New feudalism

The rise of "private equity philanthropy"

I saw an interesting article in the Observer today (an online magazine owned by Jared Kushner and published by his brother-in-law). It tackles the problem of billionaire philanthropists not being able to give their money away effectively—Jeff Bezos’ ex-wife Mackenzie Scott has been the most aggressive “mega-philanthropist” in recent years, and even she has seen her wealth increase by billions, despite her best efforts to give it all away. The problem is that, when you have billions of dollars, that money just keeps growing, no matter what you do. The lesson, as always: once people have billions, it’s too late. You can’t ever tax them enough to make a difference, and they can’t even give it away enough to make a difference. You have to make sure they don’t get all that money in the first place—deal with the problem on the front end, before they get it, rather than hoping to fix it on the back end through taxes and philanthropy.

The other problem the article addresses is that mega-philanthropists are looking for new ways to give their money—as Mark Reed, one of the billionaires interviewed in the article, says: “I think there is a growing sense among many wealthy families that the marginal utility of, say, another $50 or $100 million gift to a favorite Ivy League alma mater is somewhat limited.” Indeed! And this shows how little imagination the billionaire class has—they just funnel their godlike wealth into the Ivy League system that serves as the basis for the social reproduction of their class. But even that is boring to them now—that’s how utterly dominant they are, the little fortresses where they reproduce their class foundations don’t even need their wealth anymore. They’ve won so totally, dominated the lower classes so completely, that they need new ways to use their endless extra cash.

So one way for them to use their superhuman wealth that this article highlights is in housing for middle income families—they call it “workforce housing.” The article outlines a system for bringing private equity into the philanthropy world, so that housing can be subsidized for the middle class people who increasingly can’t afford to live anywhere. This form of housing project isn’t like the section 8 or section 9 housing voucher thing—that’s for very poor people (although what’s the difference between them and the “middle class” anymore really?). The very poor, who need to live in subsidized, low-income housing projects, they are beyond helping. Billionaires have no interest in them—they want them to die. This new kind of private equity housing philanthropy isn’t even going to try to help them—they can get fucked basically.

The focus of this new thing is called “workforce housing.” What is that? It was the first time I had come across that term, but it’s been around for a while I guess. It refers to people in jobs that used to be enough to provide solid middle class lives for whole families, on just one salary too—police officers, nurses, teachers, things like that. In the past, you could have one of those jobs, and provide for your family—you earned something that used to be called a family wage. And this enabled you to live a comfortable life in a decent house, with two cars, to go on vacations, and even send your kids to college. Now of course if you’re a cop, nurse, or teacher, you can’t do any of that—but with the help of private equity billionaire philanthropy, you might be able to live in a subsidized housing project! Isn’t the future great?!

So this type of housing philanthropy is aimed not at the poorest people—again, they are basically beyond saving—but people like cops, nurses, teachers, government workers, etc. These are people who used to be able to have lives, but now they can’t, and they need billionaires to give them a place to live.

Why does the billionaire class have an interest in helping them? Because on some level they realize that they will need those types of roles in society to protect them as everything collapses. They will need cops to save them from the rampaging hordes of homeless people that will be unleashed, and they will need nurses to take care of them when they get sick—and these service workers will need a place to live.

Here’s how it will work (I am going to paraphrase the article): If a large real estate developer wants to build a 300 unit apartment complex, in say New Jersey, for the “workforce” (cops, teachers, nurses, etc), they would have to charge $4,000 a month per unit, which is market rate. But if a billionaire wanted to give an interest free, $100 million loan to the project, the real estate developer could lower the monthly rent from $4,000 to $2,500 (which the author of the article seems to think is super affordable…).

So the workforce housing (what a fucking phrase!) owes its existence to the largesse of a super rich lord. The workers are allowed to live on the land that the lord owns, in exchange for providing the services, like being a cop, that the lord needs.

What does this sound like to you? There’s a word for it—it’s called feudalism. And the article makes it sound like it’s some innovative, ground-breaking new thing. That’s how it always goes with neoliberalism—the elites just push the masses backwards into a new kind of serfdom, and this neo-feudalism gets called an exciting future…