The UK's recent #Brexit vote serves to further illustrate a divide in global politics that is widening into a vast chasm. The old political framework of neoliberalism has lost its grasp on reality and is in the process of being replaced with something new.
Capitalism is best explained as a market system based on neoliberal principles. Markets in and of themselves are not inherently harmful; they're an efficient mechanism of distributing resources to actors that have demand for those resources by way of exchanging values. Capitalism in particular adds extra rules on top that encourage the accumulation of wealth while discouraging its expenditure.
Herein lies the problem.
In 2002, Dani Rodrik presented a paper at the Alternatives to Neoliberalism Conference titled "After Neoliberalism, what?". In it, Rodrik provides a rich analysis of our current neoliberal market system. One key takeaway from it is that our system currently describes what an advanced economy looks like, but fails to prescribe a feasible, practical course of action (Rodrik, 2002). Further, Rodrik describes what neoliberalism isn't.
Rodrik makes the case that rejection of neoliberalism isn't rejection of mainstream economics. I would like to draw a parallel between Rodrik's assertion and the growing YIMBY movement. A core tenant of YIMBYism is that market forces of supply and demand still apply to our current housing crisis. Eric Fischer describes this in detail. Opponents to the movement such as Tim Redmond of 48 Hills argue that more supply in the housing market causes more demand for services. The increased demand leads to more low-income jobs that further put pressure on lower-cost housing (Fischer, 2016).
Fischer's model supports the conclusion that the rise in the cost of housing is predicted by the market's ability to supply it, and it isn't when you don't.
Thus it can be argued that the market forces of supply and demand induce a strong correlation between the supply of housing and its cost.
In a capitalist market, incentives are aligned such that limiting the movement of capital as much as possible results in the most gains. Holding on to capital results in the generation of more capital. Californians familiar with Proposition 13's impact on property taxes should see the relation. Proposition 13 caps increases in property taxes to be less than inflation which gives a strong incentive to hold on to property as long as possible.
The YIMBY movement is part of a larger effort to dismantle our ruling capitalist economic system by rolling back decades of policy built in the context of neoliberalism. It is here that I argue that the market is still the most efficient mechanism of resource distribution. However, markets are not self-creating, self-regulating, self-stabilizing, or self-legitimizing (Rodrik, 2002).
The housing crisis will not be solved by only ending capitalism; Capitalism is merely the market one gets when neoliberalism reigns supreme. There is much more to be done with respect to systemic injustices, reducing socialized losses, and rebuilding society's faith in a market economy. YIMBYism is a movement that aims to dismantle neoliberalism itself.
A major focus in YIMBY movements is the realignment of market incentives to add more homes to our housing supply. I argue that we must do more by ensuring:
Building more housing is but an end to a means; There is insufficient incentive to build enough housing. Through the politics of challenging the status quo we are collectively realigning these incentives to direct our economic growth at the social problem of wealth inequality that has resulted in widespread homelessness.