George S. Clason – The Richest Man in Babylon

In the twenties, America was a country of laissez-faire capitalism that saw people’s incomes rise and new bounds of wealth creation. The businessman George S. Clason took to writing a series of didactic pamphlets intended to help those without a financial background survive harsh times and prosper through even the smallest of earnings. His work was published as a book, The Richest Man in Babylon, in 1926 and distributed by banks and financial companies to encourage intelligent financial management and investment.

What will strike the reader first is the setting of the stories. They are based in ancient Babylon, beyond any recognisable historical period, making for a more digestible work than an economic manual may have otherwise been. We are introduced to two men in Babylon who have worked long and hard for many years yet have not advanced their economic position significantly. They compare themselves to an old friend who was known as “the richest man in Babylon”.[1] They notice that he never showed exceptional academic or physical ability at school and so decide to question their friend just how he managed to make his wealth and how they might replicate his success.

The heart of the book revolves around “The Seven Remedies for a Lean Purse” that their friend prescribes; the first of which is to reserve a tenth of one’s income indiscriminate of fluctuations; the second is to devise a budget to prevent “leaks” in spending; the third advises to invest the saved money; The fourth warns the investor to be cautious and protect their investments through background checks and by consulting with people more knowledgeable; the fifth commands “Own thy own home”; the sixth suggests protection against old age, i.e. pension and life insurance; and the final, seventh, remedy is, simply, “Preceding accomplishment must be desire”.[2]

Babylon quote

Following this are several tales illustrating the folly of not abiding these rules and the financial difficulties that can be escaped or avoided by strictly adhering to them. They are necessarily simplistic and omit much of the complexity of contemporary America that the average person would encounter yet they fulfil the goal of creating a guiding principle of frugality and steady investment. The tales also reveal several other gems of advice like “Opportunity is a haughty goddess who wastes no time with those who are unprepared”, “Better a little caution than a great regret” and, “If thou desire to help thy friend, do so in a way that will not bring thy friend’s burdens upon thyself”.[3][4]After reading this short text the reader may feel better equipped to survive in a capitalist society, confident that with a steady income, clever budget control and resolve to succeed, no financial situation is insurmountable. The approachable style and exotic setting make the tales themselves interesting whilst implicitly teaching us economic truths.

The challenge left to the reader is to take on the advice laid out in this book and prove the confident author wrong. It has certainly changed my mind-set and I hope it will help yours.

 

 

[1] George S., Clason, The Richest Man in Babylon (Penguin Books, 1926), p. 30.

[2] Ibid, p. 33.

[3] Ibid., p. 18.

[4] Ibid., p. 65.

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