Problem

Subsistence approach to capital resources


Experimental visualization of narrower problems
Other Names:
Subsistence economic orientation
Subsistence poverty economy
Prevalence of subsistence earning
Subsistence level profits
Crippling subsistence planning
Reluctant investment of capital resources
Low capital flexibility
Debilitating economic preoccupations
Nature:
Every community is confronted with the necessity of operating on a credit economy with the means of financing both immediate and long-range enterprises; however, most of the world's population has no consistent source of income but is largely dependent upon the high risk factors of under-developed agriculture or small, family operated, business ventures. In particular, Third World village families live on a subsistence economy. Most of their food is raised or gathered near their homes, any money must be spent in town for necessities. Current capital seldom goes for farm equipment, tools or other hardware, but rather is taken up by the costs of food, education, transportation and medicine. There is a lack of the financial flexibility required for planned individual economic growth, and a sense that finance is unavailable for any but the most immediate necessities; loan capital to meet critical bills is borrowed only in small amounts. Start-up capital is lacking and loans inaccessible because of unmanageable interest and repayment terms. The heavy debt borne by farmers who, having actually negotiated a loan, experience crops ruined by a drought, weighs heavily against willingness to risk again. An overwhelming attitude that there will never be enough money fosters a style of wearily making do with less than what is adequate or, at best, allowing short range priorities to take precedence.
Problem Type:
F: Fuzzy exceptional problems
Date of last update
24.04.2000 – 00:00 CEST