2012 News

​​​​Why the rest of the world saves more: Saving and financial capability

Sheldon Garon, the world’s leading historian in “popular savings” initiatives such as postal savings, will speak and answer questions at Washington University on Thursday, April 26th from 3:00 to 4:30 pm.

Garon, Professor of History at Princeton University, recently published Beyond Our Means: Why America Spends While the World Saves, which investigates the historical factors and policy approaches that made the United States a nation of borrowers and spenders, while many other countries’ citizens excel at saving.

In his book, Garon concludes that the difference in regional “savings cultures” is largely due to federal policy, not individual thrift or profligance. “The thrifty societies of Europe have long histories of encouraging the populace to save,” said Garon, pointing to the establishment of postal savings banks and school savings banks by central banks in European countries. The United States, on the other hand, has a history of encouraging borrowing. “Rather than democratize saving,” Garon said, “the American system rapidly democratized credit.”

As many Americans are now all too well aware, this dependence on credit was a central contributor to the recent economic crisis. The value of examining other approaches is clear, and, as Garon demonstrates in his book, other countries provide useful models. Nations in Europe and East Asia, for example, encouraged ordinary people to save by establishing various small savers’ institution—including savings banks, postal savings systems, and school savings programs.

“Never has Sheldon Garon’s work been more timely,” said Michael Sherraden. “He offers practical insights for addressing our current financial mess.”

Garon’s lecture is the second in a new Financial Capability lecture series co-sponsored by the Center for Social Development at Washington University’s Brown School and the St. Louis Federal Reserve Bank. The first lecture in the series featured Jonathan Mintz, Commissioner of the New York City Department of Consumer Affairs (DCA).

Garon will speak at Danforth University Center, room 234, 3:00-4:30 pm, on Thursday, April 26, 2012. Copies of his latest book, Beyond Our Means: Why America Spends While the World Saves, will be available for purchase.