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Homelessness: One of Capitalism’s Many Inevitable Products

Fear of homelessness helps capitalism maintain its power.

Fear of homelessness helps capitalism maintain its power. (Photo: Alex Wichman / Moment / Getty Images)

“As long as the capitalist mode of production continues to exist, it is folly to hope for an isolated solution to the housing question or of any other social question affecting the fate of the workers.” — Friedrich Engels, 1872

“Homelessness exists not because the system is not working but because this is the way it works.” — Peter Marcuse

Housing is the necessary precondition for security, identity, emotional well-being, work, leisure and community. There is no greater condemnation of capitalism than its inability to provide adequate housing for those who produce its wealth — the working class. The high percentage of people of color who are homeless points to the wealth divide between the white and non-white working class, based on the historical legacy of racism and the building of capitalism out of slavery. The ruling class explanation relies on blaming the victims, arguing that people experiencing homelessness are in some way individually incompetent. Other, more perceptive, yet incomplete explanations point to shortages of affordable housing, privatization of civic services, investment speculation in housing, poorly planned urbanization, as well as poverty and unemployment.

Actually, the fear of homelessness helps capitalism maintain its power. In the days of industrial capitalism, the unemployed were used by the ruling capitalist class to signal to the workers that they were lucky to have their jobs, and if they rebelled, they could be unemployed. Now, after the 2007-8 recession, as we move further into post-industrial capitalism, the homeless are a warning to those potentially rebellious workers unhappy with their loss of wages, lack of stability and benefits, and to students of the zero generation: zero jobs, zero hope, zero possibilities, zero employment, who are in debt for their schooling. The message is: Accept the declining status quo or end up homeless.

The media reports daily about the “crisis” of homelessness. The use of the term “crisis” implies that housing insecurity and homelessness is abnormal, a temporary variation from a tolerable standard. “Crisis” is currently used to voice the experience of some of the newly devastated middle class, an outcome of the 2007-8 recession. But for working-class, low-income and communities of color, the “housing crisis” is the norm. In a recent study, it was found that nowhere in the United States can someone who works 40 hours a week at the federal minimum wage ($7.25 an hour) afford to live in a one-bedroom apartment at fair market rent. Housing and homelessness have been problems for the poor and working class throughout history. Even in the beginnings of capitalism in England, peasants kicked out of their land were forced to rush to the crowded cities and sell their labor to the new factories in order to survive, with the resulting problems of slums, squatter settlements and homelessness.

In reacting to the current housing crisis, the US government and local communities create programs to help, even though due to austerity cutbacks, fewer funds are allotted. Some of these attempts are helpful, but most are insufficient or even illusory. The dominant view is that the housing system is temporarily flawed but can be resolved through a targeted approach. Many homelessness programs tout “successful” measures. But with further examination, the picture is not so positive. For example, Utah reported a 91 percent reduction in chronic homelessness, but upon further investigation, it was found that the figure was false and driven by changes in how people were counted. New York City has a 99 percent failure rate of convincing those without homes to go to shelters. San Francisco has not markedly reduced homelessness in 20 years. Los Angeles has continually failed in its attempts.

An analysis of capitalism actually demonstrates that the government, under the control of powerful corporate lobbies, uses housing policies to preserve political stability and support the accumulation of private profit. Over the last decades, housing policies have been primarily aimed at expanding homeownership for the middle class, giving private homeowners a chance at the “American dream” by aligning their interests with those of the real estate and banking industry in rising property prices, while programs to prevent homelessness have suffered. Building affordable housing for low-income and potentially homeless people is not as profitable as building homes for the wealthy.

The housing market would collapse if shelter was plentiful and affordable for everyone. In the book, In Defense of Housing: The Politics of Crisis, the authors demonstrate that the interlocking processes of deregulation and financialization turn homes from a living space into real estate — a commodity, manipulated by investors, banks and even some local governments. This occurs because there is no right to adequate housing in our Constitution or in federal law. If housing was a right and not a commodity, then shelter would be taken out of the private market.

The contrast with homelessness in Cuba is telling, where Cuba has no significant homelessness problem. It is a contrast between the US, a rich society based on profit (capitalism) versus a society based more on the common good. In the US, we are currently hostages of capitalism, an economic system based on wage labor, private ownership or control of the means of production, and the production of commodities for profit, while a tiny corporate elite uses its wealth and political power to dominate. Currently, the effects of this domination are that the poorest people cannot afford housing and end up homeless due to the inequalities caused by capitalism.

Two examples of how homelessness is perpetuated in the US under capitalism are Detroit and the San Francisco Bay area, including Silicon Valley.

The economically vibrant San Francisco Bay area has experienced a high-tech boom, record high housing prices and a significant increase in the number of homeless people in encampments. Studies have placed the causes of this condition on federal government policies. There are five basic causes: 1) cuts in affordable housing programs, which began during the Reagan administration; 2) rent increases during a time when incomes are not also rising; 3) the supply of housing units has not kept up with population growth; 4) welfare cuts, thanks to “The Personal Responsibility and Work Opportunity Reconciliation Act” signed by President Bill Clinton, giving states the power to impose stricter eligibility rules, limiting families to five years on welfare; 5) a decline in the value of benefits given to low-income Americans.

In economically depressed Detroit, outsourcing and automation contributed to a destroyed job market. Most of the remaining labor force changed from a high-productivity, well-paid middle class, into low-paid domestic service jobs. Many workers who lost their jobs also lost their homes. Some moved elsewhere to find work. Detroit’s housing market is currently in flux, with some groups claiming success, for example with “tiny homes” for the homeless population, but workers don’t often have the income to pay for new housing. The remaining workers are faced with low-paying jobs or loss of jobs, loss of homes and no way to get back to a decent life.

Capitalism goes where the profits are. In the ’60s and ’70s, it was Detroit, the automobile capital of the world, and now it has shifted to the Silicon Valley, one of the new centers of power of the economy. When Detroit was in its prime, US politicians proudly brought world visitors there to show off capitalism’s success. Now it’s a destroyed area, with a thin veneer of the glory days exhibited in the inner city, giving the illusion that Detroit is back in business. Silicon Valley is full of profit potential, a center of creativity, a laid-back life, beautiful buildings and campuses, near a world-class tourist city, and the destination for world visitors, mirroring an earlier blue-collar Detroit. Since capitalism is profit driven, it takes no responsibility for those without homes, the laid-off workers or abandoned plants and toxic dumps. One can only imagine what Silicon Valley will be like when the American empire declines and the center of capitalism moves, probably to China.

So, how do we address the fate of homeless people in the US? In the short term, we must continue to find ways to get them shelter and support community-based organizations that are working to that end. In addition, as Engels stated, we must also look at homelessness from the larger political-economic context and see it as an inevitable outcome of capitalism. In the long term, we must use our knowledge of how capitalism shapes the economy, the culture and our minds, as we organize to change that system into a democratic community-based sustainable system that serves human needs rather than profit. To achieve that end we can, for example, find common cause with other “single issue” campaigns (Black Lives Matter, women’s rights, poverty, climate change, anti-imperialism, health care for all, Indigenous rights, LGBTQ equality, civil rights, the environment, unions, etc.) as we work towards the long, difficult task of overcoming capitalism.

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