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|First published in The Cambridge Tab, in defense of capitalism, October 12, 1999|
|The affordable housing followers of Marx|
|By YVES A. ISIDOR|
Cambridge, Massachusetts - These days, one is under the impression that in the conference halls and on many streets of the city of Cambridge, many citizens wish not be remembered as disciples of Karl Marx and Friederick Engels. Not surprising, perhaps, given the failure of communism to destroy capitalism, as Marx and his friend Engels envisioned. More importantly, its failure to deliver the goods that were promised.
To see how contradictions in the Soviet Union - the world's first communist state - killed Marx and Engels' vision of a free and prosperous society, it is worth, briefly, recalling that the average Soviet consumer was squashed in cramped housing and enjoyed few consumer durables - no telephone and car. Even basic staples, such as flour, soap, bread, sugar, salt and vodka, were rationed.
|Not bad at all, Marx's affordable housing|
The unhappy facts about China's Mao Zedong's 1948 cultural revolution are added reasons a great number of Cambridge citizens are now trying to erase their image as disciples of Marx and Engels. These include the execution of two million landlords in the early 1950s, the anti-rightist movement of 1957, which threw a generation of intellectuals into the stocks, and the 35 million-plus deaths in the famine of the Great Leap Forward, let alone the countless lives ruined
So, too, Cuba's Fidel Castro piles of victims among its own people are the reasons for a great number of Cambridge citizens now speak of communism in the past tense. Tales of medical doctors dispirited by low pay and lack of medicines, or hospital staff moonlighting as taxi drivers are common coin.
However, to the surprise of the whole world, capitalist revolutions are now taking place in Russia, China, and Cuba, with the exception of the pariah state of North Korea. It is evident that communism is dead. Still, a "de minimus" group of Cambridge extremists from the far-left wish to remember communism, at least, for its draconian price controls - specifically, rent controls.
By the account of the small group of Cambridge extremist activists, the idea of affordable housing is best understood by the abolition of private property, concentration of political power in the hands of the "lumpen proletariat," and the replacement of Cambridge government by an association in which the free development of each is the condition for the free development of all.
Consequently, the small group of lunatic activists have not just declared war on economic rent but gathered some questionable 6,500 signatures on a petition, hoping to place a referendum question on the Nov. 2 ballot and have voters declare it illegal.
This is odd because Cambridge is not, for example, a North Korean city. Instead, it is a city of the United States, with a free market economy. Since it is so, economic rent is set by the forces of supply and demand. The quantity and quality people demand in the marketplace depends on incomes, tastes, prices, and availability of other goods (or close substitutes), and expectations. Some people prefer to spend less on economic rent and more on clothes and cars. A group of citizens and whose behavior reflects such contention are both, for example, male and female teenagers. Others, such as adult citizens, want more spacious living quarters but can't afford them. All these diverse circumstances are reflected in the market demand curve.
The lack of housing in Cambridge for the poor should not be attributed to the demise of rent controls, in 1994. Instead, it is the result of misguided, unsound housing regulations, which for years unfortunately, have been part of the Cambridge political lexicon.
The failure of the city of Cambridge, as it continues to enjoy a budget surplus, to build more housing for its poor residents will only provide the small group of notorious troublemakers with the opportunity to attempt to inflict pains, mainly on the small property proprietors.
The pains - suicide, bankruptcy, divorce, homeless, stroke, and heart attack - are remarkable not so much for their telling but the long-term multiplying effect they will have on families who no longer have hope of lifting their incomes above the poverty line.
But what about the supply of rental units? Will more housing become more available to satisfy the quantity demanded, as claimed the pro-rent controls extremists who seem not to comprehend basic economics? Not according to the law of supply. Instead, the quantity of available rental units will actually shrink.
Another problem is that since rent controls will have such predictable effects - no return on investment - landlords will be forced to stop maintaining their buildings, letting the units deteriorate. The rate of new construction will slow, too, as builders decide that rent controls make new construction less profitable. So will the city of Cambridge be directly affected as house, home and building market value plummets in importance since it depends heavily on property taxes to pay for the cost of public goods.
Yves A. Isidor is an economics faculty member at the University of Massachusetts at Dartmouth and spokesperson for We Haitians United We Stand For Democracy, a Cambridge, MA-based nonpartisan political pressure group.
Correspond with Yves A. Isidor via electronic mail: firstname.lastname@example.org
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