Dec

22

The other day, I was forced to attend an amateur showing of Dickens "A Christmas Carol." The production was well executed, the stagecraft was excellent, and the scenery was first rate. I've seen the Dickens classic so many times, I either just nod off, daydream, or try to improve my mind. During the show, I started to think of how the author, Charles Dickens, really hated capitalists and was a socialist at heart. He portrayed Ebeneezer Scrooge as the prototypical capitalist of the day, but his real "sin" was that he was a miser, only interested in his self, mistreating everyone. The fact that Scrooge had a bad attitude and dour personality did not work in his favor and was a great device used by Dickens to generate hatred for capitalists and the rich in general.

This got me thinking on many levels. For one thing, Scrooge was a businessman who earned his money fair and square. He cheated nobody and expected his contracts and debts to be paid as per any previous agreements, Scrooge ran a tight ship, to the point of being called miserly. He was a demanding employer of his clerk Mr. Cratchit, who accepted the employment contract with Mr. Scrooge with good cheer. Much has been said and written about the evil Mr Scrooge, his name has become part of the lexicon of the definition of an evil capitalist. Even the people in the neighborhood made disparaging remarks about Scrooge, and this mistreatment and lack of respect added to his dour personality. There was no evil to Mr Scrooge, and his unfavorable treatment was a literary device, a populist reaction by the left, the socialists who portray all rich as greedy, evil people who allow people to suffer while they live rich, extravagant lives. 

As I said before, Mr Scrooge had an employment contract with his clerk, Mr. Cratchit who was a man of good cheer. Cratchit's wife constantly complained that Scrooge was an old miser with a flinty heart of stone. She neglected to mention that Mr. Cratchit was free to seek employment elsewhere if his working conditions were so bad, but this aspect and so many others were left out by Dickens. As for Scrooge's miserly description, some would call his miserliness thrift, which is an esteemed Franklinian virtue.

Scrooge's refusal to participate in a festive dinner with his nephew and wife was his business and he certainly didn't deserve the ridicule heaped upon him by the women folk, nor was he required to offer an explanation or apology. He was merely exercising his freedom to do what he wanted, and if he chose not to celebrate Christmas, that was his natural, god given right. During Scrooge's pre ghost phase, he was a hard nosed flinty business man, albeit a bit ill mannered. There is no law against being ill mannered, dour, mean, or miserly. Scrooge was free to do whatever he wanted, with no worries what society would think as long as he behaved within the law and remaining scandal free.

Every good story likes to make a case of human redemption, a change from self interest to the interest and service of the collective. In popular culture, rich are inherently evil, their gains ill gotten off the backs of workers, and the poor always triumph over the rich. Dickens masterfully pulled this off when he had three ghosts visit Scrooge on Christmas Eve to scare the hell out of him and change his evil ways. His powerful scare tactics caused Mr Scrooge to abandon his own self interest, abandon his personal freedom for the good of society, destroy the profitability of his business, and spend his hard earned wealth on charity to repent for his earlier miserliness.

The messages Dickens made in a Christmas Carol were very clear. Productive people must give to the more deserving poor to be considered worthy, rich people are not happy due to guilt, producers must abandon self interest in order to satisfy the needs of others in a society who don't work as hard, businessmen must run their personal business for the sole benefit of their employees, conversely to the detriment of the stockholders. And finally one must give exorbitant sums to the poor, provide medical care for the employees, and give retroactive raises to allegedly underpaid employees. Benevolence is not a virtue in this world, it is a requirement. Scrooge was manipulated into this transformation by the three ghosts creating immense guilt and fear, and by the end of the story Mr Scrooge was more concerned with what people thought of him, his personal image, than the real work of creating profits, creating jobs, growing a business, and contributing to the general business climate.

At the end of the story Mr. Scrooge was a transformed man. He was happy, benevolent, highly thought of, giving,almost giddy, much like a person who has had a drink or ten. A good case could be made that he was a better man, but w hat he lost was the real tragedy. Scrooge lost his independence, his freedom, became dependent not on profits, but on the opinions of others. He was required to give money away, raised expectations of others, and caused economic imbalance by changing the market pay scale of employees in his business. In a way, Scrooge's new found largesse probably was bad for the economy as a whole a la the theories of Hazlitt. On another note, happiness tends to be fleeting much like health and I suspect that with Mr Scrooge, old habits die hard.

When the curtain closed, everyone was cheering. I felt a bit of sadness, as here's another story of poverty trumps wealth, rich is evil while poor is good, and being a second hander is more important than being a real, virtuous free man. In the end, Mr. Scrooge was the real loser and the real story was the transformation of a rich, productive man into a welfare state.

Rocky Humbert comments:

Dear Jeff:

Considering "A Christmas Carol" to be an indictment of Victorian Capitalism is not a novel idea, yet I still find your words and spirit to be sad, indeed.

While you are free to intrepret Dickens however you see fit, you have no such freedom with respect to core Judeo-Christian values, which parts of Dickens' play embodies. The principles which you lament are the core principles of Judaism and Christianity.

What you find lamentable, I find laudable. When you find trivial, I find grand. In short, I celebrate the charity and goodness toward man that Christmas celebrates, while you mock it as political correctness.

I wish you a happy holiday, and hope that you someday discover what Scrooged learned– that there is no greater joy than bringing happiness to others.

Scott Brooks adds:

Let's not confuse charity with force of threat.

Scrooge offered a fair deal at a fair price. The way we can infer that this is the case is that people came to him, and willingly signed a contract. Scrooge performed his half of the contract by loaning them money. What is wrong with him expecting that they honor their portion of the contract?

