The Wall Street Journal’s Indefensible Defense of Scrooge

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The voice of capitalism has got a big, old “bah, humbug” for the world’s masses. Merry Christmas!

The photo depicts Ebenezer Scrooge hoarding his money.
SOURCE: Maurizio Blondet.

Happy Christmas morning, America and the world. Did you get your special Christmas gift from the Wall Street Journal, the newspaper of record for U.S. capitalism? This year, it’s in the form of a revealing opinion piece, published on December 23, by Phil Gramm and Mike Solon. The title tells you almost all you need to know; I’m just adding a little context the authors conveniently omitted.

The op-ed is called “In Defense of Scrooge, Whose Thrift Blessed the World.” I assure you I am not making that title up, and the authors are dead serious. Their piece is a manifesto in support of trickle-down economics — the basic premise of which is that freeing up money for the wealthy allows them to invest more, hire more workers, and pay better wages. That increased wealth will trickle down from the rich to the teeming masses.

That patently ridiculous capitalist ruse is no less of a crock today than it would have been had the concept existed when Charles Dickens created the Ebenezer Scrooge character in his 1843 work A Christmas Carol. The Journal authors would have us believe that today’s capitalism, 177 years later, can and should be counted on to save the world from want. This in the very year when Jeff Bezos and other billionaires have been practically printing money for themselves, reaping wealth from a deadly pandemic that is decimating the working class around the globe. These modern day robber-barons are good for us and good for society, goes their argument. For Gramm and Solon, there is no such thing as being rich enough. 

The article’s basic premise is that poor old Ebenezer Scrooge gets a bad rap. His name, they write, “has become an eponym for stingy or miserly.” Of course, in the Dickens tale, Scrooge realizes he has lived his life the wrong way, and goes to great lengths to make amends. Gramm and Solon, however, “write in defense of … not the redeemed one” but the Scrooge who they complain is a “distilled caricature of a businessman in the Victorian era: a rich, obsessive wealth hoarder.”

If you remember the story, Scrooge’s nephew visits him on Christmas Eve to urge him to stop working. “You’re rich enough.” That happens on the same day Scrooge’s clerk, Bob Cratchit, is hoping for Christmas Day off — “If quite convenient, sir,” he says to Scrooge.

Scrooge relents, with great reluctance and a strong reminder to Cratchit that a day off for him is a direct assault on the boss’s ability to extort that day’s surplus value from his worker.

“It’s not convenient,” said Scrooge, “and it’s not fair. If I was to stop half-a-crown for it, you’d think yourself ill-used, I’ll be bound?” … [Y]ou don’t think me ill-used, when I pay a day’s wages for no work.”

The clerk observed that it was only once a year.

“A poor excuse for picking a man’s pocket every twenty-fifth of December!” said Scrooge, buttoning his great-coat to the chin.

The Gramm-Solon defense of “history’s most notorious wealth accumulator” is that Scrooge’s business “contributed to the common welfare of mankind.” His nephew criticizes him for never spending his wealth, for never using it, but the op-ed authors contend that “Dickens never considered who Scrooge’s wealth was useful to.”

It’s worth knowing a little bit about Phil Gramm and Mike Solon themselves. Solon runs U.S. Policy Metrics, a boutique advisory for hedge funds — those special creations of capitalism that invest with borrowed money to trade very liquid assets and reap huge capital gains. Often, their maneuvers destroy jobs and entire communities to overfill the coffers of their already super-wealthy clients. They leverage, sell short, and employ derivatives as part of their work. Yes, derivatives — the “contracts” based on unreal “value” that took down Enron.

Gramm is a former Republican U.S. senator from Texas. He was the chairman of the Banking Committee who authored the Gramm-Leach-Billey Act signed by Bill Clinton in 1999. It essentially repealed the old Glass-Steagall Act that had kept U.S. investment banks and commercial banks separate. Once investment banks had the green light to enter the commercial arena, they started looking for ways to speculate — just like the hedge funds they’re part of — and ended up creating subprime mortgages. They weaponized them for speculation, triggered a crisis in 2007 that triggered a global Great Recession in 2008, and the rest is history. Capitalism hasn’t yet recovered.

