Economic prudence for economic depression

Huzaima Bukhari

“Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body—the producers and consumers themselves”—Herbert Hoover

Over a span of thirty years a well-to-do family was reduced from riches to rags because of an elder’s tendency to obtain heavy loans from banks by placing his assets as collateral for their expenditure on frivolous things like weddings and travels. These bouts of spending attracted the awe of their acquaintances who enthusiastically enjoyed their lavish parties while other members of their clan tried to establish matrimonial ties for their own sons and daughters. Their lifestyle became the talk of the town with anyone who was someone desiring more proximity so as to exploit their influence. During this period, little attention was given to checking expenses, increasing income or developing available resources which were gradually diminishing in value because of mismanagement and lack of care. The end result seemed quite obvious. The family was doomed for bankruptcy as it is inevitable when liabilities start mounting and income starts decreasing and this is exactly what would have happened had it not been for the timely intervention of the twins, a son and daughter.

The youngest of six siblings, they had the opportunity of good education and despite opposition from the parents who wanted them to study business and finance, the boy obtained a degree in visual arts, media and films while the daughter preferred studying philosophy. Although the two did not have much say in family life they could perceive with anxiety, how imprudence of their elders was rapidly leading them towards a dark future. While their elders were flaunting their wealth and deeply engaged in merry-making, the twins began to develop a distaste for all this fanfare. They would silently retire to their rooms on returning from their universities, keep themselves busy in their academic pursuits and spent more time in the company of their teachers and mentors instead of indulging in the luxurious lifestyle of their family. For this kind of behavior they were usually the target of derision as they refused to see eye to eye with their elders. Almost outcastes, instead of showing resentment, they continued to remain steadfast with their own convictions.

As anticipated, the stream of artificial income and wealth became erratic with occasional periods of scarcity that eventually culminated into defaults attracting legal consequences and causing the loan sharks to circle around the family tightening their hold over them. The bubble had burst and unfortunately it was too late in the day to rescue themselves out of this quagmire. Assets were sold to pay off interest on debts, employees were laid off, everyday expenses became too difficult to meet and as expected, hardship began to invoke rifts between family members with one blaming the other for their financial woes. Except for the family house and some unattended agricultural land, valuables were pawned to meet basic needs. As luck would have it, illness seeped in with the father hit by a stroke and the mother diagnosed with a terminal disease. The older sons tried to escape their distress by resorting to alcoholism while the daughters just kept nagging their parents for their disability in maintaining them.

Just when all hope was lost, the twins who were always the victims of their family’s sarcasm, took upon themselves the resolve to turn around their fortune but for that they needed to take some serious decisions. For them, their education and acquired wisdom were the only redeeming factors which they intended to utilize fully. They urgently had to take measures for putting their family’s life back on track and to restore their former glory without its worthless accompaniments. So for starters they moved from their huge family mansion leasing it out to earn some income, to a smaller rented house. This helped them to cut down heavy expenses for maintenance of a larger home. Meanwhile, the sister began her teaching career and the brother joined a media house for additional income sources.

With expenses cut down to the minimum, no extravagant spending and a small but steady stream of income, the twins were able to focus more on making the best of whatever assets were left with them. A visit to their earlier ignored agricultural land revealed its true potential and they were ecstatic to learn that with some expert advice, they could mint sufficient income from this source. They managed to convince their elder brothers to oversee farming, who reluctantly at first but eagerly later, started taking interest when the land began to bear fruits. Using their talents and honed skills, displaying their sense of economic prudence and sensibility, discarding a pretentious life of vulgar ostentation and instilling an attitude based on reality, the twins had successfully turned around the fortunes of their family.

The story of Pakistan is much the same. The country is presently caught in a vicious economic depression, thanks to the imprudent actions of its politico-civil-judicial-military complex that has not only entwined the country in a vicious debt trap, has played havoc with the country’s physical resources but above all, has stripped the nation of the character that is vital for recovering from any setback. As a nation we are unwilling to sacrifice our petty desires of luxurious lives, of imported brands, of imported vehicles, without simultaneously attempting to revive our sick industries or making the best of available resources. Patriotism seems to have taken a back seat with the educated finding solace in distant lands leaving the nation’s ship in stormy waters of crisis upon crisis. Political in-fights and mud-slinging is given preference over efforts to redress the problems faced by people living in sub-human conditions.

We are so overwhelmed by our woes that instead of ameliorating our sufferings we prefer to indulge in learned helplessness in the hope that a messiah would rid us of all ailments. The self-help syndrome is no where visible, self-sacrifice is a lost theory and reliance on foreign aid knows no limits what to talk of economic prudence. White elephants in the form of public sector enterprises are devouring our meager resources, nation-building is at the mercy of self-centered religious leaders, educational institutions are merely churning out degree holders without the necessary application skills, imports are increasing at the expense of exports while the public is dissuaded by sly bureaucrats from pursuing what it is supposed to—economic growth with economic prudence to surmount the economic depression, perhaps the only path to attaining  self-actualization and economic stability.

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The writer, lawyer and author, is an Adjunct Faculty at Lahore University of Management Sciences (LUMS)