City University of New York (CUNY) CUNY Academic Works Dissertations, Theses, and Capstone Projects CUNY Graduate Center 9-2020 A Defense and Expansion of the Theory of Capitalist Ground Rent: Speculation, Securitization, and Struggles Over Land and Housing Francesca Manning The Graduate Center, City University of New York How does access to this work benefit ou?y Let us know! More information about this work at: https://academicworks.cuny.edu/gc_etds/4069 Discover additional works at: https://academicworks.cuny.edu This work is made publicly available by the City University of New York (CUNY). Contact: [email protected] A DEFENSE AND EXPANSION OF THE THEORY OF CAPITALIST GROUND RENT: SPECULATION, SECURITIZATION, AND STRUGGLES OVER LAND AND HOUSING by FRANCESCA T. C. MANNING A dissertation submitted to the Graduate Faculty in Earth and Environmental Sciences in partial fulfillment of the requirements for the degree of Doctor of Philosophy, The City University of New York 2020 i © 2020 Francesca T. C. Manning All Rights Reserved ii A Defense and Expansion of the Theory of Capitalist Ground Rent: Speculation, Securitization, and Struggles Over Land and Housing by Francesca T. C. Manning This manuscript has been read and accepted for the Graduate Faculty in Liberal Studies in satisfaction of the thesis requirement for the degree of Master of Arts. Date Dr. David Harvey Chair of Examining Committee Date Dr. Monica W. Varsanyi Executive Officer Supervisory Committee: Dr. Ruth Wilson Gilmore Dr. Marianna Pavlovskaya Dr. Gary Dymski THE CITY UNIVERSITY OF NEW YORK iii ABSTRACT A Defense and Expansion of the Theory of Capitalist Ground Rent: Speculation, Securitization, and Struggles Over Land and Housing by Francesca T. C. Manning Advisor: Dr. David Harvey Why are the rents so high? Who is responsible for homelessness, for urban and rural displacement? How can these problems be combatted? Recent literature addressing these questions has pointed to gentrification and the financialization of land and housing, faulted financialized landlords, hedge funds, and the irredeemable logic of finance, and pointed to the importance of land and housing regulation to prevent displacement. However, theories of displacement—in both land and housing, on both urban and rural terrain—suffer from a lack of an underlying theory of the logic, tendencies, and limits of ground rent extraction in capitalism. This dissertation develops a theory of capitalist ground rent that is applicable across the rural/urban divide. I outline the necessary social forms which arise from capitalist private property in land, and point to essential tendencies and limits to ground rent extraction. In so doing I offer the beginning of a general structure which underlies struggles over land and housing. iv My arguments involve an explication and advancement of Marxian ground rent theory, and draw extensively on Marx’s own writings as well as classical economists on ground rent. I analyze mainstream economic research on real estate markets and critical literature on the financialization of land and housing. I mobilize data from the Bureau of Economic Research, the Federal Reserve, and the United States Department of Agriculture, as well as some private companies aggregating data on land, rent, and housing. I draw from personal and published accounts of struggles by working and poor people for land control. I situate my arguments in a position on capitalism developed, but not exhausted, by Value-Form Theorists and Marxian critiques of political economy–which view capitalism as a system governed in part by specific abstract logics such as that of value production—and by theorists of racial capitalism, primarily within the Black Radical Tradition, who suggest an endogenous account of race within the capitalist mode of production and emphasize the importance of refusal. Chapter 1, The Landowning Class, presents a defense of the concept of the landowning class as third class of the capitalist mode of production—a theory which has been widely abandoned over the last century. Chapter 2, Ground Rent, revisits Marx’s theory of ground rent by contrasting it with interest (in opposition to contemporary scholarship which often collapses rent and interest) and argues that the categories of absolute rent and differential rent each reveal an essential aspect of the capitalist mode of production: absolute rent highlights the power of the landowner to withdraw land from the market, and differential rent reveals the fact that land (or space) is the singular value-less, monopolizable resource. Chapter 3, Land and “Finance,” defines and categorizes the different forms of speculative and securitized ground rent, including mortgages, sale price of land, and land-based securities such as REIT stock and Mortgage-backed securities. I analyze mainstream economic approaches v to land-based revenue streams and investment vehicles, and suggest