And, let's not confuse what Scrooge did for charity. Giving to other under threat of force…..i.e. the spirits (under the direction of Dickens) threatened him with the threat of eternal damnation if he didn't commit business suicide.

Another problem with "A Christmas Carol" was that the story ended on December 25th. Let's flash forward to the "The Week After Christmas":

Bob Cratchit shows up at work on the 26th only to find that he doesn't have a job. Why? Because Scrooge, in his "fit of charity to bring happiness and joy to others" tore up all the debts owed to him and there was no more accounting work for Cratchit to do.

Later that day, and throughout the next week, a bunch of former Scrooge customers come to the office to borrow more money, only to find it closed because Scrooge has no more money to lend out. If he did, it would be evil (under Rocky's view of the world) to unfairly loan out money. And he couldn't just keep the money, he would have to give it away to atone for his supposed sins.

Therefore, the vital role that Scrooge played in the community…i.e. loaning money to people that had need of a loan for whatever purpose they felt they needed a loan for (and that Scrooge deemed as a good "loan risk")….that vital role was no longer available in the community.

And what happens when credit dries up in a society….well, I think we can all agree that that's not a good thing.

Sorry Rocky, but you're wrong in your assessment. This is not charity or Christian/Judeo ethics. This is a story by a man who didn't like Capitalism, that slams capitalism. It could have been written by most any journalist or university professor in today's society.

David Hillman writes:

And then, there's the contrarian point of view…

….which makes as much sense as does the interpretation of A Christmas Carol as an indictment of Victorian Capitalism [which, by the way, was far different from what we generally think of as 20th Century capitalism, i.e., the kinder, gentler Fordist model or the so-called millennial capitalism that has been evolving since the 1980s.]

I don't know much, but two things I know, 1) what Dickens' meaning and intent in A Christmas Carol was is about as clear as what the founding fathers intended in the Constitution, or as clear as whether the origin of the universe was a God or a Big Bang, and 2) we don't see things as they are, we see things as we are.

That said, I would posit that one's interpretation of A Christmas Carol, or just about anything else for that matter, tells us far more about the interpreter than it does of Dickens. 

Gary Rogan writes:

It's interesting that with all of his supposedly anti-capitalist novels, Dickens undertook two trips to America mostly to lobby for copyright enforcement. He also blamed his bankruptcy and later health and financial problems close to his death on being deprived of his rightful royalty stream. Somehow various American software companies and their hyper-liberal billionaire founders fighting intellectual property theft in China come to mind, although they are all in decidedly better financial shape.

Kim Zussman chimes in:

It's not every day you see Jewish pro-Christmas arguments against Mormons; a market top indicator?

The 1938 Christmas Carol is a great film, and if you don't tear up your trading accounts are definitely too flush.

Scrooge's encounters with ghostly futures cause us to ask what is really important. It is difficult to balance the race for money with taking time for things and people who will too soon be grown, old, or gone.

Stefan Jovanovich writes:

"A Christmas Carol" is far less about what our List calls "capitalism" - i.e. pricing by competition - and far more about Dickens' wanting the world to have a universal catcher in the rye and not be like the America he saw in 1842. He was appalled by our slavery and by our insane "push". He was also upset by the fact that, like the East Asians today, Americans were notorious copyright pirates. We were also the source of his growing wealth by being the best customers for his books. During his visit to New York his American publisher and his admirers (Washington Irving, William Cullen Bryant) held a gala in his honor, with 3000 people attending.

Dickens knew almost nothing about business by 1843 (the date of A Christmas Carol's publication) from direct experience or observation. His father had worked in the Navy Pay office and lived on a family inheritance. Dickens' only job in any "dark, satanic mill" was a few months sticking labels on bottles of shoe polish. He then went back to school. After school he worked in a law office as a clerk, taught himself the new short-hand and became a court reporter through a family connection. That led to political journalism. Sketches by Boz - his first book published in 1836 - is a collection of his political pieces for the Morning Chronicle, covering the Parliamentary elections.

The socialism Jeff finds in the story is there; it is the same socialism you find in Thoreau. It came from the same source - Unitarianism - which Dickens became interested in while visiting the U.S. And, capitalism in its modern forms was still in its infancy. It would be another decade and more before limited liability was formally recognized in Britain in the legislation of 1855-1856.

Gibbons Burke writes:

A Christmas Carol is not anti-Capitalist as such. But it makes a case strongly against Capitalism run by capitalists who serve Mammon rather than God. Scrooge, who initially perfectly represents that anti-human form of Capitalism at its worst soul-less excess, is the perfect picture of a seemingly-self-satisfied soul roasting in a Hell on Earth of his own devising, and he seems certainly destined for the eternal flame pit until his heart is converted later in the book. At that moment he becomes filled with the Joy that is the gigantic secret of the Christian (according to Chesterton).

Here is Dickens' initial description of old Scrooge - which seems to have plenty of editorial voltage:

Oh! But he was a tight-fisted hand at the grindstone, Scrooge! a squeezing, wrenching, grasping, scraping, clutching, covetous, old sinner! Hard and sharp as flint, from which no steel had ever struck out generous fire; secret, and self-contained, and solitary as an oyster. The cold within him froze his old features, nipped his pointed nose, shrivelled his cheek, stiffened his gait; made his eyes red, his thin lips blue; and spoke out shrewdly in his grating voice. A frosty rime was on his head, and on his eyebrows, and his wiry chin. He carried his own low temperature always about with him; he iced his office in the dog-days; and didn't thaw it one degree at Christmas.

External heat and cold had little influence on Scrooge. No warmth could warm, no wintry weather chill him. No wind that blew was bitterer than he, no falling snow was more intent upon its purpose, no pelting rain less open to entreaty. Foul weather didn't know where to have him. The heaviest rain, and snow, and hail, and sleet, could boast of the advantage over him in only one respect. They often "came down" handsomely, and Scrooge never did.

