Gordon McLauchlan: Colour of wasted money irrelevant

When Ansett collapsed in a financial heap and nearly took Air New Zealand with it, I heard a Maori say: "Thank God one of us wasn't involved in that or Pakeha would be repeating yet again, 'See, they can't handle money'."

Dozens of Pakeha businesspeople can collapse enterprises through incompetence or dishonesty and no one plays the race card: the Scots are no good as entrepreneurs because they're too canny; or you have to watch those Greeks, they're shifty.

And Jews sometimes suffer what seems especially risible to me - they're ostracised for being too successful.

Most people who are grumbling about the financial scandals involving Maori are conveniently forgetting that Maori broadcasters have proved decisively in Auckland that they can make a radio station work so successfully it attracts Pakeha listeners by the thousands.

Maori businesspeople and bureaucrats do themselves no favours, though, when they sincerely flatter Pakeha glad-handers by imitating them. There is a class of businessperson who believes the sparkle is worth more than the substance.

And it's a short trip from glad-handing to crime. No one should forget that for every Flash Harry glittering as a celebrity in the business world, for every shyster no matter what their race or class, thousands of prudent, hard-working, honest and successful businesspeople are keeping the wheels of commerce turning.

But a fact of social history that especially interests me is the change of public attitude towards thrift, which has, in my lifetime, been as dramatic a volte face in social mores as the change in attitude towards sex outside marriage.

For thousands of years thrift was among the fundamental virtues and profligacy a despicable vice. The parable of the Prodigal Son is as much an injunction against profligacy as an enshrinement of forgiveness.

Benjamin Franklin's admonition in Poor Richard's Almanac was once widely quoted: "If you would know the value of money, go and try to borrow some; for he that goes a'borrowing goes a'sorrowing." And of course, there is Shakespeare's injunction to neither a borrower nor a lender be.

Capitalism has long relied on borrowing for investment towards growth, but in prudent borrowing from people who understand the risk.

The joke used to be that if you borrowed $1000 you were a wastrel, $10,000 you were a businessman, $100,000 you were an entrepreneur, $1 million you were a financier, and $10 million you were a Government.

Not any more. Many ordinary people now live the most extraordinarily precarious lives on a sea of debt, adrift of any moral suggestion that thrift is a virtue.

They see it rather as the constraint of people living stifled, unexciting lives.

One of the least attractive traits that seem to emerge in folk as they grow older is the consistent belief that people today are not what they used to be, but I'm not going to lay a serious decline in financial ethics on the new generation. The truth is that, for good or for ill, the standards themselves are the opposite of what they once were.

Social conditions modify morality more than age-old imprecations against prescribed vices. When I was a kid, banks provided a savings service to kids even in primary schools to encourage small savings - saved pennies turned into pounds, we were told. Good people saved for their futures, for their families and themselves.

Now young people are exhorted to take risks. People are irresponsibly more profligate than formerly because thrift is not socially valued any more.

In fact, the very measure of our vaunted economic growth, GDP, depends on our being spendthrifts.

Imaginative marketing separates you from your money. Economic commentators exuberantly welcome news that retail spending is up, car sales are climbing and building permits are increasing.

At the same time, we are constantly being exhorted to save for retirement to stop us from being a drag on the economy when we are unable to work. This is one of the great social paradoxes of our time. I don't understand it. Does anyone?

Thrift was a necessity rather than a virtue among the great majority of families until the middle of the last century because making ends meet was much more desperate then than now. The welfare state itself was a bid to free families from the lifelong fear that calamities such as unemployment, illness or the death of the principal income-earner would bring destitution. Then, necessity became the mother of subvention.

I came across figures the other day that amazed me. Americans' debt at the end of last year (according to Harpers magazine) was "US$1.713 trillion, nearly three times the value of the nation's circulating currency". The story continued: "This year debts of US$135 billion - most resulting from credit cards, health care or student loans - will be assigned to America's 6500 collection agencies, up from US$73 billion in 1990. (At most agencies, a fifth of the collectors leave within three weeks, and annual turnover reaches 80 to 100 per cent. Average earnings are about US$10 an hour, not including commission.)"

Maybe that's why 35 million contemporary Americans have been treated for clinical depression, although my guess is that similar figures of personal indebtedness and depression are replicated around the Western world.

So Maori profligacy is no worse than anyone else's. On the other hand, a crook is a crook whatever the colour.