An economy is like a life-form. When it is deprived of the necessary means to sustain itself fully, it first attempts to degrade its performance gracefully. After this it has no choice but to amputate its less vital functions. Nowhere is this more manifest than in a family striving to exist on State welfare. [PDF]
We are told by government that if we cannot manage on what we are given, we should "tighten our belts". But we have already tightened our belt as far as we can. We cannot reduce the mandatory invariants or the fixed essentials. These are all pre-determined by statute and corporate decree. They are beyond our control. The minimum costs of our sons' school uniforms and other items prescribed by their schools as being 'necessary' are also beyond our control. We cannot reduce these.
In a growth economy, one can expand one's resources to meet demand. In a recession, one can rightly be expected to reverse this process. The question is: how far?
The human body can survive under extreme conditions of deprivation. When starved of food, the body becomes weak and the mind lethargic. If the deprivation continues long enough, the person will die. But if food and water are restored in time, the body and mind recover to their former strength and alertness. If to deprivation we add the cold of a harsh winter, the body becomes unable to maintain its operating temperature. It has to make a drastic decision. To preserve the brain, the heart and the other vital organs, it must sacrifice the limbs. It conserves heat by withdrawing circulation from them altogether. They die so that the rest of the body may live.
Without limbs, the person can still live and think, but he can no longer move himself around independently. His complete mobility function has been amputated. He therefore can no longer survive within the natural world or human society without external help. Our family and home is now suffering the harsh cold of unemployment. The belt has now been tightened too far already. And we still cannot make ends meet. We have no choice but to amputate one or more of our home's vital functions.
In a large economic unit like a company, the active elements are small compared with the size of the whole. Expansion and contraction are relatively smooth processes. If you get rid of a proportion of the work-force, machinery or vehicles, you reduce the overall size and capacity of the business. However, this does not cause any of its vital business functions to disappear completely.
On the other hand, in a small economic unit like a family, the major active elements are large in proportion to the whole. Contracting a family's accommodation, transport facilities, household aids or the tools of one's trade in order to meet an inadequate budget means getting rid of the one and only house, the one and only car, the one and only washing machine, the one and only telephone.
The effect is not merely a reduction, but a complete amputation of one or more of our domestic economy's essential functions. Our household then becomes no longer able to perform as a complete system. When the recession ends, its potential 'breadwinner' will no longer be equipped to take the opportunities which a revitalised market presents. In other words, if I cannot manage to hang onto my car and my telephone, I will lose the potential for doing any work which may become available. Having had to sell my vital means in a buyers market during the recession, I will not have the capital to re-acquire them from a seller's market when the recession ends.
As I think the figures in my budget for 1993-94 adequately show, the current Spartan level of State welfare is not even high enough to sustain the biology of a socially and economically inactive human existence. Certainly, it has no chance of maintaining even in a dormant state the additional personal transport, communications and trade-specific functions vital to servicing a new outbreak of work at the end of the recession. The necessary mechanisms for carrying out such work will no longer be in place: they will have passed away forever.
The sole culprit for our impossible situation is the Draconian level of State welfare. As it stands, this has not the slightest hope of maintaining our family in an economically operational state. It has forced us to degrade. It has forced us to amputate functionality. We only hope it does not force us to sell up and disband. The only source of income which would be large enough to sustain us in our present form is the capital 'market value' of our house. However, this would only last us for 3 to 4 years. Then it would be all gone forever. Conveyancing and other costs, associated with moving to a smaller house, would eliminate any gain from price difference.
When our children leave home, our State welfare will be reduced to the point at which we will be unable to meet the running costs of our present home. We are therefore faced with the spectre of having to sell the house anyway and move into council accommodation. But this would mean that, even if by this time work became available again, I would be no longer equipped to do it.
At our present level of existence, life retains no pleasure or purpose. All one can do is survive in the hope of better times to come. One can be said to be fed, clothed, washed and sheltered. But nothing more. We are like zoo animals trapped in an economic cage.
Although belt-tightening can reduce the cost of sustaining a dormant economic unit, there is a threshold at which this process ceases merely to contract capacity and starts to amputate functionality. This renders the unit productively inoperable. The current level of State welfare leaves my family economy below that critical threshold.
You cannot place a family economy, as if in cryogenic suspension, expecting it to be able to expedite an automatic demand-driven switch-on the next time you decide that you have a need for its breadwinners' skills. Human beings are more than machines.