That there wouldn't be a price for the use of land or built structures sounds very strange, if you otherwise do favor the price mechanism of markets to barter or central planning. — ssu
The price is the purchase price. "To have a right to use something" and "to own something" should be the same thing. The point is for the users of things to be the owners of those things, instead of some people using things owned by others and others owning the things that everyone else uses.
Wealth only effects one's potential to buy products and services — ssu
In a truly free market, without rent and interest, yeah. The exact problem is that that's not true: that wealth can just "generate" more wealth not by being spent but just by being lent. You said earlier:
it is these rents and interests, should we say return on investment, that makes assets grow — ssu
But that's not how actual wealth is created, that's just how wealth enables one to extract more wealth from the productive economy. If you'd actually read Wealth of Nations you'd understand that the reason why economies aren't zero-sum is because it's not simply the quantity of stuff in the economy but the distribution of it that constitutes the wealth in the economy: if I have a gazillion pencils and no paper, and you have tons of paper but no pencils, we can make the very same stuff worth more by trading some pencils for some paper so that we each now have the ability to write whereas before neither of us did. Trade is what actually creates new wealth; lending just siphons off of that.
And those with skills that are in higher demand usually get wealthier than others — ssu
All else being equal, yes. The problem is that all else is not equal, and you can get (and stay) wealthier just by starting out wealthier, despite being less productive a worker than people who started out poorer and, despite their greater productivity, remain poorer.
In a modern economy agricultural production is a small cog in the wheel where the service sector is in an important role. So owning land isn't the only thing that rich people can do. — ssu
True, but the underlying mechanism of lending productive capital is unchanged. This is actually an analogy I make a lot: rent and interest are the remnants of feudalism, adapted to a modern economy. In a feudalistic, agrarian economy, serfs lived and worked on land that belonged to someone else, and had to give much of the product of their labor to that landlord for the privilege of living and working there. In a modern economy, there are more types of capital besides land, and we usually work upon one lord's capital while living on another's, but still a big chunk of the product of our labor goes to the first "lord" (the employer) and then a huge chunk of what we "get to keep" goes straight to paying another (the literal landlord, or else the bank).
Paying rent isn't the problem. — ssu
Yes, it is. And banks don't solve the problem, because
interest is rent on money and has all the same problems. Borrowing money isn't any better than borrowing housing.
Here if you rent a large two room or a normal three room apartment, you could with the same money buy a smaller flat of your own and pay similar amount some years and then have the flat for yourself. — ssu
Maybe that's true in places where land is dirt cheap and three-room apartments are "normal". When you live in the middle of nowhere and supply is virtually infinite relative to demand, these problems are easily overlooked. But in places where people actually live, where there is a crunch, all these flaws show through.
My parents have spent their entire lives paying for housing and still own no housing to show for it, despite having paid over that time more than the current cost of a house. I have spent my entire life paying the lowest rent I can possibly find (in the area where I was born and raised and where my entire life is so don't just say "why did you move somewhere expensive" or "why don't you just move back somewhere cheap"), saving and investing at ridiculous rates (currently up to over a third of my take-home income) trying to save up enough money for a down payment on
anything available for purchase such that the
interest alone (which is, again, rent on money) wouldn't exceed my existing rent, so that I can actually finish paying off a house before I die and not spend my entire life having to pay just for the privilege of having somewhere to sit and stave to death in peace.
I have never wanted to rent. I have always wanted to own. I have always lived in the place I want to continue living. But owning within my lifetime has always been out of reach. Even now that I make more than 75% of people in the country do. I don't even live in a big city, I live in a trailer park surrounded by farms and ranches out on the edge of civilization (within walking distance of national forest), and I would settle for anywhere within commuting distance of here, but there isn't
anything affordable for
hundreds of miles. I have to save up hundreds of thousands of dollars of down payment just so that
interest alone on the
cheapest available home doesn't make owning more expensive than renting. And
the vast majority of people are poorer than me, and live in places more densely populated than my hometown, so this isn't just a "me" thing, this is a huge systemic problem affecting billions of people.
Owning is more expensive than...? — ssu
Than it otherwise would be. If you own two houses, you can live in one and rent the other out for free money. That makes owning houses attractive to people who otherwise wouldn't be interested in owning more houses, people who already have a house of their own, people who generally have a lot more money than people who don't yet have a house and need one to live in. So with more rich people interested in buying additional houses as "investments" (free money machines, not actual investments), the price of those houses goes up way above what it would be if the only people buying were people who need a first home to live in.
And so the people who would be the buyers otherwise, the people who need a first home to live in, are priced out of that, and forced to rent a tiny studio apartment or a bedroom in someone else's house, or if they're rich like me, a plot of land on which to park an oversized vehicle vaguely resembling a reasonable one-bedroom apartment. (One still two small for two people to live in, leaving me approaching 40 years of age and 10 years of a serious relationship and still unable to get married because we can't afford a place we could live in together).
Who's incentive is to build houses if there isn't any price? — ssu
PEOPLE. BUY. HOUSES. TO. LIVE. IN.
I don't want to continue this conversation. Ideological capitalists like you simply can't conceive of any heterodox economic model, and just writing this reply has sucked up my entire day so far. I've had this conversation a million times, and the only people who ever get it are the people who already got it, so I don't want to have it again.