Expropriation has always been seen as a very capitalist move. Countries expropriate companies that consider vital to the development of the country. Petrol, mining or even basic needs such as water or electricity are the main commodities the countries tend to expropriate, and especially when these commodities are under control of foreign companies. Such was the case of YPF, part por Repsol and renationaliziced from Argentina.
Other times, the nationalization of assets could be made in favour of new infrastructures (such as roads, airports, reservoirs, dams,...) that require private ground becoming public. Normally an amount of money is given it can not be considered stealing, but in almost every case the amount of money given is way under the market value.
Sometimes, normally in socialist countries, expropriation is made to take from the rich and give it to the country. As in every case an amount of money is given it can not be considered stealing, but in almost every case the amount of money given is way under the market value. We can remember the very famous video from Hugo Chavez walking around pointing and shouting “Expropiese”(“expropriate”) taking away assets from the people and giving it back to the country.
Some weeks ago, the socialist government of the Balearic Islands (the very famous islands is Spain because of the great amount of foreigners living there) decided to expropriate some flats from big-tenants and rent them at a discount price to low-income families. At first this may sound good, but as we read deeper into the news we found out a lot of red flags that make this “Socialist move” a very capitalist move:
The location: the Balearic Islands are well known between germans and british. Foreigners tend to buy flats and houses that they will use during the summer time, bringing in more money that nationals do. Sending out news like this one will only sabotage the tourism in favor of other countries not that stupid, such as Greece or Croatia.
The amount: big news for only 56 flats. The housing market will probably see an increase in the amount of houses on sale in a moment where consumers are missing, this will bring down the prices and even being this something positive to make the market more accessible, it is very unlikely the low clases will profit from this. Why will the lower classes be the most affected? In general everyone will be affected, but as this is a region were almost 70% of the people is related with the tourism (something almost missing during 2020) and being the unemployment rate 17%; it is very likely that the lower and middle classes are not ready to buy a flat at this moment, even if the prices are cheap. Rent prices could go down, something they are in desperate need of. Let's give them this point… but in any case it is uncertain if only 56 flats will have enough domino effect to the 15.000 flats demand.
The move: they say they will pay “in advance” to the tenants being expropriated, but they will only expropriate for the next 7 years. This means that after 7 years the tenants will recover their flats. Even if the tenants are getting 30% less income from these flats, they are getting all the money in advance… the money of the next 7 years all at once… at this point I think someone at the government doesn't understand that the money is more worthy today than tomorrow, less to say in 7 years.
The price: in a very loyal and dedicated move, they plan to rent the flats to low income families, making them pay less than the official regular rent price… and less than what they are paying to the expropriated tenants! This means that the people of the Balearic Islands will have to pay with their taxes for the difference. As always, germans, british and upper classes are not paying taxes to the balearic islands and once again will be the middle and lower class the ones paying for everyone.
As always, the problem with not being economically literate is paid by the lower classes while they clap thinking socialism is real and not just a sword coming towards their pockets. The politicians should learn more and think about the consequences as for sure many rich people (and especially the ones being expropiated) will take advantage of this stupid move.
People don't need socialism to survive, they need to learn how to save money, invest and control their expenses, something that will cost less than selling the socialism dream, and will do more for it.
Comments made on the news showcase are an expression of economic opinion only, and should not be construed in any manner whatsoever as ideology expression in any case.