Why Does Thrift Matter: Is It a Practicality or a Virtue?

Why Does Thrift Matter? Virtue?Shutterstock

Once upon a time in America thrift was a popular and celebrated character ideal. Parents exhorted thrift to their children; teachers taught it in schools; religious leaders commended it to their congregations; charitable institutions prescribed it to the poor and downtrodden; public officials extolled its virtue in promoting the general welfare; even advertisers paid obeisance to it in the hawking of sundry wares and goods. Once upon a time in America, thrift constituted part of a tripartite national ideal of industrious, diligent, and frugal citizens. It was, to be sure, an ideal to which Americans frequently failed to live up to—honoring it as often in the breach as in reality—but few questioned its practical advisability or doubted its virtue.

Today, few Americans are fluent in the vernacular of thrift.  As if following the fate of certain aboriginal languages, its native speakers are dying off, and the culture, customs, and social context in which thrift once made sense seem to be passing from living memory. Not surprisingly, few Americans under the age of thirty can define thrift, let alone explain why it matters—for most, its comprehensible mainly as a label for second-hand (or “vintage”) clothing. Thrift still retains some semblance of meaning for Americans over forty, at least for those who can remember the eccentricities of their parents and grandparents, who, marked by the scarcities of the Great Depression and Second World War, practiced forms of parsimony that were increasingly out of step with the mass consumption of post-war prosperity. In the ears of the contemporary world, the idiom of thrift registers as a relic from a bygone age, similar to words like chastity and temperance. By most empirical measures, the practice of thrift is going the way of powdered wigs and dueling.

Seen in this light, any attempt to pose thrift as one of the “big questions” of our moment immediately confronts the twin problems of incomprehension and seeming obsolescence. The fact that we have to ask why thrift matters at all reveals the extent to which it has lost its conceptual grip on our imaginations.

This loss of imaginative grip may be serious and widespread enough, in fact, that standard methods of addressing the question of thrift’s value risk deepening the confusion. Moral philosophers can debate the “virtue” of thrift or its lack thereof; economists can debate the so-called “paradox of thrift” and praise the miracle of compound interest; historians can debate whether Americans were ever as thrifty as some would claim or argue over whether thrift was one of the secret ingredients responsible for American prosperity. As important as these debates surely are, they all presuppose that we know what thrift is and that it has a fixed, agreed upon, and active meaning. It does not.

To see why and how thrift matters for our time, then, it is necessary to begin by asking what thrift meansand by extension, what it has meant to previous generations of Americans. Approaching it culturally will reveal how impoverished our understandings of thrift have become and how beneficial a recovery of that understanding can be. We live at a moment when practices of restraint, habits of delayed gratification, and conventions of wise use and prudent investment have never been more critical to individual and collective well-being, but never more in question. We live at a time when the lack of publicly compelling frameworks for thinking about the greater dependencies that tie private and public goods together have never been more harmful to our present or to our posterity. In short, just when Americans stand in urgent need of its cultural powers, they have lost touch with the one word that once gave those powers a name and an idiom. Historically, thrift was the keystone in the cultural architecture that traditionally supported and sustained the full range of such powers. This is why thrift matters and why it is essential we reacquaint ourselves with its legacy. This is the promise of thrift.

Thrift and Thriving in American History

Thrift’s cultural powers derive from its distinctive etymology. Thrift originally referred to the condition of thriving, and throughout its history, thriving has been the subtext of thrift. It is in this connection that we glimpse thrift’s true value and imaginative potential, for it moves thrift beyond the instrumentalities of “more or less” and raises fundamental questions about the ends of economic life: more or less of what and for what purpose? In short, thrift brings us face-to-face with the most fundamental economic question for any society: what does it mean and take to thrive?

Culturally speaking, all societies must provide some provisional set of answers to this question. However partial or contested they may be in practice, such answers give expression to some idealized vision of what human thriving looks like, just as they exhort a community to embrace particular practices and habits that are believed essential for achieving that ideal vision of thriving. Over time, these answers gather the force of custom, morality, and even law, and as they do they become recognizable as distinctive economic ethics. Thrift can only make sense, therefore, when it is seen as an expression of those larger cultural constellations of beliefs, habits, practices, and supporting institutions that animate and support it. Crucially, the content and constitution of such constellations are never static, but change dramatically over time, and the meaning of thrift with them.