Nobody ever stopped him in the street to say, with gladsome looks, "My dear Scrooge, how are you? When will you come to see me?" No beggars implored him to bestow a trifle, no children asked him what it was o'clock, no man or woman ever once in all his life inquired the way to such and such a place, of Scrooge. Even the blind men's dogs appeared to know him; and when they saw him coming on, would tug their owners into doorways and up courts; and then would wag their tails as though they said, "No eye at all is better than an evil eye, dark master!"

But what did Scrooge care! It was the very thing he liked. To edge his way along the crowded paths of life, warning all human sympathy to keep its distance, was what the knowing ones call "nuts" to Scrooge.

The book is available in several illustrated editions for free on Project Gutenberg.

Jeff Watson responds: 

So, in other words, while Scrooge was unpopular, he enjoyed total freedom. That sounds pretty good to me. At least If I had his rep, I wouldn't have to say no to 30 requests for donations a day. Can you imagine how refreshing it would be to perform an essential service, perform admirably in business, deliver superior service, and not give a damn what people thought of you? That would make Hank Reardon proud. It is not a crime to be disagreeable, a skinflint, self serving or any other eccentricity. If we punished men for their eccentricities, Henry Ford would have never created and revolutionized the automobile business, J.P. Morgan would never have risen beyond the level of margin clerk, the old Commodore Vanderbilt would have probably died in a house of ill repute, Barney Frank would have been hanging out on…, and Bill Clinton would probably be in an Arkansas … for a very youthful indiscretion. 

John Tierney writes:

In 1899 Elbert Hubbard viewed the "Scrooges" thusly:

We have recently been hearing much maudlin sympathy expressed for the "downtrodden denizen of the sweat-shop" and the "homeless wanderer searching for honest employment," & with it all often go many hard words for the men in power.

Nothing is said about the employer who grows old before his time in a vain attempt to get frowsy ne'er-do-wells to do intelligent work; and his long patient striving with "help" that does nothing but loaf when his back is turned. In every store and factory there is a constant weeding-out process going on. The employer is constantly sending away "help" that have shown their incapacity to further the interests of the business, and others are being taken on. No matter how good times are, this sorting continues, only if times are hard and work is scarce, the sorting is done finer- but out and forever out, the incompetent and unworthy go.

It is the survival of the fittest. Self-interest prompts every employer to keep the best- those who can carry a message to Garcia.

I know one man of really brilliant parts who has not the ability to manage a business of his own, and yet who is absolutely worthless to any one else, because he carries with him constantly the insane suspicion that his employer is oppressing, or intending to oppress him. He cannot give orders; and he will not receive them. Should a message be given him to take to Garcia, his answer would probably be, "Take it yourself."

Tonight this man walks the streets looking for work, the wind whistling through his threadbare coat. No one who knows him dare employ him, for he is a regular fire-brand of discontent. He is impervious to reason, and the only thing that can impress him is the toe of a thick-soled No. 9 boot.

Tim Melvin comments:

The question of scrooge and how we view him is one that men of business have wrestled with since the damn story was published. The thing is that Dickens does not paint Scrooge as the example of every businessman. We tend to take much of the Scrooge story out of context, I think. Business itself is not painted as evil or wrong. Was not Fezziwig the owner of a prosperous and successful business when young Ebenezer was employed there in his youth. Judging by the Christmas party it was prosperous business indeed. Yet Fezziwig was a generous soul to his employees who treated then well and asked for a fair days work for a fair day's pay and got it it cheerfully from those in his employ. Scrooge described his time employed there and his boss thusly, "The happiness he gives, is quite as great as if it cost a fortune ."

In contrast Scrooge underpaid Bob Cratchitt and treated him poorly. To say that Mr. Cratchitt could simply look for other employment is as ridiculous a statement as it is heartless. With a large family and a sick child he would be foolish to change what employment he did have by seeking other employ. Given the hours he toiled when would he had the time anyway?

Scrooge is indicted not for being a man of business but for being a man who shuts out the world and pursues only business in a mean spirited way. I greet my lender when I see him on the street. Scrooge was harsh man who was probably the lender of last resort and treated his customers poorly. Good business is a win win were the partied walk away feeling that both have scored a victory in my experience. To have your neighbors ignore you in the street and cackle over yor corpse does not paint the idea that he did business fairly in my mind. To be sure we all have probably made some enemies along the way, but we have made friends as well who would mourn our passing/ not so in this case.

Scrooge is indicted of closing his heart to all of humanity. He chooses commerce over the love of a woman and the potential for a life and a family. He helps no one with a kind word, a gentle lesson or a shared idea. The concept of charity is unique to us all. But hard asses as all of us are, as libertarian and objectivist rooted as we are, would we hesitate to assist a friend, relative or even employee who had an ill child if we had the resources to do so? Which of us would not give our nephew, our only family a visit on a holiday eve or at least a kind word, a lesson in the ways of the world that might help them succeed in life?

Scrooge was not indicted and sentenced to haunting for being a business man. He was convicted of living without love. The love of a child, of a woman, of humanity. He hated himself as much as he hated the rest of the world. Scrooge's crime was not being a business man but for failing to appreciate the wonder that life actually can be. I like so many other readers of this site detest the corporate charities, and I say no quickly and clearly in my best bah humbug fashion. But just like everyone else here there are charities and causes I believe in and donate my time and money. I do not buy the in the give to all philosophy or faceless giving anymore than the rest of you. I do believe in libraries, special olympics and a few other causes and I give. So do you whether it's a church, a cause, a philosophy of a friend in need so quit pretending your are an objectivist hardass who helps no one. Not only is that so much BS, it's a heartless life that would create a scrooge like existence and so far I have met no spec who fits that description.

