The trailer park owner in the article owns 131 units and "makes" (presumably grosses) $400K a year. Those units are about $250 per month, hardly the stuff of Viking-style pillaging, IMO. The other landlord has also built herself a business in real-estate and now can afford to take a vacation? Good for her, seriously. She's providing housing and her tenants/customers are providing her income. Building such a business (and I assume running a 131 unit mobile home park) is absolutely work, the value of which is evident by the paying tenants.

> Building such a business (and I assume running a 131 unit mobile home park) is absolutely work, the value of which is evident by the paying tenants.

Running a sweatshop is still work, the value of which is evident by its customers.

Just because someone needs to work or a place to live doesn't make it right or commendable.

Nobody is 'profiting from poverty' here. These landlords would make much more money if these people were wealthier! I'm sure they'd love to make nicer places and charge higher rents with higher margins, but they can't, because that's all these people can pay.

Here's the thing: being a slumlord is profitable. Yes, your tenants don't pay much, but if you don't improve your property, ignore complaints, refuse basic maintenance and throw everyone on the street if they're a day late on the rent, your margins are excellent, far better than you'll make with decent apartments where people demand things like legally-conformant housing and nonabusive contracts.

These are tenants who don't have recourse, or at least not easy recourse, to the legal system, so cold water flats, no A/C or furnaces, black mold, and rats and roaches are part and parcel of the slumlord experience. Of course, all this is illegal, but slumlords tend to have a lot of free cash to throw at local politicians and attorneys, and if they own a large number of single-family dwelling it's hard to track down and deal with every nonconformant property.

The simple answer is that if I can't afford to maintain a minimal level of environmental and residential standards, I'm not allowed to rent out my property. Likewise, I can't buy an empty lot, fail to maintain it to code, and then offer a defense that it's too expensive to keep it up. Governmental police powers are quite adequate to compel compliance.

All this is quite separate from the other point you bring up, which is that affordable and decent housing is going to require socializing costs. In fact, there's no reason government shouldn't engage in more public-private partnerships to help fund affordable housing as part of mixed-income residential planning. But I don't buy the argument that minimal living standards are an unwarranted intrusion on the liberty of rentiers -- and I dont think you do, either. If payday loans can be deemed predatory, can't "environmentally hazardous" rental units also be?

That's all well and good, but what happens to the people who are renting there, and what happens to the people who can't afford a place with "minimal level of environmental and residential standards"? Will those people be better off sleeping rough?

Everyone should have access to basic housing. If they do not that's a failure of government to provide a sufficient social safety net.

Of course not. But neither is it all or nothing; slum or safety net. My point is the root cause needs to be explicitly identified before it can be rectified. The root cause in this case is America's fetishism for small government and smaller taxes.

Why do you think anything with a government stamp is automatically 10x the price? It's not because of people wanting smaller government. Smaller government is about localizing procurement down to the smallest workable level.

Making a huge tender to build these environmentally safe houses for everyone would mean only the biggest and most expensive companies could compete in the 10 year long bidding process. Making a tender for 10 houses for the local poor in your village would be free in comparison, and those 10 houses would be ready before the poor die of old age.

In general, yes. But not in the best run governments---Singapore comes to mind.

(But even Europe isn't quite as bad as the US. American public procurement---especially for infrastructure projects---is truly hideous and expensive by global standards.)

The Swiss seem a good model if you are looking for how localized government can work.

I don't understand why that is. We paid ten billion dollars to replace the SF Bay Bridge, and it took forever. Now we're going to spend seventy billion for a train that goes from nowhere to nowhere, and very little is actually going toward construction itself.

Is it the cumulative effect of regulations, or the price of labor, or corruption? Something else?

There's some special American factors. One is that your population, and by extension the lawmakers they vote for, don't trust the bureaucrats at all, and thus make try to micromanage the public servants with laws that remove discretion. These laws are intended to remove opportunities for corruption, but they also remove opportunities for common sense.

For example, in most of the US they have to award public contracts to the lowest bidder---no matter how likely the awarders think the lowest bidder is going to overrun schedule and budget.

I've read a bit about these problems (and my summary above is from memory). Even lurking on HN, this topic comes up from time to time in the comments.

(And just to be pedantic, historically there's also spoils from conquest.)

There's also government debt. I know you could argue that this has to be paid back eventually---but when interest rates are below inflation, that's a better than free loan. (And in theory they could invest in assets that yield even more, instead of just consuming the difference between inflation and interest.)

Most people buy government debt out of their own volition even at these low rates. (And if it's foreigners buying it, there's even less direct coercion via regulation involved.)

Today's poor housing would look like a damn luxury 100 years ago. Today's luxury housing will probably look bellow standards after 100 years

So the point is that following your reasoning there is really no end to the depravity you can reach and somebody would still be able to claim that is all fine, because only rich people in the stone age could afford such luxury.

The point Smith made was that poverty is always a relative phenomenon. What is a necessity is always defined in terms of the society you live in. There is no such thing as a universal definition of necessity.

I had an interesting conversation about this with my wife's American parents. Despite the fact that her parents were noticeably better off economically in their childhood than my parents, they felt a severe stigma of poverty my parents never felt. My parent grew up in a country where they were much the same as everybody else. In fact a little better off. They did not feel poor at all. They had a happy childhood both of them. But one of my wife's American parents had a bad childhood, plagued by a strong feeling of being lesser than everybody else. Never having people over on visit out of shame over their own poverty. She was used to seeing everybody else being better off and internet the idea they they were somehow lesser people.

Today my home country is richer than America by GDP per capita but comparisons of wealth and of people's feeling of wealth or poverty is difficult. Many of my american relatives enjoy bigger houses and cars than I do, but one always gets the feeling that their life is much more of a struggle than mine. I live in a smaller house and have no car. But I have no financial worries like them. I have long vacations, I am not constantly overworked. I don't worry about health care insurance, saving for college education to my kids, getting fired.

So I think one should have some respect for the desperation and despair the poor in America feel. Knowing that a surprising car repair or medical bill could send you onto the street in no time. Even poor in much less wealth western countries have to deal with quite that level of insecurity.

> I live in a smaller house and have no car. But I have no financial worries like them. I have long vacations, I am not constantly overworked. I don't worry about health care insurance, saving for college education to my kids, getting fired.