For example, in the economic ethic of the American Puritans, thriving was centered ultimately in the soul, which motivated members of the New England township to pursue pious management of time and talents and to accumulate wealth as a spiritual calling, not just for individuals, but for the whole community. Nevertheless, without thrift in the soul, there could be no thriving in either this life or the next. For the Victorians, however, the picture shifted from an all-encompassing but thoroughly spiritualized condition of thriving to one focused on material well-being and individual frugality. This was the birth of classic thrift epitomized by Benjamin Franklin’s famous maxims “time is money” and “a penny saved is a penny earned.” In the Victorian era, thriving was primarily located in individual and family life as a reflection of financial security, middle-class respectability, and diligent philanthropy. In time, the Victorian picture of thrift and thriving would be supplanted by yet newer visions—by the rise of Progressivism in the early twentieth century, by mass consumption in the post-world war era, and so on.

In our own time, a new and comparatively more radical ethical sensibility emerged, which both challenged and embraced aspects of former economic ethics. This sensibility is epitomized by a distinct character type: the proper subjects of “free markets” are “free-agents”—individuals who are oriented to material security, but also to self-actualizing through work, consumption, and social commitment. On the positive side, this ethic combines a vision of expressive consumption with a work ethic that privileges authenticity, self-cultivation, mobility, and autonomy as much as industrious time management. Yet like all such ethics before it, what we might call the Free-Agent Ethic has its downsides: even in good economic times many Americans are unable to meet the demands or enjoy the privileges of free agency. Such agency is empowering, even exhilarating, if you are one of the meritocratic professionals who can move securely from one job to another in the global economy, but distressing, often painful if you are not.

Not surprisingly, the Free-Agent Ethic has inspired a diverse array of protests, and in some cases, alternative, even reactionary economic ethics—from the Eco-thrift of environmentalists, to the simple life ethic promoted by certain religious groups, to the civic republican ethic of communitarians, to the social justice concerns of the Occupy Wall St. movement. These are divergent and internally diverse movements, but taken as a whole they represent a growing and widespread concern that what it means and takes to thrive in the era of free agency is proving unsustainable—especially when confronting the asymmetrical risks of global markets and disruptive consequences of technological change. (Indeed, if there is a leading contender for thrift’s replacement as a public language and ethic of future-oriented restraint and wise use today it is the idiom of sustainability.)

Virtue of Necessity or Necessary Virtue?

Throughout all of these periods, it needs to be said, the practice of scrimping and saving existed as a perennial virtue of necessity whenever times got hard. So it is and has ever been for humans since time out of mind.  Given the long human acquaintance with scarcity, however, it is easy to see how Americans came to extol thrift explicitly as a distinct virtue just when they began to confront the moral ambiguities of living in a world of material abundance. With so much to be profligate about, parsimony became, if only for a time, a necessary counter to the temptations of reckless vice. While it cannot be developed sufficiently here, no single factor has impacted the fortunes of thrift more than the shift from the material conditions of scarcity to those of abundance. Our evolving conception and experience of abundance has been the persistent, if largely latent backdrop to the evolving prospects of thrift—first as a mostly unarticulated means of survival in epochs of material want and dearth, then as a highly articulated virtue of personal and public responsibility in an era of increasing affluence, and more recently, as a seemingly outmoded character ideal.

Thrift has therefore counted as both a matter of practicality and a virtue in American history. Given its seeming obsolescence today, however, any call for a recovery of “thrift” (in either sense of the word) will likely fall on uncomprehending ears. Even when it does not, reviving the virtue of thrift classically understood as individual frugality will be insufficient in addressing the scope and scale of the challenges we face in the present moment. An adequate response to runaway debt, growing social inequality, severe market turbulence, mounting environmental risk, and extreme political polarization will require the full range of thrift’s cultural powers beyond individual frugality. Tapping into these powers begins by reacquainting ourselves with the animating source of those powers found in the connection between thrift and thriving.

