When I became a student of the glass armonica, I also began studying its inventor, Benjamin Franklin, in greater depth. And I am powerfully struck by the great differences between the cultural environment and political leaders of the American Revolution era and of our own day.
Like us, the Founding Fathers were a complex mix of Virtue and Vice, of high morals in some ways and moral failings in others—all at the same time. To the extent the Founding Fathers sowed Virtue (such as the idea of “all men are created equal”), we generations later are still reaping the benefits, yet to the extent that they sowed Vice (for example, their acceptance of slavery), we generations later are still reaping the painful consequences (we’ve made progress, but racial prejudice is STILL a serious challenge).
Consider Franklin. As a young man he decided he wanted to improve himself. In his autobiography he describes how he made a list of Virtues to work on:
- Temperance. Eat not to Dulness, drink not to Elevation.
- Silence. Speak not but what may benefit others or your self. Avoid trifling Conversation.
- Order. Let all your Things have their Places. Let each Part of your Business have its Time.
- Resolution. Resolve to perform what you ought. Perform without fail what you resolve.
- Frugality. Make no Expence but to do good to others or yourself: i.e. Waste nothing.
- Industry. Lose no Time.—Be always employ’d in something useful.—Cut off all unnecessary Actions.
- Sincerity. Use no hurtful Deceit. Think innocently and justly; and, if you speak; speak accordingly.
- Justice. Wrong none, by doing Injuries or omitting the Benefits that are your Duty.
- Moderation. Avoid Extreams. Forbear resenting Injuries so much as you think they deserve.
- Cleanliness. Tolerate no Uncleanness in Body, Cloaths or Habitation.
- Tranquility. Be not disturbed at Trifles, or at Accidents common or unavoidable.
- Chastity. Rarely use Venery but for Health or Offspring; Never to Dulness, Weakness, or the Injury of your own or another’s Peace or Reputation.
- Humility. Imitate Jesus and Socrates.
Franklin especially focused on one Virtue for a week in turn, and tracked his failures/progress on all the Virtues in a chart (each row is a Virtue, each column is a day of the week, each dot records a ‘lapse’):
Franklin later said about the effort:
Tho’ I never arrived at the perfection I had been so ambitious of obtaining, but fell far short of it, yet I was, by the endeavour, a better and a happier man than I otherwise should have been if I had not attempted it.
Now Franklin was no prude, or saint, but I think it’s safe to say that the effort he invested in his ‘Virtues’ played no small part in his rise from the 13th son of a poor soap and candle maker (with a formal education only through the 2nd grade!) to successful businessman and author—to successful inventor—to successful statesman of worldwide and everlasting renown.
Franklin has quite a few aphorisms about debt; here’s a sampling:
He that goes a borrowing goes a sorrowing.
When you run in debt; you give to another power over your liberty.
The second vice is lying, the first is running in debt.
Lying rides upon debt’s back.
Disdain the chain, preserve your freedom; and maintain your independency: be industrious and free; be frugal and free.
Rather go to bed supperless than rise in debt.
And what was Franklin’s own practice surrounding debt? When he was starting his printing business as a young man, Franklin borrowed the money to get started. But he worked like a maniac to pay it off as quickly as he could.
It’s also worth pointing that civilization as we know it isn’t possible without credit/debt. If you’re employed, essentially you’re extending your employer ‘credit’ by working for the month, and being paid at the end of the month. (Or whatever your pay period.) It just wouldn’t be practical for your employer to write a check for every employee every day.
Similarly, companies frequently have ‘accounts’ with their suppliers—they get supplies as needed day to day and then settle up accounts at the end of the month. (Or whatever the mutually agreed terms might be.) It would simply be impractical for a large company with many of projects and supply requirements to write a check for each and every purchase with each of its suppliers day in and day out.
That’s short-term credit. Like any practical businessperson, Franklin extended short-term credit to his customers, and had accounts with his own suppliers.
But all of these are examples of using credit when the cost (in both time and money) is far less than doing without. In these examples it just makes good dollars-and-cents sense to use an appropriate amount of credit/debt.
So what’s an appropriate level of debt? Opinions vary, of course. Choosing a couple at random:
“As a good rule of thumb, a debt-to-capital ratio below 40% is generally considered low; a ratio of 40%-60% starts to become a concern; and a ratio greater than 60% is definitely cause for concern” (”The Straight Dope on Debt“, The Motley Fool)
“As a general rule, your consumer loan payments, not counting your mortgage, shouldn’t exceed 10% to 15% of your monthly take-home pay. Add in your mortgage payments and your property taxes, homeowners insurance premiums, and private mortgage insurance payments, and your total debt level generally shouldn’t exceed 36% of your monthly gross income.” (”Debt Level Calculator“, CUNA Mutual Group)
(I’m not interested in quibbling exact numbers—there’s a range of opinions and these two examples use different rulers, but they are still “in the herd” and give a sense of what is sensible.)
