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By Declan Murray

The Rent Went Up Before the Task Force Ever Met

Here is a small, true story that contains the entire argument, so pay attention before you get bored and go back to your phone.

A federal government announces an affordability task force. It has a mandate, a chair, a slate of consultations stretching into next year, and the full sombre theatre of people in good suits agreeing to study a problem rather than touch it. Meanwhile, a real estate investment trust — the kind whose largest unitholders are the same pension funds that manage the retirement savings of the nurses and machinists this task force claims to be worried about — raises rents across several thousand units by double digits, effective the first of the month. The task force’s first meeting is scheduled for the autumn. The rent increase needed no meeting at all.

This is not a coincidence, and it is not a scandal in the sense your local newspaper understands the word, because nobody broke a rule. That is precisely the point, and it is the point this entire essay exists to make: the rule was never written to stop this. It was written to make this possible, and then to make it invisible.

We are told, endlessly, soothingly, by finance ministers and their communications staff, that markets produce winners and losers, and that government’s job is to come along afterward with a tax credit and a task force and smooth the losers’ rough edges. This is the origin myth of respectable centrist economics, and it is a lie of omission so complete it deserves its own museum wing. The redistribution has already happened. It happened before the REIT existed, before the rent was set, before anyone competed for anything. It happened in the statute books.

Capital Is Not a Thing. It’s a Verdict.

The economist wants to tell you that capital is land, plus labour, plus savings, compounding quietly like a well-behaved garden. This is a fairy tale for people who went into finance specifically so they’d never have to read a law report.

The legal scholar Katharina Pistor‘s actual insight — the one that ought to be taught in every high school civics class instead of whatever performative nonsense currently occupies that slot — is that capital is not a substance you can point to. It is a bundle of legal privileges the state chooses to attach to some assets and not others: the privilege of surviving the death of the people who created it, the privilege of standing first in line when a company goes bankrupt, the privilege of being pledged as collateral, the privilege of being defended in court as intellectual property rather than treated as a shared idea anyone can use. Pistor calls this legal coding, and her phrase for the resulting asset is one worth remembering — capital on legal steroids. An orchard is not capital. An orchard with a priority lien, a limited-liability wrapper, and a trust structure that will outlive everyone currently eating its apples is capital, and the difference between the two is not economics. It is a filing at a registry office.

Nobody voted on this in any meaningful sense. Nobody stood up in the House of Commons and said, plainly, “we are going to design the bankruptcy code so that a bondholder gets paid before a laid-off worker collects severance.” And yet that is exactly what the bankruptcy code does, has done for decades, and will keep doing until enough people understand that it was designed, not discovered.

This is what people mean, or ought to mean, when they say the system is rigged. Not that a few bad actors cheated at a fair game. That the rulebook itself was drafted by the players who intended to win, and then handed to the referee as though it had fallen from the sky.

The State Never “Intervenes.” It Writes the Whole Script.

Every business columnist in the country writes some version of the same sentence at least once a month: government should get out of the way and let the market work. It is worth asking, calmly, what exactly is supposed to be left once government gets out of the way.

Property, for a start. Contract. The corporation itself — a legal fiction so total that it can own things, sue people, and, under most jurisdictions’ rules, never actually die. None of that exists prior to the state. None of it is discovered in nature the way you discover a mountain or a river. It is written, amended, litigated, and enforced by public power, continuously, in real time, whether or not a news camera is pointed at it.

The political theorist Ellen Meiksins Wood made an argument that lands here with real force: the tidy separation we imagine between “the economy” and “the government” is itself a historical achievement of political power, not a natural fact that power occasionally interrupts. Land had to be forcibly cleared of the people farming it and consolidated into private holdings before anything resembling a labour market could exist. That was not economics arriving to displace politics. That was politics, executed with considerable violence, manufacturing the conditions under which economics could later pretend to have been there first.

Once the clearing is done, of course, everyone forgets it happened. The fences look permanent. The deed looks eternal. The dispossession recedes into the furniture of ordinary life, and the columnist writes his little sermon about getting government out of the way of a market that government built, stocked, and continues to referee every single business day.

None of this is new, and none of it is subtle once you know where to look.

Enclosure Never Ended. It Just Retained Counsel.

History is not decoration here. It is evidence, and the pattern does not change, only the paperwork does.

