‘Safe as houses.’ ‘Buy land – they’re not making any more.’ ‘The best investment on Earth is earth.’ Truisms about the value and reliability of real estate are a crucial part of the imaginary of modern capitalism. The first thinkers labelled economists, the physiocrats of eighteenth-century France, believed land and its extractive industries to be the source of all economic value. Limited, monopolizable, naturally productive – these qualities combined with the political valorization of property ownership to cement a powerful understanding of the value (in all senses of the term) of real estate. This faith, boiled down to slogans on real estate agent signs, has proven impervious to spectacular market crashes, to waves of foreclosure, to staggering numbers of homeowners who continue to owe more on their mortgages than the current market value of their house.
There is more at work here than a common-sense preference for familiar investments you can see and touch over abstract securities and anonymous intermediaries. Anyone with experience of real estate is familiar with its capriciousness, both as a physical good and a market object. In the eighteenth and nineteenth centuries, the unreliability of harvests, the threat of deterioration from natural disasters, the sheer luck that one piece of land might be more fruitful or hold more resources than another, was an obvious, everyday reality. Today, the rise and fall (and smash) of housing markets is the subject of daily reportage and conversation in many parts of the world. How, then, does this myth of stability endure?
There are several answers to this question, which is itself quite complex. But one is that, put simply, these myths don’t endure – they are instead persistently reinvented. This may seem like a small distinction, but it is in fact quite significant; it replaces axiomatic assumptions with a series of repetitions, reimaginings, and reckonings. How and why this process of reinvention reoccurs is the subject of this article.
Real estate – an assemblage of land, buildings, and the rights that make up private property – is uniquely suited for demonstrating the particular work of memory and historical narration in processes of financialization. Real property has a sort of double life under modern capitalism: it exists simultaneously as a tangible object, productive and material, and as an abstract legal entity, a set of rights materialized in contracts and registries and deeds and mortgages. This double life has long attracted the interventions of people and institutions that see opportunities for profit in the gap between secure property and property securitized. Years before he wrecked the French economy with his scheme to colonize and monetize the Mississippi territories, notorious gambler and financier John Law captured the allure of financialized land in his 1705 pitch for a land mint, where he contended that “land conveyed by paper” loses nothing of its natural qualities, but rather, because it “serves the uses of money and produces at the same time,” it “will receive an additional value from its being applied to the uses of money.”  The obvious, ‘real’ productivity of land makes the productivity of notes (or securities) based on it equally obvious and real.
European countries were host to a plethora of such proposals, schemes, and experiments in the eighteenth and nineteenth centuries. Visions of paper instruments that represented land’s credit but which – unlike land itself – could circulate quickly through the economy, moving from hand to hand, travelled across borders thanks to intense international discussion on the problem of property. (A problem rendered urgent and contentious due to linked processes of democratization, industrialization, and imperialism.) The 18th-century Handfesten of the German city-state of Bremen, for example, inspired the cédule in France (a self-mortgage briefly in existence between 1795 and 1798) and then informed the land registry and transaction regime known as the Torrens System, which regulated the status and movement of property in many parts of the French and British empires. Slightly different but related were the modern covered bonds – obligations foncières in France and pfandbriefe in German territories – instituted at national scales from the 1850s, turning pools of mortgage debt into transferable securities and creating exponential growth in financial markets – a role they continue to play. This was particularly the case in France, where mortgage bonds were often issued with lottery chances attached, bringing hundreds of thousands of novice investors to the market. After all, these instruments were familiar: they were land, “folded and placed in a wallet, and passed from hand to hand,” in the words of one observer in 1881. 
All were based on – and persistently re-inscribed – a fantasy of land’s physical and juridical stability. France, one of the world’s most important imperial powers and a country whose modernity-defining revolution invented real property anew at the turn of the 19th century, is an important place to look to see these fantasies in motion. In the nineteenth century, the question of whether and how real estate and instruments based on its value should circulate was subject to fierce debates among politicians, economists, and jurists, as well as property owners and entrepreneurs. Broadly speaking, one side of this contest over what was called ‘mobilization’ advocated a more commercial treatment of real estate, with land and buildings “in a constant state of readiness to be sold and liquidated,” to use the words of the inventor of the self-mortgage.  Their goal was to resolve the absurd irony that the ‘realest’ and ‘truest’ of values was in fact, thanks to bad laws, dead value, locked in fields and buildings and mortgages buried in the back of lawyers’ desks. (There are striking echoes here in the ‘dead capital’ of the poor after which Hernando de Soto’s neoliberal devotional The Mystery of Capital (2007) thirsts.) Their opponents saw either economic inefficiency or moral disaster in the elimination of boundaries between real property and commerce, with family farms spread out on the floor of the stock exchange and the permanence of the nation’s land unravelled by the fluctuating world of finance.
This problem of mobilization reached a crisis point about once a generation, when the terms and projects of earlier discussions were replayed practically verbatim and without resolution. After the revolution, which invented an infamous land-backed currency known as the assignat, it was an urban real estate bubble in the 1820s that led to new banking ventures and public debate; then the revolution of 1848, which came close to introducing its own land-based currency and created a new national mortgage bank; and then a period of dramatic decline in rural land values in the 1880s that led to a serious (though inconclusive) effort to reconstruct the country’s cadastre. But the intensification of imperial expansion provided some of the most significant, ongoing opportunities for theorization and experimentation, and was integral to how modes of extracting value from real property were understood.
