Dorothy Rowe

September 2004

Is Debt a Vice or a Virtue?

Dorothy Rowe

Personal debt in the UK is nearly a trillion pounds. It's made up of what we owe on credit cards and other loans and, most of all, on what we owe on our mortgages. I find such an amount of debt very troubling but then I grew up in the years when to be in debt was shameful. I saw my mother put a shilling or so aside each week until she had enough to buy some new linoleum for the kitchen, or, if she saw some small item she needed but could not immediately afford, she would put it on lay-by. At the shop the item would be wrapped in brown paper and put in a cupboard beside other such parcels, all waiting for their would-be owners to pay the full amount. It was a great day when the last few shillings were paid and the parcel given to the new owner.

After World War Two governments tried to stimulate the economy by allowing expensive items to be bought with hire purchase. However women were not considered capable of managing their own finances. A woman wanting to use hire purchase had to get two male guarantors to sign the hire purchase agreement. When I bought my first car the hire purchase agreement was signed by my husband and my father. Two men less capable of managing their own finances would be hard to find. Now almost daily my post is contains offers of favourable loans and extra credit cards. Owning your own home and refurbishing it to the highest standard has become a national goal and competitive sport. There is now an enormous range of objects which our parents, had they ever encountered them, would have regarded as luxuries but which we regard as necessities.

Such a plethora of money and things is immensely seductive because it appears to promise to fulfil our greatest need and to assuage our greatest fear.

Our greatest need is to feel that our life has some significance. We all need to feel that other people have noticed our existence and regard it with some respect. We all need to feel that we have not simply filled in time between birth and death; that we have left what Samuel Beckett called 'a stain upon the silence'. When the time comes for us to leave the world stage we want to feel that our life has been satisfactory to us and that something we have done will have a long lasting effect upon the world. Those people who present themselves for the humiliations of Big Brother are seeking significance for their lives just as others seek significance through the arts or business or politics or the church. Having a nice home, a new car, the latest bit of technology can promise to give us the significance we crave. Manufacturers and advertisers sell what they hope is an image of personal significance.

When it comes to our greatest fears we fall into two groups. There are the extraverts, the People Persons, whose greatest fear is that of being rejected and abandoned. Through credit they can try to appear to be so attractive, so generous, and so admirable that people want to be in their company. If that fails then with credit extraverts can try bribery. The promise of a super present can ensure that grandchildren come willingly to visit, and paying off their parents' mortgage can create a lifelong sense of guilt in the parents which ensures that your children will always be there to look after you.

For introverts or What Have I Achieved Today Persons credit means that you can ward off the chaos that follows failure by expanding the range of goals you could achieve. Your home can be endlessly improved, or you can move ever upwards from one expensive house to an even more expensive house. A good education can ensure that your children are always a credit to you, while your smart wardrobe and even smarter car can smooth the path of your successful career.

It is easy to forget the danger of living on credit. The poorhouses and the debtors' prisons have long since closed. Governments since the 1980s may have condemned drunkenness and gluttony but they never condemn greed. Indeed, it has now become highly moral to be in debt. We are all consumers now. Whether Conservative or Labour, governments have pursued policies which ensure continual economic growth. Politicians of the ruling party praise themselves for achieving such economic growth but they fail to point out that without such a huge amount of personal debt the growth rate of the British economy would be much lower. The committee which decides what the interest rate will be carries an enormous responsibility. If the interest rate goes beyond a certain point and repayments become larger than what the debtors can afford, the effects on individuals and on the economy will be disastrous.

Britain is not alone in this degree of indebtedness. Indeed, the whole world runs on debt. My image of the international capitalist system is of a large number of people engaged in a game called 'Keeping the Debt Balloons in the Air'. These people are standing close together on a huge field. Above their heads float millions of balloons of various sizes and colours. The purpose of the game is to keep all these balloons in the air. None must touch the ground and burst. Anyone can join the game provided he brings a balloon to join those already there, but once a person and his balloon have entered the game he cannot take his balloon and leave. The game must go on forever.

Events affect the game. Small, nasty wars and conflicts that threaten the game have to be contained, and so far this has been managed. However, another world war would disrupt the game completely. Hence no large power can afford to start a world war. For those of us who remember that the last world war debt for once can be seen as a blessing.

Dorothy Rowe The Real Meaning of Money HarperCollins.