The lost virtue of thrift

Below is a transcript from a Georgene Rice KPDQ FM interview with Theodore Roosevelt Malloch, author of “Thrift – Rebirth of a Forgotten Virtue”.  Malloch is the Chairman and CEO of The Roosevelt Group.

Georgene: This is a subject of which we don’t see much written or spoken.  What motivated you to encourage readers to reconsider the virtue of thrift?

Malloch: It is indeed very much a virtue…..I think thrift has both a public side and a private side.   The public side used to be called “fiscal conservatism”.  That’s gone out of practice for some time.  But even on the personal side, with our consumerist culture and indebtedness, we’ve lost track of our grandparents’ most important value which was thrift.

Georgene: In the book you cover not only the subject of thrift but its origins and how we got to this path.  Take us back to where it began and how we’ve lost it.

Malloch: Well the word “thrift” actually is an old Norse word that means “thriving”, so it doesn’t have to do with this pejorative sense that some people assign to thrift which is very miserly and negative—almost cheap and mean.  The original use of the term had to do with prospering.

Georgene: We have in this generation been reduced to consumers, where we are viewed and often times behave as if that was our highest virtue—what we consume, what we can purchase, what we possess, what we maintain.  At what point in this country did we experience the shift from a people that was fiscally conservative both in personal and in public life, to one that sees its highest virtue as to what it can accumulate and consume?

Well I think that process is a long and slow one that’s probably taken place over a century.  The definition of the person has moved from more spiritually defined to more materially defined during that time period.  In the last couple of decades it seems it’s gotten rather extreme.  The history of fiscal conservatism in the American political experience has been with us since the very founding—since the words of Benjamin Franklin, which are so wise, and the practices of George Washington and the debates between Jefferson and Hamilton.  But it was most vividly re-explored and re-identified by Ronald Reagan in the 1980s when we actually practiced such things as balanced budgets.

Which would you say came first:  a nation-state that’s centralized that has less emphasis on thrift, or is it an expression of the people who moved away from that virtue that found its expression ultimately in the nation-state?

Malloch: Well I make a case that in the 20th century, particularly in the second half of it, the movement towards an all powerful centralized state, which crowds out all the other mediating structures and really disregards the family, the school, the voluntary associations—most certainly the war against the church or religion in general—has made the practice of these virtues more and more difficult because the government in effect has usurped all of these powers in an all-powerful welfare state and that makes it difficult to practice some of these old-fashioned or Victorian Enlightenment virtues.

Talk about the implications of a nation that no longer regards thrift as essential to its own survival and the people who follow that same pattern.

It has two sides.  One would be government indebtedness, which is at unprecedented levels and continues to grow.  On the other side you have personal indebtedness, or a lack of responsibility in the financial sphere.  People have credit cards that are maxed out, and they try to run away from them.  They take mortgages that aren’t based on income.  They have all of these practices that amount to a kind of “casino finance”, and in a recession like the one we are experiencing that is long and deep, the problems are exasperated and, in fact, they are going to be with us for a very long time.

Georgene: Who are some of the heroes of thrift that you write about in the book?

There are many worth considering.  Many of them are people in our neighborhoods, people in our churches and communities, distant relatives—grandparents in particular—people who came through the Depression.  But I write about three heroes of thrift in the book.  One is Benjamin Franklin, whose wise proverbs really deserve to be re-read—those that appeared in Poor Richard’s Almanac…very insightful.  Second was Samuel Smiles, a Victorian of a Calvinist background who wrote about self reliance, discipline, duty and thrift……Third, my own mentor Sir John Templeton, the greatest  stock-picker of the last century….amassed a huge fortune as a result of saving of over $4 billion and started a very generous philanthropic foundation giving away about $100 million a year.

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