The folly of the London mayoral elections

Looking at the candidates for the next Mayor of London and their policies, it’s clear that all of them have misdiagnosed the true cause of the capital’s major social issues – and do not understand the effects of government action. Thus their proposed ‘solutions’ aren’t solutions at all, and are the economic equivalent of a medieval doctor prescribing leaches to heal wounds.

Take the two frontrunners, Zac Goldsmith and Sadiq Khan, who seem to be the most intelligent (or least misguided) of the lot. They both promise the building of hundreds of thousands of new houses over a four-year period, but both make senseless – from the perspective of achieving the most and fastest alleviation of London’s housing/rent crisis – compromises. Goldsmith’s pledge to protect the Green Belt merely upholds an arbitrary prohibition and cap on land development around London. Which means less house-building than would otherwise be the case.

Similarly, Sadiq Khan’s pledge to arbitrarily cap the prices of 50% of new houses reduces the profitability of house-building, thus leading to less than would otherwise be the case. The price cap will also lead to less of those new houses being rented out than would otherwise be the case, which means rents will stay higher than they otherwise would have been with a greater supply of rental properties.

Why would two intelligent and educated men like Goldsmith and Khan pledge to implement policies that can so obviously only impede the solution to the problem? Ones that can only delay the arrival of a downward trend in house prices and rents in London?

Given the incentives they face and their desire to reign as London’s Mayor, there is only one answer. They made these solution-defeating pledges because they need the votes of people whom these policies will please. In this case this is people who want to impose their aesthetic preferences upon society as if they were moral imperatives, i.e. in the form of preserving London’s ‘green belt’, and younger people obsessed with home-ownership who are ignorant of basic economic truths.

Politicians almost never propose to do what is best because that’s not what they are most interested in. They’re most interested in getting elected. (This isn’t because they are unusual or especially ‘selfish’ people. On the contrary, it is because they are normal human beings driven by immediate self-interest). And getting elected means doing – or at least promising to do – that which pleases most people, not what is best.

Herein lies the folly of charging politicians with power over our economic freedoms to solve social problems. They can’t get into power without pleasing most people. And invariably they cannot please most people without implementing policies that in some way impede or raise the cost of the economic behaviour (by people in society, which in this case is developing land, buying to let and becoming a landlord) that is the solution to those problems – and reducing the incentive for more people to do so. It’s the paradox of politics.

Adults know and except that it isn’t Santa Clause that brings them Christmas presents, it’s real people. They now need to understand and accept that politicians do not solve social problems – a society of profit-seeking and wealth-creating people do through their economic exchanges. At best, politicians impede solutions with people pleasing policies in their pursuit of votes. At worst, they exacerbate them and create new problems.

It’s clear that, whichever candidate gets elected, London’s housing and rent problem won’t be alleviated to anywhere near the degree that he or she believes they will. Of course, the building of a large number of new homes will help. But the point is that we could have even more new homes more quickly if it wasn’t for the inhibiting policies of a Mayor of London seeking applause, and if developers didn’t have to sink time and money into seeking permission of government officials to buy and develop land (land which isn’t ‘protected’ from development).

Some of the candidates for the London Mayoral election are worse than others. Sian Berry of the Green Party is the worst of the lot. She pledges to get rid of London City airport, set up a “renters union” and introduce a flat fare on the tube. These are illiberal and terrible ideas.

Establishing a renters union, assuming it had the same legal powers of other unions, would almost certainly lead to an exodus of landlords, which would in turn push rents even higher. A flat fare on the tube would cut TfL’s revenues, which it would have to recoup through increased public funding or else shrink its services.

She’s not just a highly motivated socialist, who sadly is somewhat popular, she’s an environmental socialist. Which is even worse, but not surprising. Socialism has become one with the catastrophic anthropogenic global warming movement over the last few decades.

Socialists used to believe that adopting State socialism would lead to material utopia, but now many believe that State socialism on a global scale is necessary for the very survival of humanity – or at least most of it. We’ve gone from “socialism will make us all better off!” to “we need socialism to prevent hundreds of millions of people dying!”, but what hasn’t changed is that advocates of State socialism are still mistaken.

The economic ignorance of this women is surpassed only by her hubris. The sheer despotic arrogance of desiring to close down a profitable airport in one of the world’s greatest cities, with absolutely no regard for the negative impact this would have on millions of people’s lives, is breath-taking.

It is the product of her being convinced that a global human catastrophe awaits unless she makes the necessary sacrifices (for us) that the average selfish person today just isn’t willing to. To her, Air travel is a luxury and thus a perfect candidate for sacrifice. It’s all about necessary sacrifices. And, naturally, she wants to be the one who decides what we all sacrifice. This is the mindset of a dictator, hidden behind the kindly face of a slight, blonde woman. This we should find disturbing.

Democracy is widely accepted as the best form of government because people believe it to be the best defence against tyranny rule by an individual, which up to a point it is, but in the long-run it breeds a million despots and makes totalitarianism almost inevitable.

Political economist Thomas Sowell describes modern liberalism as totalitarianism with a human face. Sian Berry is the perfect illustration of this description. She will see herself as the polar opposite of a dictator, of course, and would, I’m sure, be absolutely astonished to be described as such. But, then, all dictators are I imagine.

The solution to London’s housing shortage and soaring rent problem is simple: supply needs to meet demand. Thus London needs a Mayor who recognises that it is government laws and legislation that is preventing supply from meeting demand – and that no amount of price caps or subsidies is going to help.

London needs a Mayor committed to removing government barriers to developing land and building houses in and around London; and one who will fight for removing government legislation and regulation that raises the cost of renting out property. Sadly, none of today’s candidates have any intention of being this Mayor.

Advertisements

Got thoughts?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s