David R. Henderson  

Dwight Lee on Ebenezer Scrooge's Morality

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The first Scrooge [before the visit of the three ghosts] satisfied only the requirements of the first morality, which I call mundane morality, while the second Scrooge [after the ghosts' visits] enthusiastically embraced the second morality, which I call magnanimous morality. Economists who want to make a moral case for free markets need to take both moralities into account.
This is from Dwight R. Lee's Econlib Feature Article for May, "The Two Moralities of Ebenezer Scrooge."

Why run an article about this in May rather than, as is traditional, December? Because, as I explain in an editor's note upfront, "people's understanding of that classic affects their thinking all through the year."

In the article Lee highlights the fact that Scrooge was a moral man. He didn't cheat or steal. He worked hard and productively for what he earned.

But after the visits of the three ghosts, Scrooge became magnanimously moral. Lee's last two paragraphs give us the moral of the story for those who want to teach about the wonders of mundane morality:

Most economists understand the importance of magnanimous morality to a good life. However, they approach their teaching by trying to get their students to appreciate the mundane morality of the market in the absence of magnanimous morality. As a result, they face much the same difficulty as when they try to get people to appreciate the first Scrooge. Economists could go a long way toward eliminating this difficulty by recognizing that those whose mundane morality helps them succeed in the marketplace are motivated largely by magnanimous morality--the desire to take care of their families and help their friends, neighbors and close associates, and being willing to make sacrifices to do so. Both moralities are necessary for a life of achievement, of purpose, and of the joy that comes from being able to do more for those we care about and who care for us.

Market behavior really is motivated largely by the same desire that transformed Scrooge on Christmas morning--the desire to help those who mean the most to us--and that motivation, when directed by the mundane morality of markets, results in our also serving the interests of multitudes of people we will never know. By emphasizing that a good economy, like a good life, is best achieved by the mundane morality of markets coupled with recognition of the motivational importance of magnanimous morality, economists would make a case for the morality of markets that has some of the same emotional appeal as does the transformation of Scrooge in A Christmas Carol.


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COMMENTS (6 to date)
Fred Foldvary writes:

There is only one natural moral law, hence one universal morality. It has rules for good, evil, and neutral acts. In doing no coercive harm, Scrooge adhered to the rule regarding evil, and then when benefiting others, he adhered to the rule regarding good.

Hazel Meade writes:

There are other readings Ebenezer Scrooge that tend to get neglected. It's not just about altruism vs. selfishness.

It's also about enjoying life vs. self-abnegation. Scrooge is stingy even with the coals in his own fireplace. He's completely focused on long-term accumulation of wealth, versus enjoying the present. Part of the lesson is a reminder that the purpose of accumulating wealth is to eventually enjoy it.

Also, scrooge has no children, so the only people he could leave his money to are his neices and nephews - which he's excluding from his life by never celebraitng the holidays with them. IIRC, one of his visions is of the jolly and generous uncle he remembered from childhood. So he kind of decides to emulate that uncle and bring his family into his life, since then he will have heirs to leave him wealth to.

Bill writes:

Should Lee's magnanimous morality, the desire to take care of their families and help their friends, neighbors and close associates, and the joy that comes from being able to do more for those we care about and who care for us, impact U.S immigration policy?

MikeP writes:

Should Lee's magnanimous morality, the desire to take care of their families and help their friends, neighbors and close associates, and the joy that comes from being able to do more for those we care about and who care for us, impact U.S immigration policy?

Of course!

Allowing families and friends to live together wherever in the world that may be and allowing individuals to live and work wherever they can while they support their families elsewhere are both examples of magnanimous morality.

Needless to say, magnanimous morality can never trump mundane morality. You cannot prevent the moving to your city of someone who might compete for your nephew's job. Nor can you prevent the moving to your nation of someone who might compete for your fellow citizen's job.

David S writes:

The real tragedy is that Scrooge has actually harmed society by his change!

The original Scrooge efficiently concentrated wealth into the control of the person most able to efficiently create wealth, thereby maximizing society's aggregate wealth. Scrooge didn't spend any of his money on items that did not generate wealth! Capitalism at its best!

The later Scrooge took all his wealth and distributed it to those incapable of using the gifts to generate wealth - in essence, his recipients ate all the seed corn. So in addition to missing out on the increased wealth (and thereby employment, inventions, etc.) that Scrooge inc. could have generated, the basic demand items of the poor (food, entertainment, and other one-shot use items) saw rampant inflation. After all, it isn't that Scrooge made more food or entertainment available - he just gave out money. So while those that he gave the money to directly were helped, those that did not receive the boon were harmed - because now the direct recipients ate twice as much, moving the others from mere abject poverty to death by starvation.

Far more harm than good was done, to far more people. I leave any comparison to government spending up to the motivated student...

Tom Lee writes:

Thanks Dwight Lee and David Henderson for posting this blessing for us!

The common wisdom is that Scooge was a bad man who became good. But my view is that he was good the whole way through the story.

If you really pay attention I think you can even see hints of his goodness early on which he's trying desperately not to let out. If you want to look for yourself, here's the full Alistar Sim version free: http://www.youtube.com/watch?v=MP2HnAXHHqg

Why would he be bother being so mean and bitter if he weren't trying to repress his better nature? After all, being nicer would have been good for business! I think the turning point is when he meets the second ghost of Christmas Present (minute 50 of link). The ghost is surrounding with trappings of abundant wealth. Ironically, it's the very materiality of this wealth that starts to wake Scrooge up -- by sharing his wealth he could finally have it himself in a satisfying way.

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