The Bosses' Response to Being Socially Useless is Social Crisis

For capital’s economic policy experts, it is a peculiarity, caused by mismanagement or a freak externality with the pandemic. As for the capitalists themselves, despite their claims of being socially-useful, it is an opportunity to make a buck off of the misery of the working class. But, beyond these appearances, the crisis of housing is reflective of the total crisis of capitalism itself. It is a crisis that has been moving for decades, exacerbated by the pandemic, and now headed towards a new level of social disaster.

One must understand the depths of the housing crisis within the context of the crisis of profitability that emerged at the end of the last cycle of accumulation in the 1970s. It was in financial speculation and the financialization of housing that capital saw an opportunity to circumvent the low rate of profitability in production. With this context, one can understand the financial crisis of 2008, marked by the subprime mortgage crisis in the American housing market, and it is through this logic that one sees further economic crises such as those of the Eurozone in 2011, Turkey in 2018, and in China today with the failure of Evergrande.

In contrast to the United States, the Canadian property market did not see a collapse post-2008. On the contrary, housing remains a chief means of speculation. Pre-pandemic, Canadian housing bubbles assumed a fairly localized character, particularly regarding Toronto and Vancouver. In just the year of 2015, for example, property values in Vancouver increased over 30%, while in Toronto, they increased 42% in the period from 2014 to 2019.(2) The construction of high-end condominiums, producing the generalization of precarity among wider and wider sections of the working class, marked these price hikes.

This trajectory has been exacerbated and extended by the pandemic. Government policy established massive capital injections and the continuation of low interest rates. While the state strove to stave off complete economic collapse, in the quagmire of low profitability, mired with the stalling of available labour-power, capital flooded towards speculative asset classes.

In the Canadian context, this is primarily housing. What was previously limited to Vancouver and Toronto has now been generalized throughout the Canadian economy. From the start of the pandemic to 2021, Canadian home prices increased by 30%,(1) and in traditional working class neighbourhoods like Verdun, Montreal, rent has spiked by 14%. Throughout the pandemic, housing presents itself as a fragile lifeline for capital; during this period it tallied for 10% of the entire Canadian GDP. With the inflation spike of commodities, the Bank of Canada is in a nervous sweat regarding the current interest rate. Already remarking that they may need to raise interest rates by 2023, capital faces the question: which leg to cut off? The capitalist class, which has long touted its rational character, its entrepreneurial brilliance, and its liberty to deliver humanity from misery, now offers its latest gift: insecure housing. The irony has not been lost on the working class.

The role of real estate as financial speculation comes into contradiction with the conditions the working class has found itself in throughout the pandemic- mass unemployment, precarity, reduced working hours, and large debts. While landlords and property corporations concentrate their holdings at an ever-increasing price and scale, they find that the corresponding rent hikes they expected as return on “investment” cannot be paid by unemployed and under-paid tenants.(3) In the United States, nearly one in five renters are behind on their rent, of which there are 3.5 million likely to face eviction.(4) Similarly, in Canada, there are 250,000 households in arrears on rent, with high rates of indebtedness in Ontario and the large Prairies cities.(5) No sector of the capitalist economy was truly independent of the pandemic’s production crisis. Capital as a vampiric whole seeks to attack the workers’ paycheck at the point of rent.

In the midst of the pandemic, the U.S. and Canadian governments implemented a series of temporary and direct relief policies for (nominally) both landlords and tenants. The two primary modes of relief, eviction moratoriums and direct payments, jointly served to stem the tide of mass homelessness amidst widespread lockdowns while guaranteeing landlords and real estate capital its “right” to revenue.(6)

Whether the direct payments are made out to landlords (such as the Biden policy of Emergency Rental Assistance (ERA)), or to tenants (including catch-all relief programs like the Canada Emergency Response Benefit (CERB)), the intended effect is the same; the rule of property over its inhabitants must continue unabated. The central position of real estate in the pandemic economy only strengthens the prioritization of continuous access to profits (and all of the extractive measures that entails).

The temporary nature of the government relief policies is directly tied to pandemic-induced lockdowns and workers’ loss of income. When the production crisis was most acute, this secured for capital the minimum subsistence of a future workforce.