Further, this necessary process of rediscovery comes not by privileging any single previous economic ethic but drawing from the best of all of them. We have much to learn, for instance, from the Puritan Ethic’s concern with the common good and with ends that transcend private material (even worldly) well-being and the Victorian Ethic’s emphasis on individual responsibility, delayed gratification, and benevolence. We can learn from the Progressive Ethic’s concern with virtuous consumption and managerial efficiency alongside the championing of mutual obligation, social justice and civic virtue. We can learn even from the Free-Agent Ethic’s celebration of self-expression, autonomy and mobility. We will also need to take heed of the array of alternative ethics that have emerged in reaction to the deficiencies of free agency.

However, rediscovering the connection to thriving is only the first step in rekindling thrift’s cultural powers. Unless it is accompanied by an institutional framework that supports new ways of conceiving and practicing economic life—the generation of a new moral order—talk of thrift and thriving will likely lapse into platitude, or worse, shrill moralism. Until the hard work of conceptual, ethical, and institutional reconstruction begins, the promise of thrift will remain only a promissory note we hold unpaid against an otherwise severely mortgaged future. Still, the promise of thrift rightly understood is real and offers conceptual and ethical resources for renewing a common language by which we can talk together in the face of our many dilemmas and political disagreements about the nature of a prosperous, just, sustainable, and humane economy.

Discussion Questions:

  1. Before reading this essay, did thrift matter to you, and if so, how? Who would you have said was a better exemplar of thrift, Ben Franklin or Scrooge?
  2. What would it take to make thrift popular again as a virtue? Would this be adequate in addressing the challenges (and opportunities) of our present socio-economic circumstances?
  3. Do we need to rescue the term, “thrift”, or just the social practices it once named–e.g., habits of wise use, practices of delayed gratification, conventions of conserving care, and so on?
  4. How do we create the social and institutional conditions in which the best of what thrift has meant throughout American history might once again find expression as a realistically compelling and potentially unifying social ethic?

Discussion Summary

To reiterate my answer to the question of why thrift matters, my claim is that thrift can be, and has been historically, both a practice of necessity and a virtue.

It is hard to see, however, what acknowledging that rather bland fact does to help us in the present.

In fact, I think asking the question in terms of how thrift matters—as a practice of necessity or as a virtue—risks distracting us from the more fundamental point of why it matters at all. At a moment when the word “thrift” has clearly lost its hold on our imaginations and on our material practices, the salient point is that Americans need to be reminded about the full range of thrift’s cultural powers, of which forced scrimping or the valorization of saving represent a severely reduced sample. As important, Americans need to be shown that for even these partial notions of thrift to be effective (and potentially culture shaping), they have to be connected to something beyond their own instrumentality. For the powers of thrift to work, they need to be energized by the ends to which they provide the means. Thrift is a package deal. Thrift matters finally when it is connected to a vitalizing notion of thriving and supported by the wider cultural and institutional context. Only when these dimensions are taken into account will thrift genuinely figure as one of the Big Questions of our time.

As it stands, the stated presumption of the question is that thrift matters mainly as a synonym for frugality, that is, for prudent savings and careful spending. The desire to revive this “classic” but restricted notion of thrift is understandable and certainly to be encouraged. We Americans would be clearly better off if we lived more fully within our means, individually and collectively. Of course, many make the case more forcefully, even ominously: The bill for our now generations-long lack of frugality will catch up with us eventually–may very well be upon us now–and frugality will once again become a virtue forced on us by necessity.

And yet, until it does, simply preaching the virtue of “thrift” will continue to fall flat, if not largely on deaf ears. This is not to say that Americans don’t recognize the importance of prudent savings or careful spending. A booming personal money management industry, trading in helpful consumer tips and advice, not to mention offering a vast array of on-line resources for sound financial management, is evidence enough that we still believe in the ideals of pennywise thrift. Consider the celebration of do-it-yourself parsimony in the writings and talks of popular finance guru Suze Orman, or in the best selling advice literature epitomized by The Millionaire Next Door.

