The austerity fetishists trying to do to Europe and America what the IMF and World Bank did to its third world victims in the eighties, on behalf of their masters in Wall Street, often compare an economy to a household. This household, they tell us, has lived beyond its means, by maxing out its credit card and getting into debt. What do you do when you get into debt? You pay it off! Stop shopping at Whole Foods and go to Walmart instead. Take the shiny gadgets you don’t need to a pawn shop for a bit of extra cash. Work harder.
Even ignoring the fact that the increased indebtedness of households these days is part of a structural problem rather than a moral one, the basis for the ‘economy is like an indebted household’ analogy has no relation whatsoever to economics. They would have you believe that austerity is a practical measure, where if you sell off your wasteful trinkets you will become solvent once again – all premised on the iron moral principle that Debts Must Be Paid.
This is a load of bollocks.
We want to propose instead that austerity is like a restaurant kitchen, not because we think the analogy is perfect, but because every time a Keynesian economist tries to knock down the household analogy they drone on with “households can’t print money”. Which is hardly a catchy argument to throw at the right wing pub bore. It is possible to have a little more imagination than that. Here is the Leveller’s austerity kitchen analogy, for your pub argument utility belt. Use it carefully.
The restaurant has got itself into debt. We don’t really care how, suffice to say the decisions that led to it were made by the owners and not the staff. The owners like to say “we” are in debt to include the staff, which is interesting, given that when the restaurant was making a tidy profit the previous year there was no “we” when it came to giving themselves a fat pay rise.
But now, for whatever stupid structural reason you’d care to pick, they are in debt.
Even if there isn’t some troll sat there insisting that the ovens and hobs don’t create value through being there – let’s call her Libby Terrian – consider austerity as being like the restaurant saying, “well there is no immediate value being created by the dishwasher, and we already have a porter and a sink, so let’s sell the dishwasher”. As in the machine, not the porter.
So they flog the dishwasher and get some liquidity, and use it to pay off some of their interest-ridden debt. Sadly the value of the dishwasher is not equal to the value of the debt, not even close, and so the debt starts to mount once more; all they’ve done is bought a little time. At the same time, the poor kitchen porter is having to work much harder to keep everything clean – naturally they can’t afford to give him a pay rise to reflect this increase in workload – but he just can’t keep up, because the value of his labour has been reduced by taking the dishwasher out of the microeconomy.
Meanwhile Libby Terrian thinks it would be way better if the chefs just cooked the food at home and brought it in because then the restaurant wouldn’t have to spend money on oven maintenance every few months, but thankfully nobody listens to Libby, because she is mental.
Further problems mount from this, of course. The porter’s increased workload with less ability to do it properly leads to an unfortunate situation several nights a week whereby he can’t produce clean plates quickly enough for the chefs, who end up having to wash plates by themselves. Not only does this affect the quality of their dishes, it also affects general hygiene in the restaurant. The restaurant begins to get a reputation for being dirty.
Of course, the restaurant could totally save a few quid on washing up liquid, except for that damnable Environmental Health Organisation guideline FORCING them to wash their plates – the curse of big government, pushing costs on business like that! Each full sink costs 20 pence worth of washing liquid! Luckily, some nice government who believes in freedom comes in, and removes the requirement to use washing up liquid. That’s 20p a wash saved!
And the place gets filthy quickly. Libby Terrian blames the subsequent dirtiness on big government, for some weird reason that she never quite gets around to explaining satisfactorily.
The debt continues to mount as the efficiency of the kitchen falters from all that dirt, and fewer customers come in because it’s getting a reputation for food poisoning. The management, panicking, even start to listen to Libby’s suggestion that the problem is how much money the porter is charging for his labour. He isn’t even that good, she points out, look at how inefficient he is! His labour is worth less! And the stupid boy is asking for them to hire another porter! Doesn’t he know how businesses work? So the porter’s pay gets cut, and the difference goes on servicing the debt, for debts must be paid. The restaurant’s credit rating is still good, so it’s fine!
But they’re still servicing enormous debts, and they’re running out of things to sell. Libby’s idea to sell the ovens is eventually taken on, but not because, as she wants, food can be prepared in the individual freedom of chefs’ homes – come on, Libby, that’s just insane. Instead, after selling the ovens, they get in new, smaller ovens that are instead leased to them by a business appliance letting company, so that instead of having to fork out for new ones they can just spend a little every month to pay for the lease, no problem!
Let’s be honest, the appliance company is probably German.
But the debt is still not paid because it was never possible to pay it off, even if you sold the kitchen off bit by bit. And even less revenue is coming in. The restaurant is getting bad reviews, not just because of its dirtiness but also because the chefs, who took a pay cut, just don’t care about their work as much as they used to. One of the chefs suffered a breakdown from stress, so he got sacked because obviously what was really going on was that he was just lazy.
And there stands Libby, in the filth and the chaos, on the final shift of a restaurant that will, by next week, have closed completely, insisting that because the chefs didn’t produce the food in their own homes and the restaurant HAD to pay for equipment, the greedy bastards, that therefore austerity never happened. If only people had listened to me, Libby thinks, avoiding the difficult subject of where she was going to steal her food from now.
You can believe in democratic self governance or you can believe in debt fetishism, but you cannot believe in both. Taking bullshit fairytales from a Tea Partier in a suit and couching it in mathematical-sounding jargon is tantamount to declaring that you’re really not a big fan of sovereign democracy.