It is imperative to intervene in the housing market and increase taxes on capital income, as recently proposed by SUMAR. Otherwise, the gap between rich and poor will continue to widen.
In the 1980s, Margaret Thatcher popularized the phrase “there is no alternative,” turning it into a banner of neoliberalism. This idea, which promoted privatization, economic liberalization, and tax cuts for the wealthy, spread globally and persists in the collective imagination to this day, even surviving the financial crisis of a decade ago.
Less well known, but no less influential, is Thatcher’s notion of “people’s capitalism.” This idea suggested that capitalism, in addition to being the most efficient system, allowed all citizens to benefit from its advantages. Contrary to Marxist predictions about social polarization, people’s capitalism argued that financial globalization would allow even the working class to participate partially in the capitalist class.
This concept was based on the premise that new technologies and financial deregulation would make it easier for working families to invest their savings in the financial system. Thus, well-paid professionals, although employees, could supplement their income with financial income, blurring the boundaries between social classes and creating a broad middle class, the social base of neoliberalism.
Thatcher, however, did not invent this idea. In Spain, the Franco regime had already used housing policy to create “owners rather than proletarians,” as the economist José Manuel Naredo has studied. This strategy transformed Spain from a country of renters to a country of owners in a few decades, based on the premise that home ownership would encourage more conservative attitudes and provide a sense of social advancement.
Popular capitalism and real estate promotion policies have a politically demobilizing effect. However, these phenomena mask an underlying reality: the growing inequalities in family net worth.
The latest financial survey of families by the Bank of Spain reveals significant disparities:
– Only 21% of the poorest families* own a home, compared to 96% of the richest.
– Only 8% of the poorest families own real estate other than their usual residence, compared to 93% of the richest.
– In terms of financial investments, only 3% of the poorest families own shares and 1% own investment funds, while these percentages rise to 44% and 35% respectively among the richest families.
These figures show that, even if capitalism has become superficially “popularized,” capital income continues to be the domain of the richest. The social majority is limited to home ownership (almost always in debt) and conventional low-profit checking accounts. The resulting dynamic is clear: over time, the richest families get richer and the gap with the poorest widens. Families who see “their money grow” significantly while they sleep represent only a small part of the population.
This reality has crucial implications for fiscal and housing policy. When governments fail to address these inequality dynamics, our societies become polarized and potentially more conflictual. This happens when capital income benefits from lax taxation, allowing the wealthy to avoid fair taxation, or when homes become sources of income for the wealthiest families.
A truly progressive government should tackle these problems head on. Intervention in the housing market and raising taxes on capital income, as SUMAR recently proposed, are imperative. Otherwise, the gap between rich and poor will continue to widen, perpetuating a system that favors the idleness of a few at the expense of the many.
*Note: “Poorest” families are defined as the 25% with the lowest net wealth, while “richest” are defined as the top 10% in terms of net wealth.
