Marxism for Newbies: Landlords
The landlord is one of the last vestiges of feudalism still holding power in (now, even late) capitalist society. But because financial capitalism has overrun and conquered industrial capitalism, in this the era of late imperialism, the problematic and fully parasitic existence of the landlord is just another welcome tool of wealth extraction in the capitalist arsenal. It’s a particularly nasty method of wealth extraction, to boot, as evictions will frequently leave former tenants homeless and on the street, or worse. Just as the serfs in the times of feudalism had to give some fraction of their grain (or other labours) to their lords, so too do renters have to give some fraction of their income — the wealth that they produced at work during the month to their landlords, or be removed from the premises. Yes, modern landlords are literally that, lords of the land, and we still haven’t abolished this wretched vestigial feudal appendage.
The Lords of the Land
A familiar and common historical scenario — should a feudal serf refuse to service his lord and refuse to share the grain upwards, the lord would come round with his knights and force the serf off the land. The serf would then have to seek out another available plot of land to work, but would quickly find that lords have already extended their claims across nearly all the available plots of land. Unless the serf was somehow lucky and resourceful enough, under the right historical circumstances, and/or able to maneuver into a position to become a lord himself (a rather uncommon but not at all impossible historical occurrence), the serf would have to submit himself to another lord, and be placed in a similar arrangement again, to work the land.
Even under those rare occasions where a peasant or group of peasants rise to nobility, the vast majority of their fellow serfs would still remain in serfdom for all their lives, again, much the same as can be said for the landlord-tenant relationship. There is no situation where all the serfs can become lords, as their feudal system would collapse with no one to do the necessary labour. And in much the same way, there is no possibility that all (or even most of) the world’s tenants can go on to become landlords — someone would have to pay the rent. Some few might (just like how some small amount of peasants became nobles, lords, or even Emperors); most will not. The landlords most certainly need the tenants, for without them they have no incomes to extract from, but this essay shall examine the inverse — without the landlords would there then be no housing? (spoiler: of course not!)
For you see, the house exists independently and separately from the landlord. The resources required to construct the house existed (and were mined, collected, refined, processed, transported, delivered, and then used) all entirely independently and separately from the landlord. The house was constructed by a plethora of contractors and construction workers of various specializations — again independently and separately from the landlord. Once the house was completed, it sat there, empty, on the land, all independently and separately and totally disconnected from existence of the landlord. The only time the landlord becomes relevant to the house is when someone attempts to live within the house without paying the property-claim-holding landlord a fee. This relationship has nothing to do with the construction or production of the house. The landlord does not need to be the purchaser, the original property claim holder, and especially today, does not even need to directly be the owner — the landlord is simply an obstructionist; a vile troll blocking the pathway between human beings and shelter. Landlords create no value and provide no service, they merely exist to prevent the use of existing shelter without extracting a fee (called ‘rent’), based on and upheld by the underlying property relations of capitalism.
Does the Landlord create value or provide service?
If landlords “don’t create value” then why does anyone rent? Do they not provide the service of offering living space for those who cannot afford to own property themselves?
Well, no actually. There is no new value being created, all of the value was already created and already exists prior to the landlord. The actual “service” part of what is ‘provided,’ is not some offering of shelter from the landlord to the shelter-less public, it is the opposite! It is the denial of access to the already existing shelter. If I were to own the land between an aqueduct and the town downriver, which derives its water from said aqueduct, and then I were to place a gate to block access to the water and keep it closed unless the town pays me a “water rental fee” — I have not created value. The river existed without me, the access to water was there prior to my blocking of said access, and even when the “water rental fee” is paid, the payers are receiving nothing different and nothing improved and no new service exists from when I first arrived and blocked access. It’s the same water and the same river and the same necessity as before. I am simply using property relations to extract their wealth by restricting access to a necessity that is otherwise already available. The same is true for landlords and housing.
The landlords do not create value. The act of landlording is the regular interval wealth extraction in which the tenants must pay the landlord from a chunk of their work produced (or worse, their savings, or worse still, via debt) during that interval, as an unending upkeep to simply have shelter/a home — something that is a human necessity as far as finding work, raising a family, self-improvement, or having any sort of life with dignity goes. The landlord expects this wealth extraction to be paid regardless, of circumstance (how many landlords offered free rent to workers that lost their jobs in the wake of COVID-19?) and only really needs the deed of ownership to expect state institutions to back up his position, with force. The people “can find another landlord” as much as they like, yes some might be less terrible than others, but that doesn’t absolve any of them from being terrible.
