Hungarian Pancake Economics

Today I managed to pass an economics exam at the BOKU here in Vienna. Taking courses within the program ‘Umwelt- und BioRessourcen Management’ this year, it was not an easy task for me to recover mathematics – in German – after so many years (this one was obligatory…). But the basics of economics remain strikingly simple:

We use our skills and possessions to work and earn money with it, a part of this money is used to consume goods from companies and another part is lent by the company from us to invest in growth and innovation; a nice, logical cycle of working and rewarding, buying and lending – as a romantic I would say that companies are there for us, for our wellbeing.

Now the common economic model in our world has become a bit less friendly: it assumes the main task of a household is consumption and we are supposed to do it egoistic, well informed and to always look for the highest benefits. They tell you that nobody is really like that, but then why do we continue to model the world like that? Was it ever a free choice to become an over-consuming and materialistic consumer? With a positive attitude you can still think that companies are there for us, but the balance goes already more in the direction of the company.

Last weekend I had a friend over from Hungary. She is a very strong woman; having lived and worked in The Netherlands for many years, it requires some creativity, flexibility and talent to manage your life in Hungary at a considerable lower income level (the average salary is still not much more than EUR 600). But she did. She now works at a multinational company in IT. She told me that due to the crisis, wages in her team have been frozen for the third year in a row. She also told me that the company invested in a time registration model that requires you to justify every 10 minutes you didn’t touch your keyboard. And when you login or change activities, you have to allocate your time to a specific type of activity, like phone call, contract design, etc. If your lunch break is longer than defined – e.g. because you had a lunch meeting– the time is deducted from your working time and you have a serious system problem to reset the time.

Now I was in shock after hearing all this. This is something like the reverse economic model: people have to work harder and under tougher conditions, underperformers are easily picked out and when a whole group of workers is doing worse than a sister company in e.g. India, the company moves its activities. In the meantime, employees get no salary increase whereas the annual (consumer price index) inflation rate in Hungary has been between 4 and 5% since 2008. This is the model where we are there for the company: where we supply our services at marginal costs in order to allow companies to eat and grow like a consumer.

But my friend doesn’t complain. Instead, she brought me several quality, local foods from Hungary: the best paprika powder for ‘Gulyasleves’, plum jam and local Plum Palinka (ok, and a few Turo Rudi’s from dairy market leader Friesland Foods). Our children, who have lived in Hungary before, asked her to make Hungarian pancakes – the so called ‘Palacsinta’:

The batter is actually not that different from Dutch pancakes: meal, eggs, milk, water and a bit of salt. But 2 things are important: to use soda water instead of still water and to make the batter much thinner than for e.g. Dutch pancakes. The 1^st pancake she baked with a little oil, but all the others without. And, most important, you have to roll the batter in the pan until the bottom is fully covered with a very thin layer; that way the pancake needs very little time to be turned around and that explains why you can bake without oil or butter. After 15 minutes, we had a big pile of pancakes. With some sugar or jam they tasted like the real Hungarian palacsinta, super delicious!

I guess this meal has cost around EUR 1,50 for 5 persons in total. A ‘limited resources-low cost’ menu. And with maximum joy. Hungarian pancake economics: a recipe for crisis economics?