest in start-up businesses or other projects and gain a share of the company; a process made famous by websites like www.kickstarter.com and www.indiegogo.com.

In property investment, this same structure is utilised. Investors are are pooled together to fund a ‘company’ (a special purpose vehicle formed for the sole purpose of investing in the property) which then purchases a buy-to-let property and secures the investors’ shares against its equity. The proceeds of the rent and any capital appreciation (or depreciation) is then shared between them, and the company takes either a percentage fee, a portion of the rent, a slice of the capital appreciation on sale (assuming such appreciation exists), or all three. Although the ‘crowdfunding’ sector is dominated by investments in debt and equity to start-up companies (estimated to be worth a total of £1.6 billion in the UK this year), increasingly, companies are maneuvering around the same regulations to create these bastardised models for the shared ownership of real-estate assets.

One of companies at the forefront of this industry is the House Crowd. Their introductory video outlines the procedure:

 

In bringing simple online access to Buy-to-Let investment to those who would never normally be able to access the sector, these products have created a secondary market which has the potential to both dramatically change the way people invest in property, and the formation of the private rental market. There is a lot to say about the potential impact these financial products, but in the tight confines of this blog post there are two points worth highlighting.

 

  1. The Absence of Regulation

The Financial Conduct Authority now regulates ‘crowdfunding’ platforms in the UK, but none of the regulations are designed specifically for the form of property investment highlighted above. Instead, they class companies such as the House Crowd or Property Moose as ‘investment-based crowdfunding’ – effectively, the regulations are blind to the existence of the property, instead focusing on the purchase of ‘shares’ in the company which facilitates the transaction. In short, somebody investing in a house is seen the same as someone investing in a startup company. There are other regulations imposed on equity-based investments by the Companies Act and the Financial Services and Marketing Act, but these are easily navigated by ensuring potential investors sign-up to the service (and agree to various criteria) before being able to view the properties on offer.

There is a growing appetite, particularly at the EU level, for re-assessing the regulatory framework these companies operate in. However, the input into this process has been devoid of any consideration the role property plays with the focus entirely on investing in ‘companies’ – not a single mention of the use of these financial tools in this way is in the the most recent European Securities and Markets Authority (ESMA) advice, nor following the European Commission’s public consultation on the issue.

Much of the due diligence which underscores good practice in this emerging industry is undertaken voluntarily by the firms themselves – not prescribed by law. Property management in particular has the potential to be a risky activity. The companies themselves decide which properties to float for investment on the cloud – the vetting and management of these rests with the company themselves or the agents they appoint. It does not follow that those skilled at the creation of financial products will be skilled at the maintenance of a property portfolio.

 

  1. The industry looks set to tip

The industry is growing at an extraordinary rate. Equity based crowdfunding investments in the UK rose to nearly £100,000 per day in the second quarter of 2014 – a rise of more than 120% on the first quarter. The crowdfunding market as a whole has grown approximately 600% in the last calendar year. The draw of very high potential returns in comparison to more traditional investments – the House Crowd advertises returns of up to 20% per annum – coupled with the British love-affair with property, promises to make the sector particularly appealing to those seeking to draw down on their pension pots following the Pensions Tax Bill or looking for alternatives to the record-low returns available in savings accounts.

A key persuasive factor with these returns in comparison to previous smaller-scale Buy-to-Let investments, is that there is some liquidity and diversification available – albeit somewhat limited. For instance, investors can sell their ‘shares’ in the property to others investing on the platform, and smaller investments allow for them to spread their portfolio across multiple properties to mitigate the exposure to risk. This comes at a cost. Creating fungibility in the system requires the dynamics between the multiple investors to be managed by the platform – for instance, if there are 12 people with shares in the property, and 6 want to sell, or if a group of investors wish to change an aspect of the management of the property. The mechanisms for resolving these issues raise some interesting academic questions about shared ownership.

Academia has hardly even begun to consider the impact of ‘crowd-funding’ on the property market – these investment-based platforms only begin to scratch the surface of what is possible and what is happening elsewhere in the world. It is hoped that as this industry grows, the regulatory framework around it steps up to the mark and recognises the profound impact these investment options could have for the nature of the property market – and the role that banks and other institutions can play in it – in the UK.

