In 1716, the great New England clergyman Cotton Mather gave a sermon in Boston on a popular virtue of the day. Preaching on Romans 13:8—which reads, in part, “Owe no man any thing”—Mather urged that Christians should “come into [debt] with the pace of a Tortoise, and get out of it with the flight of an Eagle.” Being deeply in debt, he proclaimed, degraded a man’s ability to remain honest, self-contained, and humble: “It should be a principle with a Good Man, ‘I may not have, what I cannot have.’”
Mather was a classically severe Puritan, but advocacy for such financial restraint wasn’t a radical message at the time. His wary admirer, Benjamin Franklin, would soon translate this Christian idea of debt-free stewardship into a populist language of daily thrift and its rewards. Where Mather warned that debt encouraged self-indulgence, Franklin emphasized that it restricted autonomy and success. “Be industrious and frugal,” he wrote, “and you will be rich.” Franklin’s American version of thrift, intertwined with the ideal of independence, runs throughout the country’s history, buoyed by such varied figures as Mark Twain, Henry Ward Beecher, and John Kenneth Galbraith.
Like piety and self-denial, however, thrift now seems more quaint than urgent. We can blame formerly easy credit for that, perhaps, or a creeping conventional wisdom that says that shopping is the only response to national troubles. We can blame too many wrongheaded regulations or not enough smart ones. We can even blame the twenty-first-century churches, which have wandered far from Mather’s prudent exhortations. The “prosperity gospel” preached by hugely popular evangelical pastors like Joel Osteen holds that God doesn’t want us to do without.
But if there was a sliver of good news coming out of autumn’s Wall-Street-to-Main-Street bloodletting, it was that thrift, despite its unfashionable status, is poised for a comeback. In October, the John Templeton Foundation hosted a forum to discuss an important new report, “For a New Thrift: Confronting the Debt Culture,” which begins with a call to give more Americans “opportunities to save and build wealth.” Sixty-two scholars signed on to the report, which was produced by the Institute for American Values and several other think tanks from across the ideological spectrum. Panelist David Blankenhorn, one of the report’s authors, organized thrift into three qualities: industry, or work ethic; frugality, or spending less than we earn; and trusteeship, or wisely giving back to worthy causes. Together, they make for a life not of grim tightfistedness, but of generosity, fulfillment, and eventual abundance.
In the past, the report observes, people in need of quick cash would turn to their families or friends. Usurious lenders lurked only as a last, shameful resort. In the twentieth century, institutions like savings banks, credit unions, and savings and loans grew to constitute a benevolent conspiracy in favor of the now-embattled “small saver.” Meanwhile, lotteries were illegal across the country, predatory interest rates were banned, and casino gambling was restricted to just a few locations synonymous with vice. Thrift was embedded in both the institutional and social atmosphere.
But today, there exists a constellation of “anti-thrift” institutions—such as state lotteries, rent-to-own stores, check-cashing outlets, and yes, subprime mortgage brokers—that have made it increasingly difficult for Americans to live according to Mather’s and Franklin’s wisdom. These troublingly powerful anti-thrift organs, the report argues, promote “behaviors and attitudes that undermine the habits of thrift, the ability to save, and the opportunity to achieve important life goals.”
This observation isn’t unique to our era, of course. Bemoaning profligacy and pining for a golden age of thrift has a history almost as long as the virtue itself. Historian Lendol Calder calls the belief that people acted better in an earlier time “the myth of lost economic virtue.” Even Adam Smith was exasperated by imprudent spending: “How many people ruin themselves by laying out money on trinkets or frivolous utility?” he lamented in 1759. Mark Twain conjured up a financially foolish buffoon in his novel The Gilded Age, popularizing the handy little phrase “Charge it” in the process. A 1921 film named for the same expression warned that free spending could lead to broken families. Around the same time, the New York Times opined: “In other and simpler days, debt was a thing dreaded as the worst of ogres.”
Of course, recognizing that history repeats itself is no reason to disregard its lessons. As we tackle the credit (and debt) crisis, we should also recognize the opportunity to resurrect the old American virtue of thrift.