20. Edwin R. A. Seligman, Economics of Instalment Selling: A Study in Consumers’ Credit (1927), 222.
21. See 101–2 above.
22. Quoted in Calder, Financing the American Dream, 235.
23. Seligman, Economics of Instalment Selling, 224.
24. Louis Hyman, Debtor Nation: The History of America in Red Ink (Princeton, NJ, 2011), ch. 2.
25. It is, of course, also true that high-income households tend to have higher debt. The interplay between these factors is complex. See further: Sarah Bridges, Richard Disney & Andrew Henley, ‘Housing Wealth and the Accumulation of Financial Debt’, in: Giuseppe Bertola, Richard Disney & Charles Grant, eds., The Economics of Consumer Credit (Cambridge, MA, 2006), 135–79; and Richard Disney, ‘The UK’s Household Debt Problem: Is There One? And, If So, Who’s at Risk?’ (London: Institute for Fiscal Studies, 2007).
26. According to the European Mortgage Federation, per capita mortgage debt in Greece in 2010 was €7,120 and €5,830 in Italy – in the United States, it was four times that (€27,040); http://www.hypo.org/Content/Default.asp?pageId=414.
27. Martha L. Olney, Buy Now, Pay Later: Advertising, Credit and Consumer Durables in the 1920s (Chapel Hill, NC, 1991), table 4.6, 108.
28. George Norris, governor of the Philadelphia Federal Reserve Bank, cited in P. J. Kubik, ‘Federal Reserve Policy during the Great Depression: The impact of Inter-war Attitudes Regarding Consumption and Consumer Credit’, in: Journal of Economic Issues 30, no. 3, 1996: 829–42, at 833. For intellectuals’ ongoing ambivalence, see Horowitz, Anxieties of Affluence.
29. M. L. Olney, ‘When Your Word is Not Enough: Race, Collateral and Household Credit’, in: Journal of Economic History 58, no. 2, 1998: 408–31.
30. P. Scott, ‘The Twilight World of Inter-war British Hire Purchase’, in: Past & Present 177, no. 1, 2002: 195–225.
31. From DM27 billion at the beginning of 1970 to DM115 billion at the end of 1979. See the Bundesbank Zeitreihe PQ 3150 ‘Sonstige Kredite an . . . Privatpersonen’. While not perfect, this data series gets us closer to the volume of consumer credit than the MFI-Zinsstatistik, used by some writers, which includes credit to individual traders and non-profit-making organizations; http://www.bundesbank.de/statistik/statistik_zeitreihen.php?lang=de&open=banken&func=row &tr=PQ3150.
32. Luca Casolaro, Leonardo Gambacorta & Luigi Guiso, ‘Regulation, Formal and Informal Enforcement, and the Development of the Household Loan Market: Lessons from Italy’, in: Bertola, Disney & Grant, eds., The Economics of Consumer Credit, 92–134.
33. See Gaillard, ‘Télévisions et crédit’, 108f; in 1960, 70% of consumer goods were bought on credit in the USA and Canada, 60% in Britain, 55% in West Germany, but only 35% in France.
34. A. Börsch-Supan, ‘Savings in Germany – Part II: Behavior’, in: James M Poterba, ed., International Comparisons of Household Saving (Chicago, 1994).
35. Great Britain. Dept of Trade and Industry, Committee on Consumer Credit, ‘Consumer Credit. Report of the Committee. Chairman: Lord Crowther, etc.’ (1971), Cmnd. 4596, 123.
36. Casolaro et al., ‘Lessons from Italy’, in: Bertola, Disney & Grant, eds., The Economics of Consumer Credit, 120f.
37. P. Horvath, ‘Die Teilzahlungskredite als Begleiterscheinung des westdeutschen Wirtschaftswunders, 1948–1960’, in: Zeitschrift für Unternehmensgeschichte (1992) 19–55, esp. 35–7.
38. Sombart, Luxus und Kapitalismus, 96, my translation.
39. Horvath, ‘Teilzahlungskredite’, 22.
40. Crowther Committee on Consumer Credit (1971), tables 2.1 & 2.4, 52–55.
41. ‘Beryl’ in Hemel Hempstead, in a 1997 interview, quoted in O’Connell, Working-class Debt in the UK since 1880, 120.
