Friday, February 01, 2008

The Ownership society

"It was always tempting to dismiss the ownership society as an empty slogan - "hokum", as Robert Reich, labour secretary during Bill Clinton's presidency, put it. But the ownership society was quite real. It was the answer to a roadblock long faced by politicians favouring policies to benefit the wealthy. The problem boiled down to this: people tend to vote according to their economic interests. Even in the wealthy United States, most people earn less than the average income. That means it is in the interest of the majority to vote for politicians promising to redistribute wealth from the top down.

So what to do? It was Margaret Thatcher who pioneered a solution. The effort centred on Britain's council estates, which were filled with diehard Labour party supporters. In a bold move, Thatcher offered strong incentives to residents to buy their council-estate flats at reduced rates (much as Bush did decades later by promoting sub-prime mortgages). Those who could afford it became homeowners while those who couldn't faced rents almost twice as high as before, leading to an explosion of homelessness.

As a political strategy, it worked: the renters continued to oppose Thatcher, but polls showed that more than half of the newly minted owners did indeed switch their party affiliation to the Tories. The key was a psychological shift: they now thought like owners, and owners tend to vote Tory. The ownership society as a political project was born."

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