Wednesday, December 24, 2008

The New Scrooges

"Christmas is coming, the goose is getting fat...
but please don't put a penny in the old man's hat,"

or at least that's what the classic carol would go if some intellectuals could re-write it according to their ideology.1

Lew Rockwell site still has posted Butler Shaffer's defense of Ebeneezer Scrooge from Dickens's A Christmas Carol. (I will not dwell on Shaffer's misspelling of Cratchit, but merely speculate that Shaffer was following the irregular spelling conventions of Dickens's time. For clarity of commenting, I have taken the liberty of replacing Shaffer's brackets with parentheses.)

Shaffer's defense of Scrooge centers around the claim that there is no just wage. In fact, he blames Bob Cratchit for being underpaid:

One of the offenses with which my client [Scrooge] has been charged was that he had not paid Bob Cratchett a large enough salary. Cratchett has worked for an allegedly substandard level of pay – whatever that may mean – for my client for many years. Why? Why did he not quit? Why didn’t he go to work for some other employer – perhaps one of the politically-correct businessmen who periodically show up at Scrooge’s office to solicit and browbeat charitable contributions from my client?

...

To anyone with even the most rudimentary understanding of [abstract] economics, two things should be clear: (1) if, as has been alleged, my client is a tight-fisted, selfish man, he surely would not have paid Bob Cratchett a shilling more than his marginal productivity was worth to Scrooge’s firm, and (2) if Bob Cratchett was being woefully underpaid by my client, there must have been [!] all kinds of alternative employment available to this man at higher salaries.

"Must have been"! What question begging! Shaffer fails to consider the possibility that if all of Crachit's possible employers are poorly formed wretches like Scrooge, then none of them will give him what he justly deserves. For comparison one might ask: how much is slave labor worth? Slavery was a social institution. A single family could not have held slaves without the consent of an overwhelming majority of fellow citizens. Else, the slaves could have sought refuge with a neighbor. Slaves were paid nothing, not because their labor was worth nothing (the basis of the antebellum economy!), but because society unjustly agreed to pay them nothing.2

Similarly, I claim that Cratchit was like a slave unable to better his lot with another employer by the broad consent of all possible employers, whose common misunderstanding and personal injustice permitted them to underpay employees.

Shaffer reveals the assumption behind his argument:

If Cratchett cannot find more remunerative work, and if my client is paying him the maximum that he is marginally worth to his business, then Cratchett must be worth precisely what my client is paying him! Economic values are subjective, with prices for goods or services rising or falling on the basis of the combined preferences of market participants.

What's being asserted here is far more than the truism that a thing's price is what you pay for it. The claim is that goods are only worth what people (arbitrarily) agree to be their price: they have no intrinsic worth. As much as I agree with the Austrian school of economics on many of its concrete prescriptions and proscriptions, its fundamental problem is its disbelief in intrinsic worth.

The ridiculousness of the Austrian school on this point is shown by examples of things that people pay for that are demonstrably valueless and even harmful, such as addictive drugs, pornography and the like.3 There are also borderline cases: how much are relatively injurious commodities, like cigarette's, worth?

Then there are inflated prices: How much does the latest celebrity news (Britney, Paris, et al.) add to our existence? Does anyone seriously think that tulips in seventeenth-century Holland contributed so much to human life that they were actually worth the enormous prices of the tulip bubble?

Another class of counterexamples transcends normal economic valuation: how much is motherhood worth? It is surely part of the myopia of modern economics (and their MBA minions) that mothers aren't figured into economic indicators like gross national product. If stay-at-home mothers don't "contribute" to the economy, no wonder women feel pressure to work outside the home!

The values of things come from their connection to real human goods, like health and education. For example, the food you buy in the grocery store has value to you because it provides nutrition that allows you to keep living. To deny intrinsic value is to deny intrinsic good. Shaffer and fellow travelers have become relativists through economic nominalism.

Nominalism is the denial that universals point to realities in the world. To a nominalist, "cat" is simply a useful label to group a bunch of particulars that have no real commonality, so that there is no way for the intellect to grasp4 the essences of things in order to form universals.

Similarly, in nominalist economics, there is no way for the intellect to grasp a commodity's connection to real human goods (e.g., nutrition, family, safety) in order to discover its intrinsic value.5 As Richard Weaver wrote, "The genius of value seems to have taken wings along with the other essences which nominalists would deny." If we cannot know what is good, we are moral agnostics—relativists, effectively: the good is just what each person says it is.

