A Christmas Carol – the Virtues and Vices of the Market Economy

This week in 1843 Charles Dickens published his book A Christmas Carol that would become a gift of joy and timeless tradition for society. But Dickens also imparted an incredibly powerful story of economic ideas that sheds light on severe economic problems while inspiring charity. Dickens invokes Adam Smith, the Scottish moral philosopher who is considered father of modern economics. In his landmark book, Inquiry into the Nature and Causes of the Wealth of Nations, Smith extolls the benefits of free markets as the foundation of capitalism, in which voluntary exchanges by members of society, motivated by the pursuit of individual self-interest, translates into collective good. Smith captured the economic interactions during the emerging industrial era at the time that still rings true:

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.” 

In the early scenes before his ghostly hauntings, Mr. Scrooge declined to donate to a charity cause. He even criticized for the overpopulation problem that resulted in people who take more from public resources than they contribute. In the Christmas Carol Scrooge in his callous way, said that: “If they would rather die, they had better do it, and decrease the surplus population.”

What Scrooge describes follows the lines of the population theory advanced by the economist Thomas Malthus. He used statistics to theorize that a growing population over time would drop off when society cannot supply sufficient food and basic necessities. Within time war, famine and natural disasters will flatten out population growth. This dire prediction gave economics its name as the dismal science. Personally Dickens grew up in a large family of eight children. Due to unfortunate circumstances, Dickens dropped out of school to start working to support his family.

In Dickens’ Christmas story, Mr. Scrooge is a cold workaholic banker. Yet, there’s little moral judgement on his profession nor does Dickens calls for the downfall of capitalism. Rather he calls out the greed and excesses of society, via the miserly, lonely banker, Mr. Scrooge. Like Adam Smith, Dickens notices a glimmer of hope in capitalism based on the virtues and sympathy that people have for one another.

Dickens has always been sensitive to the plight if the poor. An earlier event affected him deeply, According to reporting by the NY Times, in the fall of 1843, Dickens visited Samuel Starey’s Field Lane Ragged School, a school that provided education for slum children. When his father’s bankruptcy sent him to debtors’ prison, the twelve year old Dickens resorted to working long hours at a boot-blacking factory for no more than six shillings a week. Though he did help make ends meet for his family, he was scarred by the working conditions of the ragged children and men working warehouses and factories.

Dickens became a vocal critic of the widening wealth gap in Victorian England era, with a particular cry for the poor children who had to work at an early age. The tens of thousands of homeless children languished on the streets; life was brutish. Compared to his American counterparts, Dickens is slightly ahead in his progressive thinking, equivalent of a muckraker, a movement in America in the dawn of the 20th century that involved writers and journalists who published outrageous working conditions and economic injustices. Upton Sinclair, a novelist and journalist, wrote a harrowing account in The Jungle about labor conditions in the meat packing industry and slum urban dwellings with large immigrant demographics. Like Dickens in Britain, the American muckrakers shed light on deplorable economic issues which led to public policy changes and industry reforms. President Theodore Roosevelt and his White House team would take up the cause of economic justice during the Progressive era.  

The letters inscribed on his tomb reads: “He was a sympathiser to the poor, the suffering, and the oppressed; and by his death, one of England’s greatest writers is lost to the world.”

In honor of this holiday classic, here are a few of my favorite excerpts from A Christmas Carol: 

“Reflect upon your present blessings—of which every man has many—not on your past misfortunes, of which all men have some.”

″‘Business!’ cried the Ghost, wringing its hands again. ‘Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were, all, my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!‘”

“‘There are many things from which I might have derived good, by which I have not profited, I dare say,’ returned the nephew. ‘Christmas among the rest. . . . And therefore, uncle, though it has never put a scrap of gold or silver in my pocket, I believe that it has done me good, and will do me good; and I say, God bless it!‘”


Dickens, C. (1843). A Christmas Carol. In Prose. Being a Ghost Story of Christmas. Chapman & Hall.

Malthus, T. (1798). Principle of Population.

Mortimer, J. (1993, December 24). Poorhouses, Pamphlets and Marley’s Ghost. The New York Times. https://archive.nytimes.com/www.nytimes.com/books/99/03/28/specials/mortimer-poorhouses.html

Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations.

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