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In Chapter 29, The Fundamentals of Good Behavior, of her Etiquette in Society, in Business, in Politics and at Home (1922), Emily Post advises that “A very well-bred man intensely dislikes the mention of money, and never speaks of it (out of business hours) if he can avoid it.” 80 years later (July 2005) great-granddaughter-in-law Peggy Post updates this advice in Don’t be gauche: Polite ways to talk money.

Where did this American money taboo come from?

Not all American ethic groups share this taboo–I know from personal experience that American Jews do not. After my parents were divorced, my father remarried a Jewish woman and I came to live with them and my two Jewish step-siblings in an affluent, over 80% Jewish town in Long Island, New York. I attended high school there and later attended college at State University of New York at Albany (SUNYA), a school demographically more diverse than my high school, but still significantly Jewish. Most of my friends and boyfriends were Jewish; I converted to Judaism before marrying a Jewish boyfriend I met at SUNYA and we raised our kids in the Jewish faith. Coming from a WASP (White Anglo Saxon Protestant) background, I was in a position to compare cultural differences and observed (with individual exceptions on both sides) nearly opposite attitudes about money, including the importance of discussing how money works and of mastering concepts of personal finance.

The New York Times Sunday Book Review piece Jews and the Burden of Money by Catherine Rampell about Jerry Z. Muller’s essay collection Capitalism and the Jews outlines the development of this expertise and was particularly illuminating for me in connecting the financial illiteracy of the wider culture with a historical pattern of anti-Semitism:

For centuries, poverty, paranoia and financial illiteracy have combined into a dangerous brew — one that has made economic virtuosity look suspiciously like social vice.

Wait a minute, how does economic virtuosity become equated with social vice? Rampell explains that Christians were forbidden to lend money at interest–to make money from money itself–but Jews were permitted to do so:

This early, semi-exclusive exposure to finance, coupled with a culture that valued literacy, abstract thinking, trade and specialization (the Babylonian Talmud amazingly presaged Adam Smith’s paradigmatic pin factory), gave Jews the human capital necessary to succeed in modern capitalism. It also helped that Judaism, unlike many strains of Christianity, did not consider poverty particularly ennobling.

For Christians, lending money at interest was a vice, and Jews were the money lenders. Think of Shakespeare’s character Shylock in The Merchant of Venice. To this day, the Roman Catholic Church officially forbids usury, but the money taboo I experienced growing up–not discussing money–has its origins in a kind of Victorian Protestant self-disgust with its own capitalist work ethic (see a related up-to-date version of disgust here). Christopher Herbert’s “Filthy Lucre: Victorian Ideas of Money,” Victorian Studies 44.2 (2002): 185+, graphically depicts the Victorian dilemma:

A pious man, Paul says twice in the First Epistle to Timothy, must be “not greedy of filthy lucre,” for “they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition” (1 Tim. 3.3, 8; 6.9). The Victorian worship of money, rooted though it is in Protestant culture, is shot through with the dread and aversion that such passages enjoin upon all faithful believers. If money is a divinity, it is a “forbidden” one–one tabooed for human contact as a source of pollution. Hence the profusion in Victorian popular literature of moralized tales of misers and hoarders, greasy bloodsucking lawyers and usurers, and similar exemplary types whose morbid craving for money is figured as a disgusting perversion, often with overtones of sexual depravity.

The article goes on to discuss Charles Dickens’ novel Little Dorrit, as an example of Victorian popular literature dealing these “degenerative personality disorders” and the development of the money taboo as a kind of antidote:

The exact converse of the society mania, according to Little Dorrit, is a stringent system of avoidance and repression that expresses itself in the form of a panicky dread of indelicate references to money matters, or of even indirect contact with the taboo element of poverty. [...] Such a logic works like a consuming passion among the rich in Little Dorrit, necessitating nonstop recourse to what Dickens names, in a whole lexicon of terms for this apparently central, defining function of respectable Victorian society, “genteel mystifications,” “Circumlocution,” and “varnish.” [...] What Frazer would later identify as the principle of taboo is almost the dominant one in social life as portrayed in Little Dorrit, and no other behavior is more central to this society than that of refusing to be cognizant of unseemly, potentially distressing realities.

