Please Make Room for the Stateless Superrich
posted by Frank Pasquale
A recent panel at the Milken Institute decried a grave injustice. Jeff Greene, a billionaire real estate investor, noted that a single mother who weighed “over 300 lbs” received welfare of about $600 a month. “She could barely take care of herself, much less her kids,” lamented Greene. The redoubtable Niall Ferguson swiftly summed up the problem:
Why, he wondered, was Greene letting this lady off the hook? Why doesn’t she get up off her fat lazy butt and get a job?!, he demanded, with his Scottish brogue in full Braveheart mode. “Taking from the successful and giving from the unsuccessful.”. . . Loud applause ensued from the Wall Street-friendly crowd, most of whom paid several thousand dollars for a conference ticket.
Contrast the target of Ferguson’s wrath with the “stateless superrich,” whose “second, third, or fourth homes” are often vacant as they “spend a few months in St Moritz, before moving to their trophy mansion in London, and then on to their luxury villa in Sardinia for the summer months.” Some worry that “their children will become indolent spongers, who will blow their inheritance ‘recklessly and lose their ambition or even their health.’” But they tend to employ “legions of charge-by-the-hour gurus” who can help make crucial decisions about, say, “how to divvy-up seven properties between three” heirs. That is job creation par excellence.*
Fortunately for Ferguson, global trends in housing indicate that “the successful” are not ceding much ground to the “unsuccessful.” Property prices in “superprime” areas keep rising, as do ultra-high-net-worth individuals’ real estate investments elsewhere. Meanwhile, tens of thousands of individuals in Hong Kong live in cages (or “coffin homes“). The UK is pursuing “criminal landlords” who put “beds in sheds.” In Utah, storage units are turned into makeshift residences. Maybe they could move to Oregon—if “80 percent of the repossessed homes in the Portland area” weren’t off the market.
As “unsuccessful” individuals move away (or into closets), they leave more room for the “successful” to roam. One property consultant exulted to the FT that “The more money you have, the more rootless you become because everything is possible.” But that freedom depends more and more on another kind of rootlessness, dispossessions large and small that leave a growing class of “unsuccessful” unable to resist the will of those with thousands of times more purchasing power. David Harvey evokes the struggle for space:
Finance capital can run around the world—it’s what I call the “butterfly” form of capital—but the butterflies have to land somewhere. And where do they land? Well, they land in Manhattan, a lot of them, and they build these vast complexes . . . . And I think we struggle where the butterfly lands. . . .
I came in to Kennedy airport at 6 o’clock in the morning early this month, and I got on the E-train, and at that time it’s packed with mainly women of color, obviously exhausted, going in to Manhattan to wake the city up . . . . And they’re living way, way out there. They’re the people living on less than $30,000 a year, and they’ve been effectively expelled from the city. . . . [T]here are a million people in New York City who try to get by on less than $10,000 a year. Half of the population of New York City earns less than $30,000 a year.
Harvey discusses the slogan of a “right to the city” in a provocative new book. I prefer to think of the state’s duty to provide well-distributed opportunities and support. However formulated, we need to think more clearly about the political economy of space. There are aspects of human experience, such as living space, education, and health care, that should not be directly proportional to one’s bank account.
Creeping Space Concessions
Given the psychology of last-place-aversion, there may be a large middle class constituency for continuing redistribution away from the poor and to the top. Even some forms of Christian theology eagerly envision a “terrible fate reserved for most and radiant promise for a few.” However, minds may change as space concessions affect the workplace as profoundly as the wage and rights concessions employees are already accustomed to.
Unwilling to pay for space for “cookware, shoes and other personal items” like pictures of family, corporations are implementing the “officeless office“–otherwise known as the backpack and laptop. The new office order makes precarity visceral, advertising the dispensability of those workers unable to grab the few remaining “real offices.” And pity the poor workers who must make a business trip in coach, squeezed ever closer together to make space for bars, showers, and “fine bone china” in first class. At least they might be able to genetically engineer their children smaller, to avoid such discomforts.
The geography of spatial concessions has become a staple not only of less developed countries’ slums, but of futuristic literatures of America. For example, in “Ready Player 1″ (2011), masses live in “stacked mobile homes.” In Gary Shteyngart’s Supersad True Love Story (2010), a fused homeland security and property development apparatus razes high-rises in Manhattan to make way for “triplexes” for the stateless superrich. Shteyngart also imagined a popular movement in a park violently dispersed by police. Life has imitated that art, both in New York and in Oakland, where “stay away” orders are an increasingly popular police tactic.