And how are we as a country doing? Consider this chart. It shows the ratio of debt to deposits for the banking systems of various countries around the world. As you can see, the U.S. is almost ‘off the chart’—our current debt-to-capital ratio is over 300% !!!
(Click for source article in Fortune Magazine, Sept. 2008)
And to whom have the banks been over-lending all this money? Or, more to the point, how does our total U.S. debt break down, in terms of government vs. business vs. consumer debt? Here’s how the U.S. Federal Reserve breaks it down (‘Domestic non-financial debt’ as of the end of 2007):
|
Billions of $ |
% |
| Households |
13.8 |
43 % |
| Business |
10.6 |
33 % |
| Fed.,State & Local Govt. |
7.3 |
23 % |
| TOTAL |
31.7 |
100 % |
Just for personal/household debt alone, that works out to $43,000 for every man, woman and child in the U.S. (PLUS business and government debt.)
Mirror, mirror on the wall, who’s the biggest debtor of them all? It’s not the Feds, it’s not Wall Street—it’s We The People! To be sure SOME of that personal debt is sensible—student loans, unavoidable debt from medical bills, and so forth. But I’m thinking that a lot of that debt hasn’t been so sensible—that there’s an awful lot of MacMansions, SUVs, flat screen TVs and Salad Shooters in that $13.8 billion dollars.
As a people, we’ve become Raving Addicts to Debt. And like addicts with a serious problem, it’s affecting our ‘job’ (our ability to compete in the global economy), it’s affecting our relationships (to other countries and our foreign affairs in general), and it’s affecting our health (our own U.S. economy).
To be sure the Credit Industry hasn’t helped—they’d be like the Debt Drug Dealer. “The first credit card is FREE, little girl! Hee hee hee!” Or… “This adjustable mortgage won’t hurt you one little bit!! Hee hee hee!” But the Credit Industry hasn’t been forcibly sticking that Needle of Debt into our arms—WE’VE been doing it to ourselves. And on top of that we keep electing politicians who promise to keep sticking the Needle of Debt into Uncle Sam’s arms. (Addicts love company.)
And, in typical addict behavior, our first instinct is to blame our own problems on someone else. “It’s the Republi-crats fault!” (Wait, we elected them!) “It’s the Credit Industry’s fault!” (Wait, we signed up for those credit cards and mortgages of our own free will.) “It’s too good to be true!!”—it was.
I realize there are individual exceptions—I’m talking about US in general. And that includes ME. What a lot of folks are going through right now—I’ve been there. I was a computer programmer in the 90’s—remember how they said “It’s the new Internet economy that will only go up up up and never come down!” (Just like “real estate will go up up up and never come down!”—sound familiar?) I at least knew better than that—when all my colleagues were joining startups with crazy business plans, I knew that the Internet Bubble had to pop. (See Extraordinary Popular Delusions and the Madness of Crowds
. I was living in Seattle at the time, and the largest industry there besides software was Boeing, so I got myself employed there to weather the storm I knew was coming. And the Internet Bubble did indeed pop—and I was safely employed at what my former colleagues called “Boring Boeing” (maybe not so ‘boring’ anymore). But who could have foreseen 9/11? Certainly not me—and the whole aviation industry augured right into the ground. Boeing was laying off employees as fast as they could to stay solvent, and that eventually included me. At that point the Software Industry was still in the toilet. I went 18 months with ONE INTERVIEW. Looked for work up and down the West Coast—nada. Couldn’t pay the mortgage or sell the house—it finally foreclosed. Maxed out the credit cards just putting food on the table. Couldn’t find work. I tried everything I could think of—and was just stumped. I finally had to declare bankruptcy. After the final court hearing, when it was all over, I went out to my truck and wept.
We The People have been like the drunk who has fallen down, and Bernanke and Paulson and the rest are doing what they can to get us back up onto our wobbly feet—trying to sober us up enough to stagger on a little farther. And that’s fine—it needs to be done, and they’re the experts. But dare I suggest—might we want to STOP? Stop being Raving Addicts to Debt? And just maybe try ‘Credit Sobriety’?
And what’s really great is that instead of waiting for the Fed or anyone else to ‘rescue me’ (another addict behavior), I can start right now—right this minute—down the road to Virtue Recovery. ‘Virtue for Life’ isn’t about ‘virtue for your whole life’, it’s about “Have a Life—through virtue!”
My argument is that Virtue is the best long term strategy for Living. “Credit-Sobriety”—or any other Virtue—isn’t about “depriving yourself” of something good, it’s about having a sustainable happy life (another form of sustainability!) Did Franklin’s commitment to his 13 Virtues make his life better or worse? More successful or less? And here we are, centuries later, still reaping the benefits of Franklin’s genius—virtuously applied.
Consider trying Franklin’s list of Virtues. Or there are marvelous lists of Virtues in all the major Religions, and countless other places. Choose a list that resonates for you. Redouble your efforts to put it into practice. You’ll make your own life, the lives of your fellow human beings, and ultimately the whole World just a little better place to live. What’s the downside to THAT?
