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Charles Mudede

A tweet by Mike Rosenberg, a business reporter at the Seattle Times, offers a link to an interesting document released by the Association of Foreign Investors in Real Estate (AFIRE). It claims to represent "the 'who's who' in the global real estate investment industry." The document the organization dropped is called "London Edges Out NY as Top City Among Foreign RE Investors." It mainly concerns the global investor class's renewed interest in London's real estate market after a period of uncertainly caused by the 2016 passing of Brexit. These foreign investors "are [now] less concerned about the ramifications" of the UK's break with the Eurozone. As a consequence, London's real estate market is once again the top target for what I call global surplus capital.

The second city is NYC, third is Berlin, and fourth Los Angeles. Interesting enough, AFIRE rates Seattle as the third-best city in the US. It was number four last year, and eight a year after its real estate boom began, 2013. Seattle is ahead of San Francisco and Washington, D.C..

None of this is surprising because, as I have explained many times before, Seattle's fast growth was bound to attract national and international investments. Our market is as open as any other to the flows of capital. And we live in world that has two features: An oversupply of capital and stagnant wages. The former condition has meant slow growth and few investment opportunities for the latter; yet it is the owners of the latter who place great political pressure on advanced capitalist states to keep wages low or stagnant. As most Marxists know, capitalism is rife with contradictions of this kind, which is why it needs state intervention to overcome them and their dangers. Without state intervention, wages in the US would have remained low after the Great Depression and the massive middle class that today resides in suburbs and burns fossil fuels with little or no thought of the future would not have emerged.

The slow or no growth in most advanced capitalist states (which are presently dominated by the logic of austerity) has meant that sharp growth in a sector or a region cannot go unnoticed. It appears to investors around the world like a Mount Rainier on a prairie. They soon send their capital in that direction, and this capital almost immediately inflates already inflated values in that sector or that region. Mount Rainier becomes Mount Everest. If you are a city like Vancouver, these values totally delink with the region's economy and float in the pure ether of global surplus cash.

Seattle is not like Dubai, a global city that has no illusions about the investor class and what it can do to a city's economy. In 2002, the Gulf city passed a decree, the Freehold Law, that allowed foreigners to buy property, and the decree "sparked the real estate boom in Dubai’s residential property." But Dubai will never be a Seattle or a New York City or a London because it's not considered to be politically safe or stable. Why? Because, weirdly enough, it's not a democracy. This is yet another contradiction of capitalism. It does everything it can to dismantle the political system that provides it the safety of social stability.