Scrooge's crime was not business. It was living with love, without the touch and hear of another, without a child's smile, a lover kiss or the hand of a friend. By Dickens account he denied himself all the makes life special. There is no account given of good food, or beautiful music or even good books. Scrooge's crime was not one of business. He was guilty of crimes against life itself. 

Jeff Watson responds: 

(While I agree with much of Tim's premise, I'd like to see the statutes Scrooge violated regarding the aforementioned crimes). If those are indeed crimes that Scrooge committed, I fear the state is on the road to becoming more totalitarian if they feel the necessity to regulate those areas of normal but eccentric human behavior. Again, it's not against the law to be a total dick, nor should the government concern itself with forbidding person to be rude, self absorbed, cheap, hated, or mean spirited. I certainly can't find anything in the constitution addressing this issue. 

Stefan Jovanovich writes:

Dickens wanted women to stay in the kitchen; Hubbard wanted them to own the restaurant.

His company - Larkin Soap - gave Frank Lloyd Wright his first big commission. The friezes on open galleries of the building had these mottoes: GENEROSITY ALTRUISM SACRIFICE, INTEGRITY LOYALTY FIDELITY, IMAGINATION JUDGMENT INITIATIVE, INTELLIGENCE ENTHUSIASM CONTROL, CO-OPERATION ECONOMY INDUSTRY.

Here is Hubbard's story of how he started the Philistine magazine and the Roycroft shops. Begins at page 309


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12 Comments so far

  1. Gregory Rehmke on December 16, 2010 9:40 pm

    Maybe the various posts are enough on Dicken’s “A Christmas Carol.” But I wanted to throw my 2 cents in from an essay I wrote a few years ago after watching George C. Scott in a nicely done television version. I was particularly interested in the scenes on Scrooge speculating on corn prices.

    Consider Charles Dicken’s Ebenezer Scrooge, as brought to life by George C. Scott in the television movie from the 1990s. George C. Scott plays Scrooge as a competent businessman who finds both Christmas and philanthropy a waste of time and money. His eyes are opened through a series of nightmarish dreams. The book and various movie versions are offered today as indictments of greed and business, as well as celebrations of the joys of family, Christmas, and giving to those less fortunate.

    Viewers can look at this classic story through a pro-market lenses and see different lessons than do the majority who misunderstand capitalism and the role of markets and prices. And we can write our own last chapter to the story that lets Scrooge live a happier life without compromising his business principles.

    I would argue that a better, though less dramatic, interpretation of the story is simply that people—especially successful businesspeople—can get too wrapped up in their work, and lose touch with the rest of their lives. Engagement in civil society brings many unexpected and hard-to-quantify pleasures. Philanthropy can be satisfying to the giver as well as helpful to the receiver. And even the most anti-business take on “A Christmas Carol” still must admit it is Scrooge’s private philanthropy, not the state, that in the end helps the poor.

    The story begins with Scrooge successful in business but having let his personal and social world fade. He long ago let his love relationship drift away and deep down regrets it. After a difficult childhood, he gradually gained a kind of comfort in solitude and emotional isolation. As is usual in novels and movies, nothing positive is said or implied about his work. No glimmer of understanding that he must be providing a valuable service in order to stay in business and make profits. But we can agree that focused businessmen like Scrooge can lose track of their family and social lives and find themselves years later wealthy but alone.

    Second, the story features an interesting, if subtle, attack on government welfare. Scrooge is asked to donate to a relief fund. He answers that he pays taxes for just such purposes. Why don’t the homeless go to existing poor houses or to prisons he asks? The private-relief fund-raisers ask him if he has ever seen the government relief houses. Scrooge answers no, he hasn’t. He is responding reasonably and so are they. (Should we expect a socially-responsible Scrooge of today to donate to innovative private charities, or to agitate for repair of failing government welfare programs?)

    Tax-supported relief houses give the emotionally-distant Scrooge an excuse not to take personal responsibility for the poor. He has already paid, he claims, through his taxes. He uses government-funded welfare agencies as an excuse to avoid supporting private relief agencies. With no state-run poor houses in England, he might still have said: “Bah, Humbug!” and been tempted to “free-ride” on donations of others. That is, he might free-ride (an economics term) by relying on others to donate to help beggars. Scrooge would benefit from beggar-free streets without spending a dime on donations (he is greedy in the story, after all).

    Few of us enjoy seeing and dealing with homeless people begging on the street. Scrooge could well have been drawn into private relief just to keep beggars out of his way. Still a selfish motive, but one that would require helping others in order to help himself. He could have invested in enterprises that create job-expanding opportunities that help the unfortunate or unwise to get back on their feet. Consider too that Scrooge’s current business, speculation, could very well be helping the poor more effectively that any charity he might choose to support (more on this possibility below).

    Had Scrooge invested in a job-training firm, for example, he could carry business cards promoting his job-training services to helpfully put in the cups of beggars. In this way he could have helped the needy and profited as an investor in training-services at the same time (perhaps naming his enterprise Scrooge Phoenix University). Many for-profit as well as nonprofit organizations today provide job-training services and generate income through job-placement. The poor learn skills and pay a portion of their later salaries back to the job-training/job-placement organizations.