The legal historian David Sugarman studied how English private law was reshaped after 1790 to serve industrial capital, and his conclusion deserves to be studied rather than skimmed: technical legal doctrine let politically engineered subsidies pass as neutral, apolitical machinery. Nobody had to stand for election on a platform of “transfer wealth upward through the law of contract.” The transfer happened anyway, dressed as procedure, filed under the boring headings that no one outside a law faculty ever reads.

Compare that to what an honest subsidy would require. A $250-million direct grant to a favoured industry needs a budget line, a minister willing to defend it on camera, an opposition critic willing to attack it, and a paper trail an auditor general can eventually pick apart. It is, in other words, visible. It can be embarrassing. It can cost someone an election.

A subsidy achieved instead through the priority rules of secured lending, or the duration of a patent monopoly, or the liability shield of a numbered company, requires none of that. It requires a clause. Clauses do not hold press conferences. Clauses do not lose elections. Clauses simply sit in the code, quietly routing value upward, year after year, long after the politicians who benefited from them have retired to the boards of the companies they used to regulate.

This is not a bug in the machine. Sugarman’s plain lesson, translated out of the seminar room: the best subsidy is the one designed to disappear.

What Happens If You Take the Steroids Away

It is worth asking what capital would actually do if the law stopped propping it up, because the answer is less abstract than it sounds, and considerably less flattering to the people currently enjoying the propping.

Ezra Heywood, the nineteenth-century American individualist anarchist, made an argument that modern economists would find embarrassingly simple and therefore ignore: left to itself, without continuous legal reinforcement, accumulated wealth does not grow like a snowball rolling downhill. It scatters. It gets divided among heirs. It depreciates. It gets competed away by rivals who are not saddled with the same debts. Heywood’s phrase for this natural tendency was blunt — that unassisted wealth tends toward diffusion and decay, not toward compounding empire.

If that is true, and there is no serious reason to think it isn’t, then the enormous, multi-generational concentrations of capital we are told to accept as the inevitable output of free competition are nothing of the sort. They are the output of continuous legal life support: perpetual corporate succession, limited liability that severs an owner’s exposure to the damage his company causes, intellectual property terms extended every time Mickey Mouse is about to enter the public domain, interest structures that let money charge rent on itself indefinitely. Heywood had a memorable, furious way of putting the mechanism of compound interest and its dynastic effects — describing it as a golden chain binding productive labour so that a moneyed class might feed indefinitely off what that labour produces. Strip away the legal apparatus holding all of that in place, and you would not be left with a fairer market. You would be left with something closer to what markets are actually supposed to do: reward the risk-taker this quarter, and stop rewarding him the moment he stops adding value, rather than the moment his estate lawyer finally runs out of tricks.

This is why the people who benefit from the current arrangement will never, under any circumstances, describe it honestly. To describe it honestly is to make it contestable. And once something is contestable, someone might actually vote to change it.

The Source Code Is the Only Thing Worth Reading

None of the mechanisms described here are hidden in the sense of being classified. They are sitting in statute books, in corporate registries, in the small print of secured transactions acts, entirely legible to anyone with the patience of a tax lawyer and considerably less shame. What keeps them invisible is not secrecy. It is boredom, deliberately cultivated, because nothing protects a privilege quite as effectively as making its defenders’ own children fall asleep reading about it.

The idea that capitalism is simply what happens when government steps back is not a description. It is an alibi, and a remarkably durable one, precisely because the crime scene has no fingerprints — only clauses, filings, and the quiet, permanent hum of a legal system doing exactly what it was built to do.

Redistribution did not start with the tax return you filed this spring. It started centuries ago, in language most people were never taught to read, and it has not stopped since.

The task force will meet in the autumn. The rent has already gone up.

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The Code of Capital – Further Reading:

• Katharina Pistor: The Code of Capital – The official page for Katharina Pistor’s seminal work at Columbia University.
• Institute for New Economic Thinking (INET) – A premier source for challenging mainstream economic orthodoxy. Their archive provides rigorous analysis on wealth concentration and the systemic failures of modern economic policy.
• Harvard Law Review: Property, Law, and Inequality – A prestigious academic site that provides credibility for the discussion on how property law is historically engineered to consolidate wealth.
• The Brookings Institution: Economic Studies – Offers balanced, data-driven analysis on fiscal policy and housing affordability.
• The London School of Economics (LSE) Business Review – The LSE is a global authority on political economy. Their business review regularly features peer-reviewed analysis on how institutional “legal coding” impacts economic outcomes.
• ProMarket (The Stigler Center at the University of Chicago) – An academically-backed publication focused on how political power shapes markets. It is excellent for readers who want to see how “market capture” works in practice.