Mr. Merdle (the name itself a play on excrement), a rich financier who comes to financial ruin and ends his life by suicide, confirms the “irreconcilable moral contradictions” in the world of Little Dorrit:

This condition, Dickens argues, is intrinsic to Britain in the 1850s, where the capitalistic cult of money-getting and the Christian cult of the holiness of the poor and the blessedness of the state of poverty coexist. In such circumstances, that which we worship, gold, and that which we most despise and feel most contaminated and sickened by, excremental waste, are bound to seem at times like one and the same thing; rank odors will pervade the cultural atmosphere; and the feeling of nausea will be chronic.

Best not to talk about it.

Mildred Pierce

This is the third post in the yet-to-be-named series on the history of American money values.

In the previous post we considered David Brooks’ observation that the new wave of American anti-intellectualism or populism is chiefly concerned with opposing shared beliefs of the new privileged elite class, which he refers to as the “educated class” to emphasize the higher value it places on academic achievement than it did before the 1960s. I speculated that this new wave of populism seeks to remove the privileged elite from power for same ideological reasons previous American populist movements have opposed the privileged elite, but also in this case as a backlash against elites letting the economy run amok.

The point was to try to understand the nature of American ant-intellectualism; focusing on those times when anti-intellectualism opposes the power elite can help us identify common themes in populist rhetoric, but it doesn’t really help us understand the sources of anti-intellectualism in our culture or its impact on financial literacy.

Anti-intellectualism is deeply rooted in American pragmatism and capitalist enterprise. As Michael Novak writes in the National Review article Wealth and Virtue, “the distinctive, defining difference of the capitalist economy is enterprise: the habit of employing human wit to invent new goods and services, and to discover new and better ways to bring them to the broadest possible public,” and “its main resource is human capital: knowledge, know-how, skill, the knack of insight into new possibilities for making life easier and better for as many others as possible. Its primary dynamic force is human wit.”

The emphasis is on knowledge that’s useful, practical, and readily applicable to commerce. In The American Mind, Henry Steel Commager describes the American approach to education as similar to his approach to religion, expecting it to be “practical and pay dividends.” Education was expected to “prepare for life—by which he meant, increasingly, jobs and professions. His attitude toward higher education was something of a paradox. Nowhere else in the western world did colleges multiply and flourish as in America, yet not until Eliot reformed Harvard and Gilman built The Johns Hopkins did he have a real university. No people was more avid of college degrees, yet nowhere else were intellectuals held in such contempt or relegated to so inferior a position; and in America alone the professor—invariably long haired and absent minded—was an object of humor.”

And Equity and Excellence in American Higher Education authors William G. Bowen, Martin A. Kurzweil and Eugene M. Tobin describe the “Jacksonians’ contempt for privilege, the persistent popular sentiment that a college education was an unnecessary—even dilettantish—pursuit.”

Personal finance may not have been considered a practical topic of study for the majority of Americans, although according to Financial Literacy in America: Individual Choices, National Consequences, financial education was more common in American schools in the early 20th century, disappearing from school curricula only after the nation transitioned from a culture of saving to one of spending and responsibility for long-term planning shifted from the individual to government and industry. When personal investment choices were few and relatively uncomplicated and you could rely on government Social Security and an employer pension plan for retirement income, study of personal finance had no obvious practical use—you could get by with a casual understanding.

At this point the need for financial literacy is glaringly obvious, but still a challenge. For example, one of the primary concepts of finance, the time value of money, requires an understanding of the formula for compound interest, a formula not formally introduced until second-semester Calculus, while most Americans not only struggle to master high-school Algebra, but don’t really understand why it’s important. Algebra is taught at a point when American students are the least financially literate, making it difficult to link these two related areas of accomplishment.

I would argue that there is also a cultural attitude linking mastery of finance with the elite class, thereby making it a suspicious endeavor. It’s ok to succeed in commerce through hard work and business acumen, but not ok to succeed via channels primarily accessible to the privileged elite.

