Austerity and Prosperity

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

Charles Dickens’ Mr Micawber

On the occasion of the 200^th anniversary of the birth of Charles Dickens we have received from a reader, whose views are not our own, a letter of somewhat polemic intent, that may, nonetheless, serve to fuel debate on the economic crisis.

Sirs

These indeed are Hard Times that we face, but pray let us not wallow in the trough of despair. For if were but to gird our lions (sic) and have the courage and moral fibre to embrace the radical changes that circumstances by their nature dictate, we may find there are yet reasons for Great Expectations.

In this respect, I am encouraged that Spain’s finance minister, the Right Honourable Mr. Cristóbal Montoro, has taken a step in the right direction by proposing that prodigal public sector managers who breach budget caps should be visited by the wraith of things to come and bear the wrath of the penal code. But why stop there dear sir? Why not bring back Victorian-style debtors’ jails for all and sundry who transgress the golden rule of fiscal discipline. That would help solve, but only on an interim basis I must confess, some of the issues facing the Spanish economy. First of all, it would allow us to surmount the problem of the growing ranks of those made homeless by bank foreclosures, since this would require a massive construction drive to build the jails in which to house them, thus helping to resuscitate the moribund real estate sector.

Of course this would involve redirecting government revenues toward reinforcing our law-enforcement resources, which could be opened to the private sector via public tender, hence providing a welcome boost to the security industry. On the other hand, the upkeep of those so imprisoned should rest upon their families. This could be legislated for by a sensible overhaul of the dysfunctional Dependency Law.

One other way of reviving the construction sector would be to knock down the architectural monstrosities that are a blight upon Spain’s charming Mediterranean coastline, restoring the natural beauty for which it was once renowned. Imagine Benidorm once more as a fishing village of some 5,000 inhabitants attending to the needs of well-heeled tourist in a sort of historical theme park.

It should be obvious to any right-thinking person that our former prime minister José Luis Rodríguez Zapatero, is a reincarnation of the ever optimistic, but misguided, Mr Micawber; a man blinded by his innate penchant for casting money to the wind to conjure up the chimera of social welfare. Hence, Mr Montoro’s insightful Oliver Hardy-esque recrimination of the ill-starred Stan Laurel (for whom we must read Mr Bean): “Dat's another fine mesh you've got us into.” But pray forgive my digressional whimsy, for surely these are matters at hand of the most serious import.

Thus on the occasion of the great man’s birth I would like to remind you what his contemporary and fellow Londoner Karl Marx said of him. In an article published in 1854 in the New York Daily Tribune, the author of Das Kapital averred that Dickens belonged to that “splendid brotherhood of fiction writers in England, whose graphic and eloquent pages have issued to the world more political and social truths than have been uttered by all the professional politicians, publicists and moralists put together.”

For if you were to allow me to digress further, there is a lesson to be learned from the fact that Marx died poor, whereas Dickens, a comic genius who profited from conjuring up a cast of two-dimensional, but larger-than-life characters that have entered our cultural acquis, but who, also haunted by the personal misery and affront wrought by his father’s monetary recklessness, departed this mortal coil leaving in his folly immense riches to be squabbled over and squandered by his fetter of prodigal offspring on whom he wantonly and foolishly doted.

But not wishing to seem overly prolix, neither Dickens nor Marx could foresee that, with what I confess was in enlightened self interest and not without – I hasten to add – a certain spirit of charity toward those less fortunate than ourselves, we began to build some seventy years ago (somewhat later in Spain for reasons best left unsaid) what has become to be known as the welfare state. At the time, it made sense. We had a vibrant manufacturing industry with a plentiful supply of cheap domestic labour and cheap raw materials from the Third World. Hence it was logical for us to set up a universal healthcare system to ensure a healthy pool of manpower to meet the needs of manufacturing. As the level of skills demanded of labour increased, it also was in order to introduce a universal public education system. The workers also needed somewhere to live, hence affordable public housing. But none of these initiatives resolved the problem of how to expand our markets. Workers did not make enough to buy the products they laboured to produce. Voila. Increase wages and introduce hire purchasing in order to allow them to buy what they themselves churned out with the sweat of their brows. The state pension system also ensured the perpetuation of purchasing power to the grave. Impeccable logic. And then progression toward the promise of joining the asset-owning class by becoming homeowners helped our banking system grow. And for bubbles to form, from which we could profit by selling into the bubble and subsequently buying up assets at post-bubble deflated prices. The invisible hand, of course, must always remain invisible.

But the zeitgeist has changed. These are the worst of times, but also the best of times in that they present us with an opportunity to rectify the folly of our now self-evident hubris. Globalization, as you know, has irreversibly unravelled the economic logic of the West remaining a manufacturing centre unless wages fall sufficiently to make us competitive again with the accompanying spectre of social unrest this would throw up before people come to their senses and understand the futility of protest in the face of the ineluctable call of true progress. But I fear this will not come to pass to the extent that is required. The jobs are for the better educated, less demanding youth in Asia and it is time for us here in the West to contemplate the option of euthanasia, more on which I shall expostulate later.

Having administered, no without a certain degree of sorrow, the last rites to our manufacturing-based consumer society in most of the West and most certainly in Spain, we have at last had the foresight to go back to the millennial principle that we do not need to make anything to make money – indeed, all you need is money to make money as witnessed by the European Central Bank, in the acme of its enlightenment, distributing European taxpayers money with canny largesse at a cost of next to nothing in order for these funds to be reinvested by the banks in short-term, liquid, low-risk assets that yield higher rates of interest, hence obviating the now superannuated practice of lending to the so-called real economy, but helping simultaneously to save the banks and, most of all, the well-earned bonuses of our judicious, loyal, hardworking but much put upon bankers.

