Whether Auckland has a house pricing problem doesn’t really concern me. If there is a remedy to this situation, then it’ll be found by people smarter than me. What concerns me is the rage.
As a quick summary, the economic problem of expensive housing is essentially the danger of oversaving and undersconsuming, as the IMF recently pointed out. If young Kiwis do not have sufficient funds to purchase a house in a desired area, then their only options are delaying house purchases, moving away from the town centre or lowering their standards. This is an economic disaster in the making.
Too much money is invested in the housing, banking and construction cycles for Kiwis to avoid taking out loans or opening their wallets and keeping the cycle spinning. This is undesirable from the system’s perspective and reforms must therefore be made, apparently. And for those reforms to be popular, public opinion needs to be stoked in the required direction. Hence the media’s scapegoat of Chinese home buyers.
If there is any country in the world in greater need of more people and more foreign direct investment, it is New Zealand. News articles often show statistics proving that Auckland is one of the most “liveable” cities in the world. Yet only 1.3 million people call the city home, indicating it’s perhaps not quite as “liveable” as first assumed. But as soon as people start immigrating to the city, all of a sudden this “liveability” is a bad thing.
So the problem of Chinese home buyers can’t be economic because we need both them and their money. But to turn this into a problem it must be packaged as if the housing crisis is a morally “bad” thing.
Whenever a moral argument is made by either the corporate sector or government, it is imperative to search for the manipulation. In a narcissistic consumption society like ours, the only goal for making people feel good is if it leads to more consumption. I smell some narcissism.
After all, no one wishes to highlight how many New Zealanders also treat housing as a commodity and have been driving up housing prices for years. Attacking the Chinese is a defence against change for the collective identity. Remember this, we’ll come back to it soon.
A parallel problem is that foreign buyers do not – and this is crucial – further contribute to the New Zealand economy by renovating those homes. Foreigners generally don’t live in New Zealand (that’s why they’re called foreigners), preferring instead to buy houses as a store of wealth.
At least Kiwis live in the houses or upgrade them for resale. Simply put, the wider “housing” system wants a house to be just the first purchase. There’s a whole other industry in need of servicing. This is why home improvement reality TV shows are positively correlated with household savings trends, and another reason why the negative attention is on Chinese buyers.
The media helps with this by redirecting us away from a re-evaluation of our underlying assumptions and expectations of a good life, and creating a xenophobic and nationalist narrative. In presenting the problem of foreign home purchases, the default argument is structured to assume that young Kiwis already desire to buy a house. This is not biological, this is conditioning. The question you are not supposed to ask is: why should owning a house be desirable?
The form of the question expects every answer to be made in the required direction. The moral argument that all young Kiwis should be able to buy a house and it is immoral that they cannot is introduced to expedite this process.
By this logic, whatever stops them from buying a house is the cause of immorality and must be eliminated. Hence the call to introduce capital gains taxes, immigration quotas and foreign investor taxes, etc. So the media nudges us in the wrong direction because it too has been hooked on the moral argument that buying a house is somehow an unspoken “right” for good, hardworking young Kiwis.
If the central ideology of the present economic society is narcissism, then only narcissism will explain it. What we are seeing with housing is a narcissistic injury drawn from generations inculcated to expect a certain flowchart of life that no longer exists. And they aren’t happy about it.
When young Kiwi first home buyers were 17 they probably imagined life at their parent’s age, a glimpse of a bourgeois future to which they thought they were entitled. This fantasy was predicated on information received from multiple sources – which I will collectively call the system – preaching that every generation does better than the last. The message was that future happiness was inevitable with a safety net for our aspirations.
Since the 1960s, the middle class have been implicitly promised a series of “life steps” and led to expect those steps in a predictable order. There was an expectation of upward mobility. Access to education, entry into the workforce, steady annual income raises, a house, promotions and an eventual retirement. It is the message that’s still delivered every day on the internet and television in newspapers and by our friends and families.
This hope of growing wealth was connected with an individualistic ideology elevating the narcissistic self as individualism became the main driver of consumerism. The individual has become the central character in their own movie, while everyone else is simply an extra. If citizens tick all the boxes then the promised next step was always a first home, just like your parents and grandparents.
None of this is reasonable to expect anymore. Some would argue that the answer is for laws to transfer wealth from the rich to the struggling middle class. That might increase consumption but it would also deter investment by eliminating incentives.
After all, you can't invest what you don't have. Yet if the message of upward mobility is preached as possible if the required boxes are ticked, but is then ripped away as the economy changes faster than the message can travel, people will demand a restoration.
As people realise these promises are no longer assured, society feels the pain as an attack on the self, a narcissistic injury. These injuries against the self are unlike other injuries in that they attack a person’s assumed identity. What makes it so dangerous is that the assumed identity is a public identity – the way they wish others to see them. And when this identity is attacked, an individual often feels there are only two reactions.
The first reaction when narcissism is confronted with a greater power is to take the offence personally and quietly seethe while fantasising about finding information that will expose the injurer as a hypocrite.
But let’s do this correctly. What we are seeing is collective rage channeled at a minority. If it is rage, then the rage is because of a threat to identity. So what could possibly threaten the identity of hardworking young Kiwis? In this case, the whole point of owning a house is not for an abode but to show other people something important about how young Kiwis identify themselves.
Finding hypocrisy is always satisfying because the narcissist’s identity is defended. They judge the offender as a stereotyped identity. Chinese home-buyers are easy to hate because of their weakness as a minority, but attacking fellow New Zealanders who are a reflection of the self would be as an attack on our own identity. This is the danger in connecting nationalism with narcissism.
Because the second reaction to a narcissistic injury is violence. Remember, narcissists don’t feel guilt, they only feel shame. So the removal of the source of shame is the only way to defend an assumed identity. In the case of the Chinese home-buyers, New Zealand’s response is funnelling towards violence.
When a weaker people-group is singled out as a cause of societal or individualistic narcissistic injury, it really shouldn’t surprise anyone that violence is the eventual outcome. Rather than search for hypocrisy, the choice of the New Zealand government and public was to remove freedoms by implementing special laws and regulations directed at the Chinese demography. You might not think this is violence, but it is.
In the age of the Leviathan, not all violence comes from weapons. Often it is leveraged with the weapons of the state, by creating laws to favour one group of people above others. French philosopher Jean-Paul Sartre called the violence of laws built to remove freedom the “exis” and “praxis”.
Sartre also wrote that violence helps raise the consciousness of the oppressed. What better way to spur young Kiwi home buyers into opening their bank accounts than to highlight a narcissistic injury and enact violence on the injurer? Job solved, identity defended.
People much smarter and luckier than me will have to find a solution to the quickly changing global and domestic economies. I am simply pointing out the potential consequences of not talking correctly about the underlying structure of outdated narcissistic expectations and the inadequacy of all the ideas I have seen so far.