The multiplication of the margin: price, housing wealth and inequality^*

* This paper was first presented at a workshop on ‘Price’ held at the University of Turku, Finland, 1–3 June 2016.

ABSTRACT

Price is one of the key axioms of capitalism. This paper seeks to understand the axiomatic status of this category in material terms by focusing on the nexus between housing, price, wealth and inequality. Within theories of marginal utility, it is the periphery – the margin – of a field of exchange that defines value and the ways in which it can be priced in circulation. However, even a brief assessment of contemporary housing markets reveals that today the margin possesses an elasticity inseparable from the apparently limitless capacity of credit/debt obligations. Real estate has become the site of new kinds of wealth and inequality as housing, which remains an absolute necessity for the ‘unhoused’, simultaneously becomes a marginal object of speculation, a financial instrument in other words, for the investor with their portfolio of investment properties and other assets. The paper addresses this multiplication of the margin, while also examining the increasingly pronounced links between an asset-based economy and financial liquidity.

KEYWORDS:

• Price
• housing
• real estate
• assets
• wealth
• inequality
• financialization

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Fiona Allon is Senior Lecturer in the Department of Gender and Cultural Studies at the University of Sydney. She is the author of Renovation Nation: Our Obsession with Home (UNSW Press, 2008) and Home Economics: Speculating on Everyday Life (forthcoming with Duke University Press).

Lindsay Barrett is a Research Fellow in the School of International Studies at the University of Technology, Sydney. He is the author of The Prime Minister’s Christmas Card (2001) and New Year’s Day at the Hotel Australia (2018).

Notes

* This paper was first presented at a workshop on ‘Price’ held at the University of Turku, Finland, 1–3 June 2016.

1. The ‘transformation problem’ is usually glossed as the most contested debate in Marxian economics. See Samuelson (1971).

2. Michel (2018) makes a similar argument about the attempt by early neoclassical economists to establish economics as a positivist ‘science’. Jevons was certainly part of this ‘formalist turn’.

3. According to the theory of marginal utility, the degree of utility or benefit of a good is inversely related to the number of units already owned or consumed. Interestingly though, this maxim tends to be negated by the phenomenon of the investment portfolio, where the diversified utility of each unit is much more than the sum of its parts or of each constituent portfolio element, rather than a progressively acquired individual unit intended to satisfy a progressively satiated demand (Ascher 2016).

4. See https://www.brickx.com/ (accessed November 1, 2107).