Paul’s Lack of Conceptual Clarity

On Monday, we examined Elon Musk’s claim that working from home is “morally wrong.” Such a claim derives from a lack of conceptual clarity. Musk is hardly alone. Today, we will examine a claim that a home mortgage is a form of rent control.

Mark Paul, an assistant professor of economics at Rutgers, writes,

Some 67 percent of Americans live in owner-occupied homes—meaning they enjoy de facto rent control in the form of the 30-year mortgage.

He goes on to argue that, since thirty-year mortgages were a creation of the federal government, the government should extend rent control to all Americans.

Conceptual clarity is necessary if one wants to communicate effectively and accurately. Conceptual clarity requires precision. It requires one to clearly identify what a concept represents in reality. In this context, that includes identifying differences between two concepts.

Paul ignores a fundamental difference between a mortgage and rent control. A mortgage is a contractual agreement that all parties enter into voluntarily. The parties agree to the terms and conditions of that agreement, including the payment amount and the length of the agreement. Rent control is an arbitrary limit on what landlords may charge. Under rent control, the terms and conditions of renting housing are imposed upon the landlord—i.e., it is not a voluntary agreement. To equate the voluntary and involuntary is a gross evasion.

Further, many homeowners do not have a fixed payment for the life of their mortgage. Those with adjustable-rate mortgages can be subjected to significant increases in their monthly payment when interest rates rise. And if we include insurance and property taxes, monthly payments will increase further.

Paul’s argument can only be effective if his audience also lacks conceptual clarity. If a reader regards superficial similarities as important, he likely swallow Paul’s conclusion. As one example, Progressive Regressive writers are citing Paul’s piece in an effort to defend rent control.

If we want to make good decisions regarding policy, then we must seek conceptual clarity. If we don’t, then we are guaranteed to draw the wrong conclusions.