The ‘choices’ people have is extremely limited, as all the world (minus a few tiny places) uphold this same property relationship in which an ‘owner’ of a property is allowed to extract the wealth of the people living at the property. And this, the act of landlording, is done with the full (and necessary) backing of the state: it is the state’s police enforcer-repressors will evict a tenant who does not pay, and the state’s courts will rule the letter of the law in the landlord’s favour to uphold his property relationship. What little tenant protections exist in places in some few parts of the world were the result of organized collective action and the result of the effort of decades of working class movements to create minimal regulations and protections (many of which are being eroded, ignored, or rolled back). Most people cannot buy a home — and for those that might be able to, it is something left to the discretion of that other great parasite on the economy — the banks — who also produce no virtually value, make their money almost exclusively on money, and, like landlords, extract their wealth out of actual work done by others. For the masses of home-needing tenants, we are imposed with that false dichotomy — ‘buy a home’ (from a bank, essentially) or ‘rent from a landlord.’
For most of the world, as nearly all humans need and require housing and shelter, there are no other options — not because the masses lack ingenuity or fail to work hard, but because nearly all the property and land has already been claimed. There are not choices available to most of the world, or even much of the first world labour force about where they can live, where there are jobs, and what can be done about this property relationship. It isn’t a choice for most when having a home is a necessity for living, and these wealth extractions for occupying a home are something that has been imposed upon us, and that system is held in place with state power. There is no choice other than renting to be had for anyone needing a home, outside of the small (globally), wealthy minority with capital who have the ability to own. And all they need to do is own (or otherwise insert themselves as middlemen to banks or larger landowners), upholding the extractions of value from the tenants, who exist under threat of state-backed eviction should they ever fail to pay.
The landlord provides none of the value — they ain’t the makers, they the takers. The value is in the material thing that exists — the physical house made of wood and brick and concrete and whatever else. The landlord is not the one that provides this. This value was created by the people that made the building (the construction workers, contractors, etc). The act of landlording has nothing to do with the gathering of the construction materials or the manufacturing of the interiors, the installation of the windows, the electrical lighting fixtures, the plumbing, the roofing, the floors or any other part of the home. But what about if the landlord is the one who built the home? Or what about if the landlord is the one who mows the lawn or fixes the plumbing? Isn’t that providing value and doing a service? The answer is, of course, yes, but the problem is that none of that is the act of landlording.
The Landlord is not the Groundskeeper
For all the work of repairs and groundskeeping (and whatever other upkeep or maintenance) the landlord did not provide the value here. Yes, the landlord could (only for smaller property claims, really) be the same person who makes the repairs and maintains the property, but in doing so he is not fulfilling the role of the landlord, but rather the role of the repairman or the groundskeeper. More importantly, he is not being paid like a repairman or a groundskeeper. And as any landlords wealth extractions go on, they inevitably hire others (trained repairmen and groundskeepers, property managers, etc) to take over these labourious tasks for them. It’s the repairman and groundskeeper who did the labour, provided the value, and completed the work, and were paid with a wage or salary or per a contract, but a fixed amount or rate proportional to the labour done, and all of the money to pay them comes ultimately from the wealth extractions of the landlord! If the landlord would ever lose more money on repairs or maintenance than he could ultimately recoup through rents, he would not suffer the loss, he would sell/abandon the building instead, leaving any tenants in precarious positions.
But one can simply eliminate the landlord from the equation — if the tenants hire the repairmen and groundskeepers themselves (paying them at a wage per hour of labour done — even at a very competitive rate!), then all those labourers can be paid with (merely a small portion of) the aggregate tenant money that would otherwise have gone to rent payments to the landlord, and then they can simply skip having to pay the rent and keep the remainder of the money for themselves (or for their community). This leaves the groundskeeper, the repairman, etc all just as well off as before, and leaves the tenants with more of their own wealth, since they no longer need to pay rent to live in a building that is already constructed, and now maintained by the repairmen and groundskeepers, and others, that they hire themselves as needed.
