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Saturday, 10 July 2010

Hoarders and Wasters

One of our responsibilities to ourselves is to live our lives and not have them lived for us by others or by our vices and weaknesses. That is something which can be said in affluent, democratic societies. Those who are at the mercy of famine or terror have no chance of making something of lives which are nasty, brutish and short. In advanced societies, even disability and disease does not always stop someone living their life and even living it well.

Living one's life involves ambitions and projects and doing all that one does with as much energy, talent and commitment as can be mustered.

Most people have to earn a living to live a life. I don't really know whether it is a misfortune or not to be able to live on money you have not earned. It doesn't stop you having ambitions or projects or living life to the full. But the need to prioritise and structure and savour must be weakened.

People who earn a living save deposits to buy their own home or to travel the world. That is intelligble and rational. They may save for a rainy day - but that is often the thin end of the wedge for saving to no purpose, since they may have no clear idea of what counts as rain.

Saving turns easily into hoarding, the activity of those who believe that life isn't worth the money. They fold their arms and refuse to live the lives they've got.

In most Western societies, inflation generally outstrips the rate of return on ordinary savings. When I was a child, the Government could rely on the Post Office Savings Bank - in which every child was enrolled - to supply it with cash at what, in reality, was a negative interest rate. So savers always ended up with less (real) money than they started with. They still do. Most saving is an irrational activity. It's hoarding an asset which wastes away. That is why people who have scrimped and saved for a lifetime complain that they still have to scrimp when they are old. They have paid the price of their own meanness.

In my working life as a stamp dealer I see it in collectors' hoards, almost universally stored in unsatisfactory conditions - damp or dust or sunlight degrade the hoard so that it ends up, at the collector's death, worth much less than it cost. A serious collector, as opposed to a hoarder, takes care of what he has collected.

There is a lot of talk about splitting cautious "High Street" banking from "casino" banking and fiercely regulating the latter. A life-affirming government would be equally worried about the former. People should be encouraged to live their lives; hoarding money should be made difficult and the miser socially disapproved of. Why do you want to make bankers rich? is the question that should be asked of hoarders.

Gambling can be an addiction, like hoarding but the opposite. But wasters are sometimes rational too. Given a choice between negative real interest and the chance of a big win, the latter - depending on the odds - may be the more rational choice. When it is clearly rational, we call it investment.

A good rule of thumb for living a life is to take no heed for the morrow. That is why I have no savings, just an income which I spend as it comes in.

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