But the stubborn fact remains: Americans are saving less than ever in practice. It is not for lack of believing in the classic ideals of frugality but in the motivation and ability of Americans to practice it consistently. There is a lot to say about the cultural and structural conditions that have brought us to this point—more than I can say with any brevity or concision. The simple issue is that our inherited view of thrift as frugality is too truncated in meaning and too disconnected from any supporting culture, customs, or social context to make it effective in the face of present challenges. It is hard to imagine how even a national revival of the practice of thrift by individual Americans would, by itself, be equal to the scale and scope of the pressures and dislocations we face at present. One needs only to contend briefly with the massive creative destruction currently being wrought by the combined forces of globalization, information, and automation to see that we confront a set of cultural and structural realities that exceed the power of our faintly inherited and badly curtailed notion of thrift to address sufficiently.

So what do we do? Do we consign thrift to the dustbin of history?  Do we give up on frugality because it is insufficient by itself? Is this analysis a recipe for resignation?

I am arguing for three things as a starting point for reflection and action. These three provide a conceptual point of departure for the real and difficult work of renewal that needs to take place.

First, we need to revive the full range of what I have called thrift’s cultural powers. To paint in the broadest of strokes, these powers include (a) several varieties of personal restraint, from delayed gratification to temperance to saving for a rainy day (frugality is but one species). Animating and directing these types of restraint are (b) practices of stewardship, wise use, and preserving care. Behind each of these powers, in turn, stand (c) an array of contextualizing concerns, most prominently personal improvement, sociability, and mutual aid. Under optimal conditions, these combined cultural powers of thrift raise us above mere material survival and make possible all the ennobling and dignifying pursuits that make us fully human and life worth living. How do we revive this complete picture of thrift? The place to begin is the recovery of thrift’s mostly unknown, but surprisingly rich history. (See Thrift and Thriving in America: Capitalism and Moral Order from the Puritans to the Present, Oxford, 2011)

Second, for the cultural powers of thrift to work, they have to be connected to an animating power source. This is to return to thrift’s innate connection to the underlying concept of thriving. This connection is often neglected by the most ardent champions of thrift, who valorize the instrumentality of thrift as a virtue. But the real virtue of thrift is activated only when its practice (i.e., cultural powers) are connected to, and thus find their meaning and inspiration in, a robust and compelling vision of thriving.

How do we begin to recover this connection between thrift and thriving? How do we adjudicate between competing visions of thriving in a time of raging political polarization and far-reaching moral disagreement? In a pluralistic society, it has to begin as a dialogue at many levels of our society around the question: what does it mean and take to thrive? Here we might also consider what visions of thriving are on hand and whether they we find them adequate? The possible venues for such conversations are numerous, including neighborhood associations, places of worship, town and city councils, professional associations, community organizations, local cooperatives, families, affinity groups and so on.

Third, out of this discussion about what it means and takes to thrive, and with a full picture of the cultural powers of thrift in view, we need to begin the tough work of generating new languages, practices and institutions. Here we move even more fully out of the realm of cultural analysis to the concrete practices of citizenship–to the civic art of thriving. The connection between thrift and thriving has to be supported by complimentary norms and institutional arrangements we work for in common. Individual self-interest alone clearly has not been enough to generate a consistent commitment to thrift, especially when the larger cultural and institutional context almost universally works against it. We cannot hope to change the behavior of the system one thrifty person at a time. As the Puritans and the Progressives alike understood, thrift, like all our ideals, is a community affair.

These are three trailheads for the quest of restoring the ethos of thrift to its fullest expression. Clearly, there’s plenty to be done in the endeavor. We are, in fact, just beginning.

Two New Big Questions

  1. Sustainability—is it the new thrift?
  2. What does it mean and take to thrive and how do we assess or measure it?

8 Responses

  1. Meyer1953 says:

    Addressing question four, how do we make thrift work into the future?

    We have a compelling strength of direction, in our culture, from those who comprehend things and act on those comprehensions. So this address applies first to those who comprehend things, that they might take that impact on into the world about. It is a different thing than saying, make it popular so that the consumer public will have its jollies tittled and thus swell a movement.