Even if the landlord wants to insist that they deserve recompense for their labours of repair or groundskeeping, this arrangement could certainly be made by the tenants. Indeed, the landlord could be paid an hourly wage by the tenants , rather than having any form of rent extraction — the landlord could receive an hourly wage, all at fair market (no such thing, but unimportant right now) rates, competitive to other groundskeepers, repairmen, lawnmowers, window washers, gutter cleaners, or whatever task the landlord is assigned by the tenants. This would result in the landlord being properly and fairly rewarded for the work that they put in with (solely) the hourly wage, multiplied by the number of hours of work they did (they can clock in and out under tenant supervision to ensure that the landlord is cleaning and not leaning). The landlords doing work would be properly rewarded for their labour! The tenants can then live rent free, and all instead proportionally chip in to ensure that the landlord is fairly and properly paid for each hour of his life was committed to producing and providing actual value for the building through his toil and labour. But something tells me that the landlords would not prefer this just and fair arrangement for their contributions of groundskeeping and repairs.
But hey, wait a second — what about the paperwork? What about the various laws and issues and contracts and obligations that a landlord has to deal with — isn’t that work? Yes, like groundskeeping and repairs, it actually is, but there’s two problems. First, is that most landlords opt to skip this, by taking a fraction of their rent extractions and giving it to a property manager, who then do the paperwork, hire the repairmen, etc, so that the landlord is free to sit on his ass and collect rent cheques without having to do anything at all. All the laws — the property relations under capitalism — are fully upheld even in the landlord spends the entire month in bed, playing video games, or at the golf course. The tenants still owe him the rent at the first of each month. Even less the property manager and repairs and maintenance and taxes, the remaining rent extractions are all still pure profit for the landlord, regardless of any material contributions that they put in, and with a competent property manager (or entire property management business) running things, landlording becomes nothing but regular extractions for the landlord.
Do you Own or Rent?
The landlord is not being paid for the work that they do (there is no wage or salary), they are being paid via the wealth extractions from rent — a decidedly different form of payment that is utterly contingent on the societal property relations at the base, that is (in its current form): capitalism. If the tenants instead were the ones to hire the property manager, the same as they could for the groundskeeping or repairs, then they can again eliminate the rent payments altogether, using a small fraction of it to pay the property manager hourly for their labour to manage the affairs, do the paperwork, etc. Everybody involved wins except for the parasites — the landlords, and the equally vile institution over and above them who expect and collect their wealth extractions from many of those same landlords — the banks, and other institutions of late finance capitalism (which is, as Lenin pointed out, necessarily imperialism, which really is the worst sort of capitalism). Just like the landlords, they too are trying to get a free lunch out of the works and labours of the tenants — with many of the landlord class serving as the sleazy middlemen for financial institutions, when they themselves don’t have sufficient capital to operate as independent owners.
But what about the banks role in all of this, the landlords decry. “Banks hold mortgage and loan claims over landlords — they feel the pressure too, just like the tenants they exploit!” There are, of course, numerous problems with this. The first and most obvious of which is that you virtually never see the landlords attempting to ‘punch upwards’ by using their power or voice to fervently go after the banks — they much prefer the safer strategy of focusing their punching downwards, applying the same pressure applied to them back down upon the tenants. Landlords being beholden to banks and financial powers above them does not absolve them, it’s only offers further criticism of their existence. On the rare occasions when landlords do speak negatively of banks, it is rarely of the institution, nor of capitalism, but more commonly conspiracy theories of bankers (read: racist scapegoating of Jews).
There’s a reason that you will commonly encounter the question: “do you own or rent?” — because if you have a home (the pretext for the asking of this question), then you almost certainly do one or the other. One option is to own, which is impossible for any but the wealthiest (the capitalist class and some labour aristocrats) to purchase a home outright, but for most others ownership will be conditional upon a type of loan (usually called a mortgage), coming from a bank or similar financial institution. For those that rent, they will rent from a landlord, who themselves either owns outright, or also enters into a conditional loan agreement with the bank. Declaring this to be ‘the choice’ for the tenant in need of a home is a deliberately deceiving tactic to keep the tenant from looking to alternatives to either condition (such as abolishing these backwards property relations, and/or establishing communism).
Marx 1844: Rent of Land
Karl Marx Economic and Philosophic Manuscripts of 1844 ||I, 3| Landlords’ right has its origin in robbery. (Say, t. 1…
But what about Small Landlords?
For the landlords who engage in their landlording through loans and mortgages, there is still no value being provided from the landlord. All this is saying is that it can be convenient as a member of the petty bourgeoisie (the ownership class) to have sufficient capital (and trust from the banks) to wedge yourself between the banks and the soon-to-be renters. The landlords are ultimately needless middlemen, who have thrown themselves into the process to allow banks to mitigate their liability, and in order to cut themselves a slice of the rent extractions that the bank is imposing (directly onto the landlords through payments and interest, but absorbed by their tenants paying rent — as they are making straight profit less the costs of the aforementioned gardeners and repairmen). It’s still the tenants who are the ones getting screwed, as they are now seeing a cut of their workload go to landlord, and another cut of their work goes to you and then goes from landlord to the banks. Nothing about the home has changed — no service has been provided, nothing new has been produced, no value is created. The landlord is free to spend the entire month napping in bed, and on the first of the month he can expect the rent payments, same as always.
