Huddled over their steaming bowls of thin gruel counting out their gold coins, it is very easy to criticise misers. By practising something mildly virtuous–thrift–to excess, they appear to miss the point of the money, which is that it is a tool to be used for something, not a dead asset to be senselessly accumulated for its own sake.
But some misers become misers on a mission. It has always interested me how many of this disparaged breed–misers–eventually deploy their hoards for philanthropic purposes thereby doing massively more good for society than large groups of happy, seemingly better-adjusted consumers. Here are a few worthy examples:
George Peabody
It was only recently I learned that the man who gave his name to the Peabody Trust, now witnessed on charitable housing all over London, was actually the founder of what has become JP Morgan. Peabody made his money by establishing George Peabody & Company, which became the leading American bank in London. Having steadily built the bank up from nothing, Peabody took one Junius Spencer Morgan (father of Pierpont) as partner in 1854.
According to Ron Chernow, in his superb House of Morgan, Peabody was a “solitary miser”. A confirmed bachelor dwelling in furnished rooms, he reputedly did not take two consecutive days off in one twelve-year period and worked an average of ten hours a day. Junius Morgan told a story about a day on which Peabody was suffering badly with a cold; Morgan suggested that Peabody leave the office to go home and rest. But shortly afterwards Morgan came upon Peabody standing outside in the rain: “Mr. Peabody, I thought you were going home”, Morgan said. “Well, I am, Morgan” Peabody replied, “but there’s only been a twopenny bus come along as yet and I am waiting for the penny one.” (Despite his huge wealth, Peabody was a user of public transport and did not even own his own carriage–a trait common amongst misers.)
Thomas Perman, a clerk who worked for Peabody, told many stories about his alleged tightness. One story described how Peabody would dispatch an office boy to buy him an apple at lunch time every day; apples cost one pence and one halfpenny and the office boys, as they are wont to do, would hanker after the halfpenny change as a tip. Peabody, however, was resolute in demanding the return of his change.
But on the other side of the ledger, Peabody was prudent with a purpose. In the US Peabody established numerous educational institutions and in Britain he formed the Peabody Donation Fund, now the Peabody Trust, to help house London’s poor. He is known to have given away over $8 million, mostly in his own lifetime, a colossal sum in the 1860s.
Warren Buffett
This might be a controversial selection but, I am afraid, being funny and charming does not prevent you being classified as a miser, if you meet the main criteria. Consider the evidence:
Despite his colossal wealth, Buffett lives in the same, average-sized house he purchased in 1958. He drives beaten-up second-hand cars. He dresses badly, in a permanently rumpled fashion, having no interest in good tailoring. His taste in food does not extend beyond that of an average ten-year old: cokes, burgers, chips, and ice cream. Sashimi and spelt risotto would be poison to Buffett.
Buffett does not believe in bequeathing huge lump sums to his children and they all tell of how ignorant they were of the family’s wealth growing up. Howard said that, as soon as he started to get his own pocket money, his Father installed a slot machine in the attic and any money that Howard put into it wasn’t given back! Buffett’s daughter, Susie, apparently once asked her Father for a loan to extend her kitchen so that she could fit in her daughter’s high chair. Buffett simply told her to go to the bank and borrow on commercial terms, in the same way as everyone else. Buffett doesn’t believe in dynastic wealth and calls those who grow up with the silver spoon “members of the lucky sperm club.”
But he does believe in philanthropy and in 2006 announced that he would give away his fortune to charity with 86% of it alone going to the Bill & Melinda Gates foundation, and further large donations to foundations run by his children. This translated to about 5% of his Berkshire shares being given away annually, something he has been doing ever since. Prudence with a purpose.
Andrew Carnegie
Andrew Carnegie is probably the most influential miser/philanthropist of all time. Born in Scotland, his family emigrated to the US when he was 13. Carnegie, having started as a telegrapher, accumulated investments in variety of industries but made his fortune in steel by building the Carnegie Steel Company. This was sold to JP Morgan in 1901 for the tidy sum of $480 million.
Carnegie Steel operated at a time of massive labour force strife and his company endured one of worst lockouts and strikes: the Homestead strike. This saw everything from gunfire, dynamite, the Pinkertons, and flaming trains. A leading Union official, Hugh Dempsey, was even found guilty of attempting to poison non-union workers and sent to prison for a seven-year stretch. But the end result was a bitter defeat for the union and a 40-year delay before steelworkers were permitted to unionise.
Having sold his company, Carnegie received his share of the money in 5% gold-backed bonds, giving him the dream combination of safety (gold backing) and yield (a handy 5%). I do not think anything equivalent exists today, incidentally. Carnegie’s bonds were stored in a personal vault in a bank in Hoboken, New Jersey.
However tough Carnegie was in acquiring his wealth, he was equivalently generous in disposing of it and his list of endowments is impressive–including: Carnegie Hall, Carnegie Endowment for International Peace, Carnegie Hero Fund, Carnegie Mellon University, Carnegie Trust for the Universities of Scotland, etc. He also wrote the influential article “The Gospel of Wealth”, which appealed to the wealthy to deploy their wealth for the good of society and influenced philanthropy for generations.
Yossele
Yossele was a Jew who lived in 17th century Poland. Yossele was reviled during his lifetime for his notorious tightness and refusal to contribute to charity, despite his great wealth. On his death, the townspeople refused to bury his body for days out of contempt for the man. Eventually, when he was buried, it was at the back of the cemetery amongst the outcasts, ne’er done wells, and paupers*.
After his death, however, it became apparent that Yossele had in fact been providing weekly allowances to the town’s poor. Yossele had been misunderstood and the town’s rabbi hurriedly appended “–the Righteous One” to the inscription on his tombstone, which had read simply “Yossele the Miser”. The morale of the story? If you want to get people off your back, make your donations public. Alternatively, for the thicker skinned, other people’s opinions don’t matter.
This private donating contrasts markedly with the new Buffett/Gates school, which attempts to lead by example. My suspicion is that people are always open to influence and giving silently misses an opportunity to exert influence. Buffett is probably, as usual, right.
* Why, incidentally, were paupers also reviled?
Recipe for Gruel
Gruel is a staple for genuine misers and should always be served thin. By huddling over the bowl you will be able to use its warmth as a source of heat thereby enabling you to manage without heating your sparsely furnished room for the evening.
- 2 tablespoons of oatmeal
- 2 tablespoons of cold water
- 1 pint boiling water
- Small pinch of salt
- Mix the oatmeal with the cold water until it makes a paste.
- Add the boiling water gradually, while stirring continuously.
- Add a small pinch of salt.
- If feeling extravagant, add any scrapings or leftovers you can scavenge, for example, old bits of dried meat, papery onion skins, lemon rind, apple cores, bacon fat and so on. Second helpings are not in the spirit of the endeavour and any leftover gruel should be eaten cold for breakfast.
And here is a link to Oxfam, if you want something to read while you eat.