    The first thing we see about thrift is, that supplying substance for those of it pays less and is much harder work than to lavish splendor upon the holders of foolish money. A gold-gilded bathtub sells for a vast net profit, whereas providing consumers with a steady loaf of bread requires much daily effort and willful resource. But precisely because of this necessary effort, thrift sets us free.

    Without thrift a society is in thrall to its foolishness. Parents abort their children because those children would drag down the family’s means, all because the adults are keeping up with the Joneses. At the same time commercials scream at those adults, “Get a sexy lifestyle with this gismo to make everyone jealous of you.” The James Bond thing. And this is just one corner of the whole situation, a particularly pernicious one.

    Thrift is, that which supports and enables life to speak in life to life. First, this is found in family and then found in society – though it is anything but obvious in present commercial media. An internal definition settles the question, what really is thrift? The definition is this, that one person lives to do well towards another person and then others beyond that person. Success in such a life then has nought to do with requiring gilded bathtubs. They are for those who like and can afford them – they are not the necessary entry into society’s community.

    For the vastest societal example of thrift we may look three thousand years back at the Jewish culture, that of Israel. They were defined internally as tasked with being a blessing to all of humankind, though the times of their tasking were anything but amenable to said task. As a result, each and every city they built had as its future a time of siege by a lethal enemy, with the siege devolving into starvation of eating leather and babies (Deut 28). As a result, Israel’s successful cultural developments engaged both of, a necessary self defense and an extraordinary thrift. How else, culturally, do we see the reignition of Israel today from its apparent ashes several decades past?

    Israel then, thousands of years back, was tasked to be life in life for life – life now, as it turns out. The price for this being was extreme, devolving again and again into Holocaust-like sieges and atrocities against Jews. Yet because it was life spoken to them, to be life for life abroad, they answered. And in which answering they yet stand a nation.

    Can we not learn from their resolution?

  2. Joshua Yates says:

    Assuming I understand the reader’s comments correctly, there are three points that I’d like to single out as especially worth affirming. The first is the idea that thrift takes effort. Thrift, however defined, is always concerned with some species of constraint—e.g., delayed gratification, saving for the future, and sacrifice—that can be, and often is, personally (or collectively) demanding.

    Secondly, the reader avers that by dint of such effort we are “set free.” I presume that the reader means that we are freed up from necessity. This strikes me as correct in a general sense. Thrift, we might say, is a practice that enables us to rise above the basic needs of mere survival and have the wherewithal to pursue “higher,” and typically more long-range, possibilities.

     The third point I take to be what the reader believes the primary purpose of thrift to be: thrift is the “entry point into community.” I certainly endorse this view as a partial reading of thrift’s chief end. As the hard work of thrift raises us above the necessity of survival, it provides the surplus of resources for transcending the overriding concern of self-survival by empowering a host of capacities for regarding the welfare of others–e.g., hospitality, generosity, and mutual aid. Though I believe the powers of thrift do more than this, this is thrift at its best. 

    • Meyer1953 says:

      Thank you for your kind response.

      Regarding being “set free,” what I am particularly saying is that we are freed from obeisance to some tawdry baloney that makes no sense.  Look at the many media figures who, though talented, died by their capture into drugs.  Similarly, many are those who regret having paid less attention to family and community than to amassing luxury.  Honoring the wholesome needs of, and target of, thrift frees us from such.

      Thrift is a principal means by which we form a whole and engaged life with one another, being directed as thrift (ideally) is towards one another’s well being.

       

  3. George Gantz says:

    I’m not sure thrift as a virtue stands on its own.  Is it not, rather, part of a the virtue of self-control by which one delays immediate gratification for the achievement of long term goals?  There is some evidence of a decline in the capacity for self-control  – just look at the collapse of social capital (Putnam et al) and Baumeister and Tierney’s call for renewal in Willpower: Rediscovering the Greatest Human Strength (2011).  This all seems to be the natural consequences of a powerfully commercial, radically secular society,  Will anything short of a religious revival change the course?    

