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The Primitive Keynesianism of Dickens’s “A Christmas Carol”

December 23, 2009

Lee Erickson in Open Democracy:

The traditional interpretation of Scrooge is of an avaricious miser graced by visitations which convert him into an enthusiast for Christmas. But from a Keynesian point of view, Scrooge is a hoarder with an obsession for maintaining almost complete liquidity in deflationary times like the early 1840’s. Even then, Dickens recognised the problem and understood the cure…

Dickens’s description of Scrooge bespeaks distasteful personal experience with money-lenders. We know from the first pages that Scrooge is the most cold-hearted of penny-pinchers: “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.” Further, although Scrooge has inherited a fortune as Jacob Marley’s business partner and sole surviving heir, he is still living in Marley’s old chambers in a building where all the other rooms are being rented as commercial offices and where a wine merchant has stored his casks in the cellars. Scrooge has changed nothing about the rooms, added nothing to them, and spends almost nothing on his own creature comforts. He has only a low fire for himself on a bitter winter night and takes only gruel for his cold. Further, as we later discover, his scavenged belongings would bring only a few shillings and pence from the rag-and-bone shop man. Indeed, although Scrooge is a rich man, he has spent almost nothing of his wealth but instead apparently has hoarded his money as liquid capital for his firm, which has a place on the Royal Exchange and evidently handles foreign exchange and discount bills. That is, he deals in private and commercial credit.

His financial practice is represented by the “cash-boxes, keys, padlocks, ledgers, deeds, and heavy purses wrought in steel” that weigh down old Marley’s Ghost, and which the Ghost says are also weighing down Scrooge. To remain financially sound, Scrooge has remained extremely liquid so as to have cash and to meet any bill presented to him for immediate payment. However, as John Maynard Keynes remarks in his General Theory of Employment Interest and Money, ”of the maxims of orthodox finance none, surely, is more anti-social than the fetish of liquidity”. The worst thing an individual can do in financial crises and the thing that, according to Keynes, has the most “disastrous, cumulative, and far-reaching repercussions” is not to spend one’s income on either investment or consumption, but to hoard it, as Scrooge has done, under lock and key.

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