It’s a common belief that capitalism is an economic system which arises from, and at the same time foster, consumerist values. Nothing could be further from the truth. Capitalism, both for its origin as well as for its daily working, requires values that represent the antithesis of consumerism and of a careless lifestyle. This aspect seem to be a consequence of the wealth generated by capitalism, as well as of keynesian ideas coming from a mature stage of capitalism, rather than a consequence of the values that shaped it at the beginning of the XIX century. Years ago, Daniel Bell wrote a beautiful book about the cultural contradictions of capitalism in which he prophesied that it was destined to die from its success, precisely because the population, by becoming wealthier, was forgetting the values that made possible the emancipation from poverty. When people grow up in a wealthy environment, and when they lack historic memory of the processes that culminated in the creation of that wealth, they tend to think that is something that comes from the dawn of time, something guaranteed that cannot be destroyed but only increased.
However, which are the values that we are talking about? Mainly two: thrift and hard work. In this article I will focus on the first one. Thrift is the most important capitalist value, without which capitalism could not have existed in its present dimensions. It consists in the postponement of the consumption of present goods, either because we predict a future shortage or because we want to obtain some kind of gain from that abstinence. Thrift is a virtue that needs inner discipline, meaning that we need to bend our impulses towards the enjoyment of present pleasures. The virtue of thrift requires foresight and assessment of the future. Although it is present in every human being to a greater or lesser extent, it needs to be educated if we want to achieve a capitalist society allowing a good standard of living in every sense, that is to say, an acceptable level of consumption or the enjoyment of health and education services. Above all, the nurturing of this virtue requires the configuration of a certain perspective about time, i.e. to value more the future and less the present.
Capitalist societies are born out of people with a very low time preference, just as it happened in the Victorian era in Britain. That was a puritan and frugal society that placed little value in present pleasures and focused instead on the long term, on the future. A combination of religious, social and economic values cooperated in the creation of one of the most frugal societies the world has ever seen. Because of that frugality, and not because of the colonies as it is usually claimed (many countries, like Spain or Portugal, had colonies before and did not become capitalists, rather the opposite), it was possible to generate the necessary capital to finance the primitive industrial development that would spread later to the rest of Europe. The British society of that era saw the successful establishment of penny banks that promoted the savings of the working classes, who were able to deposit small amounts of money on those banks. Therefore, these institutions contributed to the education of the most disadvantaged about the benefits of economic restraint as the means to overcome poverty. Educative campaigns in favor of thrift were frequent in that age, as we can see in the unfortunately forgotten work of Samuel Smiles, along with moralizing campaigns against alcohol and gambling. Those authors used as an example the capitalization at a compound interest for a period of ten or twenty years of the money a worker spent each day in the consumption of alcohol. They showed that these small expenditures could be transformed in large amounts of money or in insurances to avoid poverty in case of misfortune.
It is true that corporate savings form the bulk of capital formation nowadays, i.e. non-distributed profits invested in production, but it is also true that such decisions are made by people endowed with a long-term time perspective and with an understanding of the advantages of the postponement of consumption. The virtue of thrift is heavily dependent on a society’s predominant culture. Some cultures encourage thrift and frugality while others, like ours, encourage the enjoyment of life in the present moment, the well-known carpe diem. This kind of culture, propagated by mass media, arts and the educational system, affects profoundly the time perspective of a large part of the population, reinforcing the already strong tendency towards immediate enjoyment and destroying, thus, the complex architecture of savings built throughout centuries in the long and difficult process of time civilization. “I want it here and now” seems to be the sign of the times. We make a liberal use of debt, without bothering with the previous sacrifice of refraining from the consumption of goods. We even reach the extreme situation of enjoying immediate consumption goods (holiday travels, banquets) by way of loans which, in turn, influences our future capacity of saving. But our current capacity of consumption is dependent on our level of saving. If we are not able to maintain this level, our consumption capacity will gradually decrease until that moment when our current standard of living will become unsustainable.
However, education in thrift or the change in the time perspective should not be compulsory. Every person has the right to choose their lifestyle. This is a moral question where economics or politics have no saying. But it is important to know the consequences of our actions. If we keep economic unsustainable consumption patterns we cannot complain when our living standard falls and cannot enjoy goods and services considered basic by many at the level that we were used to. Thrift is a virtue worthy of praise and defense. There is no need to impose it but it is imperative to understand that thanks to it we can enjoy a life that not even a pharaoh could have ever dreamt of.