    • Joshua Yates says:

      I agree—I don’t think thrift stands on its own, but is always part of a cultural package that, when vibrant, includes practices and habits of self-control linked to particular (if not always fully articulated) visions of thriving which are both in turn supported by a larger institutional ecology (e.g., families, schools, religious organizations, the media, community organizations).

      I’m in qualified agreement about whether there has been a decline in the capacity for self-control. I believe that the capacity for self-control is probably as great as it ever was, though the exercise of that capacity certainly has much less cultural (by which I mean both moral and institutional) support than it once did. Historically speaking, however, it would be hard to argue that Americans were ever paragons of self-control. From its earliest days, America was a land of plenty, of possibility, and of freedom, and the response of the earliest Americans to this situation of New World abundance was in many instances a competition between contradictory impulses—of speculation, indebtedness, and boom and bust as much as restraint, frugality, and conservation. In the words of J. R. McNeill and George Vrtis, Americans created a “cultural format in which endless consumption rivaled spiritual grace as the path to worthiness and fulfillment” (Thrift and Thriving in America,  508).

      That said, there is no question that since the middle of the 20th century Americans have enjoyed a degree of consumptive prosperity unrivaled in human history.  Consumerism became a way of life—a way of enjoying the good life–fueled by commercial fantasy and peddled by the media and mass advertising. Overtime, Americans experienced the gradual erosion of the taboo of indebtedness (and thus the erosion of the ideal of thrift as frugality). In such conditions of seemingly infinite abundance, delayed gratification came to seem rather beside the point, if not down right irrational. Why put off until tomorrow having something that will enrich my life today? Needless to say, at a micro-level, personal indebtedness, thanks especially to credit card debt, is now an epidemic.

      I’m not sure religious revival is the only way to revitalize practices of self-control (the old virtues of temperance and prudence). I suppose it would also depend on the kind of religious revival the reader has in mind. I say this mainly because I don’t think it’s a consequence of secularity or secularism. America is still a profoundly religious society after all. I do think that the issue has as much to do with the powerful commercial forces you mentioned, to which I would add the macro changes associated with globalization (i.e., outsourcing), technological change (i.e., automation), and the boom and bust cycles of our economic system. Still, religion is certainly one social institution that can powerfully inform what the economy is for—that is, what shared vision of thriving we as a society will condone and strive to enact. Given America’s religiosity, it would be hard to imagine any real progress in this regard without religion playing a pivotal  role.

       

      • George Gantz says:

        Joshua – Thanks for the excellent response!  Just prior to reading your comment, I completed Jonathan Haidt’s new book The Righteous Mind – Why Good People Are Divided by Politics and Religion.  This is another wonderful addition to the discussion. Jonathan speaks to the “moral matrix” upon which we make our (largely intuitive) moral judgements.  This would include our judgements about what constitutes virtue or the lack thereof.      

        I was intending to be somewhat tongue-in-cheek about the need for “religious revival”, but I have been struck by how many secular / atheist researchers (including perhaps, DSWilson, Baumeister, Haidt and others) exhibit a growing, if grudging, admiration for the benefits of religious conviction and practice.  This is not just a matter of American norms.  Religious people seem to be happier and more giving, to exhibit greater self-control and to be more trustworthy and cooperative than those who are not religious.  In addition, what other human institutions beyond religions have survived and thrived for many hundreds or even thousands of years?  There is an argument that no secular institutions will never be able to provide a moral compass with the strength and sustainability of religious institutions.  As Haidt points out, the critical features for human moral evolution include addressing the problem of free riders, providing for the enforcement of norms and committment to a shared vision.  What secular mechanisms could possibly match those of Divine creation, omniscience, and eternal judgement?  Of course, you have to believe in those mechanisms to make them work – and the evidence suggests that God values free will over compulsion in matters of belief.  What a beautiful set of paradoxes. 

  4. wondering14 says:

    I had a tough time with this article, uncoiling sentences, seeking a central message, and grasping its seemingly speculative assumptions, conclusions, prescriptions.

