The Eclipse of 'Elegant Economy'

The Impact of the Second World War on Attitudes to Personal Finance in Britain

Martin Cohen

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317034711
• Edition: 1
• Topic: History
• Subtopic: British History
• Index: History

Elizabeth Gaskell might have been amused to learn that the Victorian 'elegant economy' she mocked so poignantly in Cranford reached a new apogee in the mid-twentieth century and endured the invasion of its precise antithesis, 'conspicuous consumption'. For Britons of all classes the years of austerity during and after the Second World War were years of disorientation and fears of resurgence of the worst of the interwar decades. They had never had more money in their pockets or less material things on which to spend it. Many took refuge in the 'elegant economy', its creator dubbed 'a sort of sour-grapeism, which made us very peaceful and satisfied'. Constrained by rationing, manufacturing and import controls personal finance could only be disbursed on non-material things - sometimes wisely, sometimes pragmatically and sometimes by throwing all caution to the wind. Here for the first time is the history of these diverse reactions explored through Britain's metamorphosis from austerity to affluence, with consumerism seen through fresh eyes. Today political commentators constantly warn of the encroachment of austerity. This book is a timely reminder of the years of real austerity in Britain: when regardless of financial status everyone suffered its tribulations: when a 'sub-prime' mortgage was unimaginable: when abuse of expense claims by public figures was unthinkable: and when no one dared utter a word critical of their bank or its manager.

Chapter 1
Introduction

There, economy was always ‘elegant’ and money-spending always ‘vulgar and ostentatious;’ a sort of sour-grapeism, which made us very peaceful and satisfied.

Elizabeth Gaskell, Cranford

Consumption has been shown to be central to discussions of gender, to cultural critiques of luxury, the rise of the bourgeoisie, the development of the modern nation state, the emergence of political economy and the commercialised market place, the end of both aristocratic clientage and the moral economy and the development of modern subjectivities through the categorisation of individuals as consumers …

Consumption, consumerism, consuming, price and material culture are all crucial to our understandings of twentieth-century history.

Matthew Hilton¹

The study of ‘consumption, consumerism and consuming’ that has come to prominence in recent years does not sit easily with the study of economic and social history. History is by definition retrospective, while consumption, from the viewpoint of the consumer, is anticipatory. The most perceptive of consumerist historians, including Hilton cited above, ignore or give small prominence to a basic tenet, familiar in one form or another to every student of commerce or marketing. Nobody buys the physical thing they receive in exchange for a payment: they buy only an expectancy of benefit or pleasure to be derived from its consumption, ownership or practical use. This rule is applicable not only to sustenance and material objects but to everything and anything that involves the disbursement of money. Consumption, consumerism and consuming must therefore embrace expenditure on culture, education, healthcare, security, travel and entertainment, as well as gambling, voluntary donation, obligatory taxation, savings, investment and more, where nothing tangible is expected or received in return for a payment. As personal financial situations improve, as they did in Britain in the 1940s and 1950s, the proportion of income and capital disbursed for such ethereal purposes inevitably grows much faster than for the acquisition of tangible commodities. Intangible consumption, consumerism and consuming, especially of money itself, must therefore be seen as of much greater historical significance.

This book explores the impact of the Second World War on the attitudes of the British people to their money and its usage. It combines a review of essential background history from 1939 until the end of the 1950s with comment on the cultural and political events which helped prompt a transformation from imperfect affluence, to imperfect austerity, and back to imperfect affluence. It also attempts to negate the allegation that during and as a result of this evolution, producers and entrepreneurs, through aggressive publicity or resourceful marketing techniques, in some way beguiled people into spending their money on that which they neither wanted nor needed. The leading proponent of that thesis, John Kenneth Galbraith proclaimed in The Affluent Society:

Integrating outlay on advertising with the theory of consumer demand … recognising that wants are dependent on production … accords to the producer the function of both making the goods and making the desires for them. It recognises that production, not only passively through emulation, but actively through advertising and related activities creates the wants it seeks to satisfy … The point is indeed obvious.²

Nothing could be less obvious. Galbraith and his defenders, notably fellow American Vance Packard in his anti-advertising thesis The Hidden Persuaders, fail to accept that no producer can successfully satisfy a ‘want’ unless it has been pre-created by natural human desire or nurtured by the culture of the society in which the end consumer lives. Commercial publicity in any form can never influence attitudes to expenditure, since in isolation it can neither create nor destroy the want and desire at the root of all markets. The economic and social history of Britain’s age of austerity provides a particularly poignant illustration of how, in both material and ethereal markets, consumer expectancies of benefit and pleasure invariably evolve through forces beyond the control of commerce.

