I Owe, I Owe, It's Off to Work I Go

I could go on and on about the purely economic evils of a nation that lives in debt, and I probably will in future posts. But there is a more serious issue. Debt is not just an economic question, but a moral one. And a moral fault is always a kind of enslavement. Sometimes, we must live beyond our means, because our work does not provide us with reasonable means to live, or because we can't find work at all. But that does not seem to be the cause of most debt today. Rather, most consumer debt today reflects our status as consumers; we identify ourselves not by what we are, but by what we have; identity has become a matter of having rather than being.

This is a kind of slavery. Americans work more than anyone else because we owe more. It is not the so-called "Protestant Ethic" that keeps us chained to our desks, but rather its break-down. Our forebears might have gone into debt for a few long-lived items: a house (purchased with a heavy down payment), a car, a piano, a little furniture. But the idea of putting a burger on the tab would have struck them as strange; the idea that they would be paying next year for a shirt they threw away yesterday would have struck them as bizarre.

In order to become a nation of debtors, we had to change our moral views; we had to acquire a sense of entitlement, and one that operated immediately: we cannot wait for what we want; all our desires must be filled this moment. But when we do this, we lose some degree of freedom. We work now not merely to get the things we need, but to pay for things we probably didn't need; in other words, we work for Mastercard; we labor for Visa. And Mastercard and Visa can never have enough of our work. If a man is working to get what he needs, the things he needs send him a signal as to when to stop working; but a man of unlimited desires, desires he largely gets from advertising, doesn't know when to stop working. Soon he does not own the things he bought with borrowed money; they own him.

Individuals and families go bankrupt for a variety of reasons; sometimes because they are spendthrifts, but other times there is illness, job loss, tragedy of some kind. But with nations, it is otherwise; before they lose their freedom they lose their character. Moral bankruptcy is the prelude to, and cause of, financial bankruptcy.


Kevin Tuesday, July 17, 2007 at 9:02:00 AM CDT  

The idea seems to be: People are spending on consumer goods now, going into debt. Later they will have to work more and spend less to pay the debt.

But every dollar borrowed is a dollar lent. What about those who are forgoing consuming today in order to consume more later? Bank managers and people with stock in banks are going to receive a lot of money and they are going to spend it, or pass it on to somebody who will spend it. That spent money will go to people producing consumer goods, perhaps the very people working to pay off their debts?

Averages are deceiving.

Iosue Andreas Sartorius Tuesday, July 17, 2007 at 2:29:00 PM CDT  

Excellent post. My Korean wife broke me of the debt habit. The very concept of any debt is aborrent to her and, until recently. her people.

Conversely, my parents, God bless them, taught me to run up some debt in order to get a good credit rating. I guess a good "credit rating" is essential to help one acquire greater debt in the future.

Oliver Woods Saturday, July 21, 2007 at 5:58:00 AM CDT  

Excellent post! Good to see more people flying the flag of economic rationalism and sanity in the United States!

This unlimited wants being fuelled by big business, advertising and easy credit is typical of capitalism, and is very much an intrinsic part of free market capitalism that has become entrenched across the Anglo-Saxon world (particularly in nations like New Zealand and the United States).

I don't really see how we're going to break out of it unless we fundamentally reform our terrible economic system of today, whether it be through socialism or distributism.

John Médaille Sunday, July 29, 2007 at 1:04:00 PM CDT  


It is odd that the worst credit risks today are those who actually pay their bills. In the jargon of the credit card industry, those who pay the full balance each month are called deadbeats; in other words, the old vices become the new virtues. No economy can long survive such a reversal of right values.


Capitalism must continue to multiply wants in order to be stable. That is, people must always feel the lack of something (always be unhappy with their lives). Hence they must spend not only all they have, but an excess that is borrowed, or the system will suffer a shortage of demand. This is the hallmark of irrationality.

Kevin, what you describe is the essence of the class-based society from which capitalism was supposed to free us, but is in fact re-establishing with a vengeance. One class makes more then it can possible spend, and everyone else is dependent on this class extending credit at usurious rates. Of course, these rates further concentrate wealth at the top, which leads to further need for more credit, etc., leading the economy into a death spiral.


Kevin Sunday, July 29, 2007 at 5:09:00 PM CDT  

I have kind of an aversion to thinking about society in terms of class. It seems too simplistic and divisive.

In your way of seeing the world, most of the wealth is concentrated among those at the top. Do you believe that, say, the bottom 75% have less wealth today than they had in the past? If so, what specifically is your definition of wealth? Despite the prevalence of credit, most people actually own and inhabit homes that would have seem quite luxurious to historical man.

John Médaille Sunday, July 29, 2007 at 5:22:00 PM CDT  

You may not like to speak of classes; you may not like to speak of reality at all. Nevertheless, economic classes are a reality, and realists must speak of them.

Wealthis concentrated at the top, your "aversion" to speaking of it notwithstanding. And the number of people who actually own their homes, as opposed to those who have them mortgaged to a bank, is surprisingly small.

Kevin Sunday, July 29, 2007 at 9:52:00 PM CDT  

Very well, would you please explain what definition of "class" you are using when you say we have a class based society? In what way is our society based on class, as you conceive of it? I note that you think capitalism was "supposed" to free us from a class-based society. Who made this claim? Were they using the same definition of class as you?

You say, "One class makes more then it can possible spend, and everyone else is dependent on this class extending credit at usurious rates." What class is that? How do I know which class I am in? Since the gap between these classes is so obvious to you, please let us know what the cut-off point is. What percentage of society is in the upper class? What do you have in mind when you say that the lower class is dependent on them? In other words, dependent on them for what, specifically? I don't make more money than I could spend, but I don't feel that I'm dependent on anyone for anything essential to life. Is it possible not to be in either class? You can see how exploring the class construct is a murky experience if you are used to knowing what the terms of the discussion mean...

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