42. The above draws on Sheldon Garon, Beyond our Means: Why America Spends while the World Saves (Princeton, NJ, 2011).
43. Garon, Beyond our Means, 10.
44. A. Chandavarkar, ‘Saving Behaviour in the Asian-Pacific Region’, in: Asian-Pacific Economic Literature 7, no. 1, 1993: 9–27; www.cpf.gov.sg.
45. C. Y. Horioka, ‘Are the Japanese Unique? An Analysis of Consumption and Saving Behavior in Japan’, in: Osaka University Institute of Social and Economic Research, Discussion Paper 606, (Osaka, 2004); Victoria de Grazia, The Culture of Consent: Mass Organization of Leisure in Fascist Italy (Cambridge, 1981), 154–9. See also 371–2 above.
46. Soogeun Oh, ‘Personal Bankruptcy in Korea’, in: Johanna Niemi, Iain Ramsay & William C. Whitford, Consumer Credit, Debt and Bankruptcy: Comparative and International Perspectives (Oxford, 2009), 375–93.
47. Quoted in Johnson, Saving and Spending, 213f.
48. Samuel Smiles, Self-help; with Illustrations of Character, Conduct and Perseverance (London, 1859/1866), 295.
49. E.g., the 1949 Möbelsparaktion by savings banks in Lower Saxony; Horvath, ‘Teilzahlungskredite’, 21.
50. Lehtonen & Pantzar, ‘The Ethos of Thrift: The Promotion of Bank Saving in Finland during the 1950s’ . See also: Visa Heinonen, ‘Talonpoikainen etiikka ja kulutuksen henki. Kotitalousneuvonnasta kuluttajapolitiikkaan 1900-luvun Suomessa’ (‘Peasant Ethic and the Spirit of Consumption’), in: Bibliotheca Historica (1998) 33; Visa Heinonen, Minna Lammi & Esko Varho, ‘ “Ei nimittäin haluttu valmistaa tavallista reklaamifilmiä . . . ” Mainonta ja valistus suomalaisissa lyhytelokuvissa’, Lähikuva 4/1995, 34–47. With thanks to Visa Heinonen and Minna Lammi for showing me film adverts of the target saver.
51. (Crowther) Committee on Consumer Credit, Report, Cmnd 4596, IX.1 (1971) , 151, 153; Lord Crowther, the head of the 1971 committee, had studied with Keynes and taken over The Economist the day before Munich 1938, but, perhaps equally significantly, he was a keen observer of the American economy, married an American and had a (not entirely happy) experience with the property market and hotel groups.
52. Unlike in most OECD countries, British official data is for the gross saving ratio. The net ratio is slightly lower because it deducts the consumption of fixed capital in respect of owner-occupied dwellings, that is, it takes into account the fall in value in homes owned through wear and tear. For credit, see (UK) Department for Business, Innovation & Skills, ‘Credit, Debt and Financial Difficulty in Britain, 2009/10’ (June 2011), http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/c/11-963-credit-debt-in-britain-2009-10.pdf. Mean housing wealth was £204,500 in 2008, see ‘Wealth in Great Britain: Main results, 2006/08’; http://www.bris.ac.uk/geography/research/pfrc/themes/psa/pfrc0914.pdf.
53. Franco Modigliani & Richard H. Brumberg, ‘Utility Analysis and the Consumption Function: An Interpretation of Cross-section Data’, in: Post-Keynesian Economics, ed. Kenneth K. Kurihara (New Brunswick, NJ, 1954), 388–436; Andrew B. Abel, ed., The Collected Papers of Franco Modigliani (Cambridge, MA, 1980), Vol. II; and Milton Friedman, A Theory of the Consumption Function (Princeton, NJ, 1957).
54. As Modigliani himself acknowledged in Franco Modigliani, ‘Life Cycle, Individual Thrift and the Wealth of Nations’, in: American Economic Review 76, no. 3, 1986: 297–313.
