'
Most economic commentators agree that this boom is unlikely to end well, whenever the end arrives. But very little attention has been paid to the political and social harm already done to British society by this new model of capitalism over the past decade. A closer study of the consequences of an artificially engineered housing boom might cast light on the particular deformities of our politics, and help explain a number of seemingly unrelated afflictions – from the Brexit vote to the enduring power of "culture war" provocations by Downing Street and its court press.
Consider what a bizarre model of "growth" has governed Britain since the [2007] crash – where the value of a home rises by roughly 5% every year, but the value of an hour's work rises not at all, year after year. What does this do to us, psychologically and culturally? [...]
But it's not clear that this economic model has bred much contentment among its apparent beneficiaries either. The substitution of house price growth for collective prosperity can engender a paranoid and resentful mentality among asset-owners, in which any vision of social change looks fanciful and even threatening. Knowing that one's home is worth 5% more than it was a year ago may generate some inner comfort, but it doesn't represent any commensurate improvement to quality of life, in the way that a 5% increase in income might do.
Recent research, showing that those with wealth were more likely to support Brexit, confirmed that the crude narrative of "left behind" Brexiters was inaccurate. But it also posed questions about the political psychology of property ownership in an age of wage stagnation. The study's authors suggested that the "insurance" of housing wealth might allow for riskier political choices. What has not been adequately explained is why the apparent "winners" in our economic model have become so discontented.
One explanation is that progress and prosperity are now widely viewed as private rather than public ideals. After a decade in which austerity measures have allowed the public realm to crumble, many people believe there isn't enough money to go around, and you must cling all the more tightly to what you already have. Those voters who famously swung from Labour to the Conservatives in 2019 in the so-called "red wall" may have felt ignored by London, seen their high streets boarded up and their public services underfunded – but many of them still had large amounts of housing equity.
This weird model of capitalism, in which houses appreciate in value but people don't, may not have been consciously planned, but nor was it an accident. It is a consequence of an ideology of home ownership that has been essential to the Conservative party's policy agenda since Thatcher came to power. But it has never been exploited so deliberately and divisively: this is the real innovation of Johnson's "vote leave" government. [...]
It's under these distinctive economic circumstances that "cultural" factors become politically significant. The Tories have become expert at overseeing and manipulating a new sort of post-growth economy, in which there is no attempt to produce a "rising tide that lifts all boats", and the state simply intervenes to divert money toward those voters who deserve it and away from those who do not.'
https://www.theguard...se-prices-wages
'Mind the Gap: Why Wealthy Voters Support Brexit
[...] As wealth provides a cushion against financial risk, which in turn decreases risk-aversion, we argue that wealth increases support for a change to the status quo [this must mean when controlling for how much the people in question perceive the relevant aspects of the status quo as benefitting them...].
We test our theory in the case of Brexit, which has been widely characterized as a vote by economically left-behind voters. Our results show that individuals who lacked wealth are less likely to support leaving the EU, meaning they are more biased to the status quo. We corroborate our theory using two panel data surveys, accounting for unobserved individual level heterogeneity, and also using a survey experiment. The findings have implications for the role of wealth-as-insurance in electoral behavior, and also important implications for understanding the Brexit case.'
https://papers.ssrn....ract_id=3764889
This post has been edited by Azath Vitr (D'ivers: 26 April 2021 - 04:41 PM