However, it became clear that the capitalist so-called “recovery” was marred by labour militancy, entailing walkouts, strikes, and a generalized shortage of labour-power.(7) 64% of Canadian capitalists polled at the end of September report that the accumulation of their capital is hindered by the lack of available labour-power.(8) South of the border, capitalists hired under half of the expected 500,000 workers in the month of September 2021, despite widespread and continued unemployment.(9)

Accordingly, the representatives of productive capital gathered their coercive instruments and targeted the avenues by which the working class can survive independent of wage-labour. The U.S. federal eviction moratorium, a series of orders instituted by the CDC since September of 2020, was scrapped by an August 26th, 2021 Supreme Court ruling amidst large-scale backlash by the capitalist class. The Chamber of Commerce, a representative body of American national capital, pleaded that “the economy has largely rebounded since the emergency moratorium was imposed by the CDC. The most effective solution to making housing affordable is to further reduce unemployment.”(10) Meanwhile, Canadian business groups lined up one after the other in anticipation of the October 23rd end of the Canada Recovery Benefit (CRB).(11)

In this assault on the working class, real estate capital leads the charge. In part due to the massive debt accrued via financial speculation, property owners face the acute compulsion to secure heightened profit. This could only mean grand-scale evictions and the replacement of tenants with those willing to pay higher rates.

The interests of land-owning capital and capital engaged in production have aligned in the midst of capitalist “recovery.” Their common goal is to force the already-beleaguered working class into saving the economy and their profits through increased labour productivity despite the continuation of the pandemic. The bourgeoisie, which prides itself on its social role of risk-taking, can no longer risk the continued effects of a labour shortage. Instead, it returns to open class warfare. While one part of the capitalist class seeks a return on investment and pursues mass evictions as federal and state-wide bans are lifted, another is elated to find a working class deprived of emergency aid and returning to the reserve army of labour.

However, as shown by working class history, the proletariat has the power to refuse wage-labour and housing rents, disrupting the disastrous and brutal course of capitalist recovery.

The struggle against housing capital is seen in the Parkdale tenant struggles of Toronto. The decades-long process of housing speculation and hiking rents led to a general condition of precarity amongst the workers of Toronto. In 2016, before the pandemic (which the bosses’ professional excuse-makers claim is a bolt from the blue!), a staggering 43% of renting households in Ontario had less than one month’s worth of income saved. In this context, tenants have found themselves forced into the grip of struggle. Sparked by a landlord's massive rent hike in 2018, Parkdale tenants organized outside the official channels presented by the state and collectively refused to pay rent. The landlord backed down after a three-month struggle. Thus it was demonstrated that the working class can win on its own terms and set the groundwork for future struggles- as can be seen by their slogan, ‘keep your rent,’ proliferating when the pandemic hit.

“You have to leave. You don’t have a choice. It’s dangerous for your life and the bank wants you to leave.”(12) This phrase exemplifies the process of “renovictions”- the plague of many workers and capital’s contribution to social welfare. Renoviction is the process of landlords pushing renovations as a pretext for evictions. The purpose of this process can be summed in three parts:

1. the rapid raising of rent,
2. the flipping of property at a profit, and
3. the investment of stagnant capital in preexisting buildings.

To the dismay of landlords and finance, this has not gone unanswered by the working class. In April 2021, tenants of a 90-apartment building in the Montreal Plateau neighborhood refused to suffer for their landlord’s pocketbook and coordinated together to act against the renoviction.(13) In NDG in May, in Saint-Léonard in June,(14) and seemingly throughout Montreal, tenants are faced with this massive attack by capital and are thrusted into the fight.

Ultimately, despite a quantitative expansion of tenants' struggle, it has yet to produce a mass coalescence. Comparatively, recent large demonstrations in Berlin against rising rents, despite its reformist limitations, pose an image of generalized housing struggle. Exceeding 20000 participants, it reveals the unity of the struggle beyond individual landlords, buildings, or neighbourhoods. This bridges the understanding that the housing struggle is a struggle of the class as a whole. Crossing such a bridge is vital if our class is to withstand the attacks of capital.

It is important, examining Parkdale tenants and their forms of struggle, to recognize past struggles reflected in it. They opened a break with the all-too-common NGO-dominated pseudo-struggles and the neighbourhood was organized through itself. Some of the most remarkable examples of working-class tenant struggles are when, in deep crises, the mass of local workers flood the streets to stop evictions. Whether it be in the Great Depression, 1970s Quebec, or Oregon 2020, this form assumes that, en masse, the local tenants have an immediate recognition of shared fundamental conditions and the need to fight collectively.

