For love or money? 0

Christmas in America brings out saccharine movies on TV. It’s a Wonderful Life. The Wizard of Oz. A Christmas Carol – this year the version with the great Patrick Stewart in the role of the haunted miser Ebenezer Scrooge.

In general we don’t like parsimony because we like abundance. But back in 2004, Steven E. Landsburg wrote an essay in praise of Scrooge, making the case that the parsimonious help to create abundance, and we see his point.

He wrote (in part):

Here’s what I like about Ebenezer Scrooge: His meager lodgings were dark because darkness is cheap, and barely heated because coal is not free. His dinner was gruel, which he prepared himself. Scrooge paid no man to wait on him.

Scrooge has been called ungenerous. I say that’s a bum rap. What could be more generous than keeping your lamps unlit and your plate unfilled, leaving more fuel for others to burn and more food for others to eat? Who is a more benevolent neighbor than the man who employs no servants, freeing them to wait on someone else?

Oh, it might be slightly more complicated than that. Maybe when Scrooge demands less coal for his fire, less coal ends up being mined. But that’s fine, too. Instead of digging coal for Scrooge, some would-be miner is now free to perform some other service for himself or someone else. …

In this whole world, there is nobody more generous than the miser — the man who could deplete the world’s resources but chooses not to. The only difference between miserliness and philanthropy is that the philanthropist serves a favored few while the miser spreads his largess far and wide.

If you build a house and refuse to buy a house, the rest of the world is one house richer. If you earn a dollar and refuse to spend a dollar, the rest of the world is one dollar richer—because you produced a dollar’s worth of goods and didn’t consume them.

Who exactly gets those goods? That depends on how you save. Put a dollar in the bank and you’ll bid down the interest rate by just enough so someone somewhere can afford an extra dollar’s worth of vacation or home improvement. Put a dollar in your mattress and (by effectively reducing the money supply) you’ll drive down prices by just enough so someone somewhere can have an extra dollar’s worth of coffee with his dinner. Scrooge, no doubt a canny investor, lent his money at interest. His less conventional namesake Scrooge McDuck filled a vault with dollar bills to roll around in. No matter. Ebenezer Scrooge lowered interest rates. Scrooge McDuck lowered prices. Each Scrooge enriched his neighbors as much as any Lord Mayor who invited the town in for a Christmas meal.

Saving is philanthropy, and — because this is both the Christmas season and the season of tax reform — it’s worth mentioning that the tax system should recognize as much. If there’s a tax deduction for charitable giving, there should be a tax deduction for saving. What you earn and don’t spend is your contribution to the world, and it’s equally a contribution whether you give it away or squirrel it away.

Of course, there’s always the threat that some meddling ghosts will come along and convince you to deplete your savings, at which point it makes sense (insofar as the taxation of income ever makes sense) to start taxing you. Which is exactly what individual retirement accounts are all about: They shield your earnings from taxation for as long as you save (that is, for as long as you let others enjoy the fruits of your labor), but no longer.

Great artists are sometimes unaware of the deepest meanings in their own creations. Though Dickens might not have recognized it, the primary moral of A Christmas Carol is that there should be no limit on IRA contributions. This is quite independent of all the other reasons why the tax system should encourage saving (e.g., the salutary effects on economic growth).

If Christmas is the season of selflessness, then surely one of the great symbols of Christmas should be Ebenezer Scrooge — the old Scrooge, not the reformed one. It’s taxes, not misers, that need reforming.

We see another moral in the story too.

Enormously as we enjoy all the other works of Charles Dickens, we dislike A Christmas Carol. What we particularly dislike about it, in addition to its mawkishness, is this.

Scrooge has a single employee in his investment business, a clerk named Bob Cratchit whom he prudently pays as low a wage as – presumably – the labor market allows.

This Bob Cratchit – whom Dickens makes out to be something of a hero – has six children, at least one of whom suffers, not surprisingly, from rickets or some such poverty-induced disease.

What could this man have been thinking? He earns barely enough to keep himself but he takes a wife and then has six children. Driven by lust, he brings people into the world who must suffer as a result of his fleshly urges and low-earning skill-level. He’s lucky to have found an employer who finds his contribution to the business worth something, however little.

Scrooge’s barren existence is certainly unappealing. Depressing. Okay, positively repulsive. Still, he’s harming nobody by it, and according to Steven Landsburg is actually doing good to others.

Whereas Cratchit, through his fecklessness, condemns others to want and sickness, and in our book that makes him the villain of the story.


Posted under Capitalism, Commentary, Economics, Ethics by Jillian Becker on Wednesday, December 26, 2012

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