Over the weekend we watched the 1945 movie Mildred Pierce, essentially a morality play instructing on good and bad ways to get ahead in American life. The wealthy characters are clearly bad, either obsessed with protecting social position or loafing around and frivolously spending inherited money. The character Mildred Pierce is ambitious for the social advancement of her daughter Veda, but she and her husband are living beyond their means keeping up the appearances of an upper-middle class lifestyle. The husband protests and this conflict leads to divorce, at which point Mildred is forced to work at menial but honorable jobs to support Veda’s voracious appetite for the finer things of life. Veda’s social striving goes from bad to worse, but I won’t spoil the ending. The lesson is that social striving can go too far, that success must be obtained by honorable means no matter how humble, and that the privileged elite are not of high moral character.

To increase financial literacy in this country, we will need to culturally unlink the study of finance from the rarefied world of the privileged elite and bring it back down to earth, to the world of ordinary people trying to get ahead through learning, hard work and enterprise.

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This is the second post in a new series (yet to be named) on the history of American money values.

A recent David Brooks column in the New York Times noted the increasing wave of American anti-intellectualism, specifically opposition to almost all beliefs and values attributed to the “educated class.” If you google “educated class” you see’ll a link to Brooks’ column as well as a myriad of articles attacking his points. The column itself has 464 comments, many of which disagree with Mr. Brooks. One commenter was particularly vehement:

“If you don’t leave us alone, if you do continue to bother us; we will remove you from power and replace you with those who don’t have your credentials. I can hardly see where Sarah Palin or Dennis Kucinich or Ralph Nader can do worse than you have done. And, we don’t really care whether they wear the proper school ties. We really don’t care.”

Lest you think American anti-intellectualism is always directed at liberals, the post Who’s the anti-intellectual? by Timothy Sandefur attempts to set the record straight: liberals also embrace anti-intellectuals who push their agenda.

Where does American anti-intellectualism come from? Prof. Steven Dutch, University of Wisconsin – Green Bay, believes that human curiosity is mostly of a low order, “concerned with immediate gratification of a particular desire to know, and mostly oriented toward immediate practical results.” In other words, since intellectualism doesn’t serve our immediate needs, it’s not a priority.

In Anti-Intellectualism in American Life (summary of ideas here), historian Richard Hofstadter sees anti-intellectualism as rooted in the institutions of American democracy, the egalitarian ideals exemplified by figures such as president Andrew Jackson, American business values such as ambition and practical common sense, and religious Evangelical movements emphasizing the value of emotional experience above rationality.

What strikes me is the polarizing of ideas that aren’t necessarily opposing in nature. For example, why can’t you value both emotional experience and rational thinking?

The positive arguments given in support of anti-intellectualism disguise its true basis: anti-intellectualism, or populism, arises periodically in American culture as a challenge to the power and wealth concentrated in the educated class. But I don’t see how (unless you’re willing to completley overthrow democracy) anti-intellectualism helps redistribute wealth and power? Instead, I agree with Kate Horsley that Anti-intellectualism dehumanizes and disempowers.

And it hurts your wallet! As the economic events of the last couple of years have made abundantly clear, financial competence and savvy are important skills to develop if for no other reason than to protect yourself from unethical financial professionals. It takes formal education and intellect to master the concepts underlying personal finance.

So by all means, use every weapon in your arsenal to challenge wealth and power, but don’t succumb to the falsehood that anti-intellectualism is an effective weapon against that power.

Judy Garland - A Gay Cultural Icon

A recent ABDPBT Personal Finance post invited readers to comment on their 2010 business goals, and I hastily commented that one of mine is to start a new series on the history of American money and values, then corrected that to read history of American money & moral values. The history of American money values is more like it. Not being an historian, sociologist or any other kind of academic qualified to conduct research on the history of anything, let alone the history of American money values, I will have to construct a crude model of how Americans get their money values based on what I think I know, then we’ll see how well it holds up.

