Economics/Class Relations

How Neoliberal Financialism Pushed up the Cost of Housing in Western Countries

In previous part of this series, I made the point that over past 30 years, the living standards of almost everybody in western countries (but especially in USA) have diminished considerably. This has largely occurred due to the convergence of two factors. Firstly, the cost of the basics such as houses, automobiles, higher education and in case of USA- healthcare, have increased much faster than “official” rate of inflation. To make things worse, wages have either remained stagnant or decreased and in an increasing number of cases- the jobs have been shipped overseas without being replaced by anything comparable. Even the few well-paying jobs left in this country have become much less stable than they used to be just two decades ago. Furthermore, these changes have impacted those under 40 or 50 much harder than those above that age. So it is not just a “Millennials”, “Gen Y” or “Gen Z” thing.

So now let us talk about the role of financialism aka late capitalism aka neoliberalism in creating this terminal dystopia. And make no mistake, the situation which many western countries (especially USA) has gotten itself into is, for all practical purposes, terminal. To better understand what I am going to talk about, let us compare USA (the most afflicted country) with others such as Japan, South Korea and Germany (among the least afflicted). So how is life different for the median person in the least afflicted countries when compared to the most afflicted one? Let us start by talking about the relative affordability of decent quality housing in nice or even OK neighborhoods.

If you have seen enough YouTube vlogs from expats in Japan and South Korea, one thing becomes obvious rather quickly. While many of their less expensive apartments are small- almost every single one of them is well built, adequately furnished and in areas that are not remotely sketchy. Also, apartments in these countries come in a range of sizes allowing even somebody in a menial job to have an OK place of their own. More curiously, unlike in the anglosphere, East-Asian countries have been able to ensure that the rents and prices of these apartments are linked to the real income of the people. Even somebody in Tokyo or Seoul, two of the largest megalopolises on earth, can easily find safe and affordable housing that is not too far away from their place of work and other amenities. Oh.. and they have excellent public transit systems.


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