    My great-great-grandfather, Dr. Thomas Guthrie helped start the Ragged Schools for Children in Scotland and England. He went to the Scrooges of his day (the 1840s) and convinced them to contribute. There were 192 Ragged Schools in operation at its peak with 20,000 destitute children attending each year. An estimated 300,000 attended overall, from 1840s to 1880s. The English government apparently saw the Ragged Schools as unwanted competition to their poor houses and new government-funded schools, and they drove the Ragged Schools out of business. (Students apparently preferred the industry-training they received as part of their education at the Ragged Schools. The UK government went so far as to sue to force students out of Ragged Schools and into government schools. Glimpse this fascinating story here: www.infed.org/walking/wa-shaft.htm)

    Because Scrooge feels he has already discharged his obligation to help the poor (thanks to state-mandated poor-house welfare), he loses touch with that part of the world. He doesn’t bother looking into the management and operation of poor houses because their tax-funding insulates them from private reform. And he knows he wouldn’t be allowed to withhold his taxes if he found them badly managed.

    Had he been able to choose among private alternatives he would have had an incentive to investigate how his money was used. He doesn’t do much investigation after being saved, in the George C. Scott version. He just gives a big donation to the private relief effort he refused the day before. But even so, he will surely take an acute interest in that private relief project after donating a huge sum to it. He would be angered as well as embarrassed if the relief effort he supported turned out to be ill-managed or a fraud.

    Scrooge, thanks to tax-funded poor houses, is less likely to be drawn into civil society philanthropies that might have opened up his life (and he might have been less in need of spiritual shock-therapy).

    His very skeptical eye would be a valuable service for private charities, as he seems to understand that good intentions matter less than good results. He would probably be a better trustee of a private charity than his “do-gooder” nephew, for example.

    George C. Scott’s Scrooge notes with disapproval his nephew’s offer to overpay Cratchit’s son. Scrooge understands that overpaying for a young person’s first job can have negative consequences. It breaks the connection between a person’s productivity and their pay. It confuses charity with wages in the mind of both the employee and employer.

    The intricate dance toward “just” or market wages not only pits each worker against others willing to take on a job, it pits each employer against all others willing to pay higher wages. When employers get greedy and try to hold wages below the marginal earnings each worker brings the firm, other employers have a profit opportunity, if they can hire that worker away.

    Smaller earnings from each of twenty or a hundred workers can add up to far more than large earnings from five. Henry Ford earned far less profit per car sold than did Henry Royce. But in the end, he did okay.

    The push for profits in the labor market leads employers to a bidding war that narrows the gap between what workers earn for firms and what they are paid. Competition for workers is endlessly frustrating for employers who hire and train new employees only to find them lured away by better offers. The core source of Bob Cratchit’s low pay is likely his limited responsibility and productivity at the firm of Scrooge and Marley. In fairness to Mr. Cratchit, it may not be his fault that Scrooge has been holding on too tight and not delegated enough. Marley may have offered Scrooge more opportunities to learn and share responsibilities at the firm than Scrooge had so far given Cratchit. Either could be blamed, but it seems reasonable to find fault with the side most capable of changing the situation: the boss.

    Seeing the Ghost of Famine future 

    Some are visited by the ghosts of terrible futures that never happen, but might have. Imagine Ebenezer Scrooge dreaming of a terrible famine would soon strike. Perhaps nightmare tariffs on imported grain coupled with bad harvests in England drive corn prices beyond the reach of the poor and spread famine across the land. Famines in Scrooge’s time were not rare and he would have lived through one in his youth. The Europe-wide famine of 1816/17 followed poor harvests across Europe and the general destruction of the Napoleonic Wars. Crop yields in Western Europe fell 75 per cent triggering wide-spread famine and death.

    For a businessman like Scrooge, such a vision might lead to careful (and costly) review of weather news across Europe as harvests approached. News of potentially bad harvests would be a reasons for taking a major investment position. Early on in the movie George C. Scott’s Scrooge visits the city grain exchange to do some business. He holds out for a higher price for corn in his warehouse, and is accused of hurting the poor through his greed. But is holding out for higher prices really hurting the poor? Yes and no.

    His “hoarding” or speculating on grain does raise the price today. But it also has the consequence of pushing prices down in the future. Scrooge has seen a vision of scarcer grain in and higher prices the future (otherwise he would sell at today’s prices). He is raising the price of grain for the poor (and everyone else) today, in exchange for lowering the price in the future. If his vision proves true, he will have performed a service for society by pushing all to conserve now a resource that will be more scarce in the future.

    The businessmen in the movie claim Scrooge is raising grain prices for the poor today by holding back. These less visionary businessmen may lack the weather information Scrooge could have gathered. Or they may just wish to buy Scrooge’s corn at lower prices either to help the poor today or to help themselves. How can we know they would pass these lower prices on to consumers? Perhaps they would just pocket gains from below-market prices themselves. In any case, I will argue that raising prices now can in fact help the poor. (How is that for a Scrooge-like claim!)

    Speculators like Scrooge are time-shifters. Whether or not inspired by ghostly visions, they trade goods through time. Scrooge fills his warehouse with corn then turns the dial on a time-machine to transport them to the future. It is an expensive and risky enterprise. Who knows what the future will bring? Such businessmen make informed guesses, they speculate about the future. If they are right, their fourth-dimension transportation system earns profits, even after paying rent on warehouse space and interest on money tied-up over time. If they guess wrong they lose their investment. And after too many wrong guesses, both Scrooge and Cratchit would be looking for new work.

    Across Europe, in old city-centers, you can often find the grain exchange building. Here sellers and buyers of grain would gather each day to buy, sell, and speculate. Farmers are just one part of working agricultural markets. Weather and harvests are hard to predict. Grain can be stored for some time, though at a cost. Grain prices embody the collective guesses of hundred or thousands of people about what the future will bring for the supply and demand of grain. Prices change each day as news of hundreds or thousands of events small and large filter into the buyers, sellers, and speculators on the grain exchange.

