Mortgages & Recessions

On our latest global financial crisis.

The present crisis (as many before) has its main root in the Mortgage system and the reckless extension of credit based on property values, independently of the ability of the borrower to service that mortgage.

And obviously, with increasing world population and the impossibility of increasing the available land area this would seem to be a reasonable risk, except that these values periodically experience speculative overvaluation and one then speaks of a “burst bubble”.

This points to one of the capitalistic systems fundamental shortcomings, namely the treatment of land as if it were a commodity. It is the root of one of the gravest injustices, namely that owners of land can extract tribute of those who have no ownership, therefore enriching themselves without any economic counter-prestation.

This tribute is most visible in the real estate sector, but also paid by society as a whole, the cost is invisibly included in all our products, beginning in the cost of agricultural land, of land to build factories and businesses etc. etc. These “costs” or tributes always have to be calculated in to the price of goods and eventually land in the hands of the few who have title to the land.

In my work as a farmer I am confronted with this problem, especially in the Dominican Republic where land prices have increased the last 15 years about tenfold, caused by peoples lack of confidence in the banking system but also for tor a major part by the laundering of money of corrupt government officials and the drug trade. It is also here not possible anymore to purchase land and to pay for it by agricultural production (that is to say that those costs can not be included in the price of Bananas anymore).

All material goods for our use are produced by labour, even be it minimal such as the harvesting and bringing to market of wild berries. However land and mineral deposits (such as oil) have not been created by man and should therefore be considered a fundamental right of all mankind.

The land ownership issue is at the cause of many wars and rebellions especially in poor countries. Many socio-economic thinkers have pointed to that fact that land is a right and not a commodity to be sold and bought.

Rudolf Steiner in his socio-economic lectures called the treatment of land as a commodity a cancer in our economic system; excess money is diverted and held back in land instead of productively invested in culture, research and education. (One should imagine what it would have meant mean if all the billions which are being lost by the present crisis would have been invested in Education!).

Steiner pointed out that every person incarnated on this earth should have the fundamental right to an area of land, to be determined by the available land area divided by the number of people.

In today's society obviously not everybody wants to work his “own” land and so makes his land available to those who make productive use of it. Any user of land, be it a farmer, industrial or house owner has to have the right to use the land exclusively with full control over it, however this has to be a temporary right , which when he does discontinue its use will be passed on to others for productive use.

Presently there is a interesting initiative going on in Germany, launched by Goetz Rehn, owner of the largest pharmacy chain in Europe.

He advocates a guaranteed minimum income for every citizen, and there are initiatives who would like to see this scheme financed by the taxation of real estate property values. www. basic income.