Housing Lease Protection Act Revision? A Socialist Law in Sheep’s Clothing

Farmers are unable to enjoy freedom and live in trembling anxiety. They are constantly exposed to the threat of the free market and price fluctuations, which mercilessly reduce their income and drive them into financial crisis, leaving them fearful that they could lose the right to cultivate their own land. Accordingly, the state enacts laws to manage and protect farmers’ ownership of farmland so that they can farm without such fear and anxiety. In addition, a price-setting committee fixes prices to ensure a stable and adequate income. Farmers need only cultivate the crops directed by the state, or those approved by the state.

Did the farmers in that country, under state protection, enjoy stable lives without fear of losing their land? What is described above was in fact part of the policy Nazi Germany implemented as it socialized the economy, especially the agricultural sector. But socialism? Even though the land was formally owned not by the state but by individual farmers, was it still socialism?

Ludwig von Mises, often called a knight of liberty, spoke of two patterns of socialism. One was the “Lenin pattern,” or the “Russian pattern,” in which all factories, shops, and land are nationalized, as in the former Soviet Union or North Korea, which we know well. The second was the “German Nazi pattern,” the method employed by Hitler’s Nazis. In simple terms, the socialist pattern established by the Nazis preserved nominal private ownership, while in reality rendering private property rights meaningless, little different from state ownership.

On the surface, it appears that private ownership of the means of production is maintained and that ordinary markets, prices, wages, and interest rates still exist. But in such a system, there is no real right of a private owner to use those means of production as he wishes. What to produce and at what price to sell are determined by the orders of the highest government authorities. In other words, the government directs all activity. Economic actors do not obey the market and prices; they obey the government. Mises described this Nazi German pattern of socialism as “a socialist wolf in the sheep’s clothing of the capitalist market economy.”

An absurd development has now occurred in 21st-century South Korea: the emergence of “a socialist wolf in the sheep’s clothing of the capitalist market economy.” If, in the Nazi German measures described above, one simply replaces farmland with rental housing, one arrives at a policy with much the same content. Tenants are not free from housing insecurity and suffer instability due to unilateral rent hikes or demands to vacate. Accordingly, the state manages and protects them by law so that they can live without such fear and anxiety. The right to request renewal of a lease contract, currently limited to two times—already problematic in itself—would be made available “without limit.” In addition, rent would in the future be publicly announced as an “appropriate rent” by “Rent Calculation Committees” to be established by region. These are the main provisions of the partial amendment to the Housing Lease Protection Act, recently introduced by Progressive Party lawmaker Yoon Jongo, and co-sponsored by two lawmakers from that party, six lawmakers from the Democratic Party of Korea, and one lawmaker from the Rebuilding Korea Party.

Although a landlord’s house remains officially the landlord’s property, the proposal would completely strip away the owner’s right to use it in the manner and at the price he wishes, and transfer that right to the state. It is no different whatsoever from the “German-style pattern of socialization” practiced by the Nazis.

Was it because of the major turmoil and enormous side effects related to lease policy that Korea has experienced since the Moon Jae-in administration? Or because of intense opposition? Fortunately, this amendment was promptly withdrawn. Yet attempts to hollow out private property rights and socialize them in this way have unfolded in many forms and across many areas, and they will continue to appear. It is something against which we must remain vigilant again and again.

Hyukchul Kwon, Director of the Free Market Institute

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Original title: 주택임대차보호법 개정안? 양의 탈을 쓴 늑대 같은 사회주의 법안

Author: Hyeok-cheol Kwon

Date: 2024-12-11

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=1&idx=27160