    Steam powered ships opened vast lands in American and Argentina to supply grain the Europe. And steam-powered railroads allowed Ukraine to be a bread-basket to the world. Transportation costs dropped gradually, then rapidly through the 1800s. Low-priced grain from the America’s “flooded” Europe with less-expensive grain, leading European landlords, the landed Aristocracy, to lobby Parliament for tariffs on imported grain. The landed Aristocracy of the time favored “fair trade” not free trade. Lower grain prices led to lower rents on their farmland. Struggling workers who benefited from lower food prices had less opportunity to explain the benefits of lower food prices whilst playing whist at the club.

    Scrooge was neither a landed aristocrat born with a silver spoon, nor a farmer, nor a manufacturer. How did Scrooge happen to have the corn in his warehouse in the first place? Economists argue he is performing a service by warehousing corn and releasing it when demand is strong. In the movie he is presented as being greedy and pushing prices higher, thus hurting the poor. But by aiming to make profits speculating on corn, his early purchase pushes prices slightly up and encourages conservation now. By speculating in corn he is a visionary. He guesses that in the near future, current plentiful corn supplies will turn scarce. Those lulled by relatively low corn prices to use it casually today would regret it later–but by then it would be too late. Only by taking action before the shortage can some of today’s relative plenty be set aside for tomorrow.

    No one can really see into the future and know what corn, oil, or copper prices will be next week, next month, or next year. No one can know the future, but professional speculators invest time and resources to make educated guesses. When they are wrong, they lose their own money, but when correct they make money by better coordinating consumer behavior through time. The warning from a Ghost of Famines Future alerts speculators to act today. Consumers angry now at rising prices benefit in the future when Scrooge’s warehoused corn is released, easing the shortage and stabilizing or lowering the future’s higher prices. Scrooge profits by coordinating consumption through time.

    Yet, interestingly, his actions also generate incentives that can eat away at his potential earnings. By warehousing corn and pushing prices higher now, he not only signals conservation by consumers, but also new production. Higher than expected prices signal farmers to work to expand output, to bring new land into production. These behavior changes caused now by Scrooge’s purchases and warehouse will take time to bear fruit. So when the future shortage and perhaps famine arrives some farmers will have expanded production without ever having seen a ghost themselves. Scrooge’s vision and visionary action, signal invisibly through higher prices today that high or higher prices are expected in the future.

    Such “excess” grain production does not help Scrooge profit, in fact it will lower his potential gains as the expanded harvests come to market. Still, Scrooge could not expect to feed all of London from his warehouse. He will profit enough and his speculating will have spurred production. And the ghost of possible famine will fade away in the face of both grain sources. All this happens invisibly through changing prices, trusted contracts, and private property. (And not only happens invisibly, but stays invisible for 160 years!)

    Back to Cratchit, Wage Rates, & Responsibility

    Many have been written of the economics of A Christmas Carol. But some I think hit a sour note by attacking Cratchit as incompetent and painting the early Scrooge as a hero. We have the luxury of writing our own postscript to the story, one where Scrooge gains some friends, socializes some, and continues to run his business profitably. In our free-market postscript, Scrooge can take an active interest both in supporting well-run and effective charities, and in agitating for government to shut down poorly-run poor houses.

    After his conversion, Scrooge gives Cratchit a raise, doubling his salary. Does that mean he was just exploiting him earlier? Or that Cratchit was not particularly competent? No, I think the raise can be seen as a very reasonable decision, part of Scrooge’s change of heart, that he wishes to give Cratchit more responsibility at the firm. Scrooge met his own mortality in his dreams that night. He dreamed himself standing before his own grave. Mortality creeps up quietly on all of us, perhaps especially on busy and successful businessmen. With no board of directors to push for a “succession plan” for the firm of Scrooge & Marley, he had avoided the issue.

    Scrooge likely didn’t pay more earlier because he hadn’t given Cratchit enough responsibility to enable him to be worth more. With Scrooge’s change of heart, higher pay would go hand in hand with higher productivity from Cratchit, which would follow from additional responsibilities. Scrooge will need to free up time, after all, for board meetings at the various nonprofits he will be asked to join–word of unexpected large donations gets around fast in the nonprofit community.

    Consider too that giving Cratchit more responsibility and more knowledge of the business could dramatically raise Cratchit’s income earning ability for the firm. Scrooge might make even higher profits from a better-paid Cratchit.

    It could be claimed that Cratchit is incompetent, but nothing indicates bad work habits in the movie, apart perhaps from showing up late to work one day–but that could be blamed on the overlarge and unexpected turkey Scrooge himself donated the day before. The audience, unfortunately, sees only the seemingly arbitrary nature of pay. Bosses can apparently double someone’s pay if only spirits scare them half to death in nightmares (something politicians and labor unions have tried to do ever since).

    Also, I recommend the movie Hobson’s Choice, with Charles Laughton, to give a sense of how wages rise.

 If employees like Cratchit are capable, and productive, then they earn income for their employer. If the employer chooses to pay them less than the marginal income they bring the firm (or to otherwise mistreat them), employees can leave to search for new employment at higher wages. 

In Hobson’s Choice, an overbearing employer mistreats employees and his grown daughters (who also work for him). They can try to persuade the boss to pay higher wagers (or grant shorter hours), but ultimately, then can leave to work for others or to start their own firm.

It is their productivity, their ability to create value for customers that is their claim to be compensated or to start a successful enterprise.

Hope this helps explain the concluding part of my article. 