Most certainly there is a subjective element in prices, but that does not deny each good's intrinsic value. Valuation is something that only a conscious subject can engage in, so we would expect the subject to enter into it and to bring a knowledge of hard-to-quantify realities and relations. It is difficult to consider all factors that give a commodity a particular value to a particular person. Essences and goods are more closely allied with qualities than quantities, and it takes a person to evaluate qualities.6

Plus, valuation is subjective in that it is different for each person relative to his situation. A starving man would justly part with gold for a meal, while a well-fed man rightly values food more moderately. Nevertheless, the human ends at stake are the same and can be objectively evaluated—which is not to say that some sort of rigid mathematical formalism can be applied universally.

So there are real values for things, and there is a just wage a man should be paid for his labor. Of course, the existence of a just wage doesn't guarantee that we will always know it in any particular case. Even less does it mean that a legislature can know it well enough to mandate it for an entire country, as many proponents of the minimum wage assume.

The whole point of Dickens's melodramatic portrayal of the Crachit family is to remove any doubt that Scrooge is underpaying its patriarch. How can Shaffer ignore this?

It takes a recalcitrant blindness to deny an author's manifest meaning. As we'll see, for Shaffer, this blindness doesn't stop at Dickens's creation.

Values in the Soul and the Supernatural

Human happiness comes from enjoying human goods, and unhappiness comes from lacking these goods. Shaffer himself admits that Scrooge is profoundly unhappy:

Taking my client as the miserable fellow Dickens has presented him, let me be the first to admit that if Ebeneezer’s obsession with materialistic pursuits rendered him an unhappy person, and were it the purposes of his detractors to help extricate him from his self-imposed miseries and to restore him to that state of happiness and innocence so common to most of us in our childhood years, no one would be happier than I. But it is not my client’s happiness that the prosecution endeavors to obtain, but his money.

I claim that Scrooge's unhappiness comes from the fact that he knows in his heart of hearts that his miserliness is wrong. Shaffer casts these "detracts" as if they simply wanted Scrooge's money, instead of wanting his money as a means to a greater end. It's been a while since I've looked at Dickens, but might it be possible that Scrooge's "detractors" want him to part with his cash as a means of growing out of his miserliness and finding happiness?

Is it not enough that Scrooge's own conscience condemns him? The supernatural also condemns him in the form of the three spirits of Christmas. But Shaffer has a rejoinder to this as well:

Keep in mind, these specters are possessed with the powers to suspend ordinary rules that operate throughout the rest of nature. They can successfully defy gravity, move backwards and forwards in time, cause matter to become invisible, raise the dead, and foresee the future. Having all of these amazing powers, why did these spirits not intervene to cure Tiny Tim of his ailment?

But take this argument further: if there is a God in heaven, why doesn't he cure all the Tiny Tim's of the world? Perhaps because exercising a spiritual good like generosity is more important than physical health. Perhaps because, just as a parent knows it is good for the child to clean his own room, the Supernatural knows that good actions are overall better for the actors.

It is significant that atheists use these same sorts of arguments: maintained consistently, the same relativism that denies intrinsic goods and intrinsic value eventually leads to a denial of the Author of All Good.

If it weren't for the divorce between abstract economics and the reality of human goods, there wouldn't be the philosophical rift between economic and cultural conservatives that we suffer from today. But then again, the divorce of economics from integral goods is emblematic of the rupture in the constitution of fallen man.

Even in tough economic times like these, charity is still in order, so please do put a penny (or a pound) in the old man's hat.


Notes

1. That it is an ideology is somewhat evident in the rhetoric of this more recent Lew Rockwell piece in which he absolutizes economic actions as "good" or "evil": "Don't Cave!." While I agree with his conclusion that these interventions are wrong, to call them "evil" is to conflate prudential economic decisions with moral absolutes like the right to life.

2. When I say slaves were the basis of the economy, I am of course not saying that they were the only ones who contributed value to that economy.

3. I understand Murray Rothbard admitted these sorts of cases, but didn't let them cloud his belief in Austrian-school principles.