But what of the grandmas renting out their basements to college students? Aren’t they landlords too? Am I going to unleash Chairman Mao upon them?
First of all, there are basement tenants of grandma who have been left homeless or worse from grandma’s evictions — grandma and other small landlords do not get a completely free pass just because the scale and extent of their landlording was smaller. I respect and understand the need for sympathy and forgiveness for those who struggle to make ends meet under capitalism, and had few alternatives, but the fate of their tenants must also be taken into consideration, each one just as much as the landlord themselves. A much fairer way to determine the fate of landlords, should such an upheaval of the property relations occur (again), would be to have landlords face a tribunal of all their tenants, past and present, and be judged by their experiences. We could do it all on Zoom!
There are also a great many confused petty-bourgeois landlords today, who are feeling the squeeze — tenants who cannot pay them, and holding properties they cannot rent because of COVID-19 — who then cannot pay their mortgage obligations to the larger financial sector, and are at risk of losing their rental properties. Overwhelmingly we do not need to weep for these small predators, who themselves likely carried out a great number of evictions upon tenants and collected rents well beyond the minimum for basic upkeep. They are now finding out that they were small fish in a big pond, and the larger predators are now devouring them, and their shitty rent-extracting AirBNB business, whole. Indeed, the reason the small fish landlords know that they are in a pinch is because they, too, recognize that the state institutions upholding property relations will side with the bigger fish — the larger landlords and the financial sector (who also know that they can fully expect the state to be on their side). If these lower landlords can no longer effectively keep the rent extractions pumping for the banks, their assets will simply be captured and forfeit to the financial sector — like Agar.io the largest financial blobs go around absorbing the smaller ones. And the small landlords being devoured are just the appetizer.
Property Relations Upheld by the State
Which leads into a rather important connection point between capitalism and the state. Contrary to the liberal view of the state (which sees the state as it’s own separate institution, unto itself), the Leninist view of the state sees it merely as an institutional tool — albeit the most powerful of tools — wielded by the class that controls it, to administer various societal functions in their interest. The property relations at the base of capitalism, upon which the landlord (and too the banks) rely in order to ensure the collection of their rents and interest and debts and fees, cannot exist and cannot be upheld without the existence of a state. A state, controlled by the ownership class, can (and will) uphold these property relations, interpret and enforce these claims, and repress and remove these nonpaying tenants, as well as dissenters, objectors, and physical opponents.
Think, for example, of a landlord who wishes to evict a building full of tenants who have gone on a rent strike. His only recourse is to have the state enforce and uphold his property relations and claim on ownership. Without the state, he has no tool for eviction to enforce the collection of his rents. His only option would be tantamount to basically declaring war on the tenants — using private security or private courts. But in this instance, for many buildings (especially larger ones) there are a great many tenants who would be more than happy to declare war back. And there’s a reasonable chance that even a medium sized group of tenants could defeat or overwhelm the landlord and whatever private security the landlord was willing to muster. And, as a capitalist and businessman, he would not have (nor want to waste) the billions required for equipment and weapons and even tanks and helicopters and bombs that would tip the balance so overwhelmingly in his favour. He would much rather that be financed by the state through taxation — there is a reason why a great many landlords have no problem with bloated police budgets, as long as none of the money is wasted on the other segments of society.
This is because the state functions as the administrative instrument of the class that is in control of it, and until the revolution, it is the ownership class who are in control in our society. Which leads into a very strange, often overlooked compatibility between Vladimir Lenin and another historical figure of political economy (it’s not a coincidence, as much of Marx’s work builds upon this man’s ideas) who was critical of financial capitalism, and landlords in particular. But the man is rarely held up as any sort of leftist, and even (the most foolish and ignorant) landlords can and will frequently hold the man up as a leading thinker (incorrectly) supporting their rent extractions.
