Smith’s capitalism rests upon a psychological predisposition to save rather than spend. As Smith puts it rather hopefully, although “some men may increase their expense very considerably though their revenue does not increase at all, we may be assured that no class or order of men ever does so … because the principles of common prudence … always influence … the majority of every class.” Clearly, Smith did not envisage the twenty-first-century American mortgager or the European universal bank. But what did he see, and fear, was something that would upset this natural desire to save and invest: easy money, which is what credit markets (debt) offer. In short, by perverting the sensibility of saving into lending to the government, “great nations are … impoverished by … public prodigality and misconduct."

Mark Blyth, Austerity, loc. 298