The main thesis of In Cheap We Trust, by Lauren Weber, is that most people live cheaply only when they have to. To a few it comes naturally, like the author’s father. People in comfort, Ben Franklin included, might look back on a frugal past and call it virtuous, but those were people living in poverty, remoteness, a bad economy or other repression. Much of it is taken up with the history of who lived cheaply because they had to, who thought you should live cheaply, who was considered cheap in a bad way, and who thought cheap was a good thing. While there were some interesting passages about famous misers or bizarre household economy books, I was bored until we came to the role of cheapness in the 20th century.
In the last century, the popular propaganda shifted from celebrating frugality no matter what to encouraging consumption no matter what. The turning point came when Keynes pointed out that if no one was buying anything, no one wanted to make anything. The government was the only entity with the power to get money moving again. After some fits and starts, and the return to enforced frugality in World War II, by the time the war was over, the government encouraged renewed consumption to prevent a collapse in the economy.
The book discusses the cycles of savings driving investment, and investment driving savings, which very much had me thinking about the seven fat years and seven lean years. It also describes imbalances, such as the savings trap, when money goes into bank accounts and never comes out. And the biggest place where the money’s not coming out is where our dollars are going: to Chinese manufacturers, which flows to their government, who buy US debt. When those bonds mature, there’s still no better place for the money to go, so it rolls over into more debt. When that cycle finally overflows, it ain’t gonna be pretty.
Trouble is, I already knew most of that. If you’re not aware of the history of savings and cheapness, the book explains it well enough. If you are aware, then you’re only reminded of how scary the money world looks right now, leaving you not only bored, but depressed.
I’m glad this was a library book.