    Thrift can stand alone and be better comprehended by most people apart from the complicating notion of thriving. If thrift must have a partner word, striving is a better candidate. Striving, working, is easier to grasp, and precedes thriving. Thrift, if those under 30 don’t know the word, can be replaced with saving, which if they don’t practice, they do understand.

    Thrift is practical for a person, family, organization, government because it provides stability—a term more comprehensible than the overused head-scratching word sustainability. Thrift is virtuous because hard money in the bank or under the rug gives one, and one’s country confidence and keeps excessive paternalism at bay.

    Simply setting-an-example was not mentioned. Hold up the thriving Chinese—anywhere in the world—as examples, whose restaurants and supermarkets serve us when all others are shut. They thrive only because they save and strive. Or ask the poor Korean, Mexican, Nigerian, etc. immigrant workers in America how they do it. They earn scraps but still send $50 or more every month to their families abroad. If they can save a bit each month, Americans can too.

    Those adults over 30 who do remember the basic meaning of thrift–parents, principles, pastors, and presidents—affect others when they say what they do, “I put every payday 10% of my income or pay-raise away to help me in bad times and in my retirement.” This mature simple leadership will be scoffed at by some, but not by many ordinary people who need see that others can and do save.

    In America, there is a new health  insurance program for the poor and others that allows them to stop working even though they are not sick or injured. The government pays them from the taxes it collects from workers. Even these non-workers can save 10% of what they get for the uncertainties of the future.

    During the current bad economic times is a great time to start. But in the last paragraph, the author speaks of needing an “institutional framework” and a “new moral order”. How long implement such huge tasks (if the public wants them), even if the research need not be done first? Such a program requires funding, much of which would be sought from governments. We must not forget that thrift is not only for individuals, families, universities. It also must be relearned by voters, and applied to governments with over 30 years behind them, especially to the American government. Must common sense be regained by such a program?

    What would the practical Benjamin Franklin say to all this?

  5. Joshua Yates says:

    I’m deeply sympathetic to the desire for simplicity when it comes to thrift. Invoking Benjamin Franklin seems to make the point forcefully, for we know what he would say to all of this: “A penny saved is a penny earned” and “Make no expense but to do good to others or yourself; i.e., waste nothing.” Everything else being equal it would be best (and simplest), in short, if people saved more than they do. I wholeheartedly agree, everything else being equal. But here reality intrudes, often rudely, and things are not so simple, nor so equal.

    Leaving aside the fact that equating thrift with individual frugality leaves us with a truncated, one-dimensional view of the role thrift has actually played in American history—and, by extension, how it might serve us now—individual savings makes sense in what we take to be normal times, during times with low inflation, high employment, real wage growth, modest cost of living increases, and no serious global downturns—all things that tend either to undermine the value of individual savings (as with inflation) or overwhelm what individual savings can actually cope with (as with a serious recession or depression). These happen to be all things we face presently.

    Deeper still, we have developed a way of life, a political system, and an economy based on ever-rising levels of economic growth stemming from extraordinarily high levels of consumption. All of our society’s institutions are geared to keeping the money flowing —from it’s regulatory environment and tax structure, to the easy availability of credit, to the 24-7 market place, to the number of advertisements we see every day (by some studies up to 500!), to the way we spend (on) our leisure and recreational time, and so on. There are precious few institutions that promote or support good old Poor Richard’s maxims today in a way that can compete. And, I think the reader and I agree this does not bode well for us individually or collectively, either in the short or long term. 

    My central message is thus that we have lost the culture, customs, habits, and (crucially) the institutional context in which thrift once made sense as an ideal to which we should all aspire. The truly big question before us is how we can revive it. I don’t think that will come from exhortation alone. If it could, we wouldn’t be in a situation where most Americans neither practice thrift as savings, nor know what the word means. This claim is hardly speculative. The American personal savings rate in the first quarter of 2013 was a meager 2.6 percent (interestingly the more paternalistic nations of Europe have consistently had savings rates greater than 10 percent over the past 30 years according to OECD data).

    In this way, thrift cannot stand alone, or be better comprehended by most people apart from thriving. It is the connection to thriving that helps us see the importance of the culture, customs, habits and institutions that shape our lives, way of life, and our common sense.