Scrooge and the Welfare State

Gary Wolfram
Issue CCLXXI - December 25, 2010
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Early in Charles Dickens's famous 1843 novel, A Christmas Carol in Prose, two men enter Scrooge's office seeking Christmas donations. The ensuing intercourse is worth repeating this Christmas season.

"At this festive season of the year, Mr. Scrooge," said the gentleman, taking up a pen, "it is more than usually desirable that we should make some slight provision for the poor and destitute, who suffer greatly at the present time. Many thousands are in want of common necessities; hundreds of thousands are in want of common comforts, sir."

"Are there no prisons?" asked Scrooge.

"Plenty of prisons," said the gentleman, laying down the pen again.

"And the Union workhouses?" demanded Scrooge. "Are they still in operation?"

"They are. Still," returned the gentleman, "I wish I could say they are not."

"The Treadmill and the Poor Law are in full vigor, then?" said Scrooge.

"Both very busy, sir."

"Oh, I was afraid from what you said at first, that something had occurred to stop them in their useful course," said Scrooge. "I am very glad to hear it."

When the gentleman presses Scrooge to contribute to a fund to buy the poor some food and shelter, Scrooge says he will contribute nothing.

"I help to support the establishments I have mentioned—they cost enough; and those who are badly off must go there," Scrooge reasons.

Now we usually interpret this discussion as showing how mean and selfish Scrooge is, but there is another way to look at it, given the advance of the welfare state since the time of Dickens.

What Scrooge is saying here is that he pays taxes to support the government programs designed to house the poor, for that is what the prisons, work houses, Treadmill, and Poor Laws were at the time. In effect he is saying, "Isn't the government supposed to take care of the poor? Aren't I paying my taxes to take care of this problem?"

This is one of the overlooked ill-effects of a government that goes beyond its role to protect life, liberty, and property. Our federal government officials tell us that we can't possibly be generous enough to house the poor, or to give them medical care and that it is not our responsibility to take care of the indigent. There are housing programs, food stamps, and now a massive government health insurance program that will ensure we have to do nothing other than give up half of our income to the federal government, and our leaders will do the rest. Social Security and Medicare ensure that we do not even have to provide for our parents.

In effect, we are told to become modern day Scrooges.

In the same year that Dickens published A Christmas Carol, Herbert Spencer published an essay, "The Proper Sphere of Government." Spencer wrote that one of the most under-looked and most harmful effects of the Poor Laws of Britain - their welfare system - was that the wealthy would lose their sense of charity and feeling towards the less fortunate.

He put in an essay the very point that Scrooge was making in Dickens's novel. Spencer wrote that wealthier classes would feel the annoyance towards the forced contributions to the poor that is evident in Scrooge's response to the gentlemen that were asking him to help out the poor. One hundred and sixty-seven years on from Dickens and Spencer we must ask ourselves: Have we arrived at the point where we see those less fortunate than we as an annoyance, something to be taken care of by our government with the taxes taken out of our paychecks so we don't have to be bothered to even think about them?

When the federal government takes your tax dollars to pay for someone else's doctor's visit, you are not being charitable. You had no choice in the matter.

The federal bureaucrat who sent the doctor the check is not being charitable, for he or she is spending your money, not theirs.

The doctor is not being charitable, for he is being paid for their service.

On the other hand, St. Peter's Free Clinic in Hillsdale is an example of true charity. Volunteers provide the medical care and other services, local residents and churches provide donations to pay for the medicine and supplies, and those who receive the service recognize the love and respect that they are being given.

America remains the most charitable of all nations. Despite the recession, American charitable giving exceeded $300 billion in 2009. Probably every reader of this column has given to some charity this year. But this Christmas we should make an effort to examine how we can make the transition from a government that makes us into Scrooges to a government that gives us the opportunity to be truly philanthropic.

This article originally appeared in The Michigan View ( on December 24, 2010.

This article originally appeared on the blog, a new forum for the expression of economic ideas by professors Charles Steele and Gary Wolfram of Hillsdale College.

Gary Wolfram is William E. Simon Professor of Economics and Public Policy at Hillsdale College, President of Hillsdale Policy Group, a consulting firm specializing in taxation and policy analysis, and Chairman of the Michigan Alliance for Competitive Energy. He was a member and former Chairman of the Board of Trustees of Lake Superior State University, served as a member of Michigan's State Board of Education from 1993 to 1999, was Chairman of the Headlee Amendment Blue Ribbon Commission and has been a member of the Michigan Enterprise Zone Authority, the Michigan Strategic Fund Board, and the Michigan State Housing Development Authority Board. Dr. Wolfram's public policy experience includes serving as Congressman Nick Smith's Chief of Staff, Michigan’s Deputy State Treasurer for Taxation and Economic Policy under Governor John Engler, and Senior Economist to the Republican Senate in Michigan. Professor Wolfram graduated summa cum laude from the University of California at Santa Barbara. He received his Ph.D. in Economics from the University of California at Berkeley and has taught at several colleges and universities, including Mount Holyoke College, The University of Michigan, and Washington State University. He is a regular contributor to Human Events and The Detroit News. His publications include Towards a Free Society: An Introduction to Markets and the Political System, and several works on public policy issues. He was named Hillsdale College’s Professor of the Year for 2004. Michigan Runner Magazine also named him one of the top 25 runners in Michigan of the past 25 years.

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