Redeemable Savings, or How to Become Ascetic through Consumption

During World War II, both the US and Canadian governments issued a series of propaganda posters aimed at reducing spending and redirecting private households’ financial expenditures into the general war effort. Many of those posters, developed by some of the cleverest advertisers of the time, drew on Puritanism’s most deeply rooted principle: self-restraint. One propaganda poster (distributed, in this case, by the Canadian government) succinctly exemplifies the underlying logic: as an elegant couple looks up at a gigantic elephant for sale, the caption sternly reminds them to be thrifty: “If you don’t need it … don’t buy it!” (Figure 1).

Figure 1.

If you don’t need it, don’t buy it. Propaganda Poster WWII (1942). Ottawa, Library and Archives Canada.

Such condemnation of inconsiderate and selfish consumption at a time when the nation was supposed to direct all its efforts into winning a war (to the degree that housewives were invited to send in all useful spare materials, including rubber, rags, and tin) consciously pulls at the heartstrings. In this way, nations whose economic success in the early twentieth century had been massively linked to an encouragement of consumption were reminded to value frugality, sacrifice and restraint in order to achieve a higher goal. If we are to follow Max Weber’s famous thesis, such “asceticism” is even the most important drive in North American culture, and, by extension, for capitalism wholesale.

Weber’s startling thesis in The Protestant Ethic and the Spirit of Capitalism, which appeared implausible at first sight, was frequently critiqued after its first publication and still remains contested today. Among the many criticisms voiced, one continues to resonate: the spirit of self-restraint might not be germane to capitalist entrepreneurship, since an economy doesn’t run on entrepreneurs alone; it also needs consumers willing to buy more than what simply covers their needs. As this article argues, drawing parallels between two moments of crisis—that of WWII and the current, post-2008 financial crisis—allows new light to be shed on Weber’s famous thesis about the ascetic nature of capitalism, and posits a new explanation of how investment capitalism and consumer capitalism are not contradictory, but ultimately perfectly convergent.

In the Wake of the Crisis: Economy within the Boundaries of Mere Reason

It has become a truism to say that the current financial crisis was triggered by irresponsible speculation and by the negligent behavior of credit institutions, which (by inventing schemes such as “subprimes” and other junk titles) would give up on the most basic principles of caution with the purpose of maximizing profit, thereby destabilizing the entire system. Many sides called for stricter regulations in order to better monitor financial transactions, allow full oversight upon trading operations, and achieve a semblance of a transparent market. Furthermore, many advocated a divestiture of banks in the spirit of the Glass-Steagall Act, so as to separate the more traditional credit activities from the speculative sector, the latter being seen as the main culprit responsible for the crisis.

As reasonable as this last demand may sound at first, it is nevertheless profoundly paradoxical (and beautifully epitomizes the contradictions of late capitalism): quite simply, how could there be any economic investment at all without speculation? What would an “economy within the boundaries of mere reason” look like? In the wake of the 2008 financial crisis, many economists recalled that the difference between credit activities and speculative activities is only one of degree. Investment is only possible where there is uncertainty, it was argued, and as such, regulation would only lead to stagnation. At the very climax of the subprime crisis, when there still seemed to be a consensus for stringent regulation of financial transactions, the economist Cass Sunstein—whom President Obama had just appointed head of the White House Office of Information and Regulatory Affairs (which was responsible for regulation)—coauthored an article in the Wall Street Journal explaining why “transparency is better than draconian regulation” (Thaler and Sunstein). The rationale of neoliberalism could hardly be better summarized: a reasonable economy must...