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Recovering Thrift to Solve the Credit Crisis

The credit crunch stems from a deeper moral and spiritual crunch. At stake is a virtue on which capitalism depends - thrift. Resolving the crisis will involve a recovery of this virtue.

Most westerners have long had access to grassroots saving institutions, such as building societies and credit unions. But recently, while commercial banks have focused their investment opportunities on 'high net worth individuals', financial institutions targeting the 'sub-prime' market have proliferated. The growth of this anti-thrift sector is partly responsible for the high levels of consumer debt that have become an accepted feature of advanced economies, but now threaten to undermine them.

This raises questions not only about the morality of debt, about which today's moral and religious leaders are generally outspoken, but also about the importance of thrift, about which such leaders are generally silent.

Despite this silence, Hebrew and Christian scriptures support a theology of thrift. Literally, thrift means 'prosperity' or 'well-being', meanings encompassed in the Hebrew notion of shalom, which is central to the biblical theme of redemption. True, Jesus warned against laying up treasure on earth. But his warning is against greed and miserliness, which undermine thrift. In fact, the fear that generally accompanies these vices is evident in the words and actions of the third servant in Jesus' parable of the talents (Matthew 25:14-30). This servant's fear, based on a harsh picture of God, led to actions that were unimaginative, unproductive and risk-averse.

In contrast, the fearless words and actions of the two servants who 'put their money to work', reflect a God who inspires the imagination, productivity and risk-taking that characterize the thrift needed to convert barren money into fruitful capital. Having made this conversion, which underlies all investment and entrepreneurship, these two servants are welcomed into God's shalom economy: 'I will put you in charge of many things. Come and share your master's happiness.' Their thrift leads to stewardship and happiness. This resonates with two further meanings of thrift: 'prudence' and 'providence', words that appear in the names of two large companies that began as explicitly pro-thrift institutions: the Prudential and Friends Provident.

Opinion formers emphasizing 'happiness' should draw inspiration from the way happiness is obtained in Jesus' parable, to mount a public education campaign on thrift, linked to government-backed bonds to be sold at National Lottery ticket outlets. Millions of consumers, currently bombarded with gambling and credit options, would thus be offered the freedom and opportunity to save. This is the freedom and opportunity of the market economy - an economy built on thrift.

Peter Heslam


  high levels of debt have become accepted in advanced economies, but they now threaten to undermine them
imagination, productivity and risk-taking characterize the thrift needed for investment and entrepreneurship