Beyond Our Means: Why America Spends While the World Saves

Beyond Our Means: Why America Spends While the World Saves

Beyond Our Means: Why America Spends While the World Saves

Beyond Our Means: Why America Spends While the World Saves


If the financial crisis has taught us anything, it is that Americans save too little, spend too much, and borrow excessively. What can we learn from East Asian and European countries that have fostered enduring cultures of thrift over the past two centuries? Beyond Our Means tells for the first time how other nations aggressively encouraged their citizens to save by means of special savings institutions and savings campaigns. The U. S. government, meanwhile, promoted mass consumption and reliance on credit, culminating in the global financial meltdown.

Many economists believe people save according to universally rational calculations, saving the most in their middle years as they plan for retirement, and saving the least in welfare states. In reality, Europeans save at high rates despite generous welfare programs and aging populations. Americans save little, despite weaker social safety nets and a younger population. Tracing the development of such behaviors across three continents from the nineteenth century to today, this book highlights the role of institutions and moral suasion in shaping habits of saving and spending. It shows how the encouragement of thrift was not a relic of indigenous traditions but a modern movement to confront rising consumption. Around the world, messages to save and spend wisely confronted citizens everywhere--in schools, magazines, and novels. At the same time, in America, businesses and government normalized practices of living beyond one's means.

Transnational history at its most compelling, Beyond Our Means reveals why some nations save so much and others so little.


When I began researching this book several years ago, saving money was not the sexiest of topics—certainly not in America. Policymakers here have long emphasized consumption as the driver of the economy, while historians prefer to write about the rise of our vibrant consumer culture. But recently the issue of saving has become maybe too exciting. Despite a booming economy, household saving rates sank to near-zero levels by 2005. Three years later, the U.S. economy experienced a housing and financial meltdown from which we have yet to recover. Americans now contend with massive credit card debt, declining home prices, and shaky financial institutions. It has become painfully clear that millions lack the savings to protect themselves against foreclosures, unemployment, medical emergencies, and impoverished retirements.

As American families ponder their next move—whether to spend, save, or borrow—they might consider the very different ways in which other advanced capitalist nations behave. In Germany, where households sock away much more than Americans, saving is sexy. That’s how we may translate “Geiz ist geil!” the wildly successful advertising campaign run by the electronics chain Saturn between 2002 and 2007. The message offended some because it could also be rendered, “Stinginess Makes Me Horny!” Yet for many Germans, the slogan playfully affirmed their frugal, often stodgy approach to consumption. In Japan, which until recently boasted the world’s highest household saving rates, saving was rarely sexy. But it has been stylish. The pert, modern housewife demonstrates her cleverness by controlling the family’s spending and boosting savings. Once while shopping in a Tokyo department store at the end of the year, a thought occurred to me. Americans would also be at the stores, each buying hundreds of dollars worth . . .

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