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The Scrooge Fallacy

My latest hero, Ebenezer Scrooge, is an example of a pervasive fallacy:

The widespread notion that free markets are corrupting is rooted at least in part in the innocent truism that for the market to work people must act according to self-interest. Without the motivation of self-interest, there would be no profit seeking, no price competition, no production and exchange. True enough, the market requires self-interested behavior.

But many make an illogical leap from this truism to a falsehood: that if one is self-interested, one cannot be other-interested. Many see an either/or choice. Scrooge can care about Scrooge, or he can care about others: the poor, his clerk Bob Cratchit, Cratchit’s family, including lame Tiny Tim, and so on. He cannot do both.

The error is a propositional fallacy called Affirming a Disjunct. The premise that Scrooge cannot do both is false. The argument that capitalism necessary excludes generosity is logically invalid.

Admittedly unfamiliar with the story—and taken with the performance—I missed this detail:

There is no suggestion that [Scrooge] gives up his capitalism; in fact, Dickens tells us that he is at his desk early the day after Christmas. He just broadens his other activities and ends.

My cultural sense was that Scrooge was an evil man who was redeemed by turning away from the ideals that built his fortune. I thought the lesson was that goodness comes from rejecting capitalism.


Goodness comes from having a good heart and doing good works. There’s nothing inherently evil about driving a hard bargain in the world of commerce. Charity requires having something to give.

Good for generous Scrooge! His attention now encompasses the “higher matter” of his clerk’s well-being. (By the way, observes the economist, Cratchit’s productivity will probably increase substantially.) But how could Scrooge be generous without his cash? What would pay the higher salary, go to assist the family, buy the Christmas bowl and extra coal? Praise the Lord for Scrooge’s money and his ability to earn it! May he continue to do so! It’s cash that lets a generous impulse become a generous deed.

Dickens saw that richness and wealth do not necessitate cold injustice. Would so many who feel for our modern-day Cratchits be as wise and clear-thinking as he who penned the story.