These guys aren’t about to let the historical fact of an epic global crisis get in the way of their point. To make their case, they have no choice but to revise history. Bemoaning the “dark picture” that Victorian-era literature paints of life in England in the mid-19th century, they turn to statistics for their revision — because “virtually every official measure of well-being shows the period of 1840–1900 to have been the beginning of a golden age for workers.” They tout rising wages, life expectancy, and literacy rates, better nutrition, and a plummeting infant mortality rate. “There had never been a comparable period of broad-based prosperity in all of recorded history — and, most amazingly, the progress has never ended,” they write.

Mark Twain famously popularized a quote of uncertain origin: “There are three kinds of lies: lies, damned lies, and statistics.” Sure, all of those official measures saw the changes they point to. But keep in mind two things about these “statistics.” The first is about “rising” — life expectancy of, say, 44 years is a “rise” from 42 years. The second is about overall wealth. In Scrooge’s Victorian era, wealth inequality in England absolutely exploded, to levels greater than at any time since the Industrial Revolution up until today. (If you like academic journal articles, you can read the real statistics here.) A small class of capitalists became filthy rich, and the masses got a little bit more than they had gotten beforehand — only because reproducing the labor power the industrial barons needed to buy from them each day became a little bit more expensive.

“Who then benefited from the accumulated wealth of Scrooge and [his deceased business partner Jacob] Marley?” Gramm and Solon ask. “First Britain and then all mankind. Since Scrooge and Marley never consumed the wealth they created, its use was a gift to all. It funded the factories and railroads, the tools and jobs that fed and clothed millions of British subjects and then billions around the world. Their unspent wealth was of no use to them, but it was of sublime use to humanity.”

If “sublime use” made you throw up a little bit, join the club.

British wealth did fund factories and railroads in England and around the world, where those pieces of infrastructure became part of a global network of hyper-exploited colonies that increased the global rate of exploitation — part of capitalism’s foundational laws — and subjugated entire nations to create even more unequal wealth back home in London. “British subjects,” indeed.

Scrooge’s wealth was part of “the long drive that would do more to end ignorance and want than all the governments and charities that ever existed,” Gramm and Solon contend.

How’s that working out today? According to World Bank estimates from before the pandemic, 689 million people in the world were living in extreme poverty on just $1.90 or less a day. And those numbers are calculated just based on income and the ability to meet what rich folks define as “basic needs.” Expand the field of view beyond income to include all sorts of other deprivation — yes, capitalists, we’re talking about deprivation — such as health, education, potable water, and other factors of living standards, and the number grows to at least 1.3 billion people in 107 developing countries who are what the United Nations Development Program calls “multidimensionally poor.”

Oh, and that omits the United States, where in the age of the coronavirus the number of people who are officially “poor” has grown by 8 million since May, according to a Columbia University Study. Communities of color and children are especially hard hit.

As for trickle-down economics, the real statistics tell a much different story than the one Gramm and Solon would have us believe. Researchers at the London School of Economics analyzed data spanning 50 years and 18 countries to examine whether major tax cuts for the rich help everyone else. Their study, released just this month, reveals that lowering those taxes increases inequality and is of no value to the overall economy.

But don’t let facts get in the way. Gramm and Solon — and the miserable, murderous capitalist class they represent, abet, and apologize for — are on the case. More Scrooges, they say! More wealth accumulation by a tiny portion of the world’s population. And just to make sure of continued “progress,” let’s allow Covid-19 to kill off as many of the world’s most impoverished people — because that helps keep the “measures of well-being” looking good.

Ebenezer Scrooge had to endure some spooking from a few ghosts — but he’s just a fictional character created by a novelist. The folks the Journal writes for, in the real world, are not going to get off so easy. One of these Christmases we’ll be visiting them, to settle up their centuries-long debt to the world’s majority.

Economics

About author

Scott Cooper

Scott Cooper

Scott is a writer, editor, and longtime socialist activist who lives in the Boston area.