55. A. Börsch-Supan, Life-cycle Savings and Public Policy: A Cross-national Study of Six Countries (Amsterdam, 2003); A. Lusardi, ‘Information, Expectations, and Savings for Retirement’, in: Behavioral Dimensions of Retirement Economics, 1999: 81–115; B. D. Bernheim, J. Skinner & S. Weinberg, ‘What Accounts for the Variation in Retirement Wealth among US Households?’ in: American Economic Review, 2001: 832–57. The precautionary motive of saving is ruled out by the certainty equivalence assumption underlying the permanent-income hypothesis rules; see Deaton, Understanding Consumption, 177–9.
56. Christopher D. Carroll & Lawrence H. Summers, ‘Consumption Growth Parallels Income Growth: Some New Evidence’, in: National Saving and Economic Performance, ed. B. Douglas Bernheim & John B. Shoven (Chicago, 1991), 305–48, esp. 315–18.
57. Deaton, Understanding Consumption, 163.
58. Axel Börsch-Supan et al., ‘The German “SAVE” Study’ (2009) http://www.mea.uni-mannheim.de/fileadm
in/files/polstudies/3aferngy0iaowiys_MEA_Study_6.pdf.
59. Everywhere, the rich save more than the poor, but British research for 1970–2007 also found that those who rented a council flat saved significantly more than comparative households who had a mortgage; Thomas Crossley & Cormac O’Dea, The Wealth and Saving of UK Families on the Eve of the Crisis (Institute for Fiscal Studies, 2010).
60. See Elizabeth Lanyon, chair of the law council of the Australia Financial Services Committee, in Consumers International, ‘Living on Credit’, in: Asia Pacific Consumer 35/36, no. 1/2, 2004: 1–51, 11. The above draws further on Luigi Guiso, Michael Haliassos & Tullio Japelli, eds., Household Portfolios (Cambridge, MA, 2002); Elaine Kempson & Claire Whyley, Kept out or Opted out?: Understanding and Combating Financial Exclusion (Bristol, 1999). In the United States, the number of households holding mutuals and pension funds as well as direct stocks shot up from 32% to 49% in the 1990s.
61. Quoted in Jackie Botterill, Consumer Culture and Personal Finance: Money Goes to Market (Basingstoke, 2010), 149.
62. For the United States: R. Peach & C. Steindel, ‘A Nation of Spendthrifts? An Analysis of Trends in Personal and Gross Saving’, in: Current Issues in Economics and Finance/Federal Reserve Bank of New York 6, no. 10, 2000: 1–6. For Britain: S. Berry, M. Waldron & R. Williams, ‘Household Saving’, Bank of England Quarterly Bulletin Q3, 2009: 191–209.
63. http://www.bostonfed.org/education/ledger/ledger04/sprsum/credhistory.pdf. Greenspan’s hearing was on 26 January 2000 (S. HRG.106-526), available at: www.fraser.stlouisfed.org.; the computer had reversed names. See further: Robert D. Manning, Credit Card Nation: The Consequences of America’s Addiction to Credit (New York, 2000); and Richard Berthoud & Elaine Kempson, Credit and Debt: The PSI Report (London, 1992).
64. Hyman, Debtor Nation, 150f.
65. Eurobarometer, Consumers’ Opinions on Services of General Interest, no. 230 (Luxembourg, 2005).
66. Ronald J. Mann, ‘Credit Cards and Debit Cards in the United States and Japan’, in: Vanderbilt Law Review 55, no. 4, 2002: 1055–108. Schufa, Schuldenkompass 2004: Empirische Indikatoren der privaten Verund U˝ berschuldung in Deutschland (Wiesbaden, 2004).
67. In 2006, Americans owed $801 billion on credit cards and $13 trillion on loans (including mortgages). By 2010, it was $754 billion and $13.4 trillion respectively; OECD.StatExtracts, meta data ‘Household assets’, http://stats.oecd.org/Index. aspx, data extracted 1 Sept. 2011.
68. National Bureau of Economic Research, Pattern of Consumer Debt, 1935–36, 110. Only the poorest families experienced dissaving.
69. Hyman, Debtor Nation, ch. 7.
70. I have drawn on the OECD data series for 2000–2010. ‘Households’ Financial and Non-financial Assets and Liabilities’, extracted from http://stats.oecd.org/Index.aspx on 14 Nov. 2011.