The model assumes these are the primary factors influencing the formation of American money values:

• Max Weber’s social construct of an ethnic group,
• perception of and attitude toward one’s socio-economic class,
• level of formal education,
• preferred political theory and attitude toward political discourse,
• attitude toward intellectualism, i.e., pro vs. anti-intellectual

Note: The idea of ethnic group includes race, religion and culture.

What does any of this have to do with Lady Gaga?

If you happened to read Anna’s very funny post about Lady Gaga you either thought it was hilarious because you know all about this gay cult icon as she put it or you were one of the troll commentors, or, like me, you laughed despite not having ever heard of Lady Gaga before. Fast forward to Christmas vacation, me lounging around and catching up on several months of reading. I encountered not one but two articles mentioning Gaga: the April 17, 2009 New Yorker Ladies Wild: How Not Dumb is Gaga? tells us “she is as smart as she repeatedly claims to be” and the Sunday, December 27 New York Times Lady Gaga Is As Modern as A Video Gamer’s Creation describes her as a real-life avatar. The video Bad Romance reinforces the avatar idea; the music sounds like 80s dance music.

So, according to the Gaga wiki entry and the above model, Lady Gaga’s money values were probably influenced by her Catholic Italian-American ethnic group, perception of herself as upper-class, formal music school training, liberal politics and comfort with publicly speaking about her political views, and her pro-intellectual attitude.

Of course we can’t know exactly how these factors influenced her money values (unless she happens to comment on this post), but over time, as we look at examples of real Americans and Debits Of Our Lives soap opera characters whose values and influences are known, it should be possible to assemble an historical framework pointing to how these influences tend to shape money values. For example, we should be able identify factors that help explain why Heather’s kids Jack and Sarah are financially illiterate and why Thomas Jefferson was a shopaholic and died broke whereas John Adams, who lived modestly, was able to leave a small estate to his heirs per David McCullough’s book John Adams. Subsequent posts in this series will explore the influencing factors, e.g., how different ethnic groups teach kids about money, now and in the past, and look at how these factors have influenced real and fictional Americans.

Remember that a model cannot predict specific outcomes: the role of the individual in the development of his or her money values cannot be overstated. For example, it’s quite possible that none of Thomas Jefferson’s influencing factors support spending beyond one’s means!

The first three factors of the model are fairly typical: it’s not difficult to find scholarly papers analyzing how ethnic group, class and education level impact various aspects of American well-being. I added the factors of political preference and attitude toward intellectualism based on personal experience.

Politics come into play in that limited-government conservatives vs. liberal progressives have polar opposite views regarding the role of government in providing financial assistance and security to individuals. Still in vacation mode, I read all of Charles R. Kesler’s well written and logically constructed argument The Conservative Challenge and offer the link here as a good example of the limited-government point of view. As a progressive liberal, I can’t help commenting in response to Kesler’s reference to Obama’s “gauzy” campaign slogans that Reagan used similar vague slogans to charm the people, and in response to his point that liberalism has no clearly defined goal of reform, no “terminus ad quem” that as I see it, conservatives don’t either! Case in point, how do conservatives answer the question of how small should government be? How low should taxes be?

My Dad liked to say, “well, let’s just suppose we go ahead and condemn the poor, shall we condemn their children too?” As much as I support the concept of personal responsibility and agree that big bloated government is a problem, I can’t get past the need for a minimal social safety net. However, I have seen the availability of government programs affect people’s values; a feeling of entitlement is not uncommon within my generation.

The factor of intellectualism is a big one in my point of view. Both conservatives and liberals have used anti-intellectualism, or populism, at different times in American history to win the support of ordinary people for their party’s agenda. But in an increasingly complex economy that requires significant effort on the part of individuals to understand and manage their personal finances, is it really a good idea to promote anti-intellectualism? A recent post at Bad Money Advice points to the danger of the “widespread attitude that it is unreasonable to expect Americans to understand personal finance as they should.”

So yes, I’m deliberately adding the factors of politics and intellectualism and confess to a bias regarding how each affects money values, and no, I don’t have a name yet for this series!