The Free Exchange blog has a great post today on why it is better and more accurate to think of housing as a consumption good and not an investment good. I can't add anything to that specific argument, for those of you that don't regularly read the Economist I strongly urge you to take the time to read the article.
I do think that this specific instance points to the the more general idea that culture can influence market structure in unpredictable ways. This is a major reason why I disagree with those that like to think of free markets as some sort of exogenous force. It's not, it's what is technically called a regime (or perhaps an institutions, depends on exactly what set of ideas you want to describe as the free market) and is a set of constitutive norms. How we regard different sorts of property, such as housing, have real systemic level effects on the functioning of the rest of the market.
This also leads into how different conceptions of property impact the broader market and create differences in what the free market is across different societies. In the US, we think of housing as an investment and something we have some sort of vague natural right to, we don't really think of our use and occupation of it as a form of consumption as readily. This is different in societies that have tax regimes that include implied rent to owner occupied housing, there the conception of property is different and the link to consumption, and the potential ability to use that property as a money making investment, is more explicit because the relation of housing to investment and consumption is conceived differently, so a tax regime is possible that would be impossible in the US. This has real impacts on the broader market. In both cases there is a "free" market but how that market functions is controlled by attitudes in the society to what property is and the role of real estate in that market, these differences in ideas lead to a different set of institutions that together form the regime of the free market. The market is a socially determined institution, not an exogenous force wholly formed by the free efforts of individuals.
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I agree with this. I think there is a lot to be said for the function of the market and I think it describes what people actually want better than political movements can. But it's kind of silly to assume that markets, as aggregations of humans, have some clarity that we, as disaggregated markets, do not.
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