71. Catarina Frade & Cláudia Lopes, ‘Overindebtedness and Financial Stress: A Comparative Study in Europe’, in: Niemi, Ramsay & Whitford, Consumer Credit, Debt and Bankruptcy, 249–71.
72. The starting point is: Gary S. Becker, ‘A Theory of the Allocation of Time’, in: Economic Journal 75, no. 299, 1965: 493–517.
73. Helen Jarvis ‘Housing to Manage Debt and Family Care in the USA’ and Carl Schwartz et al., ‘A Survey of Housing Equity Withdrawal and Injection in Australia’, both in: The Blackwell Companion to the Economics of Housing, Susan J. Smith & Beverley A. Searle (eds.) (Oxford, 2010) chs. 7 & 16.
74. The term was coined by Colin Crouch, ‘What Will Follow the Demise of Privatized Keynesianism?’ in: Political Quarterly 79, no. 4, 2008: 476–87, though it should be stressed that this was not exclusively an Anglo-Saxon phenomenon.
75. C. Kerdrain, ‘How Important is Wealth for Explaining Household Consumption over the Recent Crisis?’, OECD Economics Department Working Papers, no. 869, 2011.
76. The Economist, 18 Sept. 2010, 86.
77. Sharon Parkinson et al., ‘Mortgage Equity Withdrawal in Australia and Britain: Towards a Wealth-fare State?’ in: European Journal of Housing Policy 9, no. 4, 2009: 365–89; Jarvis, ‘Housing to Manage Debt in the USA’; and Schwartz et al., ‘Equity Withdrawal in Australia’, in: Blackwell Companion to the Economics of Housing, chs. 7 & 16.
78. ‘Changes in US Family Finances from 2004 to 2007: Evidence from the Survey of Consumer Finances’, Federal Reserve Bulletin, Feb. 2009, A 46, table 15.
79. In the early 1960s, those aged 65 and over made up 11% of household consumption and 14% of the population. By 1988, they accounted for 18% of consumption and 16% of the population. Jagadeesh Gokhale et al., ‘Understanding the Post-war Decline in US Saving: A Cohort Analysis’, Brookings Papers on Economic Activity, 1996, no. 1, 1996: 315–407.
80. (UK) Department for Business, Innovation & Skills, ‘Credit, Debt and Financial Difficulty in Britain, 2009/10’.
81. Elaine Kempson, Over-indebtedness in Britain: A Report to the Department of Trade and Industry (London, 2002), 43, 48.
82. ‘Changes in US Family Finances from 2004 to 2007’, A9–10.
83. Börsch-Supan et al., ‘The German “SAVE” study’.
84. Kempson, Over-indebtedness in Britain, 19; for white vans, see Scott, ‘The Twilight World of Inter-war British Hire Purchase’; and O’Connell, Working-class Debt.
85. Birgitta Klingander, Jean Lown & Sue McGregor, ‘Comparative Analysis of Canadian, American and Swedish Bankruptcy Policy: Why do Governments Legislate Consumer Debt?’ International Journal of Consumer Studies 25, no. 3, 2001: 208–27.
86. Udo Reifner et al., Consumer Over-indebtedness and Consumer Law in the European Union: Final Report Presented to the Commission of the European Communities, Health and Consumer Protection Directorate-General (2003); and I. Ramsay, ‘Comparative Consumer Bankruptcy’, in: University of Illinois Law Review 241, 2007: 241–73.
87. Udo Reifner & Helga Springeneer, ‘Die private Überschuldung im internationalen Vergleich – Trends, Probleme, Lösungsansätze,’ in: Schuldenkompass 2004, 174.
88. Reifner et al., Consumer Over-indebtedness in the European Union; Oliver J. Haas, ‘Over-indebtedness in Germany’, International Labour Office, Working Paper no. 44 (2006); Elaine Kempson & Claire Whyley, Kept Out or Opted Out?: Understanding and Combating Financial Exclusion (Bristol, 1999); Nicola Jentzsch & Amparo San José Riestra, ‘Consumer Credit Markets in the United States and Europe’, in: Bertola, Disney & Grant, eds., The Economics of Consumer Credit, 34–9; and A. Raijas, A. R. Lehtinen & J. Leskinen, ‘Overindebtedness in the Finnish Consumer Society’, in: Journal of Consumer Policy 33, no. 3: 209–23.