It must be explained at the outset that in preference to ‘expectation’ I mainly employ the term ‘expectancy’ for its air of greater uncertainty when applied to the attitudes of individuals as consumers. How often do we hear or say: ‘I don’t know what I want, but I’ll know it the moment I see it’? However uncertain their nature, expectancies are present wherever there is demand and although they cannot always be precisely identified, they can at least be loosely categorised. For the purposes of this book I have designated three categories: emotional expectancies, stimulated for example by fear, hope, nostalgia, ambition or desperation; conventional expectancies, stimulated by peer pressure, class, rank, religious or national tradition; and romantic expectancies, stimulated by culture and every manifestation of the arts, most potently by the oral legends, myths and fairy tales we all learn in childhood. One or more of these expectancies is involved in every decision to spend or to save.

It would not only be close to impossible but fruitless to attempt to explore the countless avenues through which the entire population employed their money and I am aware of many omissions. There is no reference, for example, to expenditure on prostitution, narcotics and other vices, while investment in marriage for money is mentioned only briefly, partly because there can be no reliable evidence and partly because it can be safely deduced that these were of small significance in the financial affairs of the overwhelming majority. Food and drink, although intrinsic to every personal budget and not ignored, are given small prominence since they have been more than adequately dealt with by others, notably by Ina Zweiniger-Bargielowska in her brilliantly researched Austerity in Britain (2004). Also, with the exception of housing and motor cars, this book has little to add to the wide historiography of ‘material’ consumerism. Regional attitude variations too are deliberately sidestepped: not only are they complex and hard to clearly define but would contribute nothing of value to this already multifaceted study. Comparisons with other countries are avoided for similar reasons. I do, however, include considerable analysis of the national Budgets and their impact on personal finance. The individual taxpayer’s reaction to legislative change has never featured prominently in historical literature: Martin Daunton’s unique work Just Taxes, for example, provides an incisive discourse on the cause and effect of tax measures from the government’s point of view. But before the advent of so-called ‘money’ columns, only on budget days did the press find issues of personal finance newsworthy from the individual’s point of view. Contemporary commentary on the chancellors and their budget proposals thus provides some of the most reliable evidence of prevailing attitudes to personal finance.

During the Second World War the chancellors and their budget proposals impacted especially profoundly on prevailing attitudes to personal finance. For the first time, income tax became a factor in the lives of the majority – so did thoughts of tax avoidance and, in some cases, evasion. The innovative hire-purchase and term-payment schemes that had realised so much interwar consumer expectancy vanished, and with them personal debt and insolvency. The brutal curtailment of consumer choice by rationing and production controls also added a new dimension to consumerist decisions – a conflict between national and self-interest.

At the end of the war most British people were demonstrably left in a stronger personal financial position than at its outbreak but, like all wars, it also bequeathed pain and bereavement. Neither would be relieved nor comforted through the long aftermath of deep austerity, when their new-found wealth could not buy the British people the pleasures and benefits they most craved. While attitudes to these disorientating circumstances were inconsistent, they can be generally divided between those of the abject spenders who yielded to ‘conspicuous consumption’ and those of the initially greater numbers who stoically resisted it through the practice of ‘elegant economy’. The definitions and significance of these diametrically opposed epithets will be explained and expounded through the following chapters.

Endnotes

¹ Hilton, Matthew, Consumerism in 20th Century Britain: The Search for an Historical Movement (2003), 6, 9.

² Galbraith, John Kenneth, The Affluent Society, 1958 (1999), 128.

Chapter 2
Fleeting Crescent (1918 to 1939 and Before)

I have never accepted the view that war, post-war and pre-war are separate things. War may be an intensification in the development of our lives, but there is no definite break. Everything you do before a war determines largely what will happen in the war, while everything you do in the war will largely determine what will happen after the war.

Ernest Bevin, October 1942

There still lingers a sense of loss of respectability. We feel that the opportunity to buy with cash would be better and more straightforward. We never talk to anybody about our dealing with these clubs. Collectors call, and neighbours notice things like that, still we keep it to ourselves as much as possible.

Mass-Observation survey respondent, January 1939¹

Within a decade of the ending of both the First and Second World Wars talk of gloom and despair gave way to talk of consumer boom. On both occasions the transition was no whim of fate. On both occasions the British people were given no financial reward for their sacrifice and victory but with resolve and determination pulled themselves back from economic abyss. On both occasions the needs and desires of ordinary people became more demanding in parallel with regeneration and the development of mass-communication and mass-production. On both occasions the revitalisation of commercial enterprise proved constructive and of unequivocal benefit to both the individual and to the national economy. Yet on both occasions overt money-spending was frowned upon by all sectors of the community, just as it had been through a millennium of moral and legal censure. Twentieth-century Britain remained unable to exonerate consumption – a natural desire, which when fulfilled, has invariably made a constructive contribution to every sphere of human activity.

