Tuesday, 29 December 2009

The attack on thrift

Last Wednesday, when I was in my local newsagent, I noticed a copy of the the Times, with a big headline on the front cover about thrifty families being blamed for prolonging the recession. This struck me as preposterous, and clearly I’m not the only one, for Samizdata has described this as the dumb headline of the day.

But what struck me was the implication that this was virtually a moral issue. Thrift has become a vice; spending money on things that you don’t need has become a virtue.

And that is surely the way a lot of politicians see it. The temporary cut in the VAT rate was designed to encourage spending on luxuries. The car scrappage scheme was surely intended to encourage people who were not planning to buy new cars to go out and buy one anyway. And of course, the government has shown that it regards thrift as a bad thing, because its reaction to the economic slowdown was not just to encourage citizens to go out and spend - but also to increase borrowing so that it could itself spend more.

I think that this is economically dubious. But I think that it is morally dubious as well.


Stuart said...

Excellent observations. Cross-posting this one.

indigomyth said...

On a related topic, I do rather think that thrift is a good reason for an individual to drive economically (rather than environmental nonsense).

It seems to me far more impressive being able to make a vehicle that travels dozens of miles on a gallon of petrol, rather than a big Behemoth that only does about 1 mile per gallon. It seems rather a more impressive piece of engineering. That is why, rather than price of petrol, or environmental reasons, why I think it is more desirable to drive a small car, or one with high mpg.

(of course, this is only a personal view, not an advocacy of a policy decision)

Young Mr. Brown said...

Thanks, Stuart.

I agree with you, Indigomyth. I am very impressed with the way that manufacturers have been giving us some very economical cars in the past five years, so that getting 80 mpg is now a real possibility if you get the right car.

As for driving economically, it's something I do myself - not just to save money, but also to amuse myself by seeing how many miles I can squeeze out of a gallon (or tank) of petrol!

indigomyth said...


I saw a marvellous program with James May about alternative energy. Sheared of all the environmental nonsense, the idea of "alternative" energy supplies are some of the most creative and ingenious I have seen. If alternative energy could severe its hippy, free-love, Gaia worship stigma, and be seen instead as a very legitimate area of research, on the basis of thrift, or self-reliance, or whatever, it would be a great benefit. I am personally rather looking forward to hydrogen cars - an amazing bit of engineering.