In this imperfect world, the market is the most perfect trading device mankind has ever invented. Its punishments upon the unwary are condign; the imprudent investment in tulips or in islands in the South Seas might not bring immediate ruin, but ruin it will assuredly bring. Fools, dupes, the ill-advised, the nakedly greedy; their nemesis awaits them in the open marketplace - which is the very reason why fools, dupes, the ill-advised, the nakedly greedy, want nothing more than to rig the market.
You cannot rig it without doing an injustice to someone, or more probably, to many people. Rigged markets - such as that for taxi licence-plates in Dublin - are an affront to the entire populace of the city. That particular rigged market is one contrived to benefit the few at the expense of the many, and only a polity of particular flaccidity would tolerate it. But what about the rigged market for the poor? What about the current buzz-word in the property market - social housing?
Carrots and sticks
If social housing means the State prevents families from going homeless, it not merely is acceptable, but it is right; on certain conditions, that is, which exclude naked parasitism by the parents. And for all the carrots being employed to provide a roof over the head of the needy, on occasion, sticks must be used too. Adults work when possible; rents are paid. But even then, State-developed accommodation almost anywhere seems to form epicentres of deprivation, violence, state-dependency, addiction and crime; equally in Amsterdam, London, Dublin or New York. The bulldozer and the knocker's crane have been levelling the great State housing developments of the 1960s and 1970s everywhere; and not merely because they were badly built, but perhaps most of all, their inhabitants never felt they had a stake in them. They were owned by other people; and what human being in this world cares for other people's property in the way they care for their own?
Very well then. Make property available to the poor. Let them buy into the marketplace. Let them be stakeholders - another buzz-word of the hour - in the housing market. Let there be social housing. Let the poor buy; let them place their feet on the bottom rung of the ladder. But the bottom rung of the ladder is already too high for them. Therefore, rig the market. Give them obligatory social housing. Make every developer allocate 20 per cent of any development for social housing. Let those houses be available at a discount for the needy. Let the cost of those houses be borne by . . .
Yes, well, borne by whom? The State? Is it the State's business to to say to couple A with two young children: you must fend for yourselves. You must buy a house wherever - probably miles away from where they were raised, in one of the new West Dublin estates. But you, couple B, with two young children. You earn less than couple A. Let us show you one of the new socially affordable housing schemes, which are guaranteed for people like you. The usual rules of the marketplace do not apply here. The cost of the land, which is the main reason for the rise in house prices, is irrelevant. You will pay agricultural prices for the land, even though the developer has paid development prices.
Shortfall
All right. So the couple B move into their new home. Who pays the shortfall between what the developer paid for the land, and what he was paid for it by Mr and Mrs B? The developer? Really? What developers have you been supping with recently? Do they go into business in order to see their profits diminished by corporal works of charity? More to the point, do you?
No, what happens is that the cost of the "social housing" - and it really is time to employ the inverted commas here - is underwritten by those who not merely pay the real cost of the land on which their own homes are being built, but also that of their subsidised neighbours. And then what happens? Will those who own subsidised houses then be able to sell them at full market price? Dear me. Quite a windfall. Or will they be prevented from doing so because they are tied by particular deeds of ownership? In which case, they are not free owners of the property in a free market but its prisoners in a rigged one.
Buyers' grant
We saw the State get involved in the housing market before, with its £5,000 first-time buyers' grant. That grant did nothing to ease the pressure at the lower end of the housing market, because every would-be buyer was immediately able to bid an extra £5,000. Overnight, new houses rose uniformly by £5,000 a unit, driven by the availability of government-money.
Don't blame the developers. That is the way markets react. They have laws, and those laws are ineluctable. Mess with them, and it is like stirring plutonium. All governments can do to lower prices is to increase the possibility of supply.
The problem with Dublin - or anywhere else in the Republic - is that there is not enough serviced land available. Why? Because the government, which has a monopoly in issuing permits for services, is not doing its job. Thousands of acres of land suited for housing lie idle for want of provision of sewerage, roads, water: you cannot build a housing estate and install the services at some time in the future, any more than you can install a roof, with the walls to follow on some future date.
Make the land available, and house prices will fall. Social housing is available: but only when the rules of the marketplace are respected. Break those laws, and some people, indeed many, will be weeping.