Cooking The Books 2: Profits before homes
“One of Britain’s biggest brick makers is to close two of its largest factories”, reported the Times (9 June). A few days later the same paper was reporting, as an example of what is happening all over the country in the building trade, that “Heatco Midlands has laid off its apprentices and told its employees that it cannot afford to pay them for a full week’s work because building work has dried up in the space of a month” (12 June).
Why? Why are brickworks being closed? Why are building workers being laid off or put on short-time? It is certainly not because the need for new or refurbished houses has been met. According to Shelter, “England is suffering a massive housing crisis. There simply aren’t enough decent, affordable homes.” Here are some of the figures they provide to back up this statement (http://england.shelter.org.uk/housing_issues/the_housing_crisis#0):
8.1 million homes in England fail to meet the Government’s Decent Homes Standard.
more than one million children in England live in bad housing.
in 2006/07, 554,000 households in England were overcrowded.
in 2007, almost 100,000 households were found to be · homeless by local authorities – almost twice as many as in 1997.
at the end of December 2007, 79,500 households were living in temporary accommodation arranged by local authorities. Nearly 60,000 of these households had · dependent children.
Nearly 1.7 million households are currently on local authority housing waiting lists.
So, the need for more houses and better housing is still there. The problem is that under capitalism houses are not built with the primary aim of providing somewhere for people to live. They are built to be sold on a market with a view to profit. And, at the moment, there’s a slump in what is openly called “the housing market”. Which is expected to last for years; at least that’s what the speculators think. On the futures market, “traders are betting that house prices will fall 50 per cent in four years and they do not expect prices to recover until 2017” (Times, 12 June)..
Wienerberger’s chief executive, Wolfgang Reithofer, was perfectly frank about why the two factories were being closed: “It is a question of finance and this has impact. It will impact the strategy of housebuilders. They will not start new projects or will delay some other project.”
He thinks that demand will eventually recover but by “demand” he doesn’t mean the needs identified by Shelter but only paying demand, what the economists cynically call “effective” demand. The demand of the millions of people suffering from bad housing doesn’t count – isn’t effective – because it’s not backed up by money. This, in accordance with the harsh economic law of capitalism of “can’t pay, can’t have”.
The building industry has set up a charity to help the homeless called, ominously, “Crash” (www.crash.org.uk). This handing out of a few pennies to charities for the homeless while cutting back on housebuilding is just adding insult to injury.
Not that the solution to the housing crisis is to give people more money to spend on housing. That’s not going to happen anyway. The solution is simple: build houses just for people to live in. But that’s not going to happen until and unless we move on to a society where things will be produced precisely to satisfy people’s needs instead of, as under capitalism, to make a profit and leave people homeless or in bad housing if they can’t pay.