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Priscilla Wakefield, by Thomson, published by Dean and Munday, after Thomas Charles Wageman, published 1818 - NPG D7548 - National Portrait Gallery, London

While writing chapter 3--which is on the pre-modern history of financial services for the masses, and will be ready soon--I found many stories with modern resonance. Among my favorite is that of Priscilla Wakefield, the only heroine in the history. The Literary Encyclopedia lists her as an English "children's writer, feminist, travel writer" who lived from 1751 to 1832. A Quaker, she also devoted considerable energy to charitable activities, including founding (arguably) the first savings bank. In starting the small bank, whose deposits were guaranteed by rich patrons, Wakefield was probably influenced by the philosopher Jeremy Bentham. In 1797, he had called for the creation of "frugality banks" to cultivate thrift among the poor, while criticizing the predominant institution to provide such services, the friendly society. For one, the societies usually met at public houses, where members were expected to buy drinks. "Choosing a tippling-house for a school of frugality, would be like choosing a brothel for a school of continence."

Here is Wakefield's thinking, in her own words, as typeset in 1805 and scanned by Google 200 years later:

The Reports of the Society for bettering the condition and increasing the comforts of the poor. [Ed. by sir T. Bernard]. (1st-40th report, 1797-1817). By Society for bettering the conditions and increasing the comforts of the poor

Savings banks spread quickly up to Scotland, then back down through the British Isles and overseas. By 1820, savings banks were operating in the Netherlands, France, Germany, Switzerland, the United States, and Australia. In 1861, the British government brought its postal service into the savings business. Today, there may be a billion savings accounts worldwide.

Compare and contrast that success with the modern microfinance movement. Two centuries ago, an idea for aiding the poor through financial services caught on and spread across the seas in years. Looking back, we feel pretty cocky about our modern technologies for mass communications; but it turns out that books on boats are powerful too.

The savings bank movement differed from today's microfinance in the motive the promoters usually avowed---cultivating frugality instead of microenterprise---and in the favored means---savings instead of credit. In fact, poor people have probably used savings and credit in similar ways, as I describe in chapter 2. Financial services are (imperfectly) interchangeable. You can save up to start a business, or borrow. You can get an emergency loan to cover doctor fees or, if you're lucky, use insurance. If the dominant story about how poor people can and should use savings, credit, and other financial services has changed so much over time, that's a sign that we should doubt currently fashionable thinking.

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