In America, we trade stability for social mobility (probably truer before the WWII), and our government promotes car and home ownership, but I doubt those were tradeoffs you made for longer vacations and "free" health care and education. We became more socialist and fascist after WWII and during the Cold War, but we've still managed to maintain steady income growth for average Americans, despite what the media would have you believe with "household income": http://politicalcalculations.blogspot.com/2012/12/the-discov...

Poverty will always be with us, but there are plenty of things our bureaucrats can give up to fight it better. Our federal government has more or less the same number (very few added in the last 100 years) of representatives despite our population tripling. This system has become more susceptible and beholden to corporate interests, including media corporations that promote stories like this one and the problems and divisions in our society without any context of our achievements and commonality. This promotes bandaid and politically expedient half-measures that only make the problem worse in the long-run.

And you can't have success with capitalism without a healthy and prosperous working/poor middle class to be your consumers.

I'm thinking of democratic socialism. It's capitalism with a heavy emphasis on welfare and super strong social safety nets.

If you look at the quality of life index (the "where-to-be-born" index), you'll see that the top 10 countries all employ a form of democratic socialism. That's saying something right there.

If we hope that they might compete fairly to improve their lot, are they started well behind in a house with failing power, or heat or cold that keeps them awake or sick and so on?

Without a fairer playing field, they can fall further behind.

A satisfactory home that complies with regulations would ideally allow the occupant to get a decent sleep, prepare food healthily and present themselves appropriately for work.

A modern small home, with electric lighting, an indoor flush toilet, a refrigerator and other electric appliances, hot and cold running water, thermostatically controlled HVAC, microwave, and cable TV? Absolute luxury compared to the typical house built and lived in in 1916.

My house (a quite respectable house built in the mid-1920s in Cambridge, MA) appears to have originally been fitted with a coal furnace and has had electric lighting retrofitted (originally had gas lighting). An oil furnace was retrofit in 1937. It seems to have had flush toilets from the start.

However there are a number of luxuries that have not increased in these years that are pretty important, such as personal space and privacy, my house and I suppose yours have this luxury. The houses I grew up in, and which poor people are living in now, often do not have these luxuries.

There is another thing that it seems was not a luxury in 1916 and is becoming now, relative freedom from the threat of eviction. According to the article there is a greater deal of eviction of today's poor than there was in the past, and I think that luxury might be really important if you have children. Important enough that I would be willing to trade indoor plumbing, microwave and TV for it, maybe some other luxuries if I was given the tools to make up for them (tools like ice delivery and so forth).

Finally given the low quality of poor people's housing not all of these luxuries you list can be counted on as being available, if for example the heating breaks it might take months to fix etc, so the luxury at the level is highly variable.

This article is suggesting that these landlords are causing poverty, but then it goes on to not even try to make that case. They may be making money from poor people, and they may even not provide them the level of service they are legally required to, but this article makes no actual case for them causing or being any real part of the poverty cycle. Unless of course you think that the mere fact of asking that their rents be paid is the problem - and if you do, fine, but you're then tasked with proposing an alternative way of housing these people.

The landlords are causing poverty by increasing rents to the maximum level the market will bear, removing money from the system and - usually - moving it offshore.

Because slum property is so immensely profitable, there's no incentive whatsoever to invest the profits in anything riskier. So you end up with wasteful non-projects like this:

http://www.dailymail.co.uk/news/article-3490220/The-Ghost-Ho...

Meanwhile renters see their disposable income - in fact their economic freedoms - eroded until they can barely afford housing and food.

You now have a deflationary cycle where it becomes harder to find customers for new businesses, and harder to find investment because investors don't believe customers are easy to find.

Of course it's not just landlords. But generally economic cultures are designed to be favourable to either increasing or decreasing economic freedom for the low-paid. And if it's the latter, the predictable result is massive inequality and a deflationary uncontrolled descent into terrain which not only does the poor a lot of damage, but also eats away at the sustainable economic value of the assets of the rich.

By your logic, you'd have plenty of profit to spare, and you'd be providing an enormous social good.

But my guess is that you will not do this. And you will not do this because your analysis of their margins and business is not actually correct, and you and everyone else in the market knows this.

Usually?

Yeah, your local slumlord has a Swiss bank account.

What sort of lame excuse is that for exploitation? "These people could be much worse off if they were being exploited more"? Well, duh. The point is that they're in a dire situation in the first place because they're being exploited. Their landlord is not some benevolent benefactor, he or she is the purveyor of their misery, that's the only reason why he or she has a say in how deep that misery is.

By analogy, imagine you grab someone off the street and beat the shit out of them. You break their ribs, kick their teeth in, bash in their skull, but stop just short of killing them. Then you go "hey, it could be much worse: I could have killed you".

Well, yeah, you could have. You could also have avoided attacking them in the first place. They're not "better off" thanks to you, they're much worse off than they could have been because of you.

Where is the exploitation? Nobody is being tricked or duped. Two people are coming together to exchange something without coercion, intimidation, or trickery.

In the sense that he or she is charging 70% of their monthly income for rent.

And it's coercion alright if the alternative is being left homeless.

No. He or she is charging an absolute amount, not a percentage of their payslip.

>And it's coercion alright if the alternative is being left homeless.

Coercion /koʊˈɜːrʃən/ is the practice of forcing another party to act in an involuntary manner by use of intimidation or threats or some other form of pressure.

There is no coercion here. Poor people are not mindless sheep, they have their own will, their own goals and their own plans. If they live there it is because they chose it. Not the landlord, and not "the rich".

Here's another analogy. I make this beautiful and unique item that you want to buy. I charge - literally - an arm and a leg over it. Like, the actual body parts.

You protest: "You're asking for a part of my body??". I reply "I'm asking for an arm and a leg, not a part of your body". Hey, maybe you can pay me with someone else's arm-and-a-leg, right?

That is how absurd it is to say what you just said.

>> There is no coercion here.

Yeah, there totally is. It's the same kind of coercion the Mafia employes. "You don't want to pay us to protect your establishment? Well, fine, but then something may happen to it".

You don't want to pay 70% of your income to stay at my dirty, dilapidated hovel? That's fine, but then you might find yourself homeless.

The tactics are similar because the mindset is similar. Pay up or else. It's exactly how it works and it's precisely why it's coercive and morally repugnant.

