Mass Savings and Statebuilding in the U.S., U.K., and France

• In Event: Financial Systems and Social Citizenship in American Political Economy

Abstract

This paper studies the historical role of states and policies in shaping household savings and directing them into investments. Despite growing interest in financialization and mass participation in the financial market, private savings have been studied primarily as individual choices. Where saving policies have been studied, this has been done in the context of ungenerous “liberal” welfare states, with these policies seen as substitutes for welfare policies. These analyses fail to explain the lack of correlation between saving rates and social spending, and the fact that savings institutions predate a majority of other social and economic policies. More importantly, existing analyses have overlooked the policies through which states have encouraged certain forms of private savings over others, and the importance of household savings as a source of capital for the broader economy. I first define “mass savings” as a socio-economic practice that developed in the nineteenth century in the context of the rise of modern capitalism and nation states. Second, I create a framework to study the development of mass savings as a form of statebuilding from the following perspectives: (1) service provision by the state in the form of public institutions providing access to savings (e.g., postal banks); (2) regulation of how savings are invested and protected; (3) extraction of savings by the state into a fiscal resource; (4) socializing citizens into responsible financial conduct and, at times, forging a patriotic identity, by encouraging savings. Finally, I take the U.S., the U.K., and France as cases to show how early regulatory decisions on mass savings depended on the balance of interests and power between governments and financial actors, and how these regulations implied and in turn shaped early state capacity.

Author

• Ayelet Carmeli, Massachusetts Institute of Technology