http://www.amazon.com/Progress-Poverty-Industrial-Depression...
Progress and Poverty, by Henry George
> This classic work is an enquiry into the cause of industrial depressions and the persistence of poverty amid advancing wealth. Published in 1879, it was admired and advocated by great minds such as Albert Einstein, Winston Churchill, Leo Tolstoy and Sun Yat-sen in China. Henry George lived through a period of American history which witnessed the closing of the frontier, and he noticed the dramatic deterioration in the condition of labour once that happened.
Read it, it's great.
Therefore to have a free market in credit with these constraints it's inevitable that it will be used for speculation. We should have land value tax to win back our right to exist instead of credit fueled full land enclosure. It's an unmitigated disaster - the defining issue of our times.
Credit is near infinite as thanks to fractional reserve banking banks can create as much of it as demand requires. They are not constrained by savings. Most bank lending is against land, it's how money is being printed.
How has the market adapted when we are working 25 times 2 years for the same pile of bricks our parents worked for 15 years for? It's simply the banks taking more of a share of your labour. You get nothing else back.
There is no point in being more productive. It will feed through into land prices as disposable income (briefly) increases and then land prices go up and we are back where we started. This is how banks capture all productivity.
Read http://www.amazon.com/Progress-Poverty-Industrial-Depression...
ps in the UK house sizes are falling, in part because of smaller families / divorces but mostly because of land price ramping
Prices are related to available credit. Wages (and rent) have hardly budged but land prices have rocketed.
Take 5 minutes to read this, it articulates what the author failed to (and as a result reached a conclusion of little use):
http://www.socred.org/index.php/blogs/view/it-s-time-for-an-...
Think of the banks everywhere. They are today's churches. Big spacious lobbies. Stand in awe not at the creativity but at the sheer amount of high value real-estate they can waste.
The guy writing this article doesn't understand the wider dynamics at all. It's about money creation and the use of that to ramp land prices in order to compel everyone to hand over part of their labour.
As you note if you have money you can get more of it because you can leverage it. But that's only part of the picture.
I'd encourage everyone to read the above link and also Henry George "progress and poverty"
http://www.amazon.com/Progress-Poverty-Industrial-Depression...