In their overseas territories, French policymakers took the opportunity to create property regimes that served their acquisitive ambitions. In Algeria, for instance, existing practices of private property ownership were pointedly ignored and property-holding interpreted as collective or public – a slippage that rendered it suitable for enclosure and transfer to colonists. In Tunisia, property was imagined as a blank slate. “We have particularly favourable conditions here,” a parliamentary sub-committee for property matters enthused, “insofar as there is no pre-existing legislation deeply embedded in the mores and social order of the inhabitants to present a serious impediment to our reforms.”  These reforms were a new real estate code, applied in 1885 and modelled on the Torrens system. With the ultimate priority of “encouraging the circulation of real estate,” the code did away with portions of French property law that had long frustrated those who favoured more intensive commercialization and financialization in the metropole. The mobilization that remained elusive in France seemed a necessity in colonies and protectorates, where so far as officials were concerned real estate constituted the chief resource of the people and its security and liquidity was a precondition of attracting foreign capital.
The project of transforming fixed land into a circulating value in the colonies crystallizes the contested reinvention of the solidity and permanence of real property upon which schemes of financialization depended. In the act of disembedding at work in the Tunisian reforms (legislators explained that real estate subject to new registration procedures would undergo “a liquidation of its past”) we see competing histories of this permanence. Property here was imagined as fixed and stable, but inappropriately so: it was stuck fast in obscure customs, illegible traditions, an earlier time of development in need of revolution. This was not, in fact, so far from the imagined ‘before’ of those in favour of financialization in the continental context, who at each revival of debate lambasted the civil code’s deliberate areas of opacity, its inability to accommodate property’s function in modern economies by increasing its transparency and transfer. For this side of the debate, the success of mobilization in the imperial setting – where it was destined, surely, to transform wastes into orchards – was an argument in favour of its further development in the metropole. Opponents, however, had long associated mobilization with the blind extraction of empire, wherein real property figured as nothing but a financial asset, shorn of moral and political attributes. Perhaps it was true, they conceded, that property rights and boundaries were perfectly transparent in neither the French countryside nor the imperial territories; at home in France, however, that invisibility could be taken as evidence of a civilized capacity for self-organization among self-owning individuals, something the enhanced circulation of real estate values would erode rather than develop.
Financializing real estate involves navigating a complex narrative landscape in which real property is imagined as the ultimate source and store of value even as modes of loosening and liquidating that value are explored. The imperial endeavour gave important practical experience of the ambiguities of this extractive process. This history is not only deeper than narratives of contemporary financial innovation and crisis indicate; it is also far more uneven. Indeed, it is a cyclical history of abstraction and materialization, with each round of financial experimentation re-establishing the economic bona fides of ‘real’ property and effacing earlier reckonings with real estate’s instability. The repeated re-instantiations of these imaginaries are dictated in important ways by the material nature of real property itself, which allows it to figure as a place, a thing, even a time, of obvious, natural, and reliable productivity – an alluring myth of stability to counter the unpredictable, shifting world of commerce and finance.
The democratization of real estate ownership in the twentieth century – or, more accurately, the democratization of real estate debt – has reinforced the myth of real property’s stability. Remarkably, it lost none of its potency in the years since the 2008 crisis, when, for a time, the obscure terminology and institutions of real estate finance were transformed into everyday topics of discussion, and the dissolution of homes and businesses into tranches of asset-backed paper and global pools of debt became a painful, perplexing education in the unreality of real estate. (Of course, it was also an education in the ability for property relations to constrain and embed their agents.)
Today, this myth features prominently in the discourses of both advocates and opponents of new configurations of real estate’s financialization. Debates over issues such as the spread of Airbnb or the movement of foreign capital into local housing markets, for example, see modern-day ‘mobilizers’ supporting the ability for capital to move fluidly in and out of real property, while critics frame their opposition in terms of defending the local and the authentic – ‘real’ owners and users of space – whose embeddedness is endangered. Yet if we recognize that the durability and permanence of real property under capitalism relies on the churning of dispossession, the limitations of arguments founded (however implicitly) on a nostalgic model of ownership are obvious. Without a revolutionary transformation in the place of real property in our current economic regime – a transformation in systems of state-backed pension and healthcare systems, for example, that would diminish the economic, and perhaps the emotional, significance of real estate – we will remain hostage to a cycle of repetitive abstractions.
 Antoin E. Murphy (trans. and ed.), John Law’s ‘Essay on a Land Bank’ (Dublin: Aeon Pub., 1994), 66-7.
 Alexis Bailleux de Marisy, “Les Nouvelles sociétés foncières. Mœurs Financières de la France, IV,” Revue des deux mondes, November 15, 1881, 432-52, 444.
 Martin-Philippe Mengin, Nouveau plan d’hypothèque (Paris: Imprimerie des Amis Réunis, n.d. ), 56.
 M. Pontois, ‘Projet de loi sur la constitution de la propriété foncière en Tunisie,’ Revue algérienne, tunisienne et marocaine de législation et de jurisprudence t.1 (1885), pp.121-145, 122.
Alexia Yates received her PhD from the University of Chicago and is a Lecturer in Modern History at the University of Manchester, where she researches the history of economic and urban life in modern Europe. Her first book is Selling Paris: Property and Commercial Culture in the Fin-de-siècle Capital (Cambridge: Harvard University Press, 2015). She tweets @alexia_yates
Image Credit: Image of the real estate hall of the Grands Magasins Dufayel, Paris, in 1903. Source: Bibliothèque Historique de la Ville de Paris