Reposted from Richard Murphy
Affordability has become the defining political issue in the United States. It will soon be unavoidable in the UK. But the way the problem is being framed remains fundamentally misleading.
Most discussion of the cost-of-living crisis still revolves around prices: food, fuel, energy, and transport. These are visible and emotionally resonant. But they are not the real reason why so many people feel they can no longer afford to live.
The real affordability crisis lies elsewhere. It lies in the systematic extraction of income from households.
People are paying too much rent.
They are paying too much mortgage interest.
They are paying excessive interest costs embedded in everyday purchases.
And they are paying monopoly rents to companies that dominate essential services and face little meaningful competition.
This is not simply inflation. It is a transfer of income upwards, built into the structure of the modern economy.
Housing is the most obvious example, but it is far from the only one. Telecommunications, banking, utilities, water, insurance, digital services, and online retail all operate in markets where consumers are locked in. Switching is difficult. Alternatives are limited. Prices rise because they can.
Financialisation has deepened the problem. Modern products are routinely bundled with insurance, warranties, and service contracts that are rarely needed and rarely used. The profitability often lies not in the product itself but in the financial add-ons attached to it. These practices are deliberate, normalised, and highly lucrative.
Supermarkets do this. Banks do it. Utilities do it. Online platforms do it. And because regulation is weak or captured, these costs are treated as inevitable.
Seen this way, the affordability crisis is not a failure of markets to behave. It is a failure of politics to act.
Governments have chosen not to regulate rents.
They have chosen not to restrain monopolies.
They have chosen not to control interest costs.
Regulation still exists, but too often it is designed to protect investor returns rather than household affordability.
This was not always the case. We once accepted that essentials should not be vehicles for profit extraction from captive users. We once regulated prices. We once acted in the public interest.
Affordability can be restored. But only if we change the logic of policy.
That means recognising extraction for what it is, accepting that it is not inevitable, learning from what once worked, and demanding political action.
The economics is not mysterious. The tools are already available.
The only uncertainty is whether we choose to use them.
Richard Murphy is a British former chartered accountant who campaigns on issues of tax avoidance and tax evasion.[1] He founded the Tax Justice Network. He is a Professor Emeritus of Accounting Practice at University of Sheffield Management School.
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