Comrade Adam Smith
In part of the great irony of all of this, much of the criticism in this essay doesn’t originate from Karl Marx. Much of this is Adam Smith. Discussing this in elaborate detail will have to wait (Marxism for Newbies: Financial Capitalism — coming soon!), but for those few of us who have actually bothered to read (at least some of) The Wealth of Nations, these are among the topics that Adam Smith discusses. Adam Smith was a great advocate of industrial capitalism — the sort of capitalism that operates factories and farmland, which produce tangible goods and services, but was a great critic of financial capitalism — situations where money is made from rents and fees and interest and wealth extractions with no value provided. In Wealth of Nations when Adam Smith explains about how markets bring freedom — but the discourse that is quietly removed in all capitalist discussion of Smith is that the freedom he is talking about is freedom from forms of rent extraction.
In Wealth of Nations Smith makes the case that landlords and banks are parasitic institutions upon an economy, and in order to make the national capitalist economy more efficient, we must reduce the profits of these financial parasites down to zero. This is why Smith differentiates bankers and landlords —what Marx and Lenin would go on to provide the label of finance capitalists— from the factory owning (labelled: industrial) capitalists the whose ownership claims at least involve the doing of productive labour, which results in physical, tangible good, product or service that can be shown/demonstrated . For Smith, it is a better outcome that the capitalist — in order to collect further income, must first have their means produce additional volume/quantity of said service/good, and in order to produce this more the industrial capitalist is forced to re-invest his profits into new production, new labour, and thus new value. The landlord needs to do none of this to keep extracting wealth from tenants — they just need to hold the ownership claim and they can keep extracting rent, and that’s the difference to Smith.
If you remember way back when feudalism was coming to an end, the power was moving away from castles and kings and aristocrats and into cities, but the cities quickly found themselves in a trap — the rentier economy. All the money (the tangible produced wealth — the goods and services) in the cities was being gobbled up by the banks and landlords, so the cities were largely stagnating because no one was producing anything except for whatever was produced for the banks and landlords as rent payments. These lazy landlords and bankers are not doing any production to earn their cash — they make all their rent money just sitting on their asses. Smith argued in favour of capitalism (functionally, what Marx would call industrial capitalism since capitalism wasn’t a word during Smith’s time) as the de facto economic system to escape the rentier economy — rewarding the productive, producing members of the ownership class, rather than those producing no value. It is a long story about how Smith’s industrial capitalist system rolls forward to considerable gains and development, only to be rolled backwards by financial capitalism, where we have been stuck for the past one-hundred years.
Landlords and Finance in the age of COVID-19
We’re heading increasingly towards an economy with no more value produced — except for the luxuries of the ultra rich and the bare necessities for the continuation and upholding of the rest of the system. And it’s causing additional harm to us as well. All the value of the work done of the ordinary tenant increasingly goes to basic sustenance and those ongoing, unedning wealth extractions — especially rent. You may have noticed, for example, during our ongoing COVID-19 epidemic, that the sales for small business and even most manufacturers has dropped considerably, reducing their profits, and many people have lost their jobs, but the banks have not lowered their fees or interest rates, and the landlords have not (for the most part) reduced or eliminated their rent extractions. They are still operating on all cylinders because they do not need to produce anything, they just need to keep collecting on their ownership claims.
Workers have been laid off, and they’re unable to pay their landlords or creditors. So they are falling more deeply into debt. Entire states and the cities, like New York State and New York City, are being squeezed. In addition to having to pay local unemployment insurance, they have to maintain basic infrastructure and social services. But their tax revenues are plunging as a result of fewer sales taxes and income taxes. So the pandemic is creating a fiscal crisis as part of the overall debt and real-estate crisis.
This is why you are increasingly seeing squatters, rent strikes, and other forms of resistance emerging as more and more landlords look to a fresh series of forthcoming evictions, carried out by state enforcers at the start of the month. The only way for the pressure to be alleviated would be for the rent collectors to eat the loss — but that would mean less money (dramatically so in many cases) for the banks and certainly less money for the landlords. As already described, the state is an institution under their control, working in their interests, and upholding their property relations. They are the ones with the guns, and the ones making the rules, and they aren’t going to let themselves be the ones to take a financial hit for the good of the masses —indeed, it will be exactly the opposite. But if we, the tenants, can free ourselves of this system of property relations, we can create a world where tenants don’t owe their wealth extractions to landlord or financial institutions. We can oppose both the banks and the landlords, to see that everyone (literally everyone) is provided housing. We are placed on a sadistic treadmill, where we continually have to keep hard working extra, for the extractions of individual profiteers, lording over our homes, our land. It’s time for this last holdover of feudalism to finally end. If the landlord class is not willing to cease the rent extractions on their own, the only solution may be their total class liquidation.