This essay by F. A. Harper, “Why Wages Rise” also explains the economic forces that push wages up (or down): http://www.thefreemanonline.org/columns/why-wages-rise-1-labor-unions/

  2. glenn byrne on December 16, 2010 11:51 pm

    Id have to disagree.
    Firstly it’s a fantasy tale and meant to be a ‘nice’ story for Christmas. A sad twisted grumpy old man redeeming himself.(and never forget- a lot of his anger and hatred came from his own self admitted mistakes)
    Although id have to agree with the premise of Scrooge shouldnt throw all his money away –(Although its not the case in the story) the point was mainly that hes just about to die and why not- hes miserable himself- If this article were true then hed be a happy millionaire- but hes not. The ghosts mainly showed him the mistakes hes made –the mistakes he KNOWS hes made and that turned him into who he is. eEspecially with the woman he turned down and heartily regretted it.

    And remember the ghost also showed how the public disdained him and were happy at his death- stealing his belongings and generally glad. No one wants to hear that no matter how bad. Realizing perhaps that life is not all about generating profits but perhaps also –(but not only)- improving the lives of others in any way whilst youre doing. Is there some reason why we cannot do both? Isnt that the point of capitalism-to improve lives by fair competition?

    Giving away all your cash was never implied in the book- if he was going to do that he would have walked down to the nearest church and signed it all over. Read the last few paragraphs of the story- but I guess the writer only ever saw the movies.

    Scrooge was never “manipulated” into anything. The ghosts showed facts- never untruths.

    The writer states that “I felt a bit of sadness, as here’s another story of poverty trumps wealth, rich is evil while poor is good, and being a second hander is more important than being a real, virtuous free man”

    Here he contradicts himself- the story clearly shows an angry bitter miserly man who is in chains (like Marley) who once realizing what an arse he is, is figuratively released and dancing with happiness. Scrooge was never free and one thing is for sure he was never VIRTUOUS!! There were other characters in the book/movies who were well off (take the charity collectors) poverty didn’t trump wealth and Scrooge was still rich when he changed.

    The story was set before unions or government controls on labour (please- the English were sending down 5 year old children to the coal mines and indentured labour was the norm- a practice worse than slavery) and it was hardly a free market in those days- far from it. The wealth was still controlled by the privileged few with almost no ability to change the status quo- unlike today. You couldn’t even be an army officer without being from the right circles and paying a hefty sum for it.

    Old Bob Cratchit may not have had much choice- he had a large family and a handicapped son and probably was not able to push himself out for employment elsewhere easily- the risk he faced if Scrooge found out would be extreme. There was no welfare – few advertisements and not much of a network. Also any potential person stealing Cratchit off a powerful man like Scrooge risked his wrath as well. You can imagine what sort of “employment contract “ Cratchit would have had with Scrooge in 1840 odd.

    The writer puts 21st century values and interpretations to a story almost 200 years old. Doesnt take into account business systems of the time and generally (as one person points out) interprets it his own- and i believe wrong-way.

  3. Stephen Rush on December 17, 2010 12:32 am

    What is assumed in many of these arguements is that Scrooge must be judged by his own standards. Freedom is the ability to live by your own standards but does not mean that no one is accountable for their actions. While Scrooge is free to run his affairs as he sees fit, those around him are free to judge him on his actions. Remember that Scrooge was not punished by any institution. He was accountable only to the extent that he cared about his soul. In the end, self interest won.

  4. Phillip Sampson McGerk III on December 17, 2010 3:24 am

    I don’t see this as an attack on Capitalism per se, but on a Capitalist that has no capital in his soul. In other words, he lacks generosity and meaning in his life.

    I believe Dickens is trying to show us the value of relationships. Money is an abstraction; it does not make people happy in itself. Valuable relationships do. In fact, the more valuable your relationships are, the more value the money will give you.

    Scrooge does not miss joy in the beginning because he does not really know what it is. Quite similar to Kierkegaard’s description of a person in despair - a person can be full of what they believe is joy and also be suffering from despair. Yet, they will not know they are suffering from despair because they cannot see or feel it. They need something to stir them to it.

    Still, if we are to believe Nietzsche and Dostoyevsky… this is a tight rope that needs to be walked with care. A person must do their best to discover the knowledge that is able to distinguish between pity and love. In giving and punishing.

    For instance, in the Brothers Karamazov, we see the Grand Inquisitor wants to take care of the people because he sees himself as superior to them. He pities them. He does not see them as his equal. He is above them in eyes. And yet, the Inquisitor suffers from insecurity because his self interpretation as a care giver is dependent on the people he helps. He will lose the security of his self-misunderstanding by letting go of this.

    On the other hand; Jesus loves the people. In the Inquisitor’s eyes, Jesus thinks too highly of them, he gives them too much credit. He sees them as equals. Jesus thinks they can stand on their own feet… and they need freedom to do this.

    So Jesus is a double threat:

    1. To society - because freedom will give the people the opportunity to become wholes rather than parts. Though with this freedom comes its dizziness… its uncertainty - but also, the possibility for profound suffering and real joy.

    2. To the Grand Inquisitor- because this would mean the Inquisitor would have to truly embrace freedom. The Inquisitor wants to be in a form of bondage as much as the people do.