More to the point: I find it morally repugnant because I don't have to pay 70% of my income to stay at a trailer, and I make probably 70 times more than the people who are forced to live there. There is no excuse for that. If I payed 70% of my income to live in a shithole, then I would think, OK, that's how it goes. That's life, see?

Except, it's not. I know it's quite easy to get a much better deal, as I got. If someone forced me to live in such conditions, I'd be up in arms. Therefore, I also do mind a lot that other people are living in such conditions.

I can only assume you're using all your excess income to build and subsidize homes for the poor?

The simple fact is that, over many thousands of years, humans have evolved a system of voluntary exchange. And we have found that that system produces the greatest benefit for the largest number of people as compared to all other systems we have tried at scale. This means that those with property rent their property to others so that they may live there.

If you don't allow the owners of property to rent their property, then there will be no homes for anyone. If you do not allow people to own property, then property will likely not be put to its most productive use (see: communist russia, china, north korea, etc.).

If you'd like to propose a better system, i'm all ears. But until then, you need to accept the hard reality that there is no better solution for these people, and that an offer like "pay 70% of your income in rent" is something that they have the right to accept.

To suggest that these people are being exploited when they are entering into such an agreement is to suggest that they are incapable of agency, and to deny them the most basic of human rights.

On the one hand, to say that with any authority you have to be a, well, authority, on "western philosophy and economic thought" or at least to have read it. All of it. Have you?

On the other hand, I'm not conversing with "all of western philosophy and economic thought" here. I'm disagreeing with you about a very specific thing, which btw is not at all whether "charging rents in a voluntary exchange is a coercion". That's your interpretation of my comments.

What I find coercive is charging someone 70% of their income to let them live at a shithole with the unspoken threat of them becoming homeless otherwise looming over their head. Not to mention the threat of kicking them out if they complain about the state of the property, or if somebody calls the cops on them, and so on, as the article reports.

The people who rent those properties, far from being "free agents" as you pretend they are, find themselves in dire economic straights and with extremely limited options. They are under immense pressure to find a house and grave consequences if they can't pay the rent.

If you consider that "free agency" then you might as well consider extortionate lending, such as practiced by loan sharks, with the threat of having your legs broken by thugs if you can't pay, to be a fair and acceptable exchange.

I don't know what "literally all of western philosophy and economic thought" says about extortion, but I do know it's illegal in most of the world- and for good reason.

The premise of your argument fundamentally rests on the idea that these landlords are choosing to charge "70% of their income to let them live at a shithole". But is that true?

Do the landlords have much of a choice in this matter? We can see with a simple thought experiment. What would happen if they were to lower their rents?

I'll tell you. They'd get more customers. Their vacancies would quickly be filled, because they'd be cheaper than the 'shithole' next door. And if they are already full, then all they'd need to do is keep building new shitholes until they can take all their competitors tenants too.

So, then. The obvious question: Why doesn't this happen? Why don't all these slumlords recognize this obvious opportunity for massive profit? Why don't you or I build a shithole of our own and charge only 60% of people's income?

And the answer is simple: Running shitholes costs 69% of the income of those monthly tenants. Charge any less and you're losing money. If you do not believe this to be the case, then by all means, start your own shithole and charge less. Let me know how that works out for you.

I am inclined to believe you are a troll, because the distinction between an aggression of violence and a voluntary free exchange on the market is quite easy to make, which in your argument you fail to do.

The difference between that and slumlords is simply a matter of degree.

Desperation is the route to profit in both cases. Truly voluntary exchanges without gaping chasms of systemic inequality do not provide opportunities for sustained profit.

What is wrong with this scenario? If there were no ambulance service I automatically choose "Die" (which is, apart from matters of inheritance, always the wrong choice), but if there is the ambulance service I can buy my life for the relatively meagre price of 80% of my wealth, then having neither children nor wife I would take that deal ten times out of ten.

I'd pay the price on the spot, because I like not being dead. But afterward, I think I'd try to rob that guy to get my 80% back, and maybe some of the 80% from some other people. That's not a "thank you so much, you're my hero" price. That's a "better watch your back" price.

When too many people start to see you as a parasite upon their community rather than a foundation pillar for it, they will certainly reduce their rate of cooperation with you, and some may retaliate. You may have to acquire a taste for other people's spit in your restaurant food, for instance. And worst of all, you may motivate someone to launch a business in direct competition with yours.

Then, if your choice is 80% to the dirty exploiter or waiting a few more minutes for a Medic-Uber to pick you up take you to the hospital, you would almost have to be gushing blood from a major artery to accept the former.

Either way it's not exploitation, even if there's a company that charges prices that always bankrupt their patients, I still choose broke over dead, and if I wanted to choose dead I can do that too.

If you control the premise of the arguments, it is easy to "win".

Apparently, the same kind that would leave children living in a cardboard box in front of their job.

Life as described in the article sucks, but it's still orders of magnitude better than living on the street.

Desperation is a rich source of profit. Neoclassical economics, instead of analyzing this sordid detail, masks it with assumptions.

That's why you view it as an unrealistic scenario despite the massive amount of historical precedent. Under econ 101 models (perfectly equal wealth; perfectly competitive market) it is an unrealistic scenario.

Classy.

Nicer places require larger capital outlays. The landlords chose their market, not the other way around.

    > The landlords chose their market, not the other way
    > around.

You don't choose to make umbrellas for the umbrella market, and just keep churning out umbrellas, perpetually disappointed by the fine weather.

This market is profitable, but if it were wealthier, it would be more profitable. There's no incentive for a business-owner in such a place to somehow keep the locals in a state of poverty.

    > If this market were wealthier it wouldn't exist. The
    > tenants would be getting mortgages or renting nicer
    > apartments, not living in trailer parks.

There are many factors explaining this : reduced access to law for the poorest, lack of alternatives, but also social perception of the tenants and of their worth, or the cognitive bias displayed by many about homo economicus.

You do if people keep buying them, irrespective of the weather.

You've misread my comment. I'm not saying that the landlords create the market; simply that the landlords chose a market that requires less capital outlay, and also with full knowledge that the market is not typically upwardly mobile.

In other words, it's fairly rare that landlords buy mobile parks with the intent of later upgrading their customers to upscale condominiums.