89. Gregory D. Squires, ‘Inequality and Access to Financial Services’, in: Niemi, Ramsay & Whitford, Consumer Credit, Debt and Bankruptcy, 11–30; and Angela C. Lyons, ‘How Credit Access Has Changed over Time for US Households’, in: Journal of Consumer Affairs 37, no. 2, 2003: 231–55.
90. Kempson & Whyley, Kept Out or Opted Out?, quoted at p. 42.
91. See Will Dobbie and Jae Song, ‘Debt Relief and Debtor Outcomes: Measuring the Effects of Consumer Bankruptcy Protection’, in: American Economic Review, Vol. 105(3) (2015), 1272–311.
92. Jason J. Kilborn, ‘The Innovative German Approach to Consumer Debt Relief’, in: North-western Journal of International Law & Business; 24, no. 2, 2004: 257–97.
93. Reifner & Springeneer, ‘Private Überschuldung im internationalen Vergleich’; and Ramsay, ‘Comparative Consumer Bankruptcy’.
94. James D. Davies, ‘Wealth and Economic Inequality’, in: Wiemer Salverda, Brian Nolan & Timothy M. Smeeding, eds., The Oxford Handbook of Economic Inequality (Oxford, 2009), ch. 6. And see now at length: Thomas Piketty, Capital in the Twenty-first Century (Cambridge, MA, 2014). In this section, I am focusing on income inequality (not wealth), because earned income, rather than inherited country houses, became the main marker in the twentieth century. Piketty focuses on capital’s share of income (such as dividends and capital gains) and argues that we are seeing a return to a widening gulf between capital and labour t
hat scarred the nineteenth century. But the inequality that has come since the 1970s is not primarily between capital’s and labour’s share of income, it is within labour between CEOs on high salaries and low-earning manual and clerical labour.
95. Richard G. Wilkinson & Kate Pickett, The Spirit Level: Why Equality is Better for Everyone (London, rev. edn, 2009). OECD, ‘Divided We Stand: Why Inequality Keeps Rising’ (OECD: 2011). It is a matter of debate whether ‘stress’ and ‘depression’ have actually increased since the 1950s or whether rising numbers reflect a rise in diagnostic tests and categories. Frank, Luxury Fever: Money and Happiness in an Era of Excess. See also the books on affluenza in note 1.
97. Robert Frank, Richistan: A Journey through the 21st-century Wealth Boom and the Lives of the New Rich (London, 2008), 3, 122.
98. Erich Fromm, To Have or to Be? (New York, 1976) is a source of inspiration for Oliver James, The Selfish Capitalist: Origins of Affluenza (London, 2008), esp. 46–54; James, Affluenza, esp. 65–7.
99. Jean-Jacques Rousseau, A Discourse on the Origin of Inequality, ed. G. D. H. Cole (Chicago, 1952), 362.
100. On Vevo, according to Universal Music, http://universalmusica.com/donomar/. In cases where the lifestyle of millionaires reaches broader audiences, it has had to ape celebrity culture, as in reality shows such as Made in Chelsea (UK) or Mulheres Ricas (Brazil).
101. C. Wright Mills, The Power Elite (New York City, 1956), 75. See further: F. Trentmann, ‘Past and Present: Historical Perspectives on Inequality and Collective Provision in Modern Consumption’, in: Southerton & Ulph, eds., Sustainable Consumption, 243–76.
102. David Riesman with Howard Roseborough, ‘Careers and Consumer Behaviour’ (1955), repr. in Riesman, Abundance for What? And Other Essays, quoted at 122. According to US census data, the average floor area of a new American home was 2,324 square feet in 2001 and 2,392 sq ft in 2010: http://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf. It is debatable whether the size of homes illustrates inequality and status seeking; in the United Kingdom, new-built homes have shrunk in the late twentieth century.
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