Politics & Policy

Scrooge: The First 1 Percenter

Ebenezer Scrooge did more good as a businessman than as an altruist.

I have no idea whether Charles Dickens, if he were alive today, would have joined the Occupy Wall Street movement. Given the revulsion he expressed when America’s riff-raff had the temerity to become overly familiar on his two visits to this country, one may doubt his commitment to overthrowing society’s class structure. Despite this, he may still be considered among the movement’s intellectual forerunners. For it was he, in the person of his literary creation Ebenezer Scrooge, who gave the world a character who embodied all of the evil traits the Occupiers attribute to today’s 1 percent. In fact, Scrooge might, in many ways, be considered the literary patron saint of the Occupy movement. Who among them does not dream of a time when today’s 1 percent will find the same inspiration Scrooge did, and give away their riches to “more deserving” folk? Oh wait. The occupiers don’t want the rich to give their money away to the charities of their choice. They want the government to take the wealth of the rich and give it away according to the Occupiers’ desirers.

Either way, such actions are not really going to do much to improve the human condition. I contend that Scrooge, before he became “enlightened,” was already doing more to help his fellow man than any of the other main characters we meet in A Christmas Carol. Moreover, by giving away a substantial portion of his accumulated fortune, he drastically reduced his ability to do even more good in the world.

Scrooge was a “man of business” and evidently a shrewd and successful one. Although Dickens fails to tell us exactly what line of business Scrooge is in, a typical 19th-century “man of business” could be expected to involve himself in many endeavors — what investment advisers today refer to as diversifying one’s risk. One can infer from A Christmas Carol that Scrooge was a financier, who lent money to both businesses and individuals. He also spent long hours at the Exchange, probably speculating on commodities, buying and selling government debt, and purchasing and selling shares in various joint stock companies.

We can also infer some things about Scrooge that Dickens does not tell us directly. He left boarding school early, supposedly because his father had a change of heart toward him and wanted him home. A lack of finances may also have had something to do with it, as Scrooge’s formal education ended early and he was apprenticed as a low-level clerk to a tradesman — Mr. Fezziwig. From this low start, Scrooge exhibited a relentless drive that eventually made him rich. Along the way, his business had to survive the Napoleonic Wars, adapt to the Industrial Revolution, and fight its way through several severe economic depressions. In fact, in the year A Christmas Carol was written (1843), Britain was just coming out of a five-year economic slowdown in which only the most nimble and carefully managed enterprises survived. During Scrooge’s business life, upwards of 100 businesses failed for every one that succeeded. Scrooge must have been a very good businessman indeed.

There is no hint that, as Scrooge went about making his fortune, he was ever tainted with any scandal. He appears to be a well-respected, if not overly liked, member of the Exchange. This speaks well for his probity and recommends him as man with a reputation for fair and honest dealing with other businessmen. He probably drove a hard bargain, but that is the nature of business, and his firm’s survival as a going concern depended on it. As Scrooge is trying to keep his doors open in the midst of a great economic downturn, one should not be surprised that he is cutting firm expenses by reducing coal usage. Still, he is not being overly stingy by paying his clerk, Bob Cratchit, 15 shillings a week. According to British Historical Statistics, 15 shillings a week was about the average for a clerk at the time, and nearly double what a general laborer earned. While Cratchit may have to skimp to make ends meet, he is paid enough to own a house and provide for a rather large family. Cratchit is not rich, but by the standards of the time he is doing well. Besides, given the hard economic times, he is lucky to have any job at all. If Scrooge had not been careful with his money, his firm would have folded, and then where would Cratchit be? We may of course also infer something about Cratchit that goes unstated in Dickens’s work. His inability over perhaps two decades to advance himself or secure a better position with a more benevolent boss betrays a singular lack of ambition on his part.

