ABSTRACT
Why is there a disjunction between history and finance, past experience and private indebtedness? Why is history becoming increasingly irrelevant in making personal financial decisions? A couple of reasons suggest themselves: First, although America is a rich nation by any conceivable measure, Americans are not really rich people. The median household in America in the mid-1990s had a net worth of less than $15,000, excluding home equity.3 Most American families have zero financial assets, such as stocks and bonds. Even America's richest 20 percent have a net worth not much above $50,000, excluding their homes.4 For the great majority of Americans, owning property is not of great importance, but acquiring the use of property is. The observant Frenchman Alexis de Tocqueville pointed out two centuries ago that possessions are largely what define us as individuals and as a people. The difference between acquiring the use of property actually owned by others and owning that property yourself is, of course, debt. Debt is the real currency of success in America, not net worth, and that is why Americans have a lot of debt and little net worth. This emphasis on the consumption of goods, rather than on the acquisition of knowledge or wisdom, has been much commented upon, and is surely one reason for the low importance given to understanding history in America.
