Malta’s current political crisis has many signs of a Faustian pact: A deal with the proverbial devil which has to be paid back. Figures who seemed almighty are now sinking in a Titanic of Government’s own making. Omerta’ is imploding. Hopefully this will ultimately result in justice for Daphne Caruana Galizia and for Maltese society.

Amid the corruption, the deficit in governance and the networks of power, a question which has been intriguing me regards Labour’s support in electoral terms.

I believe that are many reasons for this, but in this article I wish to focus one of Labour’s electoral strategies: Winning support through the exploitation of land. In short, the Joseph Muscat government has been encouraging voters across the board to participate in the exploitation of land through seductive planning policies.

To understand this, we must look at the political economy of land development in Malta’s recent political history.

Land developers have been benefiting from economic policies of successive governments in Malta. For example, in my 1998 sociological dissertation entitled ‘State/Power: Hiltonopoly’ I analysed the Portomaso development controversy.

I explained the ‘symbiotic relationship’ through which the State and land developers depend on each other through the exploitation of land: Developers provide economic growth, whilst the State supports this economic model.

But the political ramifications of this economic model go beyond the networks of power between the state and big business.

If we go back in time, we can observe that different administrations in Malta extended development boundaries for various reasons, ranging from industrial and touristic development to housing. Closer to our times, the Nationalist administration opened up space for development through its 2006 rationalization exercise.

Here, more people could capitalize from property development. At the same time Gonzi’s government found opposition from two radically different sectors. Environmentalists who were opposing overdevelopment, and constituents (including developers) who wanted to benefit from the economic pie by having their land included in the rationalization exercise. 

This opened a window of political opportunity for Labour. On the one hand, it cried foul of the PN’s environmental policies, but on the other hand, its ‘pro-business’ mantra promised a share of the economic pie both to big business and constituent voters.

Hence, once in Government, Labour enabled even more types of development on agricultural land and in urban areas.  The Planning Authority facilitated both big and small development projects which together have cumulative impacts on Malta’s urban and rural landscapes. Hyper-development became the order of the day.

The symbiotic relationship between the State and land developers also includes smaller developers in addition to big ones: People who are experiencing upward mobility through Labour’s planning and economic polices. The construction cake is therefore not only made up of big business, but also comprises small contractors, working class and middle-class families who can build extra storeys to sell or rent out, and owners of agricultural land who can develop it for speculative purposes.  Dependency on the construction sector is therefore being widened out across the social spectrum.  Malta’s social class structure is facilitating those who own property which can be developed or capitalized.

Within this context, individuals endowed with such property can make choices on how use it.  This takes us to the political economy of John Roemer, who had proposed a social class analysis based on uneven distribution of resources among social actors. His perspective looks at property relations and the ‘exchanges between differently endowed individuals in a competitive setting’.  

Which takes me to interesting data recently published by the Central Bank of Malta. In its third Household Finance and Consumption Survey (HFCS), it emerged that during 2016, 45.6% of households managed to save part of their gross households’ income, up from 36.6% in 2013, and 23.7% in 2010.

At the same time, the Central Bank’s Quarterly Review reports rising inequality between the rich and poor between 2010 and 2016, the latter being the most recent year under analysis. It describes “rising inequality” among those within the lower half of Malta’s wealth distribution since 2010, but it also finds decreasing inequality among the upper half of the country’s wealth distribution.

The study shows that household liabilities have more than doubled, mainly due to increased availability of housing loans. Real assets are more equally distributed than financial assets, partly due to the prevalence of homeownership in Malta, which is relatively high at around 80 per cent.  However, low-income households may have difficulties to acquire real assets, and pensioners are experiencing challenges regarding the real value of their pensions.

The data shows that households’ type of financial resources and access to loans “plays a crucial role in explaining its position in the wealth distribution .... Household income and the incidence of having received inheritance or gifts are among the most important determining factors of a household’s position in the wealth distribution”.

Most significantly, the Central Bank’s study asserts that households which afford to own their homes with an outstanding mortgage have “a high probability of being in the wealthiest quintiles in the future”.

One can interpret the Central Bank data through Roemer’s analysis of people’s endowment and class relations: The purchase or inheritance of property enables people to generate wealth, and  Labour’s economic and planning policies facilitate such capitalization.

Thus, my hypothesis is that Labour has so far managed to attract significant numbers of voters who benefit from policies that facilitate the capitalization of property. Even though others are not benefitting or disagree with this economic model, their electoral impact so far has been less significant for Labour. I am not saying that this is the one and only reason why Labour is in power, but I believe that it partly explains the numbers.

This leads us to further questions: How sustainable is Labour’s economic model? Are too many people becoming dependent on real estate? What if the demand for such properties decreases, even due to changes in population numbers?  Is this economic model too dependent on electoral cycles? Can we afford to keep pillaging the environment? What is the social impact of such class inequalities? What are the aspirations and political orientations of those who are not part of this economic model? How deeply ingrained is political patronage?

We also need to see if the Labour government will survive the current crisis related to the murder of Daphne Caruana Galizia.  

Such questions and analyses are important to understand the dynamics of power of the Labour government, but also to formulate sustainable, just, clean and impactful alternatives.