Category Archives: public debt

Dalrymple’s twin laws of political economy

Screen Shot 2015-05-19 at 08.54.52The existential problem of indebtedness

To restate the Dalrympian laws of public and private finance, they are:

Memories are short and lessons are never learned.

and

Sufficient unto the day is the credit thereof.

Screen Shot 2015-05-19 at 08.23.03Dalrymple writes that

a profound change in culture and character has taken place in my lifetime. People not very much older than myself prided themselves that, poor as they were, at least they were not in debt; not to be indebted was for them a matter of pride and self-respect. What they could not buy outright, they were content to do without. Whether or not this was a good thing for the economy as a whole I cannot say; but I think it was good for the character. It encouraged self-control and also a probity that is now uncommon.

Governments

Screen Shot 2015-05-19 at 09.15.54are under political pressure to indebt themselves

while ordinary people

are under some other type of pressure or compulsion that is internal to them and resistible but not resisted. They judge themselves and others by their modes and quantities of consumption, which give meaning to life in the absence of any other meaning. Spending, whether or not they can afford it, is affirmation that their life has a purpose.

Indebtedness

is an existential problem. Spendthrifts hope, if they give any thought to the matter at all, that the economics will take care of themselves. Sufficient unto the day is the credit thereof. At least until the next credit crunch.