Reflecting on such historical situations is crucial given the state of the crisis today. The end of rent moratoriums, inflation, and the capitalist assault on renters- the latter being straddled with debt, unemployment, hostile working conditions, and eviction notices- demands the hastening and extension of the housing struggle as part of wider working-class resistance.

Historically, where the class had a burgeoning consciousness, such as 1970s Quebec, the workplace struggle invigorated the neighbourhood struggle. Labour organizing united the two fronts against the economic and political oppression of the Quebecois, which was conceived as a class problem. The general strikes of ‘72 and ‘76 raised the prospect of class power as a whole. This conception inside the working class was not seen as limited to Quebec or even Canada-it was correctly seen as a struggle against the total capitalist mode of production. Such is not to dismiss the period's real limitations and uneven development; nevertheless, fundamental political lessons must be drawn from that experience of deepening class consciousness. This memory of the class struggle remains, and must be reignited if our class is to survive the assault of capital.

As early as 1872, Engels was able to recognize that the crisis in housing, no matter its particular form, is ultimately a crisis of capital itself, stating: “As long as the capitalist mode of production continues to exist it is folly to hope for an isolated solution of the housing question… the solution lies in the abolition of the capitalist mode of production and the appropriation of all the means of life and labor by the working class itself.”(15)

The conditions of capitalism necessitate a slew of working-class struggles in self-defence: fights for higher wages and improved working conditions, fights against rent-hikes, evictions, rising prices, and racist police brutality. However, despite the necessity of these defensive struggles, if we are to rid the world of the misery capital places upon our class, they must become a struggle towards the abolition of wage-labour and capital itself. Only by ridding the world of the socially useless class can we address the question of housing in terms of social need.

The above article is taken from the current edition of Mutiny, bulletin of Klasbatalo.

Notes:

(1) https://globalnews.ca/news/7881183/canada-housing-boom-bust-immigration-home-prices/
(2) https://toronto.ctvnews.ca/some-toronto-homes-and-condos-double-in-price-in-5-years-1.4561632
(3) University of Waterloo Professor Martine August makes the connection between the purchase and sale of property (especially insofar as it is financial speculation) and rising rents clear: “If you acquire old rental housing properties, it’s quite possible (!) to make a lot of money from that by raising the rent, raising the fees, just squeezing more from tenants.” Ari Altstedter, Bloomberg Press(4) WSWS, Millions Face Loss… Chase Lawrence, Barry Gray. Aug. 28, 2021
(5) Ricardo Trajon, policyoptions.irpr.org
(6) As put by the U.S. Department of Housing and Urban Development, “By combining financial assistance with housing counseling and legal aid, the eviction prevention programs discussed above have proven mutually beneficial for landlords and tenants, allowing tenants to remain housed during a public health emergency and landlords to make mortgage payments and maintain their properties.” https://www.huduser.gov/portal/periodicals/em/Summer21/highlight3.html
(7) In fact, a chief economist employed by finance capital, Pierre Cléroux, says on his Linkedin that the unavailability of labour-power is “in every industry and every part of the country.” https://www.cbc.ca/news/business/canada-labour-shortage-businesses-study-bdc-1.6192644
(8) https://www.cbc.ca/news/business/canada-labour-shortage-businesses-study-bdc-1.6192644
(9) https://www.theglobeandmail.com/business/economy/article-canadian-economy-adds-157000-jobs-in-september-pushing-hiring-above/?ref=premium
(10) https://www.uschamber.com/letters-congress/us-chamber-letter-extension-of-the-eviction-moratorium
(11) https://www.theglobeandmail.com/business/economy/article-canadian-economy-adds-157000-jobs-in-september-pushing-hiring-above/?ref=premium
(12) CBC News December 30th, 2019. https://www.cbc.ca/news/canada/renovictions-housing-shortage-1.5400594
(13) https://globalnews.ca/news/7741803/residents-of-montreal-apartment-building-fight-renoviction-take-protest-to-their-balconies/
(14) https://www.cbc.ca/news/canada/montreal/renoviction-quebec-montreal-jean-talon-1.6085276
(15) https://www.marxists.org/archive/marx/works/1872/housing-question/