Jed Meers, PhD researcher, University of York (@jed_meers)

How to Spot a Liberal By Joe Crawford, University of Stirling

Quliberalestion: What is the opposite of a critical urbanist?

Answer: A liberal academic

They’re everywhere. Don’t get me wrong, they’re lovely people, and some of them do very good work. But they’re liberals, and of that fact, one must always be aware (and on one’s guard), lest one be tricked into thinking, as liberals do, that the world is just as it appears, empirically verifiable, with no hidden dimensions lurking beneath the shadowy surface.

So to help you, here’s a quick guide on ‘How to Spot a Liberal’.

Liberals are champions of commonsense thinking and see a political bias (which they perceive as a left wing bias) in critical thinkers’ refusal to accept the world as it presents itself. Liberals also tend to ignore the fact that submission to the dominant order is in itself an entirely political act[1] (early warning – if you flinched at the words ‘dominant order’, you might just be suffering from some form of liberalism).

At dinner parties critical urbanists will say things like ‘all science would be superfluous if the manifest form of things and their essence coincided’[2], or ‘commonsense is a political relation, as are the categories of perception that sustain it’[3]. Liberals, on the other hand tend to talk about ‘actual politics’ (that’s the boring stuff that goes on between people who are officially recognised as ‘politicians’ i.e. people like Dave, Nick and Ed- known in Scotland as the Three Amigos). They concern themselves with ‘real worldy’ things like policy and free-market economics.

They also tend to do much better than non-liberals when it comes to promotional prospects in the academy. While critical urbanists have to hot-desk in shared office spaces and buy their own pencils and jotters, liberal academics get entire rooms to themselves, with mahogany furniture and a regular slot as a pundit on Newsnight.

Liberals talk about things like ‘evidence-based policy’, and reproduce, often without question, the concepts created via official discourse which in effect reproduce the language of governance (Newspeak to use an Orwelian term) rather than opening a space for critical inquiry.

They equate critical thinking with ‘moaning about stuff’ and invariably avoid reading articles or attending conference papers which have the word ‘Neoliberalism’ in the title, a word they deem to be not only vacuous, but a clear indication of the author’s intention to bleat on about how rubbish everything is.

More importantly, (we’re getting technical now so if you’re losing the will to live, then, I’m afraid you’re suspicions might be well placed. Yes. YOU could very well be a liberal). Liberals derive their ‘power’ from the efficacy of the double naturalization process which arises when mental structures (the categories of perception that persons apply to all things of the world) are more or less adequately adjusted to objective structures (the external world) giving the impression that everything in the world is just as it should be, natural, right, groovy and great! What liberals fail to adequately account for is the fact that when it comes to the production of these categories of perception, these epistemological couples (individual/collective, profit/loss, rights/responsibilities, etc.) the state operates on an industrial scale churning out, through the smog of ‘official discourse’, the rules and regulations, the laws, the guidelines, on how things should and should not be done, as well as the very definition of social problems and their solutions.

As Bourdieu (1994) warns, the state creates ‘social’ problems (through official discourse and processes of problematisation), which academics do little more than ratify when they take them over as ‘sociological’ problems. Liberals (mistakenly) see a hint of cynicism in the ‘radical doubt’ (Bourdieu 1994) that critical urbanists apply to their analyses of the state, particularly to the symbolic dimension, which masks, and thereby strengthens, relations of domination and exploitation by hiding them under a cloak of ‘nature’, ‘benevolence’ and ‘meritocracy’.

So be alert. Liberals don’t see the social world in this way. That’s the difference between them and us 🙂

 

Joe Crawford, PhD researcher, University of Stirling

 

References

Bourdieu, P (1994) Rethinking the State: Genesis and Structure of the Bureaucratic Field. Sociological Theory 12: 1

 

Footnotes

[1] Jeremy Paxman – the doyen of liberal thought, had to publicly admit (apologise) that the BBC had the ‘wool pulled over its eyes’ regarding WMDs and the Iraq war http://medialens.org/index.php/alerts/alert-archive/2009/583-the-bbcs-jeremy-paxman-on-iraq-we-were-hoodwinked.html This folly could have been avoided had Paxman bothered to read Machiavelli while at Cambridge.

[2] Marx Capital Volume Three

[3] Bourdieu Language and Symbolic Power