Economics 101

The last of the free market

The streets of Budapest are teaming with homeless people. All of them at varying stages of disintegration. All this despite many draconian efforts by the city administration and the national government, who have gone as far as enacting an amendment to the substitute Constitution, effectively outlawing homelessness. But while legislatively everything was done against homelessness, at the same time maintaining a home has become ever more difficult. The rents and overhead expenses have been rapidly rising in the city.

The government first expropriated the sale of energy into the hands of a sinister and secretive monopoly, then proceeded to engage in shameless profiteering in the sale of natural gas, the main fuel used by most people in the city. To add insult to injury, the import of natural gas is arranged from a single source, the Russian state company Gasprom, via a multi-year contract whose content and terms are secret. Nobody knows how much Hungary is paying for natural gas; we only know that in Europe almost everybody pays substantially less than we Hungarians do. The retail price of gas is so high and all substitution is difficut. As a result, annually two hundred people freeze to death in their own homes. Mostly the elderly, who are presented with the choice of paying – actually not paying – for food, shelter, medicine, or heating. Theose who take the ”un-practical” option of falling into arrears on their utility bills are sooner or later evicted from their homes. They drift around after that at friends’ couches, basements and corners of stairwells, but inevitably they are forced to join the ranks of the homeless. Many of them are sleeping on the streets at night and beg for food in the daytime.

(Copyright Kosa Krisztian)

Now here comes the enterpreneurial invention: Economics 101.

Some years ago, some enterprising people regarded the burgeoning masses of the homeless as a class of market, with purchasing power; and they decided to capitalize on them. Our misery enterpreneurs launched a weekly magazine called ”Fedél nélkül”, meaning, “Without a Roof”. Beneath the name of the ”magazine” is written the explanation how we, the buying public, are supposed to purchase and relate to the whole enterprise: “For each copy our vendor has paid 100 HUF. The amount you pay for it is a donation, therefore, our paper does not have a definite price.”  Actually, the homeless person himself, or herself, is paying to purchase the magazine. Depending on their ability to pay cash  and on their judgement on being able to recover the expense, they can buy any number of copies for 100 HUF each. That is their ”investment.” For the sake of comparison, a half kilo or a pound of semi-decent loaf of bread costs about 500 HUF. Now the homeless person goes to the street and begins to offer their magazine for sale to the public. There is no price printed on the paper, the member of the public can pay whatever amount they want to. The vendor, in this case the homeless, can freely decide if they want to sell at the price that is offered. You can imagine the working of the free market in this case; hereby the buyer can choose the purchase price and the homeless can choose freely to have something to eat, or wait for a better, but later prospect. After all, not having eaten for two days, another hour more or less doesn’t matter much.

The content is varied as far as quality of writing is concerned, but that is immaterial, because the buyers often refuse the paper, preferring only to make a donation. That is why the dozen or less copies handled in the unwashed hands of the seller soon become worn and crumpled and are losing their attraction (if they had any in the first place), and the likelihood of finding buyers. Thus the investment in them is lost. But by the time this has become obvious, the new issue is available and the homeless person buys the new issue with new hopes and enterpreneurial ambition, reinvesting the meager returns on the previous issue, fired by the pride and desire to participate in the only free market that is still left in the Hungarian media.

Sandor Kerekes

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