If a landlord is about to chose a market that requires less capital outlay it's because there is an unfilled need in that market. Without the lower cost housing the tenants will only have fewer options, potentially more expensive ones at that.

If all of the needs are filled and somebody else decides to target the market then they have to find a way to disrupt it, in this case that probably means figuring out how to reduce costs and charge less.

So yes, people are profiting off of poverty.

If you look back at my original comment it's WRT the assertion that these landlords would love to upgrade their properties and charge higher rents. I was simply saying that's largely untrue. These landlords are aware of the market dynamics/demographic when choosing to invest and have little-to-no desire to "upgrade for higher margins".

"If this market were wealthier it wouldn't exist"

That is exactly right.

The landlord would be more likely to wait for them to move elsewhere and just await more customers for their current offering as long as the market was there. This, rather than outlay the capital to upgrade the place; else the landlord would have likelier invested in a more upscale offering to begin with.

Likewise, depending on the degree of increased wealth, the tenants may well prefer to move. Slums and trailer parks generally don't have a tendency to just "happen" in otherwise affluent areas. With increased options, renters would likely desire better surroundings, schools, ownership, etc. vs new granite countertops in their double-wides.

Of course for this same reason, landlords don't want to risk upgrading beyond what can be recovered in a reasonable time by rents that the market will bear. No amount of upgrades is going to make more affluent buyers with other options move to a mobile park.

People are suggesting here that the landlord would upgrade because it's economically rational to collect higher rent, while simultaneously ignoring much of the actual economic reality here.

Again, I'm not claiming that the landlords create the market. But they are under no delusion when they invest.

I'm not seeing a workable alternative beyond government-provided housing, but that doesn't have a good history of success in the US.

My grandma in Israel paid rent in a public housing that had exactly such an arrangement, and after becoming a pensioner, she was finally able to purchase her house. And i have no doubt such arrangements are one reason why Israel, a nation establshed from poor immigrants did quite well for both economically and socially for relatively long.

That's right, government protecting the people again; in this case, lease-options or lease-purchase agreements with a financing component where the purchaser is living in the property during the term are now deemed consumer financing arrangements (rather than real estate financing arrangements), which are subject to review by the then-newly-created Consumer Financial Protection Bureau.

It all but dried up the willingness of sensible sellers to write lease-options on property where the lessee would live in the structure. Yes, there was some amount of fraud and exploitation under the old laws as well, but now that entire mechanism was closed off to property owners willing to sell and [typically] working-class families looking to buy.

[1] http://www.mhmarketingsalesmanagement.com/home/featured-arti...

[2] http://www.huffingtonpost.com/2012/02/03/rent-a-center-cfpb-...

Hint: most of these people can't qualify for a mortgage, otherwise they'd just buy outright.

Such schemes from government are a must.

They are much better than "welfare" which just encourages people to be lazy. Edit: added about "welfare".

It is possible to house every one. Even very sick drug addicts.

The hidden assumption here is that producing the goods and services required to keep a single human being alive in relative comfort (fed, sheltered, educated, healthy) necessarily requires an expenditure of manual effort roughly equivalent to what that human being can do.

Or, in other words, the assumption is that it is not and never can be the case that N people can be provided for by the effort of K people, where K < N.

And yet that assumption is obviously false: we have, here and now, the ability to feed, shelter, educate and provide health care to every single human being on the planet, and the ability to do so without the need for many of them to work for it. In the western world this has manifested in the explosion of service-oriented industries and administrative roles, which are essentially make-work jobs to give society as a whole the feeling that people are "earning their keep". Even among these affluent, supposedly highly-skilled people, probably the majority of the jobs are simply unnecessary.

What's needed is a realignment of our mentality about work: now that we have the ability to provide for everyone, we should simply do it regardless of whether everyone works or not. Will there be free riders as a result? Sure, but they're not actually a problem, and become less of one with every passing day (since the system that produces the necessary goods and services continues to grow in efficiency), and we just need to get over our fear that someone, somewhere might manage to have their needs provided for without working for it (we're already content to do this when someone inherits sufficient wealth to live without working, so this would just be an extension of that attitude: people living now and in the future will "inherit" the wealth of the past of the human species and be provided for out of it).

In any system, some folk will always squatter and some will always attempt to gain power/advantage.

Your world sounds too much like Atlas Shrugged.

The issue is getting over the mental hurdle of enabling such a society. The technology is actually pretty straightforward, but the politics of it is full of people who just can't stand the idea of that filthy leeching parasite, he doesn't work as hard as I do, why does he get anything at all! He doesn't deserve it! Which in turn is an artifact of an economic system that's already firmly in the past of many developed nations (i.e., one in which all people needed to work constantly in order to produce enough to keep themselves alive).

Of course this is a fundamentally irrational position to hold when one already lives in a society that's content to let people who never work a day in their lives have all their needs taken care of (see: inheritance). It also disregards the fact that many people who have everything literally handed to them from birth still feel a drive to try to do something meaningful with their lives. There are trust-fund parasites who don't do anything, of course, but it certainly isn't 100% of them. Plus, it's pretty well empirically established that humans do get bored and seek things to do even when they have no life-sustaining work left to perform (see: retirement).

What you think of as a mental hurdle I see as a way of discerning what is mine from what is yours. Show me a developed nation where a person actually doesn't have any personal property.

Without personal property rights, people will stop producing for others and society will fail. Why would I be willing to trade my load of firewood to you for your butchered hog? I'd just take your hog and not bother with providing you a share of firewood. And, in that system if you came around to get a share of my firewood, you'd disappear.

I believe that if a person doesn't have their needs met, they just don't deserve to have them met. (I'm not talking about a moralistic judgement here. Its more like the universe has just arranged itself in response to the unlucky person's actions.)

For example, 3 years ago, I got a hammer and a saw and started building a shed. I sold it and bought the materials to build another. I sold that one too. Today, I own a company that manufactures sheds and employs a few people.

I'm now much better off than I was because I decided to take advantage of people willing to buy my product. I now have employees who build my buildings and I profit from them, too. Is this a bad thing? I don't think so, because several of my employees were unemployed and needing work when I hired them.

What's fair about Capitalism is that anyone has the opportunity to make something work. If a person doesn't want to take advantage of this and better their lot, then I believe they have no right to bitch about us making money and having nice things. Let them suffer paycheck to paycheck.