4. Notice I didn't say "comprehend": we needn't have comprehensive knowledge to grasp a thing's essence.

5. The irony is that such economic relativism would seem to be more characteristic of supporters of "fiat currencies" and less of Austrian-School economists, most of whom advocate return to the gold standard.

6. That our current economic system (read: the souls of its participants) is overly obsessed with quantities is evident from the fact the recent uproar over lead-paint on toys from China. Why should it take a violation as serious as this to wake us up to the crisis of quality in goods not only from that country, but from everywhere we buy to cut the bottom line?


Butler Shaffer, "The Case for Ebeneezer," LewRockwell.com (December 13, 2004).

Richard M. Weaver, Ideas Have Consequences (Chicago: Phoenix Books, 1948), 142.

4 comments:

Anonymous said...

It has always been my understanding that the Austrian school doesn't deny intrinsic worth, but that all valuations are subjective to the individual.

The subject of economic study, human action, is riddled with subjective human values, which differ not only between individuals, but within individuals over time. It is for this reason economics must be meticulously value free.

In this manner, the Monk who denies himself goods and pleasures does so out of self-interest and a promise of treasures in heaven. (or 72 virgins, in the case of the jihadi).

Drugs also have value, though I agree many are harmful, if abused. Though addictive drugs most certainly can be helpful, if carefully administered, such as the case of many pain medications.

With slavery, you must understand slaves' economic value as a commodity. Slaves were not paid wages, but were compensated with food and shelter, because at some point, death becomes preferable to continued servitude in cruel conditions - what's more, poorly fed slaves are going to be less productive.

Slavery wasn't and isn't unjust because of what 'society' agreed to pay slaves. Indeed, the Austrian school assumes an agreement on price when transactions occur. This underpins the law of supply and demand. Slaves have no part in a transaction. They aren't free. They must yield to the whims of a dictator.

Laissez Faire, as Mises distilled it: "Let the common man choose and act; do not force him to yield to a dictator".

As for Cratchit & Scrooge, I do think it ridiculous to use this fictional tale to illustrate economic principles, especially as it applies to defending miserly behavior. However, in the real world, we don't have Laissez faire, we have minimum wages and other labor laws which intervene in economic calculi!

I do wonder why Cratchit stayed on with Scrooge all those years, being abuses and mistreated as he was! Was every employer like Scrooge? Was there no one else in town who would pay Cratchit better?

It seems an argument could be made that Cratchit didn't value his own work very much if he was willing to put up with Scrooge's treatment and wages. The saying goes 'you get what you pay for' - did Scrooge get more than what he paid for? So long as Cratchit was willing, it appears he did. If Cratchit valued himself more, he's have been looking for work elsewhere, leaving Scrooge to find some Irishman to work so cheaply!

As for 'intrinsic worth', I agree some things, if not all things, have some value, in and of themselves and as parts in some working whole. But even so, it is impossible to assess such value objectively.

Nutrition & exercise have intrinsic value, but then so does Freedom(ie, to eat poorly). Americans are paying a price for poor nutrition, but is the answer to allow 'society' to dictate diets and exercise regimes?

I think Shaffer's point is that only Cratchit can decide what his intrinsic worth actually is - Cratchit knows his family life, knows what kind of father he is - all the intangibles illuminated by the spirits which haunted Scrooge. Perhaps Cratchit could've saved Scrooge the visits had he shown his own sense of value and quit years earlier!

Scrooge might have learned all employees can work fast, cheap & well, but employers only get two of those attributes at any given time. (it can be fast & cheap, but it won't be good; cheap & good, but it won't be fast; fast & good but it won't be cheap!)

Khaki Elephant said...

Merry Christmas

And thanks for all of the great posts!

Anonymous said...

Merry Christmas LG!

Lawrence Gage said...

Dear KE and Jennifer, I hope you are enjoying a merry Christmas as well!

Dear Todd Tharp,

I'm not sure you've understood the point of the slave example. What I mean is: you might just as well say that slaves were worth no more than the poor housing and meager food they received as that Bob Crachit was worth no more than what Scrooge paid him.

Perhaps it comes down to this: it makes no sense to talk about justice and injustice in the Austrian framework. There is no "should", but only what is.

Again, this feeds into the philosophical nominalism that dominates the Austrian school, as well as our "scientific" age. You should read the Weaver book I reference to see how the undesirable consequences of this idea play out.

LG