Skip to Content

Cooking the Books: A Parasite on Parasites

Harry Hyams, who died in December, was one of the ‘unacceptable faces of capitalism’ in the 1970s, though the then Tory Prime Minister Edward Heath had coined the term in relation to another ruthless capitalist. Hyams’ notoriety was based on what he did with Centre Point, for a while the tallest building in London, as described by his obituary in theTimes (22 December):

‘Centre Point was completed in 1966 at a cost of £5.5 million. However, within seven years and still without tenants, its value was estimated at £20 million. In an era of rapidly rising rents, it was worth more as an unoccupied asset.’

A deliberately kept empty 33 storey building in central London was seen as a provocation at a time when the television film Cathy Come Home, first broadcast in 1966, had highlighted the growing problem of homelessness.

Strictly speaking, it wasn’t the value of the building itself that went up but that of the land on which it was situated, a prime spot in central London on the corner of Oxford Street and Tottenham Court Road. In fact, from a Marxian point of view, value is not the right word at all. Land, not being the product of human labour, has no value, only a price which depends solely on demand. The price of land is calculated as the rent it is likely to bring in over a period of 20 or 25 years, expressed as a capital sum. No doubt the construction of Centre Point cost £5.5 million but, once built, its value as a product of labour would have begun to deteriorate. The increase to £20 million reflected the demand for the spot of land Hyams monopolised.

Of course – like the price of a house you continue to live in – this was only a notional figure unless the building was actually let (or sold), as it eventually was. But where would the extra £14.5 million have come from? Some would have been due to inflation but the rest would have been pure gain, money for nothing. To get it Hyams didn’t have to do anything – didn’t have to invest any money, didn’t have to employ any workers, didn’t have to sell what they produced – just sit back and watch the law of supply and demand work in relation to a building in a prime spot.

Land monopolists are in a position to hold capitalists who want to use it to ransom, obliging them to share with them a part of the surplus value they extract from their workers. Which is what Hyams did and was the source of his gain. He was a parasite on parasites.

The clamour that ‘something should be done about it’ went up. A Tory cabinet minister denounced what Hyams was doing as an ‘incredible scandal’ and a tax on empty office buildings was imposed. This is still in force but, according to Jim Armitage, the City Editor of the London Evening Standard (21 December), has had some equally ‘scandalous’ side-effects:

‘Developers with empty blocks demolish them to avoid paying the tax. Others delay the final touches on building work to stop the vacancy clock starting. More still use their empty buildings as storage depots, moving boxes of files from one building to another every three months to satisfy the taxman properties are occupied.’

Trying to patch-up capitalism is a thankless task. No sooner is one tear repaired than another appears, often, as here, the result of the previous repair.

Centre Point is now used for housing – but only for the rich who can afford the luxury apartments it has been converted into.