The question is: what happens when most or all of the food and energy is being produced not by human labor, but by fully-automated processes? Why would, say, a farming robot care whether someone is "freeloading" off its labor?

What you think of as a mental hurdle I see as a way of discerning what is mine from what is yours. Show me a developed nation where a person actually doesn't have any personal property.

The idea of a post-scarcity society is not incompatible with the idea of personal property. It is incompatible with continuing to believe that basic necessities such as food, shelter, water, medicine, and possibly other things should be apportioned on a "did you earn it" basis, because that notion dates to a time when it truly was necessary for each person to put in continual effort to ensure enough of those things were produced. These things are no longer super-scarce and no longer require anywhere near the effort to produce that they used to; society should adjust in response to that change.

There is no logical reason, if the capability exists to automatically produce sufficient basic necessities for every human being, why every human being should still have to do a make-work job in order to prove they "deserve" those things. And you could still have all the capitalism you like for anything that isn't a basic necessity; the basic life doesn't have to be one of luxury, just one free from worry about things like food and shelter; the currency of such a society would need to be tied to something other than control of basic-necessity resources, but finding alternative bases for currency is something people already do for fun.

Now, add all the post-processing and transportation logistics after the food comes out of the ground to get to basic staple ingredients. Then add all the preparation activities, cooking, and packing to get to the Hot Pocket/Pop Tart level of salable food (or food-like) product.

Watersheds need to be protected; water needs to be treated, tested, stored, and pumped under pressure through a distribution network of pipes. Sewerage needs to be piped in the other direction, treated, and disposed of.

Electricity needs space, energy input, capital, and opex and a distribution network that needs on-going maintenance and repair. Gas lines need a lot of the same. Internet distribution needs...

Medicine needs space, energy, [lots of] people with specialized training just to apply the state of today's art. It also has a large research and development component responsible for ensuring that we aren't still using leeches to treat "Bilious fever".

The obvious rebuttal is that someone has to build and maintain the farming robot, so this is the guy whom you would be freeloading of.

On a more general note: The concept of property only ever arises because of scarcity. For example, you wouldn't describe yourself as owning the air in your apartment, since there is ample air. A diver, on the other hand, would definitely declare ownership in the air in your air bottle.

So how can we implement a post-scarcity society? My best guess would be to work on affordable technology that makes basic things like water, food, clothes or internet access not scarce anymore.

Well, let the people who live on welfare invent and create the machines that will give them free food, water, heat and living space. They surely have a lot of time to devote to that, not having to work for a living.

The other problem is what constitutes basic necessity. I can build you a "human terrarium" of 100 sq ft, HVAC, clean water, disposal, and 4 bottles Soylent per day - leaving you 18 hours daily to procreate & demand more. What is the limit to your demands? You have ample opportunity & resources to earn your own survival with ease; now you demand I provide your total basic survival needs from my own efforts, taking what I would give my own offspring - ENOUGH! BEGONE!

Welfare programs do not even begin to touch on who owns the means of production.

Communism implies a stateless society after a period of power by labor that is devoid of private ownership of the means of production. Supposedly, this transitionary period should do away with class. According to theory, once class is no longer a factor, the state is no longer needed.

Welfare programs, again, do not touch on this at all.

You've read too much Ayn Rand.

A system where everybody was equal was never tried.

A system where the necessities were guaranteed was tried - in the Soviet Union - and it was, by and large, very successful.

It was successful enough, in fact, that Western elites responded to it in the 50s by implementing similar guarantees - NHS, social security, medicare, etc. (McCarthy's witchhunts and the Vietnam war weren't the only responses to communism).

What made the Soviet Union finally unable to keep up economically was the prohibitive cost of the arms race and declining oil export revenues, not the lack of capitalist profit motives.

The NHS actually shows the power of democracy over an elite - after all the 1945 election removed Churchill and voted in the socialist Attlee government. Attlee was so effective as a leader that even Thatcher spoke highly of him:

'Quite contrary to the general tendency of politicians in the Nineties, he was all substance and no show.'

http://www.dailymail.co.uk/debate/article-1194059/A-giant-ma...

Do you think the fact that the UK NHS funding model closely followed the existing Soviet NHS model was a coincidence?

The Tories fought long and hard in the 40s to make the proposed new 'cover everybody' system insurance based (something like Obamacare I guess) and ultimately didn't prevail. They used all sorts of scare tactics that would seem very familiar today.

A large part of that failure was Labour being able to point to the Soviet Union (not yet enemies of the highest order) and go "look, we can achieve the same success in curing infectious disease that they did".

The problem is that pesky human nature gets in the way.

In power structures, things are great if you're part of the class that receives political favors and not so great if you're not.

In capitalist societies, capital owning classes have the time and resources to be the political class. In previous communist societies, party and administrative members were the political class.

This sounds like theory. In practice, capitalism beats communism in pretty much every way. Of course there are people that own capital. Private ownership is one of the main tenets of capitalism.

Capitalism works because it is on the correct side of human nature. It pushes people to earn more capital, which in turn, helps the rest of us.

Do you think our technology would have advanced this far if we didn't have capitalism? The only reason computers, phones, the Internet are getting better and better is because of competition. The more competition in a market, the cheaper the price is to us, the consumer.

Communism, on the other hand, makes everyone a slave to the state. Why would you want to compete and earn more when it will just be taken away from you by the government?

There were many experiments in the 1970s with communism. People created their own small communities and shared everything. Everyone was equal. The end result was always a disaster: jealousy always fueled the collapse of the group.

Would you want the person in school that never studied for his tests and partied every day to earn the same amount as you, who studied for every test and did well? I sure wouldn't.

Communism, in any form, is a failure. I don't know how much death, poverty, and famine we need to go through for some people to learn this.

What is awesome is a system where everyone benefits when everyone is self-interested.

Having access to temporary credit means that same problem, but next month.

My late rent fee is $30.

My late utility fee is $5, but if I paid by a bounced check, that would be $35. In other cities, it could be much higher.

The fee for not paying a fine on time can be a weekend stint in jail, whereby you will get charged for room and board.

The fee for not being able to pay for car repairs is losing your job.

The fee for not paying for needed medical attention when you aren't on insurance (Which, despite obamacare, many poor people lack) can be crippling.

