We all know that there is some kind of economic theme running through Charles Dickens' most famous novel, A Christmas Carol. The problem is that modern people tend to read their own views into the story instead of paying close attention to the details of the story itself. The standard modern interpretation is that A Christmas Carol is a condemnation of business, and a call for the state to step in and become the provider for the poor. But look closer and you'll see that the truth is quite in the opposite direction.
For example, when a pair of men come to Scrooge's office asking for private donations for the poor, Scrooge responds,
“Are there no prisons? ... And the Union workhouses?... Are they still in operation? ... The Treadmill and the Poor Law are in full vigour, then? … I was afraid, from what you said at first, that something had occurred to stop them in their useful course … "
Scrooge is refusing to give private aid and instead throwing the responsibility onto public, government entities. The alms-askers decry the cruelty of these institutions. “Many can’t go there; and many would rather die.”
"If they would rather die…they had better do it, and decrease the surplus population," is Scrooge's reply.
And in this exchange we see what the economics of A Christmas Carol is all about. It is a condemnation of the philosophy of scarcity and population growth hysteria popularized by Thomas Malthus. Malthus argued that history showed population tends to grow faster than the food supply, and therefore population growth was dangerous and might cause mass starvation. Historians now recognize that Malthus himself, both an economist and a Christian pastor, eventually came to a more balanced position. He corresponded with the free-market economist Jean Baptiste-Say, the forefather of modern supply-side economics and the man who coined the word "entrepreneur." Say argued that economic growth was driven by increasing the supply of goods and services and the world could consume more as it learned to produce more. He is responsible for something called "Say's Law;" i.e., "supply creates its own demand." In other words, production is the basis of consumption. As entrepreneurs move resources to more productive endeavors, supply increases, which means there's more for us to consume.
But Malthusian ideology did not shift along with its namesake, and English elites lived in fear of excess breeding among the poor classes. They devised programs for the poor that were intentionally cruel, keeping them in cold and hunger and abusive circumstances. In modern parlance, the cruelty was a feature, not a bug. The point was to impose pain on the poor to keep them from bringing more poor people into the world. As Solomon said, "The compassion of the wicked is cruel."
Dickens put the words of Malthus into the mouth of Scrooge, when he wrote the phrase "surplus population." That would have been easily recognized by educated readers at the time. Scrooge was what we would call an advocate of "Zero Population Growth" (ZPG). Malthus' ideas were key to the work of Charles Darwin and through him down into the various eugenics movements of the 20th century. Nazism was built on Malthus. The gas chambers were the "final solution" to certain segments of "the surplus population." In the "free world" the Malthusians took a more medical than military approach in the form of public health efforts at mass sterilization and, barring that, abortion. Surely a post-1973 version of Scrooge would have asked, "Are there no abortion clinics, are they still in operation?"
Later we see Scrooge talking with the Ghost of Christmas Present who tells him that he has over 1,800 brothers (i.e. over 1,800 Christmases have passed since the first one in Bethlehem.) Scrooge's reaction is to exclaim how difficult it would be to provide for such a large family, at which point the Ghost rises in indignation and looms over Scrooge. Christmas Present is rightly offended by Scrooge's philosophy, which treats his brothers as burdens rather than blessings. Later, Christmas Present rebukes a frightened and stopping Scrooge for his wish that the "surplus population" would die off, suggesting that perhaps the Tiny Tims of the world were greater "in the sight of Heaven" than the men who wished that such sick children had never been born.
Originally, A Christmas Carol was intended to be a pamphlet, but Dickens decided instead to tell a story. The trigger for him was a report about childhood poverty. Friedrich Engels (Marx's wealthy sponsor) had read the same report. But Dickens did not take the revolutionary route that Marx and Engels did. Instead, he argued for personal, private generosity, in the form of alms and higher pay. Scrooge gives Cratchit a Christmas bonus in the form of a turkey and a pay raise. Business is part of the solution. Jacob Marley is usually quoted in the films as saying something like, "Business? Mankind was my business," as if to deny moral legitimacy to the role of entrepreneurs. But in the actual story he ended the speech by saying, "The dealings of my trade were but a drop of water in the comprehensive ocean of my business!” In other words, "trade" was a legitimate part of his responsibility, alongside the true purposes which are "charity, mercy, forbearance, and benevolence." Trade makes charity, etc. possible. The example of young Scrooge's generous and successful employer Fezziwig shows the positive vision of business which Scrooge and Marley (while alive) had failed to live up to.
Dickens' response to the poverty report was not to urge more government programs and it was not Marx's violent revolution. High wages for the employable and alms for the unemployable are the ways to forestall the revolutionary children of Ignorance and Want hiding beneath the robes of Christmas Present.
Edit: An earlier version of this piece incorrectly stated that Bob Cratchit received a goose as a Christmas bonus and that the Ghost reached for his sword. Both issues have been corrected.
Jerry Bowyer is financial economist, president of Bowyer Research, and author of “The Maker Versus the Takers: What Jesus Really Said About Social Justice and Economics.”