Friday, December 9, 2011


The missus repaired some clothes the other day. As well as breathing new life into old trousers and not blowing the housekeeping the way her shopping benders usually do, this enterprise had the additional benefit of allowing her to feel thrifty. With the economy looking likely to tank again and George Osborne cutting the public sector like... well like a right-wing ideologue, surely making a few savings of this sort should be the order of the day? Thrift is practical. Thrift is virtuous. Thrift is sometimes a bit sanctimonious perhaps, but basically good. Isn’t it?

The merits of thrift in fact depend on who you want to do good for. It doesn't take a genius to work out that if you’re saving money you’re not spending it (though I know a six-year-old who would disagree). It did take a genius to work out what this means and that genius was John Maynard Keynes. Though often associated with the “hike up tax then spend like a drunken sailor” left-wing of politics, Keynes had some pretty subtle insights into the nature of recessions. His most influential principle was that, when economies are flat-lining, something needs to stimulate demand and get the wheels turning again. You can give people tax cuts and hope they spend more but, tight-fisted buggers that they are, the public might actually save some of the extra rather than blow it all on an Amazon binge. At times like this someone else needs to step in and flash a bit of green. That fall-back spender is usually the Government (pay attention young Osborne), though what they do with all the DVDs, books and iPods is a mystery.

Though not the first to notice the downside of saving, Keynes offered the clearest statement of the so-called “paradox of thrift”. One way of expressing this is to say that I may benefit if I follow Marguerite Pattens wartime austerity tips described at last year’s Seedy Saturday. I save and my quids are in. However, if everyone starts making do and mending, demand will contract and the economy will head down the toilet. Keynes would’ve used a more decorous image as he was a gentleman as well as a genius. Whether or not he would have been as much of a gentleman had he met the young Marguerite in the Blitz is unknown. He was also, after all, an associate of the metrosexual Bloomsbury Group.

So it’s personal gain set against group loss. Still Christmas is coming and we all have a chance to be economic heroes. You may be sick of shops putting up their displays at the end of summer, outraged at being told to get your last minute gifts in October, and mad at the excess of Mega-Monday, but if there was ever a time to splash out surely this is it. Even that dourest of puritans Gordon Brown thought spending was our patriotic duty. From Superdrug to Skylark, from Tesco to Tizz’s, your town needs you! 

John McGowan, 8th Dec 2011 

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