Poor people, in aggregate, aren't stupid - they wouldn't use payday loans if the alternatives weren't worse. Yes, it shifts the problem a month out, and puts you in debt for ~$100 dollars. So would juggling your missed payments (Meanwhile, giving you a black mark against your landlord).

That's still better then having the problem today. And who knows? Next month, you may be a millionaire. Or dead. Better worry about that next month.

If you want to kill payday loans, the best way to do that is by giving everyone a living wage/income.

looks at this in complete puzzlement

I'm constantly amazed at just how broken the US system is in almost every possible way.

And just for the record, there is no such thing as payday loans in Europe. At the very least not in Germany. The first time I heard of these was when John Oliver did a segment on them.

A payday loan might have an atrocious interest rate, but it's better than getting kicked out of your apartment because you're $30 short on rent or getting thrown in jail for a parking ticket.

second, receiving mail was listed as a problem. how to get people their mail for important papers?

third, allocating land for farming their own food. why should they have to take part in the rest of our food economy if they can't fork over $1.25 for an apple? Just let them tend trees with their time.

fourth: transportation. often you have to get someplace. how can we design public transportation so it gets the poorest where they need to go reliably?

I don't think providing housing for an average of $250 / month is exploitation or predatory.

In fact, a number of mobile home communities are beginning to cater towards child molesters only, because child molesters need homes too. (also, the police tend to hang around sex-offenders and check up on them, so they also make good tenants).

Win/Win for everyone. Sex offenders get a home, and can start rebuilding their lives (although some sex offenses shouldn't be a permanent black-mark on a person's life, but that's a different story). The entrepreneur gets reliable tenants who are otherwise under-served, and the regular checkups from the Police ensure that the unsavory types stay away.

As long as it is profitable, people will build more homes. And as people build homes, the poor and exploited get a chance to rebuild their lives. Now a serious concern is the businesses who exploit their tenants... but if the supply is high enough then the tenants will be able to find new homes / mobile home communities.

--------------

The main problem are the towns who are making mobile homes ILLEGAL, because they find that poor people are unsavory and the town wants to forcibly gentrify themselves.

Elitists are scared of mobile home communities that explicitly cater to say, sex offenders, or poor people, or other "unsavory" types. Not in my community, hell, not even CLOSE to my community / backyard. Think of the children!

That's the problem. Not the people who are building mobile homes, but the fact that mobile homes are slowly becoming straight up illegal in huge portions of communities.

Meetings rarely talk about the budget, for better or for worse. You'll get legions of concerned mothers talking about the dirty homeless people at the motels and ways to build fences around the motels to protect the kids... or Single-Family homeowners complaining about the black people in the Apartments (I kid you not)... and setting up cameras or paying officers / security firms to patrol those locations.

But NEVER have I ever seen anyone complain about low-property taxes of a specific unit at a homeowner's association / town hall. Literally never. People don't give a shit about the budget, they're just too far removed to understand that kind of an issue.

Based on my experience, I'm going to call this elitism, not a budget issue.

Have you started to raise funds to start and run that business?

1. Let a non-profit run those kinds of businesses. The non-profit , before starting would establish clear rules that prevent eviction, discrimination and the other nasty stuff. Financing should be gotten from institutional investors, by promising some fixed rate of return.

2. Let the government run that, it works pretty well in many places around the world , in creating a relatively stable living environment.

3. better regulation to prevent nasty behaviors.

I guess, some "ceiling on land-holding" act is a must if we want reasonable check on inequality. Currently the US economy stinks of the problems of feudalism - some kings and barons with a lot of land and then some more people down their rank with some land while the rest of the people with almost no land and perpetual poverty.

In short, no renting of land at all. I know, there are some issues to it, but I guess, those can be resolved, without much harming the economy of the 99.99% of the people.

Please correct me if I am wrong w.r.t. "Land Value Tax" vs "ceiling on land holding".

[1] https://en.wikipedia.org/wiki/Land_value_tax

edit: added clarification at end.

Why do you think they do not?

No, it's not. And, I wouldn't dismiss out of hand what can be "enforced by contract law". The contract itself represents the willingness of two parties to adhere to certain terms. If a company pays you a million dollar signing bonus and asks you for a three year commitment, then you should expect them to demand that bonus back if you leave in two years for reasons not set forth by the terms. And, you should expect claims of "indentured servitude" to fall on deaf ears in court. You can leave. You just can't keep the money.

Similarly, companies wouldn't enforce that the person continue to work for them; simply that they must repay their training costs if they don't.

This is currently done by some companies, for instance, with MBA sponsorships. They're sometimes called "loyalty contracts".

These would be voluntary programs for skilled jobs that require training. No one would be obligated to sign up, and no one would voluntarily do so without obvious benefit.

About the most you can do is try to claw-back your training expenses if they don't stay for a certain number of years, but you can't squeeze blood from a stone. That money was already spent on basic necessities of life and can't be recovered.

Presumably, if the training were significant enough to be worth the company pursuing it and the now ex-employee found it economically better to use those skills elsewhere, then there might be significant enough income against which to make a claim.

Yeah, that was my original question.

I think what you're saying is true to an extent. At the same time, a lot of companies complain that positions simply go unfilled.

> Have you started to raise funds to start and run that business?

No, because the incentives to continuously draw a greater profit from your customers goes against the need to provide housing to those who can't afford it.

Yes, the corner bodega is more expensive than the full grocery store, but they also probably have way lower sales per hour of labor, lower sales per square foot, lower sales per other overhead (rent, insurance, security, utilities, taxes), higher credit card interchange fees, higher shrinkage and spoilage, and pay more for their inbound groceries than the large chain down the street. If my guesses are true, all of these are perfectly legitimate business expenses and the corner store owner needs a return on their investment, just like the large chain does. (Grocers operate on razor-thin overall margins. Average net margin for the supermarket industry was 1.3%, 1.9%, and "1-2%" in the first three references I could find online.) Anything that increases costs basically HAS to go to the price as there's nothing else left to flex.

Payday jackholes can DiaF for all I care, but even the prevalence of those is driving in part by the banking regulations meant to "punish the banks" which have the effect of making poor communities "money losing to serve". When the predictable bank pullouts happen and payday lenders move in, it's not that hard to see the connection. Let the banks make a profit and they'll serve the community; prohibit them from making a profit and they won't, leaving only the even less savory financial businesses.

