wooden puzzles) at newsstands with the evening newspaper on their way home
from work. Jigsaw puzzles were suddenly on sale everywhere, and people
wondered, “What psychological quirk lies buried in the human brain to spring to
radiant life at the rattle of odd pieces of material in a cardboard box?”37
Bicycles, blue jeans, and cardboard jigsaw puzzles might be nothing more
than logical, rational responses to the bad economic conditions of the
Depression. They were inexpensive. But the enthusiasm for these products, the
craze nature of the phenomena, suggests that their narratives help to explain why
people stopped buying expensive consumer goods during the Depression—
which, by extension, helps to explain the length and severity of the Depression.
Perhaps people would never have ridden a bicycle to work in the 1920s not
because they were rich but because doing so would have seemed odd. Only after
one heard the narrative describing others who rode a bike to work or stayed
home assembling jigsaw puzzles in the evening would one be comfortable doing
the same things. And then one might continue doing them for many years,
weakening the market for more expensive forms of transportation and
entertainment, and thus slowing recovery from the Depression. Likewise, if
building a beautiful new house is considered to be in bad taste and stirs profound
resentment, then those are pretty good reasons not to build the house, thus
helping to explain why housing construction virtually stopped during the
Depression.
We see here that economic dynamics—the change in demand for goods and
services through time—depend on subtle changes in narratives. Over the course
of the Great Depression, people started to move beyond poverty chic, perhaps
because of changing narratives about what people’s apparent poverty implied
about them. As the Washington Post noted in 1932:
But now another handspring has been turned. Now it is no longer chic to
imply poverty. If one had lost money in unwise speculations or stocks he has
had plenty of time to recover from the world-wide upheaval. If he still claims
poverty—well, the implication is that perhaps after all he never did have
anything!38
What conclusions can we draw? The modest economic recovery that started
at the bottom of the Great Depression in 1933 occurred, at least in part, because
people were spending more because poverty was no longer so chic! All of these

narratives imply that the causes and effects of the Great Depression extend
beyond economists’ simple story of multiple rounds of expenditure and the
effects of interest rates on rational investing behavior.
The decline in modesty and compassion narratives since the Great Depression
may help to explain many economic trends. The modesty decline is likely related
to the rise in inequality, in the share of national income earned by the top 1%,
documented by Thomas Piketty in his 2014 book Capital in the Twenty-First
Century.39 It also is likely related to the long-term decline in managers’ feeling
of loyalty to their employees, documented by Louis Uchitelle in his 2006 book
The Disposable American.40 A narrative downplaying modesty and compassion
was supported by Donald Trump in his 2007 book, Think Big and Kick Ass in
Business and Life, coauthored with Bill Zanker.41
The frugality narrative was repeated in Japan after 1990, with different stories
and personalities. The high-flying Japanese economy of the 1980s had given
way to the “lost decades” of the 1990s and beyond and to stories similar to the
modesty and compassion stories in the United States. The Washington Post
summed these narratives up in 1993:
Tokyo—The once free-spending Japanese consumers have a new model
citizen: Ryokan, an 18th century hermit monk who gave up his worldly goods
to seek the pure life.
Ryokan was featured recently in a prime-time television drama and a
magazine cover story. A book about him and other ascetics, The Philosophy
of Honest Poverty, has sold 350,000 copies since September.
These days Japanese consumers seem to be trying to emulate the virtuous
Ryokan. Consumers have sobered up and tightened their purse strings after a
half-decade spending binge fueled by a roaring economy and soaring
financial markets.42
Ryōkan (1738–1831) is remembered in many stories for his kindness and
generosity to the less fortunate. He let mosquitoes and lice bite him out of
sympathy for insects, and he once offered his clothes to a would-be thief who
discovered he had nothing to steal.43 Most Japanese did not go so far, but the
new virtue lasted throughout the lost decades in Japan.