The smart money, if I might dare to use such a modern, vulgar and distasteful term, is heading towards the Dark Continent. I understand that far-thinking private equity funds are buying up swathes of cheap land, to be rented out later, in countries such as Zambia where plentiful supplies of cheap labour are still available, now that food, like housing, has rightly become not so much a bare necessity, but rather another commodity to be traded.

As a consequence, we now face the dilemma of, dare I may term it thus, the growing lumpen of ninis (made all the more dangerous by unproductive education and the forlorn, forsaken, discredited and inarticulate revolutionary ideas thus emanating from them like miasmas) without jobs, and hence without money, alongside old people with pensions so increasingly meagre that they are no longer capable of sustaining a mass consumer society. Even at the best of circumstances, the pension system was at the time a well-intentioned, pyramid scheme of pharaonic pretension sanctioned unwittingly by a state then governed by a conspiracy of the hapless, but waiting to collapse under the crush of unemployed youth and the swelling ranks of the elderly and the infirm. And why start off your adult life by running up debts to obtain a university education when there are no jobs out there, and no means of servicing those debts. Better a plumber be, young man.

Locked as Spain now is in a syzygy of mounting debt, atrocious unemployment and sclerotic economic activity, it should be patently obvious that the only way out of this vicious alignment is to forget about labour market reform and instead to dismantle the monumental folly that the welfare state has now come to represent in order to free up the funds required for much-needed investment elsewhere and relieve the iniquitous burden of taxes on our productive resources. But how are we go about this?

The solution has to lie in some form of global demographic rightsizing, or, call it, if you wish, population deleveraging, of which Spain also will play is due part. Another world war would go along way towards helping to reduce the mass of consumers now largely surplus to our needs, and provide a boost to the arms industry, whilst helping to reverse climate change. The passing of the bipolar Cold Peace contretemps and increasing challenges to American hegemony point to a fractious future more fertile for the flourishing of global conflict. Meanwhile, errant endeavours to create a united Europe, the theatre of the two great wars, seem most inspiringly to be floundering.

But as a God-fearing man who abhors gore, I have never been an apostle of culling the feral ranks of the unknown and now largely unwanted consumer via a Capitalist Jihad. No. I believe we need to find more humane solutions to our problems on the microeconomic level. Whilst labor remains an essential input to the productive process, it makes sense for attempted suicide (the most infelicitous form of failure) to form a core part of our penal code (as is still the case, I believe, in India) as an appropriate and measured response to what is after all a wanton act of economic vandalism. But we in Spain and the rest of the West, in a different stage of our development, must introduce legislation that enshrines Government Assisted Suicide (GAS) in our statutes. One possibility would be to offer those who - after careful due consideration and counselling, incline themselves towards departure rather than suffer a Sisyphean existence of unrelenting wretchedness - a single lethal dose of the finest heroin from Afghanistan (at the state’s expense of course) administered in clinical and legally-approved fashion in a warm, well-lit room with a view, holding out the abiding promise of sublime and immemorable delectation.

Another possibility could be to offer, for example, free i-pods and other such engaging, deluxe gewgaws (the patents on which the West shall retain, and for which a market needs to be developed) to men who acquiesce to volitional gelding. Or quite simply provide appropriate incentives for our young men and women to form, let us say, a Brotherhood of Onanistic Practitioners (BOP), henceforth to be known as boppers. Sufficient adherents to such worthy causes will ensure our population is restored to sustainable levels. Note, thus, Gaia-worshippers that there are a number of humanitarian alternatives at our disposal without having to resort to the final solution to climate change.

Meanwhile, in this transition that we have in our wisdom and in the ripeness of time embarked upon, I believe it is important for the health of our society to uphold the values enshrined in our system of constitutional democracy. The ballot box provides an essential escape valve for potential social unrest, whilst we rest assured that our elected leaders will only challenge the sovereignty of the market at their own peril. Thereafter, we can see what is to be done with the economically unviable and egregious clamour for universal human equity from those blasphemous heretics who dare to naysay the divine social order decreed from above.

However, in matters of such sensitive social import it always behoves us to err, as far as is possible, on the side of elliptical instruction so that subject forces by the very inertia of their own apparent nature conjugate themselves to achieve the desired but ever unstated goal. But if you believe the structural reforms I have proposed fall short of the insidious intent required to purge the Malthusian side-effects unleashed by the coming Great New Dystopia, I refer you to my fellow Dean, Jonathan Swift’s, somewhat (in my ever so humble opinion as a vegetarian) nauseous Modest Proposal for Preventing the Children of Poor People in Ireland (equally applicable to Spain) From Being a Burden on Their Parents or Country, and for Making Them Beneficial to the Publick, from which I quote below:

“I have been assured by a very knowing American of my acquaintance in London, that a young healthy child well nursed is at a year old a most delicious, nourishing, and wholesome food, whether stewed, roasted, baked, or boiled ...”

Perhaps James Joyce had his fellow Irishman in mind when he wrote that Ireland, in its latter day semblance as a standard bearer of the Profligacy of the PIGS, remains an “old sow that eats her own farrow.”

Austerity gentlemen. Austerity is the road to Prosperity, for we do give a Dickens what we bestow upon Posterity. Ever Onwards and Upwards.

Sincerely,

The Right Reverend Uriah Sutedius Cocksure-Rambler, Dean of Bumpff and Erie.