Generally, if there's a demand for a service, people should come flooding in and reduce the marginal profits through competition. In this case, people came rushing in ... and profit margins went up over time. This alone, in a big picture perspective, suggests shadiness (though not by itself guaranteeing it, since you could argue for growth in demand outstripping the growth in supply).

Their are some easy improvements (education and outreach and banking programs for the poor and poorly educated) and some controversial ones (removing citizen's legal rights and freedoms to make self-destructive decisions)

Freakonomics did a pretty good episode discussing advantages and problems with it recently.

Yes, payday loans have defait risk, whixh is part of why they are expensive. But that also shows that many borrowers can't acurally afford them. And the cost of defaults is borne by...the next-pooorest people who barely scrape by, who DO lay off their loans, but pay 50-200% APR

Some have suggested that a governmental or other instution needs to be made just to break people out of the cycle and give them a loan at a rate closer to that of credit cards. It's a tricky situation though from a regulatory perspective because you don't want to have those 60% of people who are avoiding massive overdraft fees or dropping credit scores using these services to get stuck with no options.

Personally I think if you sign up for a loan you can't pay, that's on you, not really exploitative as some people seem to propose. Take some personal responsibility, you know?

It's not primarily that people are bad at math. It's that they don't see any other way out. I've seen data that show that people play lotteries "for money" at higher rates the lower their income is. I can't find the exact citation, but here's a CMU article about study that shows something similar: http://www.cmu.edu/news/archive/2008/July/july24_lottery.sht...

We really just need to end state-run lotteries. The problem is that the states depend on this regressive tax for revenue.

But at the very least the states shouldn't be advertising the damn things!

Basically, every so many dollars that are in a savings account for a set period of time counts as one ticket, and so of course the way to increase your chance of winning is to "buy more tickets". Winnings are paid out in lieu of interest, but in the end averages to about the same.

All your justifications are reasonable from a business standpoint. But if I'm so poor and my circumstances are so bad that a bodega is the only place I can realistically go for groceries, what difference does it make to me?

This seems to be the exact point of the original article. Someone is making money off of bodegas, just like someone is making money off of gouging the poor on housing or payday loans, and in all cases the added cost can be justified as "perfectly legitimate business expenses." And the poor continue to suffer and bear the brunt.

You're also still worse off if the bodega closes, right? I think we're just circling on "being hopelessly poor sucks in lots of ways".

Do you have any examples of where Frito-Lay, McDonalds, Burger King, etc. are lobbying the government to "keep people in poverty?"

Edit: and as mentioned elsewhere here, state lotteries are another huge government-authorized program that disproportionately takes from the poor.

Make of the anecdote what you will.

However, if there isn't marginal land available nearby, a portion of her return is monopolistic-- the renters have no alternative than to pay rent on this land.

Peachum [The Beggar King]: "Because they don't know that we need them."

--Die Dreigroschenoper (1931 Film)

That's something I have a very hard time to understand. I mainly see that position on HN. It seems like here the price is always justified and fair because it is sanctified by the free market ideology. Prices should always be maximized because it makes sense for the seller and to hell with global long term consequences.

There are many other safer cheaper ways to provide this service - "lay away" would be one.

For something to be unethical, someone has to be harmed by it, yes?

I dont have much beef with the trailer park owner in question, but you are simplifying the variables at play. The net win for everyone would be providing shelter at absolute minimum cost, including for the people maintaining the trailers for others. A landlord's profits may stand in the way of this.

In both cases, you are essentially condemning the person to stay in that position forever with no chance of advancement. It reminds me of the parable of the talents[1]; I tend to agree with its conclusion that the guy who manages 30 skyscrapers should be given this recently-built batch of 12 to manage, since he's already demonstrated competence. It's hard to make this actually happen if you take everything he has except a pittance, so his purchasing power is equal to that of somebody who has no business managing skyscrapers.

[1] https://www.biblegateway.com/passage/?search=Matthew+25%3A14...

In general, I believe people should be incentivized with responsibility, which is in everyone's interest. Cash compensation only benefits one person; doubly so when considering the rate of tax avoidance in the upper echelons of income.

The United States isn't the right country for such a system, though. You might look at Japan: their corporations motivate people with social status more than money. The CEOs there don't directly make a large salary, and neither do the employees. Really, nobody makes a lot of money in Japan.

There are certain constraints that any large-scale system made of people has to work under, for example the sort of things that make communism not work very well at scales larger than a small commune.

Any localized parts of such a system, need to mesh properly with the larger system.

Much that is demonized as "exploitative" (not all, but a lot of it), seems to only be considered as such because people look at the immediate imperfections, and disregard the problems that would result from attempting to "fix" those imperfections.

I contend that the landlord mentioned is an example of this. You and the poster I initially replied to are providing no substantive arguments against this, but merely implying a lack of critical thought by anyone who doesn't stop their reasoning at the immediate local effects.

I suspect that the commenter means that any sociopolitical system other than his or her preferred one is unethical, which is what anyone who makes moral arguments for sociopolitical systems (i.e. nearly everyone I have ever met) is implicitly claiming.

  Those units are about $250 per month,
  hardly the stuff of Viking-style pillaging, IMO. 

In Linz we have something called "housing cooperatives" (the German word is "Wohngenossenschaften"). These cooperatives build apartments, and to rent them you become a member of the cooperative. The goal of these cooperatives is not to make a profit, but to provide affordable housing.

And it's amazing how well that works! Rents are typically 50% lower than average, and the buildings are always well maintained. In general, they also have better amenities (playgrounds for children etc) compared to privately owned apartment buildings. The only problem is that there are very long waiting lists (more than 5 years in some cases).

It's amazing how cheap good housing can be when it's not necessary to make a profit for the owner.

So - we now have large corporations like the Curo group who own what was once local authority housing and run it for profit - meaning that at any given time about 30% of their 13,000 properties are unoccupied, that their tenants never have any maintenance issues addressed, and the rents are high - and the waiting lists are worse than when it was publicly operated. Never mind the impact on the rest of the property market, with insanely inflated prices, as nobody wants to build anything new as it'll decrease the value of their portfolio.

So - housing cooperatives/local authority housing are great, but beware the state selling them to private profit-making entities. It hasn't ended well here, and it absolutely is the case that poverty is profitable.

