It Never Rains in America?

In one of Aesop’s Fables, an ant, having laid away enough grain for the bitter winter, mocked a grasshopper who asked him for food, saying: “Since you could sing all summer, you may dance all winter.” In Stuart-era England, Daniel Defoe, most famous for writing Robinson Crusoe and Moll Flanders, filled popular advice books with warnings against debt: “For a tradesman to borrow money upon interest, I take to be like a man going into a house infected with the plague.” Toward the end of the Tokugawa Shogunate, Ninomiya Kinjirō, Japan’s “Peasant Saint,” left behind his most famous phrase, “Work hard, spend little. Gather much firewood, but burn little.” In his 2012 book Beyond Our Means, Sheldon Garon connects many historical dots and presents a systematic account of household savings in thirteen countries from the eighteenth century to the present.

This global account begins from a strong contemporary American agenda, as suggested by its subtitle, Why America Spends While the World Saves. Garon has spent a good part of his career studying Japan and is known for his perceptive insights into the Japanese state’s “social management” program in the modern era (Molding Japanese Minds, 1997; The State and Labor in Modern Japan, 1987). Having seen firsthand how, in East Asia, the small household savings contributed both to national and individual fortunes, Garon was intrigued by an important question even before the 2008 financial crisis exposed America’s debt problem. Why do Asians save so much and Americans so little? Don’t Americans need to save for a rainy day? It surely rains in America. To fall back on cultural explanations like Asia’s “Confucian-Buddhist heritage” has serious limitations, since leading European nations have also saved at high rates in history. Thus, in this study, Garon goes far beyond the American and Japanese borders and tries to make sense of the rival trends of saving and debt that cohabit the capitalist world.

Beyond Our Means is comprised of twelve chapters, with roughly four on America, four on Japan, three on Western European nations, and one on other East and Southeast Asian nations. The story spans four periods: the 1730s to the 1860s, the origin of national thrift; the 1860s to the 1900s, the rise of systems of postal savings and schools savings; the 1910s to the 1940s, campaigns for the great wars; and the 1950s to the 2000s, the balance of consumption, saving, and investment.

Modern thrift promotion, in Garon’s account, originated in the wheels of Protestantism and the Industrial Revolution. Authorities in Western Europe found saving the best “vaccine” against the ailments of society—the logic being that the poor who save don’t rebel; thus German burghers established the first savings bank, Sparkassen, in 1778, and the British Parliament passed the Savings Banks Act in 1817. Both acts aimed to integrate the humbler class as self-disciplined members of the community. The British government then pioneered the combination of savings banks with its nationwide post offices. The new Post Office Savings Bank was an instant success, because its accessible, secure, and confidential accounts freed working-class savers from irritating paternalism. Meanwhile, the Belgians became the internationally recognized leader in school savings with its Gent Model, where teachers collected pupils’ coins on behalf of the state bank. By the early 1900s, the small savings deposited in post offices and savings banks had accumulated to vast pools of capital for European state agencies, especially when they needed to bypass the National Assembly or Parliament and sustained growing expenditures. On the other side of the world, Japan’s new Meiji government adopted postal savings “at the stroke of a pen” and accumulated eleven million deposit accounts by the 1910s (p. 144). Thrift promotion had evolved from a community-based charity act to a multinational trend; and Britain, Belgium, and Japan admired each other’s state mobilizing power from afar.

The overwhelming costs of the two world wars further...