Class in the 21st century: Asset inflation and the new logic of inequality

Abstract

What becomes of class when residential property prices in major cities around the world accrue more income in a year than the average wage worker? This paper investigates the dynamic of combined wage disinflation and asset price inflation as a key to understanding the growth of inequality in recent decades. Taking the city of Sydney, Australia, as exemplary of a dynamic that has unfolded across the Anglo-American economies, it explains how residential property was constructed as a financial asset and how government policies helped to generate the phenomenal house price inflation and unequal capital gains of recent years. Proceeding in close conversation with Thomas Piketty's work on inequality and recent sociological contributions to the question of class, we argue that employment and wage-based taxonomies of class are no longer adequate for understanding a process of stratification in which capital gains, capital income and intergenerational transfers are preeminent. We conclude the paper by outlining a new asset-based class taxonomy which we intend to specify further in subsequent work.

Assets and assetization in financialized capitalism

“…A recent paper by Adkins et al (2019) underscores the importance of the relatively widespread and uneven distribution of asset wealth for understanding the intensification of inequalities during the decade since the global financial crisis. Indeed, given that the ownership of housing is the single greatest source of wealth across populations in Anglo-America, Adkins et al (2019) argue nothing short of the rethinking of 'contemporary theories of class and stratification' is now required to 'incorporate the reality of twenty first century capital' (p. 4). To capture the stratifications that arise from the impact of the distribution of asset wealth on the structure of inequality, traditional approaches to class based on the division of labour and occupation are inadequate.…”

Safe havens: overseas housing speculation and opportunity zones

“…On the demand side, various studies have identified transnational investor types based on levels of monetary wealth (Rogers & Koh, 2017) or asset ownership (Forrest and Hirayama, 2018;Adkins et al, 2019), or through housing typology (Kadi et al, 2020). Here, we synthesize these views with the understanding that there are few hard boundaries between investor groups.…”

The Death and Life of Private Landlordism: How Financialized Homeownership Gave Birth to the Buy-To-Let Market

“…As the gains on capital increasingly outpace those on labour, wealth disparities increase (Piketty 2014). Wealth accumulation, then, becomes more important in class formation and demarcation (Adkins, Cooper, and Konings 2019). There are also notable generational dynamics involved, as older generations in particular benefited from relatively easy entry into homeownership and subsequent debt-fuelled price increases (Forrest and Hirayama 2015).…”