  5. Jeff Watson on December 17, 2010 11:40 am

    To Greg, Glenn et al, the whole point is that Scrooge “Owed” nobody anything. It is not a virtue to give to charity any more than it is a virtue to be a good Samaritan. It is a choice, not a virtue. When I hear people who become successful, especially athletes, say that doing good deeds are their way “Giving Back” to the community, that statement offends me like no other. The concept of “Giving Back,” implies that they took something that wasn’t theirs in the first place, or worse, that their years of hard work and practice were all due to the collective and they are repaying the collective, in other words, paying a tax to the collective for being successful. Guilt also plays a big part in this and there is a whole media and governmental machine out there with the sole purpose of making productive and successful people feel guilty, that somehow their accomplishments are due to the benefits bestowed upon them by this great country and not by their own hard work and diligence. The Soviet Union had this concept dialed in during their heyday, and it is being exported to the USA while withering in the former USSR. Charity and volunteerism is a matter of personal choice, and should not be a requirement or considered a virtue. Personally, I like to do good deeds, act benevolently, unselfishly, but in a quiet, anonymous manner bringing no attention to myself or family. Earlier I mentioned volunteerism, which in the state of Florida, for students to get state scholarships(which they qualify by having high GPA’s), they are required to do X hours of volunteer work. Is required work, truly volunteer work, or is it a state sanctioned form of indentured servitude? Is this concept of servitude any different than the servitude in the poorhouses of old?

    The allegations that Scrooge was not a virtuous man is pure poppycock. He might have been a nasty old unlikable man, but that does not mean he was void of virtue.

    Here’s a list of Benjamin Franklin’s 13 virtues.
    1. TEMPERANCE. Eat not to dullness; drink not to elevation.
    2. SILENCE. Speak not but what may benefit others or yourself; avoid trifling conversation.
    3. ORDER. Let all your things have their places; let each part of your business have its time.
    4. RESOLUTION. Resolve to perform what you ought; perform without fail what you resolve.
    5. FRUGALITY. Make no expense but to do good to family or yourself; i.e., waste nothing.
    6. INDUSTRY. Lose no time; be always employ’d in something useful; cut off all unnecessary actions.
    7. SINCERITY. Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly.
    8. JUSTICE. Wrong none by doing injuries.
    9. MODERATION. Avoid extremes; forbear resenting injuries so much as you think they deserve.
    10. CLEANLINESS Tolerate no uncleanliness in body, cloaths, or habitation.
    11.TRANQUILITY. Be not disturbed at trifles, or at accidents common or unavoidable.
    12. CHASTITY. Rarely use venery but for health or offspring, never to dullness, weakness, or the injury of your own or another’s peace or reputation.
    13. HUMILITY. Imitate Jesus and Socrates.

    Scrooge scored 9-10 out of 13(subjective interpretation) of Franklin’s list of virtues, which is not a very bad score. Nowhere on Franklin’s list is charity mentioned as a virtue. Nowhere does his list include cheerfulness and good will as a virtue. However, order, resolution, frugality, and industry rank very high and Scrooge had an excess of those characteristics.

    Needless to day, this conversation has drifted 180 degrees off of the original course which was “A Christmas Carol,Socialist Screed?” into an indictment and defense of Ebeneezer Scrooge, a character who needed no defense.

  6. Interesting article « Masteroftheuniverse’s Weblog on December 22, 2010 11:53 am

    […] I wrote thisarticle on Dicken’s A Christmas Carol and was surprised at the reactions. I didn’t realize that I still have the ability to inflame. Still, the whole dialogue gives much food for thought. […]

  7. Trader Kevin (Penn State Clips) on December 23, 2010 11:11 am

    Jeff, thank you for sparking an interesting discussion.

    Regarding Franklin’s virtues, does he go far enough in defining Justice? “Wrong none by doing injuries.”

    I believe there’s more to justice than simply not wronging others. Sometimes it means being proactive in stopping an injustice when you are a third party. (Obviously this can be taken too far, as we’ve seen all too often with Mommy Government.)

    Moreover, you stated, “Nowhere on Franklin’s list is charity mentioned as a virtue.”

    However, if one is going to “imitate Jesus” with regards to Humility, logic would dictate that the practicing Christian also follow the lead of Christ with regards to helping the less fortunate.

  8. jeff watson on December 23, 2010 12:37 pm

    Kevin, you said,” However, if one is going to “imitate Jesus” with regards to Humility, logic would dictate that the practicing Christian also follow the lead of Christ with regards to helping the less fortunate.” What about the practicing Jew?

    Would that humility also include whipping bankers, making wine without paying a tax stamp on it(bootlegging), he commanded 2000 pigs into rushing into a lake and drowning themselves(Probably put that farmer out of business), feeding thousands of people with just a few loaves of bread, thereby depriving grain merchants a sale and bakers a wage?

    Franklin also said to imitate Socrates, but would that humility involve pederasty and hemlock?

  9. Trader Kevin (Penn State Clips) on December 23, 2010 3:32 pm

    “Nowhere on Franklin’s list is charity mentioned as a virtue. Nowhere does his list include cheerfulness and good will as a virtue.”

    The list implies that Franklin was a practicing Christian and thus presumably understood the lessons of 2 Corinthians 6-7: “Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”

  10. jeff Watson on December 23, 2010 4:51 pm

    Kevin, Being a good sort, Franklin had at one time two slaves that he eventually freed, so at least he respected Corinthians 6-7. However, at one time he must have believed in Ephesians 6:5-9: “Servants, be obedient to them that are your masters according to the flesh, with fear and trembling, in singleness of your heart, as unto Christ; Not with eyeservice, as menpleasers; but as the servants of Christ, doing the will of God from the heart; With good will doing service, as to the Lord, and not to men: Knowing that whatsoever good thing any man doeth, the same shall he receive of the Lord, whether he be bond or free. And, ye masters, do the same things unto them, forbearing threatening: knowing that your Master also is in heaven; neither is there respect of persons with him.”

    However, Kevin we can go tit for tat until the cows come home. Let’s just agree to disagree and leave it at that.

  11. rudy on December 26, 2010 2:35 pm

    … and “God bless us, every one!”

    Tiny Tim

  12. HideHost on February 22, 2012 10:42 pm

    I want to know who is hosting this website please?

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