An Austrian Christmas Carol?

Apparently the Ludwig von Mises Institute, a libertarian think tank, publishes a perennial blog post called “In Defense of Scrooge.” Yeah, as in Ebenezer Scrooge, the infamous miser from Dickens’ A Christmas Carol. Scrooge has become a byword for foul-tempered penny-pinching and disdain for those worse off than oneself. Yet the LvMI post claims exactly the opposite: that Scrooge is an exemplar of a free-market employer.

Shocking to hear, at first, but this is the Mises Institute’s modus operandi. They are what you might call “market fundamentalists,” and believe that any ‘problem’ with markets is really a problem with government rules restricting market forces and causing inefficiency.

Never mind the fact that neoclassical economists (otherwise known as “everyone but the LvMI”)  agree that certain natural markets will always break down if left to their own devices. If anyone can fish for salmon and everyone thinks about himself, the rational thing to do is to catch as many salmon as you can before anyone else does—what you don’t catch, you can’t sell, and it probably won’t be there tomorrow. The salmon will be fished out, in a classic tragedy of the commons.

And while Scrooge may indeed be an efficient economic actor in the eyes of the Mises Institute, his treatment of Bob Cratchit may not be optimal. As this essay suggests (and economic research supports), a little altruism can go a long way. Each lump of coal in the fire is, in essence, capital investment: warm fingers allow Cratchit to do more clerical work, and in turn make more money for Scrooge.

Okay, but let’s look at A Christmas Carol again. Maybe there’s something counterintuitive about it after all.

We have to ask: why does Dickens portray miserliness in itself as being bad? Certainly it’s bad to mistreat your workers (and, contrary to the Mises analysis, Cratchit’s working conditions were pretty bad). And the labor market of Victorian London was so saturated with people that employers didn’t really need to have standards.

Unfortunately, even if “market conditions” allow for something to happen, that doesn’t make it perfectly okay.

Anyway, as far as I can tell, "miserliness” and the “spirit of Christmas” go hand in hand; that is, they are both tied in some way to Christian ideas of virtue. After all, Dante pits misers and spendthrifts against each other in his Inferno’s fourth circle. Why is it a sin against God? Because neither type of person gives the appropriate amount to charity (or, directly to the Church).

What that appropriate amount is, I'm not sure.