Vol. 72/No. 16      April 21, 2008

“Protection of property rights, so critical to a market economy,” Greenspan wrote, “requires a critical mass of owners to sustain political support.”

In other words, workers who think of themselves as “property owners” are less likely to rebel.

In a collection of three pamphlets published in 1872 and 1873, Frederick Engels, a founder of the modern communist movement, wrote about this. The articles were later printed in a booklet titled The Housing Question.

“For our workers in the big cities freedom of movement is the prime condition of their existence, and landownership could only be a fetter to them. Give them their own houses, chain them once again to the soil and you break their power of resistance to the wage cutting of the factory owners,” Engels explained. “The individual worker might be able to sell his house on occasion, but during a big strike or a general industrial crisis all the houses belonging to the affected workers would have to be put up for sale and would therefore find no purchasers or be sold off far below their cost price.”

Today, as the financial and debt crisis deepens, nearly 9 million homeowners’ debts to the banks are equal to or higher than the value of their property. It is now, on average, twice as costly to own a home as it is to rent.

Many facing foreclosure bought homes over the past decade with high-interest loans extended to millions of workers previously denied credit.

Since the early 1990s, home ownership has increased from 64 to 69 percent of households. The increases were even greater among oppressed nationalities and national minorities who historically have been denied credit.

Now that many of these loans are going unpaid, banks and lenders are trying to avoid being stuck with the homes when they’re foreclosed on. Under the guise of helping out “Main Street,” not “Wall Street,” politicians are pushing legislation to help the banks refinance and keep workers paying their mortgages.

“Many Americans are walking away from their homes, which hurts property values … and aggravates the credit crisis,” Democratic presidential frontrunner Barack Obama said in a March 27 speech. He called for “meaningful incentives for lenders to buy or refinance existing mortgages. This will allow Americans facing foreclosure to keep their homes at rates they can afford.”

Touting similar reforms, Republican presidential candidate John McCain said, “The past decade witnessed the largest increase in home ownership in the past 50 years. Home ownership is part of the American Dream.”

Engels explained that workers pay a very high price for the illusion of being part of the propertied classes. “[T]ake a look at the French peasants and at our own small peasants in the Rhineland,” he wrote. “Their houses and fields are loaded down with mortgages, their harvests belong to their creditors before they are reaped, and it is not they who rule with sovereign power on their ‘territory’ but the usurer, the lawyer and the bailiff.”  
 
 
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