Half-Forgotten Virtue

Malloch, an economist and management consultant, grounds his earnest and almost boyishly enthusiastic embrace of thrift and other tried and true virtues in a study of the philosophy, religion, and general history behind them going back to the Bible and to the Greeks. Ah, the word “virtue”–what a dinosaur! But Malloch infuses it with life. The heart of his appreciation here is for Adam Smith and other members of the Scottish Enlightenment. Malloch, himself proud to be partly of Calvinist Scottish heritage, expertly separates the ideal of thrift–acting with moderation and care to financially protect and improve ourselves and our families and so society–from that of greed and cheapness. He eloquently demonstrates how thrift–encompassing delayed gratification and careful investing (carefully considered risk-taking)–and its child, wealth, are essential to maintain a nation’s long-term prosperity and philanthropy.

Charity thrives in the merger of love and thrift. Few can be generous for long without being thrifty. Being spendthrift causes poverty and suffering and stifles innovation and prosperity. Of course, this is obvious stuff–which we all too often ignore. But as Malloch notes, after Orwell, sometimes the obligation of intelligent and honorable people is to restate the obvious.

Along the way, he drives another nail in the coffin of the idea that Adam Smith was somehow a salesman of selfishness. In fact, the great, kindly, generous, and eccentric Scottish political economist was a brilliant promoter and explainer of the much-confirmed idea that the “invisible hand” of the market, when married to the ideals of the Judeo-Christian and classical traditions, over the years improves the moral and material wealth of society. As Malloch reminds us, Smith was, above all, a moralist and astute judge of human nature. Just read The Theory of Moral Sentiments.

These Scottish principles and the idea of what Malloch (and others) call “spiritual capital” were central in the creation of modern prosperity and technological progress in the West, and eventually beyond, with the vast reduction of suffering that has accompanied them. Without the hard-work-and-thrift-created accumulation of saved funds and their investment in innovative enterprises, we’d still be working by candlelight.

With the explosion of a particularly extravagant species of greed (not to be confused with prudent and ethically informed self-interest) in the financial markets in recent decades, coupled with a sense of entitlement to government programs among special-interest groups (but little inclination to pay the bills for them as they come in), we have the present mess. Malloch’s call for a return to the verities, while it may be corny to some people, is much appreciated. Tell it to Wall Street–and Washington.

Some quibbles with Malloch, or his editors: One is that he does a bit too much throat-clearing in the early going–telling us what he’s going to tell us several times. Another is that he sometimes wanders unduly far from the thrift theme to discuss traditional Western virtues in general and, for that matter, many pathologies plaguing Western economies and the wider civilization–he hits the Europeans as hard as the Americans–thus sometimes stretching himself too thin, and diluting the force of his argument for thrift.

Finally, Thrift lacks an index, which a work with so many historical and scholarly references needs. Still, it’s generally smooth sailing as the erudite and often-entertaining Malloch presents a panorama of this too little discussed but essential part of Western Civilization, of which he is an unapologetic defender–but then why not? Western Civilization has done far more good for far more people than any of its rivals. He wisely does this, you find out early, from the standpoint of a political, social, and economic conservative but without embroiling himself in the details of current policy fights and without television-style touches. Thus Thrift should have a pretty good shelf life, even though Malloch does touch upon the current recession and the excesses that helped lead to it. (He was finishing this work as the economy started to slide toward the cliff last year.)

As a fiscal conservative myself–especially the part about paying as you go, etc.–I found that Malloch hit our current debt crisis spot-on. If only his views had more weight in Washington when the disastrous financial bailout schemes (wherein many perpetrators of the meltdown were richly rewarded) were cooked up in the last panicky months of the Bush administration and the first months of Obama’s.

“States are notoriously bad at thrift because they appropriate [wealth] for political ends, rarely rescind bad decisions, and have no conception of public savings,” notes Malloch. Right. But then, that’s what the public wants: more and more programs with lower and lower taxes. He might have done better to have walloped the public more, which has shown itself all too ready to expect the sun, the moon, and the stars not only from their credit cards but from their governments as well. Fine, if they’re willing to pay for them!

In my own family–which, like Malloch’s, is partly of Scottish origin–I have seen what happens when forward-looking thrift is jettisoned for being hopelessly retro. We often made fun of my moderately affluent maternal grandmother, whose parents were Scots, for her financial wariness and “tightness,” a characteristic unfortunately not shared by my feckless mother, who went through most of what she had. Thank God that my “cheap” grandmother, who suffered many tragedies early in her life that compounded her Scottish wariness, stashed some money in a couple of modest untouchable trusts, or at the end very little would have been left for my mother to live on in her many decades of illness. How thoughtfully Scottish of my grandmother! True thrift and true charity–which, as they say, begins at home.

I’m now going to send a copy of Thrift to my children. Hope it’s not too late. Unfortunately, they live in Manhattan.

Robert Whitcomb, editorial page editor of the Providence Journal, is the former financial editor of the International Herald Tribune.