Picture, if you will, John Maynard Keynes and Karl Marx seated together at a shabby-chic café—one of those places where the avocado toast costs more than the GDP of a small nation, and the Wi-Fi password is probably “late-stage.” Imagine them sipping overpriced cortados, locked in a heated yet oddly harmonious discussion about the ruinous potential of turning homes into speculative assets. It’s a scene so absurd it could double as an exhibit in the postmodern museum of late-stage capitalism.
And yet, the irony of their agreement on this one issue—the weaponization of shelter as an investment vehicle—is as poignant as it is biting. Because when the capitalist’s wizard of macroeconomics and the socialist’s prophet of class struggle both sound the same alarm, maybe it’s time to listen.
Let’s start with Keynes, the man whose name is now shorthand for any government policy that even smells like fiscal intervention. In his magnum opus, The General Theory of Employment, Interest, and Money, Keynes makes an eerily prescient observation: “Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation.” (Keynes, 1936). Translation? If you let people treat necessities like poker chips in an economic casino, don’t be surprised when the whole table flips over. Keynes wasn’t pulling this insight out of thin air; he had witnessed the Great Depression, which hit like a plot twist in a poorly written soap opera—predictable yet devastating. His vision of capitalism wasn’t utopian, but it had rules—like Monopoly, only without the smug uncle flipping the board when he lands on your hotel.
Now enter Karl Marx, that bearded nemesis of free markets, whose disdain for capitalism burned with the intensity of a thousand worker’s revolutions. In Das Kapital, Marx delves into the alienation wrought by commodification, and while he’s primarily concerned with labor, his critique extends seamlessly to housing. “The landowner, like every other capitalist,” he writes, “demands his tribute from the people, who pay him for the permission to inhabit the earth.” (Marx, 1867). If that doesn’t send a shiver down the spine of anyone currently paying $2,400 a month to live in a shoebox optimistically described as a “studio,” nothing will. Marx understood that when property becomes a tool for wealth extraction rather than a means of meeting basic needs, it’s the proletariat who foot the bill—until, of course, the system collapses under its own weight.
The parallels between these two thinkers are, frankly, unsettling. Keynes, with his faith in reforming capitalism, and Marx, with his call to overthrow it, converge on a single, glaring truth: housing should not—must not—become the gold rush of economic opportunism. Yet here we are, living in an era where houses are not homes but “portfolios,” where hedge funds buy up entire neighborhoods faster than your grandma snatches up Beanie Babies at a yard sale, all to maximize shareholder returns, and landlords set rents with the kind of audacity that could make even Marie Antoinette reconsider her cake comment.
And if you think that’s bad, consider the recent devastating fires in Los Angeles. According to recent data, rents in the city were already skyrocketing, with some neighborhoods seeing double-digit percentage increases annually. Now, businesses are preparing for the inevitable real estate buying frenzy, gobbling up property at rock-bottom prices like vultures descending on a fresh carcass. Housing speculation, after all, is late-stage capitalism’s favorite pyramid scheme. Newly homeless families, desperate for shelter, are met with landlords who see their tragedy as a golden opportunity for price-gouging. These landlords are the Dickensian caricatures of our age, only now they come with Instagram accounts and hashtags like #PassiveIncomeGoals. Think “land barons with Wi-Fi,” charging “market rates” that seem to be set by a Magic 8-Ball rather than any recognizable supply-demand curve. It’s disaster capitalism at its finest and most grotesque.
But wait, here comes Henry George, the lesser-known but no less significant economist who straddles the line between capitalist pragmatism and egalitarian idealism—think of him as the cool substitute teacher of 19th-century economics, dropping truth bombs about land value taxes while the class collectively realizes they’ve been duped by the system. In his 1879 book Progress and Poverty, George argued for a “single tax” on land value to curb speculative hoarding. Recent studies have shown that land value taxes in pilot programs lead to increased housing availability and lower prices—a modern vindication of George’s ideas. “The ownership of land,” he wrote, “is the great fundamental fact which ultimately determines the social, the political, and consequently the intellectual and moral condition of a people.” (George, 1879). Or, to put it in modern terms, George was saying, “You can’t build a just society on a foundation of Airbnb listings and eviction notices.” Like Keynes and Marx, he saw the inevitable disaster of allowing land to become a vehicle for unchecked greed. His legacy echoes in urban centers today, where activists rally for zoning reforms and community land trusts as antidotes to the poison of speculative ownership.
Even Franklin D. Roosevelt—yes, that FDR, the darling of American liberals and a man whose New Deal arguably saved capitalism from itself—took a stab at the housing question. “The test of our progress is not whether we add more to the abundance of those who have much,” he said in a 1937 speech, “but whether we provide enough for those who have too little.” One could argue that Roosevelt’s housing policies, which aimed to make homeownership accessible to ordinary Americans, were a direct rebuke to speculative profiteering. But fast-forward a few decades, and we’ve traded his vision for a dystopia where owning a home is less about stability and more about turning your equity into a live-action Shark Tank episode, complete with cutthroat bidding wars and the occasional emotional meltdown over “peak curb appeal.” Yet even his vision has been twisted over the decades, morphing into a system where owning a home is less about stability and more about leveraging equity to climb the ever-precarious ladder of wealth.
To those cheering on the endless rise of property values, Keynes might have quipped, “In the long run, we are all dead.” But in the short run, we’re all just trying to survive, dodging landlord emails about “slight adjustments to rent” that read more like ransom notes. Meanwhile, Marx reminds us that “Capital comes dripping from head to foot, from every pore, with blood and dirt.” Substitute “capital” with “mortgages,” and you’ve got a chillingly accurate depiction of the modern housing market—a dystopia where dreams go to die, landlords thrive like fungi in the damp corners of broken systems, and renters cling to leases like Titanic passengers clutching driftwood.
And yet, the circus rolls on. Housing prices soar to stratospheric heights, fueled by an economic system that rewards speculation over sustainability. According to recent analyses, institutional investors now own an estimated one in seven single-family homes in the United States, turning neighborhoods into profit centers and inflating prices faster than a Ponzi scheme at its peak. It’s not so much the invisible hand of the market as it is a visible slap across the face of anyone trying to buy their first home. For those lucky enough to own property, it’s a game of Monopoly with real-world consequences. For everyone else, it’s a Sisyphean struggle to keep up with rents that rise faster than wages, all while landlords and developers collect their unearned windfalls. As George put it, “Social progress makes property more valuable.” (George, 1879). In today’s terms: progress is when the gentrified neighborhood finally gets an organic oat milk café but at the cost of displacing half its original residents. But progress for whom, exactly?
Even Adam Smith, the patron saint of free-market capitalism, had his reservations. In The Wealth of Nations, he warned against the dangers of land monopolization, noting that “Landlords love to reap where they never sowed.” (Smith, 1776). His critique might as well be a prophecy for today’s housing market, where passive income has become the holy grail and tenants are little more than ATMs with bad attitudes.
If there’s any consolation, it’s that history will likely remember this moment as a case study in collective delusion. Keynes and Marx would both be appalled, but also a little smug, like two parents watching their kid ignore every piece of advice and then promptly faceplant. “We warned you,” they’d sigh, sipping their metaphorical cortados. After all, nothing brings people together like saying, “I told you so.” And if we don’t change course soon, the only winners in this game will be the landlords, laughing all the way to the bank while the rest of us fight over who gets to rent the closet under the stairs.