Reorientation of big capital towards real estate

Abstract

Why real state production, which was a relatively minor branch of capital accumulation, lagging behind in technical and organizational terms, in recent times has become a very important investment option for big capital? In a stage of weakness in profit rates and scarcity of profitable businesses, what is the appeal of real estate for large investors? In Latin America, where this activity had a limited national scope, even at regional or local level, suddenly massive multinational capitals arriving by financial means or in the form of direct investment are being seen: how do they get a sufficient remuneration to explain this mutation? This text aims to shed light on this subject on the hypothesis that this is accomplished in the urban land market through speculation. An expression usually imprecise, with very diverse and sometimes contradictory meanings. Based on the Marxist Theory of Urban Land Rent developed by the author, the key category to examine these operations is that of inductive speculation, which does not have the appearance of speculation, but in which investors are betting on combining the proper capitalist profit itself with the capture of significant increases in the price of urban land. In these transactions, the large size of capital accumulation is decisive along with the support of the State, which is functional to neoliberal urban policies.