United States | News & Politics

But markets consistently outperform all other forms of wealth distribution in terms of ensuring everyone has access to vital resources.

It’s counterintuitive, but it’s true.

What we really need to do is reduce the barriers to new construction. Density zoning is the most obvious market distortion that’s got to go. If a particular plot of land, based on location and all other considerations, results in its own most profitable use being a 100-unit apartment building, then density zoning that only permits 10 units is preventing 90 units from existing.

Profit comes from getting people what they need. This is only the case in a truly free market, where both sides must consent before money changes hands. But if that condition is true, then profit only exists when both people win by the deal.

Our current situation creates an artificial supply constriction which removes the consent side of the equation. Under our current system of artificially-constricted supply, landlord profit is indeed an indicator of money essentially being stolen from people who have no choice but to pay up.

But if we unlock more supply, simply by turning off the government activity that actively suppresses it, then renters will have choice, and their consent will be present in the deal again, and in that system (the one called a “free market”), any landlord who profits will do so by providing real value.

Consent is the key concept in a free market. That’s what the “free” part refers to. Contracts freely entered into. Investors free to build as many units as they can get profit from, and renters free to say no to those who offer shitty deals.

Most of the complaints about “free market capitalism” are actually about places in which the freedom has disappeared.

In the case of our housing market, it is the government’s constant crackdown on density that destroyed that freedom.