‘My other piece of advice, Copperfield,’ said Mr. Micawber, ‘you know. Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and – and in short you are for ever floored. As I am!’
Charles Dickens, David Copperfield, Chapter 12
This post is inspired by some comments I’ve been reading in reaction to the credit crisis to the effect that the secret of financial success is living within your means. That is Mr. Micawber’s prescription, above, and if only it were true! Although his advice may well be the key to happiness it most certainly doesn’t lead to financial success. In my experience those who’ve achieved the greatest financial success typically did so by spending other people’s money.
We don’t live in the world of Mr. Micawber. Those who are careful to live within their means soon find even their modest means eaten away by inflation, devastated by misfortune, or taxed away by the government. Rent-seeking, too, is an excellent method of achieving financial success.
No, we live in the world of the Red Queen, one in which you must run twice as fast just to stay in the same place.
What’s to be done? I don’t know. But I expect that something will be turning up any day.