The intuitive abhorrence of perceived extravagance in both religious and secular tradition can be traced back beyond the advent of money itself. From the prophets and scribes of the Old Testament to the orators of ancient Rome, luxury, seemingly embracing the acquisition or use of anything beyond the demands of primitive survival, has time and again been disparaged. In his work, Consumption, sociologist Alan Aldridge records the condemnation of such indulgence in ancient Greece, but like most commentators fails to provide a clear definition of the wrong condemned by the fathers of philosophy or explain the motive of their condemnation. He cites philosopher Roger Scruton’s interpretation of Aristotle’s argument that there is a profound distinction between happiness and pleasure:

Pleasure is precarious because it depends on good luck but happiness is robust because it flows from virtue. Consumption delivers only pleasure, not happiness. But happiness, not pleasure, is the final goal of human life and only virtuous people can be happy.²

If this is true, then those who buy or attempt to buy pleasure or benefit for themselves can be neither virtuous nor happy. Whether or not this was the impression Aristotle intended, it is improbable that he would have been aware of the concept of consumption in any all-embracing sense. Aldridge himself writes that the term ‘consume’ was not used until the fourteenth century when, inevitably, it was given a series of derogatory meanings: ‘to use up, destroy, devour, waste, squander or exhaust’, while in the sixteenth century similar critical connotations were attributed to the word ‘consumer’.³ These definitions suggest that consumption meant no more than superfluous self-satisfaction. Even food, clothing and shelter, it was thought, were destructive and wasteful if greater than the absolute minimum necessary to sustain life, or worse, if associated with pleasure.

Peter N. Stearns, in the introduction to his study Consumerism in World History, was not the first to attempt a definitive interpretation but like all others it is flawed. Stearns applies no limits to consumerism but his reference to ‘goods’ would seem to exclude ethereal commodities:

Consumerism describes a society in which many people formulate their goals in life partly through acquiring goods that they clearly do not need for subsistence or for traditional display.⁴

However desirable an alternative society, it has never existed in reality and probably could never exist. Mankind has acquired unneeded ornamentation and bodily adornment since primitive times, well before the advent of ‘traditional display’. Nor can the needs of many people be said to be clear. Examples of one man’s meat being another man’s poison are legion. Christopher Berry devotes his perceptive The Idea of Luxury to a thoroughly researched but inconclusive attempt to differentiate between luxury and necessity. In particular he cites the complex anomalies that governments have always encountered in selecting luxuries for their many endeavours to tax private indulgence.⁵ Stearns’s definition is a paradox. Taken to its logical conclusion, everyone in a society free of the totally negative consumerism he describes would constantly vary his or her diet to equal the ‘need’ to replace expenditure of energy, and would change clothing with the ‘need’ dictated by every variation in temperature. This surely would promote greater ‘need’ and hence consumerism by any definition. Stearns appears to make the common error of confusing his innate moral distaste for self-indulgence, waste, and greed with evidence of human behaviour. To him and those of similar mind, a consumerist society is one prone to their own engendered perception of extravagance. The mid-twentieth century British attitude to personal finance can therefore only be fully appreciated by consideration of some of the long history of its evolution.

Probably the earliest recorded denunciation of the display of wealth in Britain was in the thirteenth century when zealous Franciscan brothers first arrived from Italy and preached and its message of the virtue of poverty to the barbaric natives. Converts and their descendants for centuries thereafter adopted this lesson as their edict to condemn consumption in all its concepts. Alan Hunt writes of ‘perennial [religious] criticism of preoccupation with personal appearance and with fashion that is evidence of the sin of pride’, citing Phillip Stubbes who in 1583 attacked ‘the sinne of pride and excesse in apparel that induceth man to wickedness and sinne’.⁶ Like so many followers of Christianity, before and since, Stubbes found in its creed the right to call down the wrath of the Lord upon those who spend their own money as they themselves see fit – a supposed sin not only to be condemned by the religious.

The first secular laws to regulate what might be recognisable as conspicuous consumption date from 1336. These banned anyone beneath the rank of ‘knight and his lady’ from wearing furs and limited their meals to ‘[no] more than two courses and each mess of two sorts of victuals at the utmost – except on the three principal feasts of the year’.⁷ It was, however, widely held that the fabric of society could o...