The Traumatised Society by Fred Harrison

Author:Fred Harrison
Language: eng
Format: epub
ISBN: 9780856833939
Publisher: Shepheard-Walwyn

Home ownership achieved a rate of 80% in urban areas. But instead of enhancing the security of families, enormous stresses were imposed as house prices and rents rose faster than the increase in wages. Rents squeezed the disposable incomes of peasants and factory workers. Over the first full property cycle (1993-2011), house prices in Beijing rose by 2,242 per cent; per capita disposable income by 828 per cent. In Shanghai, house prices rose by 2,342 per cent; per capita disposable income by 743 per cent. The incentives skewed investment away from job-creating/wage-raising capital formation. Money went disproportionately into real estate. Incentives were distorted because the property tax levied a modest carrying cost on the ownership of empty apartments and houses.

The sociological implications of this financial process were epoch-making. By selling leases short, the Politburo began to lose control of The People’s Republic. Citizens were embarked on a process that transformed their status into tenants of the rent-seekers, as middle class investors built buy-to-let portfolios. Rich, without having to add value to the nation’s wealth, the new land tycoons purchased luxury homes in Paris, Vancouver and San Francisco.

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