Dickens doesn’t describe how Scrooge dressed. Scrooge must, however, have comported himself in a manner that was customary among those he did business with. And those petitioning him for alms had no problem discerning, from a single glance, that he was a man of some wealth. Still, Dickens tells us that Scrooge led a simple life (a simple dinner at the same restaurant every evening) and did not adorn himself with the trappings of wealth. From that we can deduce that every penny of profit was invested back into his business. And that was a very good thing.

Scrooge’s investments and lending were part of the great British capital engine that was financing the Industrial Revolution. If he was a typical “man of business,” he had recently invested capital in building railroads, establishing textile mills, building and running cargo vessels, and starting manufacturing plants. It is likely that he also was starting to invest some of his money in the United States, where British capital provided much of the early financing that helped make this nation an economic colossus.

Scrooge and his fellow “men of business” financed over 2,000 miles of railroad track in a decade. This track, in turn, greatly cut the cost of moving goods and people across Britain. In a twinkling the cost of moving coal to new industrial plants fell to rates that allowed factories to be built all over the country. This and other infrastructure improvements sparked a commercial revolution that within a generation would see a dramatic improvement in the conditions of the poor and middle class. Scrooge’s mills provided previously unimaginable amounts of cheap cloth that allowed even the poor to afford several outfits apiece. His cargo ships made Britain the richest trading nation on earth, and underpinned her unrivaled global power for a century.

More than anything else, Scrooge’s investments created jobs. A man with the wealth Dickens implies Scrooge possesses was probably making investments that employed many thousands of workers. History tells us that these “men of business” also reaped most of the rewards. They risked their capital in return for huge payoffs. These rich men of early-Victorian England were truly the 19th century’s 1 percent. Some of them did copy the nobility and squander fortunes on great mansions and unproductive land. But many, Scrooge included, took all or most of their gains and put them back into the economy. Scrooge was no miser who hoarded his money. Rather, he went every day to the Exchange to seek out new opportunities. His job — his passion — was finding places to invest. In doing so, he and others like him created a virtuous circle that not only increased their wealth, but also greatly benefited society.

There are few who doubt that the working conditions for the poor in this era were often horrid. These people were, however, leading lives far superior to those they had left behind on the farms. Otherwise, people would not have continued to leave the land in order to take their chances in the burgeoning cities. There was much that was cruel about early-Victorian society, such as children laboring under harsh conditions. Still, much of this was part of the great transition from an agricultural to an industrial society. Life was always harsh for the poor. It was only when industrialization began to make society as a whole richer that a majority of persons were able to start thinking about and caring for the more helpless among us.

It is this final result that should be laid at the feet of Scrooge. His investments began a period of growth and prosperity that, within a generation of when we assume he died, had doubled life expectancies, improved the lot of the poor, greatly increased the size of the middle class, paid for a military establishment that enforced the Pax Britannica, and propelled us into the modern age. Scrooge and the 1 percenters who followed him have enriched our lives to the point where our poor live better than medieval kings.

In the end, of course, Scrooge turned away from his previous ways, in favor of a life of altruism. If this is what makes him happy in his declining years, then he has every right to take this path. He earned the money, and he has every right to use it as he desires. Unfortunately for society, however, and particularly for the many thousands whose jobs Scrooge’s investments had underwritten, his transfer of funds to less productive causes undoubtedly cost them dearly.

But there is hope. With a bit of luck, a healed Tiny Tim, thanks to Scrooge’s generosity, will show more ambition than his father and learn the ways of business from his benefactor. Since Scrooge’s nephew demonstrates no real capacity for business, Tiny Tim might also find himself inheriting what remains of Scrooge’s fortune. If he is truly a good soul with a desire to help the greatest number of persons possible, Tiny Tim will take his inheritance and invest in the growth businesses of his era.

— Jim Lacey is professor of strategic studies at the Marine Corps War College. He is the author of the recently released The First Clash and Keep from All Thoughtful Men. The opinions in this article are entirely his own and do not represent those of the Department of Defense or any of its members.


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