The poorer and more trapped they are the more secure your investment is.

it's easy to identify the issue with the big names, but it starts way, way below that.

Everybody does, right? It's my perception, as you have yours.

From where I stand, laws are ignored as if they didn't exist, people care only about themselves and the quid pro quo is the currency to achieve anything in a timely manner. The rot is everywhere, from the guy which slows down traffic because he parked in the middle of the road to get broad, to municipal services and e.g. construction licenses.

So some proportion of poorer people are getting cheap housing, and others are priced out. This sounds like the same outcome that results from rent controls in San Francisco and New York.

"It's amazing how cheap good housing can be when it's not necessary to make a profit for the owner."

What would need to change in order for these housing cooperatives to expand enough to reduce waiting lists to <1 year?

Waiting times are less than a year if you have an urgent need (eg growing family) and are willing to accept unpopular locations (eg next to a highway exit). But in general the waiting times are too long.

The biggest problem is that the regional government is conservative/nationalist and strongly influenced by a large bank that does a lot of property development. So there are a lot of political obstacles to new developments by cooperatives. I feel that the cooperatives are a remnant of the times when the social-democrats had more influence.

•Special Supplemental Nutrition Program for Women, Infants, and Children (WIC): 9.0 percent

•Housing Choice Voucher (Section 8): 5.2 percent

•The Department of Housing and Urban Development's public housing program: 22.5 percent

•Low-Income Home Energy Assistance Program (LIHEAP): 9.1 percent

Finally, the report estimated that the federal administrative costs amounted to $12,452,000,000 for the 11 programs studied -- 6.4 percent of total federal expenditures on these programs.

PS: For comparison Social Security spends even less on administration but is vastly more expensive, which is arguably a net loss.

The other reasonable approach is simply to build lot's of housing in good locations. If the supply is large enough prices end up falling. Unfortunately, larger apartments mean taller buildings which pushes up prices.

Instead of the current approach where all apartments are basically the same thing and the only thing that drives down prices is poor location, maintenance, and older buildings.

The cost of decreasing those housing prices are paid for somewhere else in the system.

You can't seriously be saying that the housing market is working as intended in places where pushing 70-80% of the wages cannot rent a basic apartment there.

The cost of those artificially inflated housing prices are paid for someewhere else in the system. As increased stress and illness, as migrant workers in illegal occupation, as companies unable to fill lower pay roles, as a lack of nurses, teachers and firefighters, as lack of opportunity for their children.

You don't have to adopt a socialist perspective to see it's broken right now.

This sounds like supply and demand, but is exacerbated by investment concerns changing the dynamics of the market.

Look at the pay and housing cost in downtown SF. Now compare pay and housing costs to other places, say Austin, Chicago, Indianapolis, etc.

Yes you may make 400k in SF, but I don't think that buys you a lower standard of living. People look at raw $$ too much, and not cost of living when making job decisions.

Kind of a natural imbalance in the market.

This rather sounds like the lack of jobs that allow remote work is the fundamental problem.

Maybe? But maybe living within your means is more important than a sense of being entitled to live in or drive a specific thing.

This is not to say that the housing cooperative does not generate a modest profit, which is then used to build new affordable housing, or to modernize existing properties for modern energy efficiency laws.

The Netflix culture deck references Autonomy, Mastery, and Purpose. I submit that there is a similar level of empowerment at play regarding housing. That's one reason why many who can afford to buy a house do so even in situations where it's cheaper to rent (when factoring in maintenance). So as a recipient of government housing, feeling like you're in a giant bureaucratic housing solution where you have no control is demoralizing. Of course, there's always the argument "that's better than nothing; these people should not complain".

But I think we can do better. What if every tenant was in some way responsible for some part of the maintenance of the building? Some can garden, others can plumb or be apprentices under an electrical engineer, etc… Then there can be some pride associated with maintaining a dwelling that may be modest by worldy standards but that makes others smile and generates thankfulness.

In a larger sense, we must include the human dimension in what is fundamentally a human problem, instead of only being focused on the technicalities.

You could probably make the same argument for prescription drugs and patent fees, no?

yes sick people spend a lot of money on patented drugs, or their medicare does.

"For years, Ferguson's police force has meted out brutality, violated civil rights, and helped Ferguson officials to leech off the black community as shamelessly as would mafia bosses...

"Ferguson officials repeatedly behaved as if their priority is not improving public safety or protecting the rights of residents, but maximizing the revenue that flows into city coffers, sometimes going so far as to anticipate decreasing sales tax revenues and urging the police force to make up for the shortfall by ticketing more people. Often, those tickets for minor offenses then turned into arrest warrants."

http://www.theatlantic.com/national/archive/2015/03/ferguson...

You're right, but I don't think anyone has mentioned another big profiteer, the welfare bureaucracy itself. The government pays people to remain in poverty, and everyone employed in those programs is profiting from poverty and is incentivized for it to continue. So are the politicians who create these progams. It also contributes to the inflated the rents that the subject article complains about.

The problem with the article is it makes the implication that the money made by vulture capitalists in poor areas is the biggest motivation for the existence of the poor.

But one can see a much larger beneficiary. If a company that automated a factory or moved a factory to a different region or country had to pay to support the wages of those workers it left behind, the costs of automation and mobility of capital would be much higher. Thus the ability of the poor to exist, the condition of each worker being on their own even if suddenly all the jobs in a given area dry up, is tremendously profitable to the largest industrial companies in the world.

Not really. It depends on the country. Some third-world countries have most of the population in poverty, so in that case capitalists can make a lot of money from poor people and have no incentive to do otherwise.

However there are a few things that are more explainable than others; check cashing places exist because banks are not designed for the poor at all. Thankfully this is, I think, going to change in the next few years what with all the startups cropping up to offer financial services to lower income people, since most of the shit the banks charge fees for is because they rely on antiquated processes and management that can be automated.

Why is this?

Some of it is tax policy. Tax policy is very favorable to property owners. Not only can landlords deduct mortgage interest and depreciate over 27.5 years, when someone buys an old building, they can depreciate it all over again.

Antitrust law doesn't seem to be applied to rental property. In some smaller cities, there are only a few big landlords.[1]

Given the current low cost of borrowing, rental housing prices should have dropped. But they haven't.

[1] http://people.oregonstate.edu/~emersonp/rentcontrol/rc2.pdf