Ways Forward
The political economy of spatial concession is an emerging field. One critical step is to name and describe these concessions as part of a unified and planned effect of policies and markets, rather than just unfortunate, unintended consequences. A growing literature has begun that process:
[N]eoliberalism has been less an ideological programme on behalf on free markets than a ‘quest for high income on the part of the upper classes’. Much of this high income, withdrawn against asset bubbles, has been . . . ‘fictitious’ in that it represented a claim on future wealth that neither had been nor was to be produced….
Consider the machinations of just one Wall Street bank, which paid out over $5 billion in bonuses in 2006, only to lose three times that amount by early 2009. Thousands of mortgagors will lose their homes, while employees and executives enjoy their fortunes. Let us concede, for the sake of argument, that each group equally caused the world-historic waste of capital, energy, and effort known as the housing bubble. Why is only one side paying?
The investments of today’s “stateless superrich” can be as much extractive as enabling. Who, for instance, could determine how much of Wal-Mart’s profits to attribute to ingenious supply chain management, and how much to bribery and wage theft? Recognizing our fundamental inability to quantify these types of distinctions (as well as the pivotal role of luck in human affairs), states must begin to put limits on the suffering and indignity of the growing number of “unsuccessful” players in today’s economy.
Disability rights scholarship provides one exemplary response. The Universal Design (UD) movement in architecture (“design[ing] . . . products and environments to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design”) pays dividends not only for the disabled, but for all users of well-planned structures. As Ani Satz’s inspiring work on vulnerability and disability has shown, any one of us could be struck by disease or disability that could radically affect our lives. Larger hallways and bathrooms (as well as more diverse airplane and train seating arrangements) do more than empower the disabled. They also shelter the 99% from the more extreme forms of cramping and crowding that are a natural consequence of fractal inequality. The interests of the disabled and NUHNWIs (non-ultra-high-net-worth individuals) converge here.
Note
*Ferguson may also want to credit the obese (and the obesity lobby) for creating demand for larger public transit seats and other products. From a purely economic point of view, this may be as much of a contribution to economic growth as demand for private wealth advisors.
Image: $1 billion house built for a family of 5 in Mumbai.
May 3, 2012 at 3:46 pm
Posted in: Disability Law, Law and Inequality
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Responses (4)
Daniel S. Goldberg - May 3, 2012 at 5:11 pm
Fascinating to see you bring in the concept of universal design and disability rights here. But respectfully, I think you left out one of the key components of the concept, which, as usual, comes down to $$$.
Namely, contrary to what most everyone believes, universal design is generally no more expensive than non-universal design, so long as it is implemented in the earliest planning stages of a structure. Retrofitting an existing structure to be accessible can be so exorbitant that its requirement could legitimately be called a kind of condemnation. But integrating universal design from the get-go is typically cost-efficient.
This means, of course, that our widespread failure to integrate UD principles into new structures is nothing more than a choice, one that transforms human differences into disabilities, intensifying alienation and stigma by barring or impeding impaired people’s access to goods and services.
I’m tempted to say that somewhere Marx is smiling, except that it is easier and less jarring for me to imagine him weeping.
Shag from Brookline - May 4, 2012 at 8:00 am
Niall has once again “nailed” it – his foot on his tongue.
AYY - May 5, 2012 at 5:51 pm
The billion dollar house is a monstrosity.
I’m surprised the owner didn’t know that you can get something a lot nicer and more practical with a back yard in Beverly Hills for maybe $10 million, and then you can knock it down and build something twice as nice for $20 million. Even if I’m off by $10 million, as long as California doesn’t fall off into the ocean, he’s still saved %960 million. That’s nothing to sneeze at.
PrometheeFeu - May 18, 2012 at 2:42 am
I find it disturbing that you would bring up the British campaign against “criminal landlords” which from the article you linked to appears to be largely a cover for deporting illegal immigrants. (aka kicking out those most vulnerable) Not exactly the most noble of policies.
Otherwise, it won’t come as a surprise that I don’t agree with you much. Cities are expensive to live in because they are highly desirable places to live in. The reason they are prohibitively expensive for lower income workers is quite simply that a variety of regulations makes building very expensive in cities. If cities stopped standing in the way of land owners, the problem would be nowhere near as big.
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