that land-based markets and land-based securities diverge from other financial investments because they remain tethered to actual ground rent extraction. Chapter 4, Landed Class Struggle, analyzes the strategies available to the landowning class which they may use to increase their power to extract ground rent. These include withholding land from the market, soliciting favorable government policy, and inducing a rise in the price of what I call “high-rent commodities.” I advance a novel theory of urban residential ground rent, locating capitalist production in the reproduction of “home” for monthly sale. I also suggest a different answer to the question “Why are the rents so damn high?” in urban residential rentals by applying the same methods Marx used in analyzing agricultural rents. Chapter 5, Financialization, criticizes what I call the epochal theory of the “financialization of land and housing,” on the basis that the rise in “finance” and its imbrication with ground rent is not new, and that the quantitative shifts over the last half century do not indicate a qualitative, epochal break. Also, while this literature argues that finance is taking over land and housing, I argue the opposite: a larger and larger portion of global “financial” revenue is being extracted in the form of ground rent, indicating a process of the “housingification of finance.” Through this dissertation I attempt to systematize a theory of ground rent and private landownership that builds from Marx’s preliminary drafts on the topic. I intervene in several long-standing debates in Marxian political economy, critical geography, and social theory around urban ground rent, the status of the landowning class in capitalism, and the stakes of land-based struggles. I suggest that the structural analysis of land relations in capitalism can improve the concept of class struggle by including within it a broader range of struggles, and also refine our notions of what it means to struggle against capitalism. Further inquiry into capitalist landed property along these lines should also advance our understanding of the nature vi of the capitalist state form. I also suggest that the “housingification of finance” (or, more accurate but even less pronounceable, the “ground-rentification of finance”) and the behavior of landowners in “High-Rent” sectors are important avenues for future research. vii ACKNOWLEDGMENTS The many little thanks I’d like to give, for various kinds of support to finish this document, a project which is more a beginning than an end: First, to my advisor David Harvey, whose work came to me when I had run into the brick wall of disciplinarity: your work showed me there was an exciting way to move forward intellectually, and to my pleasure you accepted me and my eccentricities as a student for all these years. You have been a warm and generous interlocutor over that time, and I’m very happy that you disabused me of many bad ideas I had early on. Our disagreements that remain have inspired much of the following inquiry. Your challenges to my work have changed the direction of my study for the better. I could ask no more than such honest guidance from someone of your skill. Thank you. Thank you to Ruth Wilson Gilmore – for showing that it is possible to not compromise on revolution while doing theory; for your method of doing critical political economy that is faithful to the real. I have never felt as intellectually challenged in my academic journey as I have by your work and your lectures, thank you for helping me refine my thought and for showing me new ways of seeing. Thank you to Marianna Pavlovskaya for sage teachings, your kindness, and for the lesson that every capitalist apologist has an internal logic to their beliefs. Thank you to Gary Dymski for your intellectual generosity and support, for your close reads and spot-on criticisms, and for highlighting important paths of analysis in your scholarship. I reach back across a decade and a half to give thanks to Hasana Sharp, my undergraduate advisor, for teaching me first Spinoza and then Marx, helping me to build a foundation which I’ve been able to fall back on in many moments of mystification. viii I was supported in this work by an Enhanced Chancellor’s Fellowship at CUNY, and then the Center for Place Culture and Politics mercifully swept me up as a fellow for 2018-2019, where I became reconnected and reenergized. And to my comrades, my friends-that-are-family… First, thanks to Rachel Goffe, for an intellectual camaraderie and commitment to liberation that has made me feel less alone in this strange land, that has by turns reassured me and provoked me to do better, even better. For being a good friend when I didn’t even know what that was. You are the best. To Banu, for living the advice I needed, to do what moved me, to spend all my time on it (almost), and to do it well. Also for the quality distractions over the years.