In a recent study, Brookings Institute economist Matthew Rognlie challenged Thomas Piketty’s now well-known assertion that inequality is being driven by the fact that investments in capital produce more money than paying for people to work. Instead, he finds that while investments in technology and other assets generally follow the usual market trends and cycles, it is in fact investments in land and housing that explain rising inequality. The finding has spurred considerable discussion among economists and other social scientists, in part because it suggests that policy solutions to housing problems should focus more on reducing the artificial scarcity produced by housing policy, and less on taxing the wealthy.
What the overall frame for this debate ignores, however, is that land and housing are not simple market commodities, but basic needs that all people have in common. This is why they are so valuable as assets, and so critical a lever in asserting the rights of people over the rights of property. In the end, what Rognlie seems to argue is that inequality is really about enclosure and access, and a conflict between landowner and renters. This dynamic is captured dramatically in the Dogville-inspired short-film Londonville.
