Timothy R. Clark: Financial lessons from World War II show principles of thrift, industry
If there were debt prison for nations, America would be incarcerated. As a society and as individuals, we’ve lost the restraining discipline that made us great. We have yet to internalize the old axiom: “If your outgo exceeds your income, your upkeep will be your downfall.”
Hearken back to American society during the Second World War. Most of us weren’t alive then, but we can still bring the lessons forward. If we take a close look at that time period, we find lost principles that need to be dusted off and put into use again: the basic principles of thrift and industry that allowed us to persevere, win the war and enter a period of extended prosperity.
In those days, nearly everyone came together to support the war effort. There was a common cause that bound people together. Society was imbued with a spirit of sacrifice and contribution rather than entitlement and consumption.
David McCullough, the eminent American historian, recently stated in a Harvard Business Review article, “When the founders wrote about life, liberty and the pursuit of happiness, they didn’t mean longer vacations and more comfortable hammocks. They meant the pursuit of learning. The pursuit of improvement and excellence. In hard work is happiness.”
What do life, liberty and the pursuit of happiness mean today? I’m afraid that our softening American culture has cast a new interpretation of this chartering statement. And it does seem more to do with longer vacations and more comfortable hammocks.
In 1979, social critic Christopher Lasch wrote a book called "The Culture of Narcissism." It was an acerbic critique of our prevailing culture. He warned of the narcissistic personality of our time and the invasion of the self — in other words, the preoccupation with indulgence and gratification and the dismissal of “outmoded styles of consumption.”
“To live for the moment,” he wrote, ”is the prevailing passion — to live for yourself, not for your predecessors or posterity. We are fast losing the sense of historical continuity, the sense of belonging to a succession of generations originating in the past and stretching into the future.”
His observations ring ever more true today as our personal behavior and public policy demonstrate “the erosion of any strong concern for posterity.”
My question is whether we’ve learned anything from the great recession. Have we internalized the lessons, or was the recession just a speed bump to temporarily check our unbridled spending? We changed our behavior for a time. Household debt decreased 14 months in a row. The average age of cars on the road is reported to be the highest ever. Millions of Americans cut back in an attempt to deleverage their personal balance sheets. But have we changed our habits? Are we looking to the future and the prospects of our children?
In 1943, in the middle of World War II, the government — if you can believe it — mounted a communications campaign to urge American citizens to conserve resources and consume sparingly. The four pillars of the campaign were:
Don’t waste anything.
Buy only what is necessary.
Salvage what you don’t need.
Share what you have.
In those days, at the urging of what was called the Office of Civilian Defense, Americans went on drives to collect scrap metal. Households saved tin cans. Children foraged through neighborhoods looking for old tires and piled them into “victory bins.” Families saved bacon grease to contribute toward the production of glycerin for munitions production. The period effects of the war created a mentality of careful consumption and resourcefulness that seems to have leaked out of our culture. We are losing the moral order we once shared that constrained our spending and consumption habits.
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