Housing advocates are increasingly talking about the imbalance of power between landlords and tenants. To provide a better “balance” of power, these advocates are calling for laws that restrict landlords and give more power to tenants. These advocates fail to distinguish between economic power and political power.
Ayn Rand explained the difference between economic power and political power:
economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman’s tool is values; the bureaucrat’s tool is fear.
A landlord gains economic power by producing a value—housing—that others need and desire. The more that he produces, the greater his economic power. And his economic power is attained through the voluntary choices of his tenants. Economic power is a consequence of each individual’s freedom of choice.
Housing advocates want to use political power to control and restrict the economic power of landlords. Housing advocates have no value to offer landlords. But they do have the threat of using political power to punish those who not act as the advocates desire. Political power negates freedom of choice.
The eviction moratorium is one example. The moratorium prohibits landlords from evicting tenants for non-payment of rent. The landlord is expected to continue to provide a value—housing—without compensation, and he faces substantial fines if he disobeys the moratorium.
Rent control is another example. Under rent control, government officials dictate what rent can be charged. The landlord’s judgment and choices are irrelevant. The landlord is expected to continue to provide a value—housing—without the compensation he thinks appropriate, and he faces substantial fines if he disobeys the rent control board.
In these examples, and countless others, political power is used to “balance” the disparate economic power possessed by individuals. In principle, this is precisely what a criminal does when he robs a bank: He is trying to “balance” the disparity between his economic power and that of the bank. And he does this, just as government officials do, by threatening harm to those who disobey his demands.
A rational person would realize that bank robbers are not “balancing” the power. They are forcing others to cede their property involuntarily. And that is precisely what housing advocates are seeking.